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LABOR LAW
Fundamental Principles
Legal Basis. 1987 Constitution.
State Policies: Shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation and
free the people from poverty through policies
that provide adequate social services, promote
full employment, a rising standard of living,
and an improved quality of life for all.
Values the dignity of every human person
and guarantees full respect for human rights.
Recognizes the vital role of the youth in
nation-building and shall promote and protect
their physical, moral, spiritual, intellectual, and
social well-being. It shall inculcate in the youth
patriotism and nationalism and encourage
their involvement in public and civic affairs.
Recognizes the role of women in nationbuilding and shall ensure the fundamental
equality before the law of women and men.
Affirms labor as a primary social economic
force. It shall protect the rights of workers and
promote their welfare.
Recognizes the indispensable role of the
private sector, encourages private enterprise,
and provides incentives to needed
investments.
Bill of Rights: No person shall be deprived
of life, liberty, or property without due process
of law, nor shall any person be denied the
equal protection of the laws.
No law shall be passed abridging the
freedom of speech, of expression, or of the
press, or the right of the people peaceably to
assemble and petition the government for
redress of grievances.
The right of the people to information on
matters of public concern shall be recognized.
Access to official records, and to documents
and papers pertaining to official acts,
transactions, or decisions, as well as to
government research data used as basis for
policy development, shall be afforded the
citizen, subject to such limitations as may be
provided by law.
The right of the people, including those
employed in the public and private sectors, to
form unions, associations, or societies for
purposes not contrary to law shall not be
abridged.
No law impairing the obligation of contracts
shall be passed.
All persons shall have the right to a speedy
disposition of their cases before all judicial,
quasi-judicial, or administrative bodies.
No involuntary servitude in any form shall
exist except as a punishment for a crime
whereof the party shall have been duly
convicted.
Social Justice and Human Rights: The
Congress shall give highest priority to the
enactment of measures that protect and
enhance the right of all the people to human
dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by
equitably diffusing wealth and political power
for the common good.
Labor: Promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and
shall enforce their mutual compliance
therewith to foster industrial peace.
Regulate the relations between workers
and employers, recognizing the right of labor
to its just share in the fruits of production and
the right of enterprises to reasonable returns
to investments, and to expansion and growth.
Establish a special agency for disabled
person for their rehabilitation, selfdevelopment, and self-reliance, and their
integration into the mainstream of society.
Women: Protect working women by
providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities
that will enhance their welfare and enable
them to realize their full potential in the service
of the nation.
Civil Code: Human Relations. Every
person must, in the exercise of his rights and
in the performance of his duties, act with
justice, give everyone his due, and observe
honesty and good faith.
Contract of Labor. The relations between
capital and labor are not merely contractual.
They are so impressed with public interest that
labor contracts must yield to the common
good.
Labor Code. Afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed
and regulate the relations between workers
and employers. The State shall assure the
rights of workers to self-organization, collective
bargaining, security of tenure, and just and
humane conditions of work.
State policy towards labor:
Security of tenure. Guarantee the rights of
all workers to security of tenure, humane
conditions of work, and a living wage. Security
of tenure for labor is guaranteed by our
Constitution. Employees are not stripped of
their security of tenure when they move to
work in a different jurisdiction. With respect to
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the rights of overseas Filipino workers, we
follow the principle of lex loci contractus. The
award of the three-month equivalent of
respondent’s salary should, however, be
increased to the amount equivalent to the
unexpired term of the employment contract.
To terminate the employment of workers
simply because they asserted their legal rights
by filing a complaint is illegal. It violates their
right to security of tenure and should not be
tolerated.
Service to an employer is presumed
continuous unless there is evidence that
employer-employee relations were validly
severed in the interim. Since there is no
evidence that the compromise amount
included separation pay, the services of
petitioners are presumed continuous,
reckoned from the date they first came under
the employ of respondent.
Social justice. Promote social justice in all
phases of national development.
Equal work opportunities. Promote full
employment and equality of employment
opportunities for all.
