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TRANS-ASIA PHILS. EMPLOYEES ASSOCIATION v. NLRC

FACTS:

The case involves a dispute between Trans-Asia Philippines Employees Association (TAPEA) and Trans-Asia (Phils.) about the payment of holiday pay from January 1985 to December 1987. TAPEA filed a complaint seeking payment of holiday pay in arrears. They argued that their claim was based on the non-inclusion of holiday pay in their monthly pay, citing Trans-Asia's Employee's Manual, absence of a stipulation in their appointment papers, and a provision in the Collective Bargaining Agreement (CBA) for the payment of holiday pay. Trans-Asia countered TAPEA's arguments, claiming that they have always incorporated holiday pay in the monthly salaries of their employees using a divisor of "286" days, which already accounted for the ten regular holidays in a year.

In another case, Trans-Asia and its employees, represented by the Associated Labor Unions (ALU), entered into a CBA that included a provision on holiday pay. The employees filed a complaint alleging that they were not being paid the correct holiday pay and that Trans-Asia engaged in unfair labor practices. They argued that 286 days should be used as the divisor in computing the monthly rate, instead of 262 days as provided by law. They also claimed that the inclusion of the holiday pay provision in the CBA was an admission of past non-payment. Trans-Asia explained that the provision was included in the CBA to comply with the Labor Code and that it did not admit past non-payment but recognized employees' entitlement to holiday pay. Trans-Asia further argued that the employees were seeking double holiday pay, as holiday pay was already included in their monthly salary.

The labor arbiter dismissed the complaint, stating that there was no clear agreement on the inclusion of holiday pay in the monthly salary. The arbiter also noted that Trans-Asia consistently used a divisor of 286 days since 1977, which was not disputed by the employees.

ISSUES:

  1. Whether Trans-Asia Philippines should be required to pay holiday pay in arrears for the period from January 1985 to December 1987.

  2. Whether the inclusion of a holiday pay provision in the Collective Bargaining Agreement (CBA) signifies that holiday pay was not included in employees' monthly salaries.

  3. Whether the divisor used by Trans-Asia for payroll calculations improperly excluded holiday pay.

RULING:

  1. Trans-Asia Philippines does not need to pay holiday pay in arrears. The inclusion of holiday pay in petitioners' monthly salary is established by the consistent use of a divisor of "286" days.

  2. The provision in the CBA does not signify non-inclusion of holiday pay in the monthly salary. The agreement of the 260% holiday pay rate is a compliance with the Labor Code and does not indicate an acknowledgment of previous non-payment.

  3. The divisor used by Trans-Asia must be adjusted to "287" days as prescribed by related laws to properly account for holidays. The adjusted divisor should only be used in computations advantageous to employees, such as deductions for absences, and not in ways that would lower employees' benefits.

PRINCIPLES:

  1. Legal Divisor: Adjustments in payroll divisors must conform to statutory guidelines to ensure the inclusion of legally mandated holidays.

  2. Consistency in Payroll Practices: The consistent use of payroll practices may serve as evidence to refute claims of non-compliance with labor laws.

  3. Non-Diminution of Benefits: Adjustments in pay calculations should not lead to a reduction in existing employee benefits.

  4. Favoring Labor in Doubt: Unless irrefutably disproven by substantial evidence, any ambiguity in labor compensation should be resolved in favor of labor.