G.R. No. L-6339; April 20, 1954
MANUEL LARA, ET AL., plaintiffs-appellants, vs. PETRONILO DEL ROSARIO, JR., defendant-appellee.

FACTS

In 1950, defendant Petronilo del Rosario, Jr., operated a taxi business named “Waval Taxi” with 25 taxi cabs. He employed three mechanics and 49 chauffeurs/drivers. On September 4, 1950, without giving 30 days’ advance notice, Del Rosario sold all his taxis to La Mallorca transportation company. The drivers lost their jobs as La Mallorca did not continue their employment. The drivers (the three mechanics later withdrew their claims) filed an action against Del Rosario to recover: (1) compensation for overtime work beyond eight hours and on Sundays and legal holidays under the Eight-Hour Labor Law ( Commonwealth Act No. 444 ), and (2) one month’s salary (mesada) under Article 302 of the Code of Commerce due to lack of advance notice. The drivers were paid on a commission basis, receiving 20% of the gross earnings from their taxi’s operation, with no fixed salary. They claimed to typically work 12 hours daily, and sometimes 24 hours on weekends/holidays. The trial court dismissed the complaint. The Court of Appeals certified the case to the Supreme Court as only questions of law were involved.

ISSUE

1. Whether the plaintiff drivers, paid on a commission basis with no fixed salary, are entitled to overtime compensation under the Eight-Hour Labor Law.
2. Whether the plaintiff drivers are entitled to one month’s salary (mesada) under Article 302 of the Code of Commerce upon termination without notice.

RULING

1. No, the plaintiff drivers are not entitled to overtime compensation. The Eight-Hour Labor Law, under its Section 2, excludes “laborers who prefer to be paid on piece work basis.” The drivers, who received 20% commission based on gross earnings with no fixed hours or salary, and whose compensation depended on their industry and the results of their work rather than time spent, are considered piece workers. As such, they fall outside the law’s coverage. This is supported by a prior Secretary of Justice opinion and an Interpretative Bulletin from the Wage Administration Service. Although, as a public utility, the defendant could require work on Sundays/holidays without extra pay under Section 4, the overtime claim for hours exceeding eight on any day fails because the drivers are not covered by the law’s overtime provisions.
2. No, the plaintiff drivers are not entitled to one month’s salary under Article 302 of the Code of Commerce. First, Article 302 was repealed by Article 2270 of the new Civil Code, which took effect on August 30, 1950, before the termination on September 4, 1950. Second, even assuming it was in force, Article 302 applies only to employees with a fixed salary, as it requires computation of “salary corresponding to said month.” Since the drivers had no fixed salary and were paid on commission, the indemnity cannot be computed, and they are not entitled to it. The order of dismissal is affirmed.