Right to self-organization and collective
bargaining. It shall guarantee the rights of all
workers to self-organization, collective
bargaining and negotiations, and peaceful
concerted activities, including the right to strike
in accordance with law. They shall also
participate in policy and decision-making
processes affecting their rights and benefits as
may be provided by law. Collective bargaining
is a series of negotiations between an
employer and a representative of the
employees to regulate the various aspects of
the employer employee relationship such as
working hours, working conditions, benefits,
economic provisions, and others.
Construction in favor of labor. In case of
doubt, all labor legislation and all labor
contracts shall be construed in favor of the
safety and decent living for the laborer.
Burden of proof and quantum of
evidence. In labor cases, as in other
administrative and quasi-judicial proceedings,
the quantum of proof required is substantial
evidence, defined as 'that amount of relevant
evidence, which a reasonable mind might
accept as adequate to justify a conclusion.
Burden of proof refers to the rule dictating
which party has the responsibility to
show proof over an issue or controversy.
In labor cases, this can either be the employer
or the employee. When the evidence in labor
cases is in equipoise, doubt is resolved in
favor of the employee.
RECRUITMENT AND PLACEMENT.
Are any act of canvassing, enlisting,
utilizing, contracting, transporting, hiring, or
procuring workers, and includes referrals,
contract services, promising or advertising for
employment, locally or abroad, whether for
profit or not. Any person or entity which, in any
manner, offers or promises for a fee,
employment to two or more persons shall be
deemed engaged in recruitment and
placement.
Regulation of recruitment and placement
activities.
Regulatory authorities. The POEA is the
government agency responsible for optimizing
the benefits of the country’s overseas
employment program. This agency was
created to promote and to monitor the
overseas employment of Filipino workers.
Regulatory and visitorial powers of the
DOLE Secretary. Regulatory power. The
Labor Secretary shall have the power to
restrict and regulate the recruitment and
placement activities of all agencies and is
authorized to issue orders and promulgate
rules and regulations. The Labor Secretary is
possessed of plenary visitorial powers to order
the inspection of all establishments where
labor is employed, to investigate all possible
violations of labor laws and regulations.
Ban on direct hiring. No employer may
hire a Filipino worker for overseas employment
except through the Boards and entities
authorized by the Labor Secretary. Direct
hiring by members of the diplomatic corps,
international organizations and such other
employers as may be allowed by the Labor
Secretary is exempted from ban.
Entities prohibited from recruiting.
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of
workers for overseas employment whether for
profit or not.
Suspension or cancellation of license or
authority. The power to suspend or cancel
any license or authority to recruit employees
for overseas employment is vested upon the
Labor Secretary. Pursuant to this rule-making
power, the Labor Secretary granted the POEA,
on its own initiative or upon filing of a
complaint or report or upon request for
investigation by any aggrieved person,
authority to conduct the necessary
proceedings for the suspension or cancellation
of the license or authority of any agency or
entity for certain enumerated offenses.
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Prohibited practices. The law prohibits
the charging or accepting of fees greater than
that allowed by regulations. It is also a
deterrent to loan sharks who lend money at
usurious interests. Includes the act of
furnishing fake employment documents to a
worker, and the act of publishing false notice
or information in relation to recruitment or
employment. It is not necessary that the
worker was induced or did quit the
employment.
Illegal recruitment
To sustain a conviction for illegal
recruitment, the elements are: first, the
offender has no valid license or authority
required by law; and second, the offender
undertakes any of the activities within the
meaning of recruitment and placement defined
under the Labor Code, or any of the prohibited
practices enumerated under the law.
Types of illegal recruitment. Simple. The
offender has no valid license or authority
required by law within the meaning of
recruitment and placement. Large scale.
Committed against three or more persons,
individually or as a group. Economic
sabotage. Committed by a syndicate when it
is committed by a group of three or more
persons conspiring or confederating with one
another.
