Mercury Drug Co., Inc. v. Dayao
REITERATIONFacts
The Antecedents: Nardo Dayao and 70 other employees filed a petition against Mercury Drug Co., Inc. (Mercury Drug) and its president, Mariano Que, seeking payment of unpaid back wages for work done on Sundays and legal holidays with 25% additional compensation, payment for extra compensation on work done at night, and reinstatement of two employees with back salaries. They also sought the disestablishment of the respondent union and refund of collected monies. Procedural History: The respondent court denied Mercury Drug's motion to dismiss on the ground of lack of cause of action but granted it regarding the claims of Januario Referente and Oscar Echalar, dropping them as party petitioners. The court found that an employer-employee relationship existed between Nardo Dayao and Mercury Drug and that the claims had not prescribed. The claims against the union were dismissed without prejudice to refiling as an unfair labor practice case. Mercury Drug's motion for reconsideration was denied. After hearing on the merits, the respondent court ordered Mercury Drug to pay the 69 petitioners additional sums equivalent to 25% of their basic salaries for services rendered on Sundays and legal holidays, and for nighttime services, from March 20, 1961, to June 30, 1962. Mariano Que was absolved from money claims. The court directed the Chief Court Examiner to compute the award. The respondent court en banc denied Mercury Drug's motion for reconsideration. The Petition: Mercury Drug Co., Inc. filed a petition for review on certiorari, assailing the decision and resolution of the Court of Industrial Relations (CIR).
Issue(s)
Whether the respondent CIR erred in declaring the contracts of employment null and void as being contrary to public policy and in sustaining the claims for 25% Sunday and legal holiday premiums. Whether the respondent CIR erred in sustaining claims for nighttime work premiums, considering Republic Act 875 and alleged waiver. Whether the respondent CIR erred in making awards in favor of private respondents who did not personally appear or testify.
Ruling
The petition is dismissed. The decision and resolution appealed from are affirmed with costs against the petitioner.
Ratio Decidendi
On the issue of Sunday and legal holiday premiums: The Supreme Court affirmed the CIR's ruling that agreements in employment contracts waiving the mandatory 25% additional compensation for work done on Sundays and legal holidays are null and void ab initio. The Court reiterated that payment of at least 25% additional compensation for work on Sundays and legal holidays is mandated by Commonwealth Act No. 444, as amended by Republic Act No. 1993. Even if employees agreed to work on these days without further consideration than their monthly salaries, such an agreement is contrary to public policy and thus void. The Court found that the CIR correctly rejected the petitioner's theory that the 25% additional compensation was already included in the monthly salaries, giving credence to the testimonies of the private respondents that it was not. The petitioner's computations were found incredible and did not tally with the stated annual salaries in the contracts. The Court held that the CIR did not declare the contracts of employment entirely null and void but only the objectionable features violative of the law, and that the CIR could do so even if the issue was not explicitly raised, acting according to justice and equity. On the issue of nighttime work premiums: The Supreme Court held that the CIR had jurisdiction to award additional compensation for nighttime work. The Court clarified that while Republic Act 875 limited the CIR's jurisdiction to specific cases, claims for additional compensation for work rendered on Sundays, holidays, and for night work were consistently upheld. The Court cited previous rulings that affirmed the CIR's assumption of jurisdiction over such cases, even after the passage of Republic Act 875. The petitioner's contention that night work is not overtime and thus outside the CIR's jurisdiction was rejected, as the Court had previously held that night work could be considered overtime and that the CIR had the power to determine wages for night workers under Commonwealth Act No. 103. Furthermore, the Court found that the CIR's ruling was supported by evidence, as the private respondents' testimonies indicated they rendered nighttime services, and their daily time records could show this. The Court also emphasized that additional compensation for nighttime work is founded on public policy and cannot be waived, making the "waiver rule" inapplicable. On the issue of awards to non-testifying respondents: The Supreme Court ruled that the fact that only three private respondents testified did not adversely affect the interests of the other respondents. The Court abandoned the earlier ruling in Dimayuga v. Court of Industrial Relations which required all claimants to personally testify. Instead, the Court reiterated its stance in Philippine Land Air-Sea Labor Union (PLASLU) v. Sy Indong Company Rice And Corn Mill and Sanchez v. Court of Industrial Relations, emphasizing that the quality, not the quantity, of witnesses is the primary consideration in appraising evidence. The testimonies of the three claimants, along with other evidence, were sufficient to support the awards for the other respondents.
Main Doctrine
Agreements in a contract of employment that waive or exclude the mandatory 25% additional compensation for work done on Sundays and legal holidays are null and void ab initio as they are contrary to public policy and the Eight Hour Labor Law (C.A. No. 444, as amended by R.A. No. 1993). Similarly, claims for additional compensation for nighttime services, being founded on public policy, cannot be waived.