Dunque, Bernadette Panes
October 12, 2020
LABOR LAW 1, under Atty. Gibbon Heyres
My 1st assigned report
APPLICATION OF THE LABOR CODE
(Article 6 of the Labor Code)
ART. 6. APPLICABILITY. - All rights and benefits granted to workers under this Code shall,
except as may otherwise be provided herein, apply alike to all workers, whether agricultural or
non-agricultural.
General Rule: The Labor Code applies to all workers, whether:
(1) agricultural or non-agricultural;
(2) including employees in a government corporation incorporated under the
Corporation Code.
Agricultural workers are those involve in farming in all its branches and, involve the
cultivation and tillage of the soil, dairying, the production, cultivation, growing and harvesting of
any agricultural and horticultural commodities, the raising of livestock or poultry, and any
practices performed by a farmer on a farm as an incident to or in conjunction with such farming
operations.
(The term “agriculture” does not include the manufacturing or processing of sugar, coconuts,
abaca, tobacco, pineapples or other farm products.) Article 97 (par. d) of the Labor Code of the
Philippines.
Logically, non-agricultural workers are those who are excluded in the coverage of
agricultural workers. (These include employees in private hospitals, private educational
institutions, security agencies, and the like.)
The “workers” referred to in Article 6 of the Labor Code are employees in the PRIVATE
SECTOR only. This means, the Labor Code generally applies only to employees of private
establishments. However, the Labor Code also applies to employees in a government corporation
organized under the Corporation Law. {Article 254 of the Labor Code. Right of Employee in the
Public Service. - Employees of government corporations established under the Corporation Code
shall have the right to organize and to bargain collectively with their respective employers. All
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other employees in the civil service shall have the right to form associations for purposes not
contrary to law. (As amended by Exec. Order No. 111, December 24, 1986)}.
EXAMPLES OF GOVERNMENT-OWNED OR -CONTROLLED CORPORATION
INCORPORATED UNDER CORPORATION LAW:
(1) Philippine National Oil Corp. Energy Development Corp;
(2) Food Terminal, Inc., and
(3) National Housing Authority (formerly National Housing )
The PNOC-EDC, (Philippine National Oil Corp. Energy Development Corp.) having been
incorporated under the general Corporation Law, is a government-owned or controlled
corporation. Its employees are subject to the provisions of the Labor Code, among which are
those on the rights to unionize and to strike.
Similarly, the Food Terminal, Inc. is a government-owned and controlled corporation without
original charter. The Department of Labor and Employment, and not the Civil Service Commission
has jurisdiction over the dispute arising from employment with FTI. The terms and conditions of
such employment are governed by the Labor Code and not by the Civil Service Rules and
Regulations.
Finally, considering that the NHA (National Housing Corp.) was incorporated under Act 1459,
the former corporation law, it is a government owned or controlled corporation whose employees
are subject to the provisions of the Labor Code. The NHA is within the jurisdiction of the
Department of Labor and Employment, it being a government-owned and/or controlled
corporation without an original charter. The workers or employees of the NHC (now NHA)
have the right to form unions or employees’ organizations.
Note:
The test in determining whether a government-owned or controlled corporation is subject to the Civil
Service Law is the manner of its creation. Government corporations created by Congress are subject to Civil
Service rules, while those incorporated under the general Corporation Law are covered by the Labor Code.
(National Service
Corp. vs. NLRC, No. L-69870, November 29, 1988.)
Government-Owned or -Controlled Corporation (GOCC) refers to any agency organized as
a stock or nonstock corporation, vested with functions relating to public needs whether
governmental or proprietary in nature, and owned by the Government of the Republic of the
Philippines directly or through its instrumentahties either wholly or, where applicable as in the
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case of stock corporations, to the extent of at least a majority of its outstanding capital
stock: Provided, however, That for purposes of this Act, the term “GOCC”- shall include GICP/GCE
and GFI as defined herein.
LABOR CODE APPLIES EVEN THERE IS NO ER-EE RELATIONSHIP
The Labor Code may apply even if the parties are not employers and employees of each other.
In other words, it is not correct to say that employment relationship is a pre-condition to the
applicability of the Code.
When one speaks of employment benefits (e.g., overtime pay or rest day premium) or of
unionization, then surely employment relationship is an essential element. But when the issue, for
instance, is an indirect employer’s liability, or illegal recruitment, or misuse of POEA license, there
is no employer-employee relationship between the complainant and the respondent, and yet the
pertinent Labor Code provisions may be invoked. In short, the Labor Code applies with or without
employment relationship between the disputants, depending on the kind of issue involved.
The presence or absence of employer-employee relationship is itself a labor law question. It
is resolved by applying Labor Code provisions, the implementing rules, and interpretative court
rulings.
EXCEPTIONS TO THE APPLICABILITY OF LABOR CODE