Illegal recruitment as distinguish from
estafa. A person may be charged and
convicted for both illegal recruitment and
estafa. The reason for this is that illegal
recruitment (not part of RPC) is a malum
prohibitum, whereas estafa (part of the RPC)
is malum in se, meaning that the criminal
intent of the accused is not necessary for
conviction in illegal recruitment, but is required
in estafa.
Liability of local recruitment agency and
foreign employer. Solidary liability on
liability of recruitment agency, when it can bind
the agency vis-à-vis liability of principal
employer. Theory of Imputed Knowledge
ascribes the knowledge of the agent, to the
principal, and not the other way around.
The solidary liability nature of the
relationship between the local (recruitment)
employment agency, and its foreign principal
makes them jointly and severally liable for any
violation of the recruitment agreement or
contract of employment, such as repatriation
expenses considering that the worker was
illegally dismissed.
Termination of contract of migrant worker
without just or valid cause.
Under the law, a worker dismissed from
overseas employment without just, valid, or
authorized cause as defined by law or
contract, is entitled to “a full reimbursement of
his placement fee with interest at 12% per
annum, plus his salary for the unexpired
portion of his employment contract or for 3
months for every year of the unexpired term,
whichever is less.”
Employment of Non-resident Aliens.
Any alien seeking admission to the PH for
employment purposes and any domestic or
foreign employer who desires to engage an
alien for employment in the PH shall obtain a
permit from the DOLE. The employment
permit may be issued to a non-resident alien
or to the applicant employer after a
determination of the non-availability of a
person in the PH who is competent, able, and
willing at the time of application to perform the
services for which the alien is desired.
LABOR STANDARDS.
Refers to the minimum requirements
prescribed by existing laws, RRs relating to
wages, hours of work, cost of living allowance
and other monetary and welfare benefits,
including OSHS.
Conditions of employment
Hours of work refers to all compensable
period of work of which an employee is
suffered or permitted to work.
Principles in determining hours worked
and employees exempted or not covered.
Rest periods of short duration during working
hours shall be counted as hours worked. It
shall apply to employees in all establishments
and undertakings whether for profit or not. It
does not cover government employees,
managerial employees, field personnel,
members of the family of the employer who
are dependent on him for support, domestic
helpers, persons in the personal service of
another, and workers who are paid by results.
Managerial employees refer 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. 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 reasonable certainty.
Compensable Time. The normal hours of
work of any employee shall not exceed eight
hours a day for six days a week. Under the
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LC, establishments can require work from
Monday to Saturday at 8-hour work per day.
Night shift differential. Every employee shall
be paid a night shift differential of not less than
10% of his regular wage for each hour of work
performed between 10 o’clock in the evening
and 6 o’clock in the morning. It is not waivable
because of public policy and the burden rests
upon the employer.
Overtime work. Any employee who is
permitted or required to work beyond 8 hours
on ordinary working days shall be paid an
additional compensation for the overtime work
in the amount equivalent to his regular wage
plus at least 25% thereof.
Compressed workweek scheme. The
labor and management may agree to
compress the workdays in a week from 6 days
to 5 days thereby eliminating the Saturday
work. The effect is an increased work hour
from Monday to Friday where such excess
hours are not compensable under overtime
rules.
Built-in overtime.
Non-compensable hours; when
compensable. Meal break. The LC mandates
that every employer shall give his employees,
not less than one hour time-off for regular
meals, except in the following cases when a
meal period of not less than 20 minutes may
be given by the employer provided that such
shorter meal period is credited as
compensable hours worked of the employee:
Where the work is non-manual work in nature
or does not involve strenuous physical
exertion; Where the establishment regularly
operates not less than sixteen hours a day; In
case of actual or impending emergencies or
there is urgent work to be performed on
machineries, equipment or installations to
avoid serious loss which the employer would
otherwise suffer; and Where the work is
necessary to prevent serious loss of
perishable goods.
Rest periods or coffee breaks running from
five to twenty minutes shall be considered as
compensable working time.
