CEZAR ODANGO in his behalf and in behalf of 32 complainants, petitioners, vs.
NATIONAL
LABOR RELATIONS COMMISSION and ANTIQUE ELECTRIC COOPERATIVE,
INC., respondents. G.R. No. 147420 June 10, 2004. CARPIO, J.
Petitioners are monthly-paid employees of ANTECO whose workdays are from Monday to
Friday and half of Saturday.
After a routine inspection, the DOLE found ANTECO liable for underpayment of the monthly
salaries of its employees. DOLE directed ANTECO to pay its employees wage differentials
amounting to P1,427,412.
Thus, 33 monthly-paid employees filed complaints with NLRC praying for wage differentials
and damages.
1. LA - ruled in favor of petitioners and granted the wage differentials. He said monthly-paid
employees are considered paid for all the days in a month under Sec. 2, Rule IV, Book 3 of
the IR LC. Petitioner claims that this includes the 10 legal holidays and unworked half of
Saturdays and all of Sundays.
Further, LA agreed with petitioners that ANTECO’s use of 304 as divisor is an admission that
it is paying its employees for only 304 days a year instead of the 365 days as specified in
Section 2. The Labor Arbiter concluded that ANTECO owed its employees the wages for 61
days, the difference between 365 and 304, for every year.
2. NLRC - reversed LA. NLRC said that the daily wage rates of the employees were above the
minimum daily wage of P124. The lowest paid employee of ANTECO was then receiving a
monthly wage of ₱3,788. The NLRC applied the formula in Section 2 [(Daily Wage Rate =
(Wage x 12)/365)] to the monthly wage of ₱3,788 to arrive at a daily wage rate of ₱124.54, an
amount clearly above the minimum wage.
The NLRC also ruled that the use of 304 as a divisor in converting leave credits is more
favorable to the employees since a lower divisor yields a higher rate of pay.
3. CA - dismissed the petition for it was insufficient in form and substance
Petitioner argue that according to Section 2, Rule IV of Book III of the Omnibus Rules
Implementing the Labor Code, monthly-paid employees are considered paid for all days of
the month including un-worked days. Petitioners assert that they should be paid for all the
365 days in a year. They argue that since in the computation of leave credits, ANTECO uses
a divisor of 304, ANTECO is not paying them 61 days every year.
ISSUE + RULING: Whether petitioners are entitled to wage differentials.
NO. The SC have long declared the basis of their claim Section 2, Rule IV of Book III of the
Omnibus Rules Implementing the Labor Code VOID for in the guise of clarifying the Labor Code’s
provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion.
"No work, no pay" - The right to be paid for un-worked days is generally limited to the ten legal
holidays in a year. In this case, petitioner demands ANTECO should pay them on Sundays and
un-worked half of Saturdays and other days that they do not work at all. Petitioners’ line of
reasoning is not only a violation of the "no work, no pay" principle, it also gives rise to an invidious
classification, a violation of the equal protection clause. Sustaining petitioners’ argument will
make monthly-paid employees a privileged class who are paid even if they do not work.
ISSUE + RULING: Whether the use of a divisor less than 365 days make ANTECO
automatically liable for underpayment
NO. The use of a divisor less than 365 days cannot make ANTECO automatically liable for
underpayment. The facts show that petitioners are required to work only from Monday to Friday
and half of Saturday. Thus, the minimum allowable divisor is 287, which is the result of 365 days,
less 52 Sundays and less 26 Saturdays (or 52 half Saturdays). Any divisor below 287 days
means that ANTECO’s workers are deprived of their holiday pay for some or all of the ten legal
holidays. The 304 days divisor used by ANTECO is clearly above the minimum of 287 days.
Finally, petitioners cite Chartered Bank Employees Association v. Ople 16 as an analogous
situation. Petitioners have misread this case.
In Chartered Bank, the workers sought payment for un-worked legal holidays as a right
guaranteed by a valid law. In this case, petitioners seek payment of wages for un-worked non-
legal holidays citing as basis a void implementing rule. The circumstances are also markedly
different. In Chartered Bank, there was a collective bargaining agreement that prescribed the
divisor. No CBA exists in this case. In Chartered Bank, the employer was liable for underpayment
because the divisor it used was 251 days, a figure that clearly fails to account for the ten legal
holidays the law requires to be paid. Here, the divisor ANTECO uses is 304 days. This figure
does not deprive petitioners of their right to be paid on legal holidays.
