The Supreme Court has affirmed that employees are entitled to receive holiday pay for each regular holiday, even when two holidays fall on the same day. This ruling ensures that workers receive the full benefit of legislated holidays, preventing any reduction in their entitled compensation. The decision underscores the importance of upholding labor rights and interpreting labor laws in favor of the employee’s welfare.

Navigating the Overlap: Entitlement to Holiday Pay on Concurrent Legal Holidays

Asian Transmission Corporation contested a Court of Appeals decision regarding holiday pay for its employees. The dispute arose when April 9, 1998, coincided with both Araw ng Kagitingan and Maundy Thursday. The company paid only 100% of the daily wage, while the labor union argued for 200%, citing a Department of Labor and Employment (DOLE) bulletin that addressed such occurrences. This case hinges on the interpretation of Article 94 of the Labor Code and the intent behind legislated holiday benefits. The central legal question is whether employees are entitled to separate holiday pay for each holiday when two fall on the same day.

The Court of Appeals upheld the decision of the Voluntary Arbitrator, which favored the labor union. The appellate court emphasized that the Collective Bargaining Agreement (CBA) between Asian Transmission Corporation and its labor union (BATLU) demonstrated a clear intent to recognize both Araw ng Kagitingan and Maundy Thursday as distinct paid legal holidays. The CBA did not contain any provisions that would reduce holiday pay in the event of a confluence of holidays. Furthermore, the court noted that in the absence of explicit legal provisions dictating a reduction in holiday pay, any ambiguity should be resolved in favor of labor.

The petitioner, Asian Transmission Corporation, raised several issues, arguing that the Court of Appeals misinterpreted the CBA, improperly relied on the DOLE’s Explanatory Bulletin, and that the Secretary of Labor overstepped authority by issuing the bulletin. They also contended that the respondents’ actions would deprive the petitioner of property without due process and equal protection of the laws. However, the Supreme Court found these arguments without merit.

The Supreme Court began by addressing the procedural issue. Instead of filing a petition for review on certiorari under Rule 45, the petitioner filed a petition for certiorari under Rule 65. The Court noted that since the Court of Appeals had jurisdiction over the initial petition, any errors in its exercise of jurisdiction would be errors of judgment reviewable by appeal. Failure to appeal within the prescribed period renders the decision final and executory, precluding the use of certiorari. The Court emphasized that appeal was not only available but also a speedy and adequate remedy, which the petitioner failed to utilize in a timely manner.

Addressing the substance of the case, the Court underscored the importance of holiday pay as a legislated benefit designed to protect labor. Holiday pay serves not only to maintain workers’ income during work interruptions but also to enable participation in national celebrations. The intent is to ensure workers benefit from all legislated holidays, promoting both economic stability and national identity. Therefore, the law mandates holiday pay regardless of whether an employee is paid monthly or daily.

The Court further explained that while employers have some discretion regarding bonuses, holiday pay is a statutory right. Since workers are entitled to ten paid regular holidays, the coincidence of two holidays on a single day should not diminish this entitlement. Statutory construction dictates that when the language of the law is clear, it should be interpreted as written. In this case, there is no provision in the Labor Code that suggests reducing holiday pay when two holidays occur on the same day. This upholds the principle that labor laws are designed to protect the welfare of employees.

The petitioner’s reliance on Wellington v. Trajano was misplaced, according to the Court. In Wellington, the issue was whether monthly-paid employees were entitled to an additional day’s pay when a holiday fell on a Sunday. The Court held that the monthly salary already accounted for holidays, unlike in the present case, which concerns daily-paid employees and the entitlement to pay for two holidays on the same day. The key distinction lies in how the employees are compensated and the specific circumstances of the holiday occurrence.

The Court then invoked Article 4 of the Labor Code, which mandates that all doubts in the implementation and interpretation of its provisions should be resolved in favor of labor. This reinforces the principle that labor laws are primarily intended to protect the interests and welfare of workers. Sec. 11, Rule IV, Book III of the Omnibus Rules to Implement the Labor Code also supports this view, stating that employers cannot withdraw or reduce benefits for unworked regular holidays as provided in agreements or company policies.

Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working man’s welfare should be the primordial and paramount consideration.^[16]

The Collective Bargaining Agreement (CBA) between the parties further solidified the obligation to pay for legal holidays. The CBA explicitly listed the legal holidays that the company would pay, thereby indicating a clear commitment to providing holiday pay as required by law. This contractual obligation further supported the union’s claim for double holiday pay.

The pertinent provisions of the CBA stated:

The following legal holidays shall be paid by the COMPANY as required by law:

1. New Year’s Day (January 1^st)
2. Holy Thursday (moveable)
3. Good Friday (moveable)
4. Araw ng Kagitingan (April 9^th)
5. Labor Day (May 1st)
6. Independence Day (June 12^th)
7. Bonifacio Day [November 30]
8. Christmas Day (December 25^th)
9. Rizal Day (December 30^th)
10. General Election designated by law, if declared public non-working holiday
11. National Heroes Day (Last Sunday of August)

The Supreme Court ultimately dismissed the petition, reinforcing the principle that workers are entitled to full holiday pay for each regular holiday, even when multiple holidays fall on the same day. This decision highlights the judiciary’s commitment to protecting labor rights and ensuring that the benefits provided by law are fully realized by the workforce. This case reaffirms the importance of interpreting labor laws in favor of employees and upholding contractual obligations outlined in Collective Bargaining Agreements.

FAQs

What was the key issue in this case?	The key issue was whether employees are entitled to receive double holiday pay when two regular holidays, specifically Araw ng Kagitingan and Maundy Thursday, fall on the same day.
What did the Court rule?	The Supreme Court ruled that employees are entitled to receive holiday pay for each regular holiday, even when two holidays fall on the same day, reinforcing the principle of protecting labor rights.
What is the significance of Article 94 of the Labor Code in this case?	Article 94 of the Labor Code mandates holiday pay for every regular holiday, and the Court interpreted this to mean that each holiday should be compensated, regardless of whether it falls on the same day as another.
Why did the Court dismiss the petitioner’s reliance on Wellington v. Trajano?	The Court distinguished Wellington v. Trajano because that case involved monthly-paid employees and the issue of a holiday falling on a Sunday, unlike the current case, which concerned daily-paid employees and multiple holidays on the same day.
How did the Collective Bargaining Agreement (CBA) affect the Court’s decision?	The CBA reinforced the company’s obligation to pay for legal holidays as required by law, demonstrating a contractual commitment to providing holiday pay.
What is the role of Article 4 of the Labor Code in this case?	Article 4 of the Labor Code mandates that any doubts in the interpretation of labor laws should be resolved in favor of labor, supporting the decision to grant double holiday pay.
What was the DOLE’s Explanatory Bulletin, and how did it factor into the case?	The DOLE’s Explanatory Bulletin clarified that employees are entitled to 200% of their basic wage on days with two regular holidays, which the Court considered supportive of the decision to provide double holiday pay.
What practical impact does this ruling have on employers?	Employers must ensure that they pay their employees holiday pay for each regular holiday, even if multiple holidays fall on the same day, to comply with labor laws and contractual obligations.
What if a holiday falls on an employee’s scheduled vacation leave?	The employee is entitled to holiday pay in addition to normal vacation pay, but will not be entitled to another vacation leave for that particular holiday, as specified in the CBA.

This decision reinforces the importance of adhering to labor laws and contractual agreements that protect workers’ rights. Employers must be diligent in ensuring that they comply with these regulations to avoid disputes and uphold the welfare of their employees.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Asian Transmission Corporation v. CA, G.R. No. 144664, March 15, 2004