Power interruptions or brownouts. Not
exceeding twenty minutes are compensable
hours worked. Brownouts running for more
than twenty minutes may not be treated as
hours worked provided any of the following
conditions are present: The employees can
leave their workplace or go elsewhere whether
within or without the work premises; or The
employees can use the time effectively for
their own interest.
Idle time. It is the time when employees
have nothing to do during the working hour,
they are not able to do the work because of
various reasons. For example, there are two
workers in the restaurant, the chef and waiter.
There is an idle time when the waiter waits for
the chef to cook food.
Travel time. Travel from home to office
and vice-versa is not compensable. However,
travel away from home on official duty is
considered as compensable.
Commuting time. Normal commuting
time is not hours of work and thus not paid. If a
worker is ordered to perform substantial work
during traveling or commuting, this will be
considered his work and duly paid.
Waiting time. Compensable if waiting is an
integral part of work or the employee is
required or engaged by the employer to wait.
For example, a company driver who spends
his time waiting for his boss in the office.
Rest periods. It shall be the duty of every
employer, whether operating for profit or not,
to provide each of his employees a rest period
of not less than 24 consecutive hours after
every 6 consecutive normal workdays. Waiver
of compensation for work on rest days and
holidays is not valid. The employer shall
respect the preference of employees as to
their weekly rest day when such preference is
based on religious grounds.
Emergency rest day work. The employer
may require his employees (on a rest day) to
work on any day: In cases of urgent work to be
performed on the machinery, equipment, or
installation, to avoid serious loss which the
employer would otherwise suffer. In case of
actual or impending emergencies caused by
serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or
imminent danger to public safety. In the event
of abnormal pressure of work due to special
circumstances, where the employer cannot
ordinarily be expected to resort to other
measures. To prevent loss or damage to
perishable goods. Where the nature of the
work requires continuous operations, and the
stoppage of work may result in irreparable
injury or loss to the employer. Under other
analogous or similar circumstances to the
foregoing as determined by the Labor
Secretary. When the work is necessary to
avail of favorable weather or environmental
conditions where performance or quality of
work is dependent thereon.
Service Charge. Applies only to
establishments collecting service charges,
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such as hotels, and similar enterprises,
including those entities operating primarily as
private subsidiaries of the government. It
applies to all employees of covered
employers, regardless of their designations,
positions, or employment status, and
irrespective of the method by which their
wages are paid. Service charge is not profit
share and may thus not be deducted from
wage.
Wages, components, and exclusions.
The remuneration or earnings, however
designated, for work done or for services
rendered.
Wages are compensation for skilled or
unskilled manual labor paid at stated daily,
weekly, monthly, or seasonal periods;
whereas. Salaries are paid to white collar
workers and denote a higher grade of
employment, a superior grade of services and
a position of office.
As a rule, facilities are deductible from
wage but not supplements. In short, the
benefit or privilege given to the employee
which constitutes an extra remuneration above
and over his basic or ordinary earning or wage
is a supplement; and when said benefit or
privilege is part of the laborers' basic wages, it
is a facility.
13th Month Pay. A form of
compensation in addition to an employee's
annual salary. It is a mandatory benefit
provided to employees pursuant to law which
requires employers to grant to all its rank-andfile employees who have worked for at least
one month in a company, regardless of the
nature of their employment and irrespective
how they receive their wages.
The following employers are exempted
from paying 13th month pay under PD 851:
Government and any of its political
subdivisions, including GOCCs, except those
corporations operating essentially as private
subsidiaries of the Government; Employers
already paying their employees 13th month
pay or more in a calendar year or its
equivalent before the issuance of law;
Employers of household helpers and persons
in the personal service of another in relation to
such workers. Domestic worker (Kasambahay)
is entitled to a 13th month pay as provided for
by law; Employers of those who are paid on
commission, boundary, or task basis, and
those who are paid a fixed amount for
performance of a specific work, irrespective of
the time consumed in the performance thereof,
except where the workers are paid on a piecerate basis, in which case the employer shall
grant the required 13th month pay to such
workers.
