Facts:
The CBA between Bonpack and Nagkakaisang Manggagawa SA Bonpack-Solidarity of Unions in the Philippines for Empowerment and Reforms (NMB-SUPER) states that:
- compensable working hours shall be eight (8) hours a day including a meal break of 30 minutes and two (2) 15-minute coffee breaks;
- any employee who works in excess of eight (8) hours in any regular working day shall be entitled to an additional 25% of the daily hour basic rate as overtime premium; and
- regarding the exercise of management prerogatives, Bonpack shall discuss with NMB-SUPER matters that may adversely affect the general welfare of the latter’s members.
Bonpack and NMB-SUPER likewise agreed to establish a labor-management committee, which is a forum wherein the parties are compelled to meet at least once a month to tackle matters of mutual interest particularly those affecting labor-management relations, and/even resolve any dispute between the parties arising out of employer-employee relationship.
Bonpack then unilaterally revised its old Company Rules and Regulations (CRR), purportedly to harmonize it with the new CBA. According to Bonpack, it rearranged the CRR’s layout for easy reference of the employees, and it incorporated the 120-minute grace period policy.
The revised CRR also defined the act of committing an “over break” as an offense wherein an employee “takes coffee or snack breaks of more than 15 minutes, or lunch breaks of more than one (1) hour for non-straight time and more than 30 minutes for straight time employees.” Said offense has a corresponding disciplinary action of “final written warning.”
This revised CRR was discussed in a general assembly of Bonpack’s employees conducted and held by Bonpack. However, NMB-SUPER unfavorably reacted to the implementation of the revised CRR without it being consulted at all, especially on the imposition of harsher penalties in the commission of company-defined offenses.
NMB-SUPER also claimed that Bonpack was underpaying the employees’ overtime pay by deducting their one-hour meal period from their total number of working hours with overtime. NMB-SUPER repeatedly requested from Bonpack to formally organize a labor-management committee, in order that NMB-SUPER’s concerns may be heard and be given appropriate response, but to no avail.
Grievance Machinery: no settlement
VA: Upheld the validity of the reformatted CRR.
- implementation was in the exercise of Bonpack’s management prerogative in disciplining employees, and that there were no substantial changes made from the old CRR that would have required consultation with NMB-SUPER.
- While the VA, in its decision, required Bonpack to include the 30-minute meal break in the normal hours of work pursuant to the CBA, the VA devised a formula in the computation of overtime pay of the employees, wherein those employees who worked for twelve (12) hours and finished their meal breaks within thirty (30) minutes and resumed working are entitled to four and half (4) hours of overtime work.
CA: Reversed the VA’s decision.
- Changes in the CRR involved questions that involve the interpretation and enforcement of the CBA.
- Bonpack had indeed underpaid its employees by requiring all Bonpackemployees to observe the non-compensable one-hour meal break, which was clearly against the CBA-mandated compensable hours of work of 8 hours a day including meal break of 30 minutes and two 15 minutes coffee break
Issues
1. Did Bonpack violate the CBA-mandated right to participate in policy and decision-making processes on matters affecting the general welfare of Bonpack’s employees?
YES. It is settled that the exercise by an employer of its management prerogative is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general principles of fair play and justice.
The CBA obligates Bonpack to discuss with NMB-SUPER matters that may involve decisions or policies that may adversely affect the general welfare of the members and all matters of mutual interest particularly those affecting labor-management relations.
While Bonpack indeed had management prerogatives, such prerogative was limited or regulated by the relevant provisions of the CBA, which Bonpackdid not comply with. Bonpack failed to show that it tried to reach out to the employees to obtain and consider their position on the revisions on the CRR.
Nor has Bonpack disputed that it ignored NMB-SUPER’s calls to create a labor management committee as was so required by it under the CBA, thus deliberately depriving NMB-SUPER of its right to participate in policy and decision-making processes on matters affecting the general welfare of the employees. When Bonpack conducted the general assembly with the employees, Bonpack merely discussed the revised CRR and handed copies of the same to the employees, contrary to the requirement in the CBA where such activities shall be done with NMB-SUPER in a labor-management committee forum.
As such, the Court found that Bonpack never really consulted to its employees before it implemented the revised CRR.
2. Did Bonpack require its employees to observe one-hour meal breaks which resulted in the employees being underpaid?
YES. Sec. 83, in relation to Sec. 85 of the Labor Code, states that the compensable eight (8) hours of work in a day does not include the sixty 60 minutes time-off for the regular meals of an employee, therefore, this statutory one-hour meal break, not being part of the normal working hours of an employee, is non-compensable.
Nevertheless, the hours of work of the employees may be modified or regulated in a duly signed CBA between the employer and its employees. A CBA refers to the negotiated contract between a legitimate labor organization and the employer concerning wages, hours of work and all other terms and conditions of employment in a bargaining unit.
As in all contracts, the parties in a CBA may establish such stipulations, clauses, terms and conditions as they may deem convenient provided these are not contrary to law, morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it becomes the law between the parties and compliance therewith is mandated by the express policy of the law.
The CBA states that the working hours shall be eight (8) hours a day including a 30-minute meal break and two (2) 15-minute coffee breaks. This means that the meal time of the employees is divided into three shorter periods so that these periods can be considered as compensable (30-15-15).
However, Bonpack essentially admitted that it wittingly allowed the employees to consume one (1) whole hour of continuous meal break instead of the CBA-mandated 30-mute break and two 15-minutes rest periods. Bonpack, in defining the commission of “overbreak,” classified those consuming the one-hour meal break as “straight time” employees and those consuming the 30-minute meal break as “non-straight time” employees, which established two policies on hours of work and meal period. This classification permitted the “straight time” employees to lump the short meal breaks into one-hour, which is against the CBA. This classification likewise resulted in those employees rendering twelve (12) hours of work in an eight-hour work day being compensated only with three (3) hours of overtime pay instead of four (4) hours, which is also against the CBA.
In sum, the CA correctly ruled that Bonpack’s employees who worked for 12 hours in an eight-hour workday, and took the 30-minute and two 15-minute rest breaks as their meal time in accordance with the CBA, must be compensated for four hours of overtime pay.
