G.R. No. L-12950, December 9, 1959
Benjamin Celestial, et al., petitioners, vs. The Southern Mindanao Experimental Station, et al., respondents.

FACTS

Petitioners are 176 employees/workers of the Southern Mindanao Experimental Station, an agency of the Bureau of Plant Industry in Davao City. Since 1952, they had been paid a daily wage of P2.50. In March 1957, they filed a claim with the Auditor General for differential pay, asserting they were entitled to the minimum wage of P4.00 per day under the Minimum Wage Law ( Republic Act No. 602 ). On September 9, 1957, the Auditor General denied their claim, holding they were only entitled to P2.50 per day. Petitioners sought a review of this decision.

ISSUE

Whether the petitioners, as employees of the Southern Mindanao Experimental Station, are entitled to the minimum daily wage of P4.00 for non-agricultural workers or only P2.50 for agricultural workers under the Minimum Wage Law.

RULING

The Supreme Court AFFIRMED the decision of the Auditor General. Petitioners are entitled only to the minimum wage of P2.50 per day as agricultural workers.
The Court’s ruling is based on the interpretation of Section 3 of the Minimum Wage Law. For an employee to receive the P2.50 agricultural minimum wage, three conditions must be met: (1) the employer must be engaged in agriculture; (2) the employer must operate a farm of more than 12 hectares; and (3) the employee must be engaged in agriculture.
The second condition was satisfied, as the Experimental Station operated a 960-hectare farm. Regarding the first condition, the Court examined the functions of the Bureau of Plant Industry and its Experimental Station under the Revised Administrative Code. These functions include the introduction of improved seeds and plants, investigation of agricultural methods, control of plant pests, and operation of demonstration farms—all falling within the statutory definition of “agriculture” in the Minimum Wage Law. The Court held that both the Bureau and the Experimental Station are engaged in agricultural functions. The fact that the enterprise was not operated for profit was irrelevant, as the law’s definition of agriculture does not include a profit motive.
On the third condition, the Court found that the petitioners, whether directly performing farm work (e.g., tilling, planting, harvesting) or performing incidental office, clerical, or maintenance duties, were all engaged in agriculture. Citing an interpretative bulletin under the U.S. Fair Labor Standards Act (the model for the Philippine law), the Court ruled that employees whose work is incidental to agricultural operations are considered agricultural workers.
Consequently, petitioners fall under Section 3(b) of the Minimum Wage Law (agricultural workers on farms over 12 hectares) and are entitled to the prescribed wage of P2.50 per day, not the P4.00 wage for non-agricultural workers under Section 3(a).