G.R. No. 111359 August 15, 1995
CALTEX REGULAR EMPLOYEES AT MANILA OFFICE, LEGAZPI BULK DEPOT AND MARINDUQUE BULK DEPOT-(MACLU), petitioners, vs. CALTEX (PHILIPPINES), INC. and NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), respondents.

FACTS

Petitioner Union and private respondent Caltex entered into a Collective Bargaining Agreement effective until 31 December 1988. A dispute arose regarding the interpretation of Article III on hours of work and Annex B on premium pay. The Union claimed that work performed on an employee’s scheduled day off, specifically a Saturday, should automatically be paid at “first day off” premium rates as stipulated in Annex B, regardless of whether the employee had already completed 40 hours of work for the week. Caltex, however, maintained that such premium pay for Saturday work was due only if the work caused the employee’s total weekly hours to exceed 40, aligning with the proviso in Article III. The Labor Arbiter ruled in favor of the Union, ordering Caltex to pay differentials. The NLRC reversed this decision, prompting the Union to file this petition for certiorari.

ISSUE

Whether work performed on an employee’s scheduled day off (Saturday) under the 1985 CBA should be paid at premium “first day off” rates irrespective of the total weekly hours worked, or only when such work causes the total hours to exceed forty (40) in a week.

RULING

The Supreme Court denied the petition and upheld the NLRC’s decision. The legal logic rests on a harmonious interpretation of the CBA’s provisions. Article III explicitly states that the regular workweek consists of eight hours per day for any five days, and its proviso conditions premium compensation for work on a scheduled day off upon the requirement that the employee works “in excess of forty (40) hours in any week.” Annex B, which provides the formula for “Regular First Day Off” pay, must be read in conjunction with this overarching condition in Article III. The Court rejected the Union’s interpretation that Annex B created a separate, unconditional entitlement. To read Annex B in isolation would render the 40-hour proviso in Article III meaningless, violating the principle that a contract must be interpreted as a whole. Furthermore, the Court gave weight to the parties’ contemporaneous and practical construction of the agreement, noting that Caltex’s practice of paying Saturday premium only when it exceeded the 40-hour week had been consistently followed for twenty-two years without challenge, which illuminated their mutual intent. Thus, premium pay for Saturday work is due only when it forms part of the work exceeding 40 hours in a calendar week.