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LABOR Leyte IV Electic Co Inc V Leyeco IV Employees Union ALU PDF

Leyte IV Electric Cooperative and its employees union had a collective bargaining agreement that provided for holiday pay. The union demanded holiday pay for 1998-2000, which the cooperative denied paying. The arbitrator ruled in favor of the union, but the cooperative appealed. The court ruled for the cooperative, finding that the arbitrator ignored the union's admission that employees were paid for all days in a month. The court also found that the cooperative's use of a 360-day divisor to calculate salaries meant holiday pay was already included, as the divisor exceeded the minimum allowed. The ruling avoided imposing a double payment on the cooperative for holiday pay already paid.
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100% found this document useful (1 vote)
292 views3 pages

LABOR Leyte IV Electic Co Inc V Leyeco IV Employees Union ALU PDF

Leyte IV Electric Cooperative and its employees union had a collective bargaining agreement that provided for holiday pay. The union demanded holiday pay for 1998-2000, which the cooperative denied paying. The arbitrator ruled in favor of the union, but the cooperative appealed. The court ruled for the cooperative, finding that the arbitrator ignored the union's admission that employees were paid for all days in a month. The court also found that the cooperative's use of a 360-day divisor to calculate salaries meant holiday pay was already included, as the divisor exceeded the minimum allowed. The ruling avoided imposing a double payment on the cooperative for holiday pay already paid.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Leyte IV Electric Cooperative Inc.

, vs LEYECO IV Employees Union
Petitioner, on the other hand, in its Position Paper, insisted payment of 
Facts: the holiday pay in compliance with the CBA provisions, stating that 
payment was presumed since the formula used in determining the daily rate 
On April 6, 1998, Leyte IV Electric Cooperative, Inc. (petitioner) and  of pay of the covered employees is Basic Monthly Salary divided by 30 
Leyeco IV Employees Union­ALU(respondent) entered into a Collective  days or Basic Monthly Salary multiplied by 12 divided by 360 days, thus 
Bargaining Agreement (CBA) covering petitioner rank­and­file employees,  with said formula, the employees are already paid their regular and special 
for a period of five (5) years effective January 1, 1998. days, the days when no work is done, the 51 un­worked Sundays and the 51 
  un­worked Saturdays
On June 7, 2000, respondent, through its Regional Vice­President, 
Vicente P. Casilan, sent a letter to petitioner demanding holiday pay for On March 1, 2001, Voluntary Arbitrator. rendered a Decision in favor of 
all employees, as provided for in the CBA. respondent, holding petitioner liable for payment of unpaid holidays from 
1998 to 2000 in the sum of P1,054,393.07.  He reasoned that petitioner 
On June 20, 2000, petitioner, through its legal counsel, sent a letter­reply to  miserably failed to show that it complied with the CBA mandate 
that holiday pay be “reflected during any payroll period of occurrence” 
Casilan, explaining that after perusing all available pay slips, it found 
since the payroll slips did not reflect any payment of the paid holidays.  He 
that it had paid all employees all the holiday pays enumerated in the 
found unacceptable not only petitioner's presumption of payment of holiday
CBA pay based on a formula used in determining and computing the daily rate of 
each covered employee, but also petitioner's further submission that the rate
After exhausting the procedures of the grievance machinery* the parties  of its employees is not less than the statutory minimum wage multiplied by 
agreed to submit the issues of the interpretation and implementation of  365 days and divided by twelve.  
Section 2, Article VIII of the CBA on the payment of holiday pay, for 
arbitration of the National Conciliation and Mediation Board (NCMB), Issue:
Regional Office No. VIII in Tacloban City. The parties were required to  WON Leyte IV Electric Cooperative is liable for underpayment of holiday 
submit their respective position papers, after which the dispute was  pay.
submitted for decision.
Ruling:
In its position paper, the employees admitted they were paid all of the days 
of the month even if there was no work, respondent alleged that it is not 
Leyte IV Electric Cooperative is not liable for underpayment of holiday 
prevented from making separate demands for the payment of regular  pay.
holidays concomitant with the provisions of the CBA, with its supporting   
documents consisting of a letter demanding payment of holiday pay,  The Voluntary Arbitrator gravely abused its discretion in giving a strict or 
petitioner's reply thereto and respondent's rejoinder, a computation in the  literal interpretation of the CBA provisions that the holiday pay be reflected
amount of P1,054,393.07 for the unpaid legal holidays, and several pay  in the payroll slips. Such literal interpretation ignores the admission of 
slips. respondent in its Position Paper that the employees were paid all the days of
the month even if not worked. In light of such admission, petitioner's  above the minimum, indubitably, petitioner's employees are being given 
submission of its 360 divisor in the computation of employees' salaries  their holiday pay. Thus, the Voluntary Arbitrator should not have simply 
gains significance. brushed aside petitioner's divisor formula. 
In Union of Filipro Employees v. Vivar, Jr. the Court held that “[t]he
divisor assumes an important role in determining whether or not holiday In granting respondent's claim of non­payment of holiday pay, a "double 
pay is already included in the monthly paid employee’s salary and in the burden" was imposed upon petitioner because it was being made to pay 
computation of his daily rate”. twice for its employees' holiday pay when payment thereof had already 
been included in the computation of their monthly salaries
This ruling was applied in Wellington Investment and Manufacturing 
Corporation v. Trajano, Producers Bank of the Philippines v. National  While the Constitution is committed to the policy of social justice and the
Labor Relations Commission. In this case, the monthly salary was fixed  protection of the working class, it should not be supposed that every labor
by Law and excluding only Sundays. In fixing the salary, Wellington used  dispute would automatically be decided in favor of labor. Management also
what it called the "314 factor"; that is, it simply deducted 51 Sundays from  has it own rights which, as such, are entitled to respect and enforcement in
the 365 days normally comprising a year and used the difference, 314, as  the interest of simple fair play. Out of concern for those with less privileges
basis for determining the monthly salary. The monthly salary thus fixed  in life, this Court has inclined more often than not toward the worker and
actually covered payment for 314 days of the year, including regular and  upheld his cause in his conflicts with the employer. Such favoritism,
special holidays, as well as days when no work was done by reason of  however, has not blinded us to the rule that justice is in every case for the
fortuitous cause, such as transportation strike, riot, or typhoon or other  deserving, to be dispensed in the light of the established facts and the
natural calamity, or cause not attributable to the employees. applicable law and doctrine