There are some rights and benefits under the Labor Code that are NOT available to certain
types of employees in the private sector. These rights and benefits are:
RIGHTS & BENEFITS
PERSONS NOT ENTITLED
(1) The right to form, join, (a) Managerial employees;
or assist in the formation {Art. 82, par.2 of the LC. COVERAGE.- “Managerial employees” refer
of any labor organization.
to those whose primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the
managerial staff. These are employees who: 1. Primarily manage the
establishment or of a department or subdivision
therof;2.
Customarily and regularly direct the work of two or more
employees;and 3. Have authority to hire or fire other employees of
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lower rank or their suggestions and recommendations as to hiring,
firing, promotion, and other personnel movements are given
weight.}
(2) The normal eight-hour (a) Managerial employees;
work, meal periods, night {REASON FOR EXEMPTION: Such employees are NOT usually
shift differential, overtime engaged for every hour. It is NOT feasible to provide hourly rate of
pay,
weekly
rest
day, pay or maximum hours of labor.}
premium pay for rest day (b) Officers and members of the managerial staff;
and holiday work, regular {They are those who 1. Primarily perform work directly related to
holiday
incentive
pay,
leave,
service charges.
service management policies or execute under general supervision,
and specialized or technical work or special assignments;2. Customarily
and regularly exercise discretion and independent judgment;3.
Regularly and directly assist a managerial employee; and 4. Do not
devote more than 20% of their hours worked in a workweek to
activities which are not directly and closely related to the
performance of the work described above. Example of officers and
members of the managerial staff are: 1. Project Engineer in a
construction project; and 2. Chief Patron of a vessel because he is
tasked to take complete charge and command of the vessel and
perform the responsibilities and duties of a ship captain. REASON
FOR EXEMPTION: They perform work related to management
policies or general business operations along specialized or technical
lines. Hence, it is NOT feasible to provide them a fixed hourly rate of
pay or maximum hours of work.}
(c) Field personnel
{Art. 82, par.3 of the LC. COVERAGE.- Field personnel shall refer to
non-agricultural employees who regularly perform their duties away
from the principal place of business or branch office of the employer
and whose actual hours of work in the field cannot be determined
with certainty. Note: Fishermen are not field personnel. REASON FOR
EXEMPTION: This kind of employees work away from the employer’s
place of business, and therefore, NOT subject to the personal
supervision of the employer, hence, the employer has NO way of
knowing the number of hours they work in a day.}
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(d) Members of the family of the employer who are dependent
on him for support;
{Family members refer to are husband and wife, parents and
children, other ascendants and descendants, brothers and sisters,
whether full or half blood. Note: The following are NOT considered
as family members: cousins, parents-in-law and children-in-law. It is
because they DO NOT pertain to the same family. REASON FOR
EXEMPTION: The employer already takes care of the sustenance,
dwelling, clothing, medical attendance or education of that member
of the family.}
(e) Domestic helpers (except weekly rest day and service
incentive leave);
{Domestic helper refers to person who renders service in and about
the employer’s home on an activity which are usually necessary or
desirable for the maintenance and enjoyment of the employer and
ministers exclusively to the personal comfort and enjoyment of the
employer’s family. Examples are: 1. general househelpers; 2. cooks;
3. gardeners; 4. nursemaid; 5. laundry person.REASON FOR
EXEMPTION: It is because of the nature of their work plus the fact
that domestic helpers are NOT employed in a business undertaking.
Note: The exemption granted to domestic helpers under Art. 82 of
the Labor Code has been modified by the Domestic Workers Act.
They are now entitled to: 1. servive incentive leave (not convertible
to cash); and 2. weekly rest day (although they are NOT entitled to
premium pay if they work on their rest day. }
(f) Persons in the personal service of another;and
{These are those who minister to the personal comfort, convenience
or safety of the employer as well as the members of the employer’s
household. Examples are: 1. personal body guards; 2. private nurses;
and 3. family drivers. REASON FOR EXEMPTION: It is because of the
nature of their work and their peculiar relationship with their
employer necessitates that they be freed from certain legal
restrictions applicable to employers engaged in a business
undertaking.}
(g) Workers paid by results.
{These are those who are compensated based on their ouput
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regardless of the time spent in doing their work. Example is a
piece-rate worker. REASON FOR EXEMPTION: It is because their
compensation is NOT dependent upon the time spent in doing the
work BUT on their output.}
(3) The right to holiday (a) Employees in
pay.
retail and service
establishments regularly
employing less than ten (10) workers;
(4) The right to service (a) Employees in establishment regularly employing less than ten
incentive leave.
(10) workers
(5) The right to retirement (b) Employees in retail, service, and agricultural establishments
benefit.
regularly employing not more than ten (10) workers.
Note:

