Thursday, September 2, 2010

Manila Terminal Company Inc., v. CIR

Chester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

G.R. No. L-4148 July 16, 1952



Manila Terminal Company, Inc. hereinafter to be referred as to the petitioner, undertook the arrastre service in some of the piers in Manila's Port Area at the request and under the control of the United States Army. The petitioner hired some thirty men as watchmen on twelve-hour shifts at a compensation of P3 per day for the day shift and P6 per day for the night shift.

The watchmen of the petitioner continued in the service with a number of substitutions and additions, their salaries having been raised during the month of February to P4 per day for the day shift and P6.25 per day for the nightshift. The private respondent sent a letter to Department of Labor requesting that the matter of overtime pay be investigated. But nothing was done by the Dept of Labor.

Later on, the petitioner instituted the system of strict eight-hour shifts.

The private respondent filed an amended petition with the Court of Industrial Relations praying, among others, that the petitioner be ordered to pay its watchmen or police force overtime pay from the commencement of their employment.

By virtue of Customs Administrative Order No. 81 and Executive Order No. 228 of the President of the Philippines, the entire police force of the petitioner was consolidated with the Manila Harvor Police of the Customs Patrol Service, a Government agency under the exclusive control of the Commissioner of Customs and the Secretary of Finance The Manila Terminal Relief and Mutual Aid Association will hereafter be referred to as the Association.

Judge V. Jimenez Yanson of the Court of Industrial Relations in his decision ordered the petitioner to pay to its police force but regards to overtime service after the watchmen had been integrated into the Manila Harbor Police, the has no jurisdiction because it affects the Bureau of Customs, an instrumentality of the Government having no independent personality and which cannot be sued without the consent of the State.
The petitioner filed a motion for reconsideration. The Association also filed a motion for reconsideration in so far its other demands were dismissed. Both resolutions were denied.

The public respondent decision was to pay the private respondents their overtime on regular days at the regular rate and additional amount of 25 percent, overtime on Sundays and legal holidays at the regular rate only, and watchmen are not entitled to night differential pay for past services. The petitioner has filed a present petition for certiorari.


a. Whether or not the CIR has no jurisdiction to render a money judgment involving obligation in arrears.

b. Whether or not the agreement under which its police force were paid certain specific wages for twelve-hour shifts, included overtime compensation.

c. Whether or not the Association is barred from recovery by estoppel and laches.

d. Whether or not the nullity or invalidity of the employment contract precludes any recovery by the Association.

e. whether or not the Commonwealth Act No. 4444 does not authorize recovery of back overtime pay.


The Supreme Court affirmed the appealed decision that the petitioner's watchmen will be entitled to extra compensation only from the dates they respectively entered the service of the petitioner, hereafter to be duly determined by the Court of Industrial Relations.

On the first issue, the Court of Industrial Relations has no jurisdiction to award a money judgment was already overruled by this Court on the case of Detective & protective Bureau, Inc. vs. Court of Industrial Relations and United Employees Welfare Association that under Commonwealth Act No. 103 the Court is empowered to make the order for the purpose of settling disputes between the employer and employee.

On the second issue, based on the case of Detective & Protective Bureau, Inc. vs. Court of Industrial Relations and United Employees Welfare Association, the law gives them the right to extra compensation. And they could not be held to have impliedly waived such extra compensation, for the obvious reason that could not have expressly waived it.

On the third issue, the principle of estoppel and the laches cannot well be invoked against the Association. it would be contrary to the spirit of the Eight Hour Labor Law, under which as already seen, the laborers cannot waive their right to extra compensation. If the principle of estoppel and laches is to be applied, the employee may be compelled to accomplish the same thing by mere silence or lapse of time, thereby frustrating the purpose of law by indirection.

On the fourth issue, the employee in rendering extra service at the request of his employer has a right to assume that the latter has complied with the requirement of the law, and therefore has obtained the required permission from the Department of Labor. This was based on the case of Gotamo Lumber Co. vs. Court of Industrial Relations, wherein both parties are in pari delicto. Moreover, the Eight-Hour Law, in providing that "any agreement or contract between the employer and the laborer or employee contrary to the provisions of this Act shall be null avoid ab initio.”

On the fifth issue, based on Fair Labor Standards Act of the United States which provides that "any employer who violates the provisions of section 206 and section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages or their unpaid overtime compensation as the case may be," — a provision not incorporated in Commonwealth Act No. 444, our Eight-Hour Labor Law.

We cannot agree to the proposition, because sections 3 and 5 of Commonwealth Act 444 expressly provides for the payment of extra compensation in cases where overtime services are required, with the result that the employees or laborers are entitled to collect such extra compensation for past overtime work. To hold otherwise would be to allow an employer to violate the law by simply, as in this case, failing to provide for and pay overtime compensation.

Acknowledgement: Barbie Pinos

1 comment:

Joy said...

bakit nag petition ang manila terminla company sa cir??..ano po ba nirereklamo ng MTC???..di ko po kasi magets