G.R. No. L-31338 July 31, 1970
Atlas Textile Development Corporation and Gregorio Lim, Vice-President and General Manager, petitioners-appellants, vs. Kapisanan Ng Mga Manggagawa Sa Atlas-PTGWO, respondent-appellee.

FACTS

The respondent union filed a case in the Court of Industrial Relations against the petitioner company and its general manager on two causes of action: underpayment of nightwork differential and non-payment of overtime pay during Sundays and legal holidays from December 1, 1964. The CIR absolved the company on the first cause but upheld the union on the second, ordering the computation of overtime pay. The petitioners appealed solely on the overtime pay issue. The company operates with several shifts within a 24-hour workday. The first irregular shift works from 10:00 PM to 6:00 AM. When this shift starts at 10:00 PM on a Sunday or holiday and ends at 6:00 AM the next ordinary day, the company treats the entire period as regular work and pays the regular rate, not granting overtime for the two hours (10:00 PM to 12:00 midnight) falling on the Sunday/holiday. Conversely, when the shift starts at 10:00 PM on a Saturday or ordinary day and ends at 6:00 AM the next Sunday/holiday, the company grants overtime pay computed on the basis of eight hours (for work from 10:00 PM to 6:00 AM), which includes payment for the two hours (10:00 PM to 12:00 midnight) on the Saturday/ordinary day, even though it was not legally obligated to do so.

ISSUE

Whether the petitioner company has fully complied with the statutory mandate requiring employers to pay additional overtime remuneration for work rendered during Sundays and legal holidays, specifically concerning the two-hour work done by the first irregular shift from 10:00 PM to 12:00 midnight on a Sunday or legal holiday.

RULING

The Supreme Court set aside the order of the CIR and dismissed the union’s complaint. The Court held that while the two-hour work from 10:00 PM to 12:00 midnight on a Sunday or legal holiday would ordinarily warrant overtime pay under Section 4 of Commonwealth Act 444 (the Eight-Hour Labor Law), the members of that shift were, in practice, paid overtime for the two-hour work from 10:00 PM to 12:00 midnight on the preceding Saturday or ordinary workday, even though the company was under no legal obligation to do so. Consequently, the workers suffered no actual deprivation of income for the Sunday/holiday work. The Court found that the company had substantially complied with the law, as the workers were properly and fully compensated for their labor under the circumstances.