It was also applied in Odango v. National Labor Relations Commission,  * a grievance is any difference or dispute between an employee or the 
where Court ruled that the use of a divisor that was less than 365 days  union, and the employer with respect to the interpretation, application, or of 
cannot make the employer automatically liable for underpayment of holiday compliance with any terms and conditions of the contract.
pay. In said case, the employees were required to work only from Monday  The Grievance Machinery 
to Friday and half of Saturday. Thus, the minimum allowable divisor is 287, Article 260 of the Labor Code requires parties to establish a 
which is the result of 365 days, less 52 Sundays and less 26 Saturdays (or  grievance machinery for the adjustment and resolution of grievances
52 half Saturdays). Any divisor below 287 days meant that the employees  arising from the interpretation or implementation of a collective 
were deprived of their holiday pay for some or all of the ten legal holidays.  bargaining agreement or the interpretation or enforcement of 
The 304­day divisor used by the employer was clearly above the minimum  company personnel policies. 
of 287 days.
 Grievances submitted to the grievance machinery and not settled
In this case, the employees are required to work only from Monday to  within seven calendar days shall automatically be referred to 
Friday. Thus, the minimum allowable divisor is 263, which is arrived at by  voluntary arbitration. 
deducting 51 un­worked Sundays and 51 un­worked Saturdays from 365   The grievance procedure refers to the internal rules of 
days. Considering that petitioner used the 360­day divisor, which is clearly  procedures intended to resolve all issues arising from the 
implementation and interpretation of the CBA.  
 Established by the parties in their CBA, this grievance procedure 
leads to voluntary arbitration as the final step. It is part of the 
continuous process of collective bargaining, which intended to 
promote friendly dialogue between labor and management as a 
means of maintaining industrial peace.

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