Article 83. NORMAL HOURS OF WORK. -
The Labor Code prescribes an eight-hour work
a day. Since the law prescribes the maximum, the employer is free to adopt a regular work
schedule of less than eight (8) hours a day. REASON: To safeguard the health and welfare of
the employee, and in a way to minimize unemployment by forcing employers in cases where
more than eight-hour operation is necessary, to utilize diferent shifts of employees working
only for eight hours each.

Article 85.MEAL PERIODS. - Generally, employers are obliged to give his employees at
least one (1) hour time-off for regular meals.

Article 86. NIGHT SHIFT DIFFERENTIAL. - An additional compensation given to a covered
employee for working between 10:00 PM and 6:00 AM.

Article 87.OVERTIME WORK. - Overtime pay is an additional compensation given to a
covered employee for woking beyond eight (8) hours a day. REASON: To compensate the
inconvenience of the employee.

Aricle 91. RIGHT TO WEEKLY REST DAY. - The rest day is the period of inactivity of NOT
less than twenty-four (24) consecutive hours given to an employee after rendering service for
a week. (A week of labor = understood to embrace the ordinary six (6) labor days.)
 Premium Pay is additional compensation for working on a special non-working
holiday or rest day.

Holiday pay is is a premium given to an employee during regular holidays, the
purpose of which is to prevent diminution of the monthly income of employees on
account of work interruptions.

Aricle 94. RIGHT TO HOLIDAY PAY. -(a.) Every worker shall be paid his regular daily wage
during regular holidays EXCEPT in retail and service establishments regularly employing less
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than ten (10) workers; and (b) The employer may require an employee to work on any holiday
BUT such employee shall be paid a compensation equivalent to twice his regular rate.
 Examples of regular holidays are: New Year’s Day, Maundy Thursday, Good Friday,
Eidul Fitr, Eidul Adha, Araw ng Kagitingan, Labor Day, Independence Day, National
Heroes Day, Bonifacio Day, Christmas Day and Rizal Day.

Article 95. RIGHT TO SERVICE INCENTIVE LEAVE. - akin to vacation leave. It is intended NOT
merely to give additional salary or bounty BUT to give the employee a chance to get a much
needed rest in order to replenish his worn out energies and acquire a new vitality to enable
him to efficiently perform his duties.
 SIL is commutable to cash if unuse. The employee, hence, may choose to
either use his SIL or commute it to its monetary equivalent.

Article 96. SERVICE CHARGE. - These are amounts collected by by service establishments from
customers for amenities that they enjoyed.
 Q: Who are entitled to SC?
A: All employees of establishments collecting SCs, such as:
1. Hotels;
2. Restaurants;
3. Night clubs;
4. Cocktail lounges;
5. Massage clinics;
6. Bars;
7. Casinos; and
8. Gambling houses.

Aricle 302. RETIREMENT. - Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.
 Note: Being entitled of the employee under Section 12-B of R.A. No. 1161, as
amended, otherwise known as the SOCIAL SECURITY ACT OF 1997 and other
existing laws or company policies or practices. (As amended by R.A. No. 10757)
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DEFINITION OF TERMS (For my understanding of GOCC - chartered and nonchartered GOCC)
Section 3 of R.A. No. 10149. - AN ACT TO PROMOTE FINANCIAL VIABILITY AND FISCAL
DISCIPLINE IN GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS AND TO
STRENGTHEN THE ROLE OF THE STATE IN ITS GOVERNANCE AND MANAGEMENT TO MAKE
THEM MORE RESPONSIVE TO THE NEEDS OF PUBLIC INTEREST AND FOR OTHER PURPOSES
(f) Chartered GOCC refers to a GOCC, including Government Financial Institutions, created
and vested with functions by a special law.
(p) Nonchartered GOCC refers to a GOCC organized and operating under Batas Pambansa
Bilang 68, or “The Corporation Code of the Philippines”.
“Government Financial Institution” (“GFI”) refers to any financial institution or corporation in
which the government directly or indirectly owns majority of the capital stock and which are
either:
(1) registered with or directly supervised by the Bangko Sentral ng Pilipinas (“BSP”); or
(2) collecting or transacting funds or contributions from the public and places them in financial
instruments or assets, such as deposits, loans, bonds and equity, including but not limited to, the
Government Service Insurance System and the Social Security System.
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