Holiday pay. Premium given to employees
pursuant to law even if he is not suffered to
work on a regular holiday. If worker did not
work on regular holiday, he is entitled to 100%
of his basic pay; If he worked, he is entitled to
200% thereof.
Principles. The principle of no-work, no
pay is the basic factor in determining
employee wages. It is based on the ageold rule of “a fair day's wage for a fair day's
work.” Equal pay for equal work. Means
persons who work with substantially equal
qualification, skill, effort, and responsibility,
under similar conditions, should be paid similar
salaries.
Fair wage for fair work.
Non-diminution of benefits. Requisites
for application of non-diminution rule: Grant of
the benefit is founded on a policy or has
ripened into a practice over a long period; The
practice is consistent and deliberate; The
practice is not due to error in the construction
or application of a doubtful or difficult question
of law; The diminution or discontinuance is
done unilaterally by the employer; and
Contingent or conditional benefits or bonus.
Minimum wage. Payment by hours
worked. Where required to perform such
overload within the 8 hours’ normal working
day, such overload compensation shall be
considered part of the basic pay for the
purpose of computing the 13th-month pay.
Payment by results. Calculated not on the
basis of time spent on the job but of the
quantity and quality or the kind of work they
turn out.
Payment of wages. Payable by an
employer to an employee under a written or
unwritten contract of employment for work
done or to be done, or for services rendered or
to be rendered, and it includes the fair and
reasonable value.
Prohibitions regarding wages. Employer
is prohibited from limiting or otherwise
interfering with the freedom of any employees
to dispose of his wages. The employer should
carefully observe the rules against salary
deductions to avoid liabilities. He is prohibited
from requiring his employees to make deposits
from which deductions will be made for the
reimbursement of loss or damage to tools,
materials, or equipment supplied by the
employer.
Employers are prohibited from withholding
wages from employees. The Labor Code also
prohibits the elimination or diminution of
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benefits. However, our law supports the
employers’ institution of clearance procedures
before the
release of wages. An employer is allowed to
withhold terminal pay and benefits pending the
employee’s return of its properties. Claims
arising from an employer-employee
relationship are not limited to claims by an
employee. Employers may also have claims
against the employee, which arise from the
same relationship. therefore, a claim only
needs to be sufficiently connected to the labor
issue raised and must arise from an employeremployee relationship for the labor tribunals to
have jurisdiction. Clearly, in this case, it is for
the workers to return their housing in
exchange for the release of their benefits. This
is what they agreed upon. It is what is fair in
the premises.
Wage determination. Wage order.
Establish detailed standards related to wages,
hours and working conditions of industries.
Compensation which is less than such
minimum rate is considered an underpayment
that violates the law. Wage distortion. A
situation where the application of a
mandated wage increase results in the
elimination or severe contraction of existing
salary differentials among employee groups in
an establishment.
A wage increase not included in the CBA is
not demandable. However, if it was withheld
by the employer as part of its unfair labor
practice against the union members, this
benefit should be granted.
Leaves. Service incentive leave is a
leave benefit with pay for employees who have
rendered at least one year of service. Under
the present law, eligible employees are
entitled to a yearly service incentive leave of at
least five days, which may be converted to
cash if unused.
Unless specifically excepted, all
establishments are required to grant service
incentive leave to their employees. It shall
apply to all employees except: Those of the
government and any of its political
subdivisions, including GOCCs; Domestic
helpers and persons in the personal service of
another; Managerial employees; Field
personnel and other employees whose
performance is unsupervised by the employer
including those who are engaged on task or
contract basis, purely commission basis, or
those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof; Those
who are already enjoying the benefit; Those
enjoying vacation leave with pay of at least
five days; and Those employed in
establishments regularly employing less than
ten employees.
Special laws. Parental Leave of not more
than seven working days every year shall be
granted to any solo parent employee who has
rendered service of at least one year.
Expanded maternity leave. Increasing the
leave period to 105 days for female workers
with pay and an option to extend for an
additional 30 days without pay. This also
grants extension of 15 days for solo mothers.
The maternity leave period is counted
in calendar days, inclusive of Saturdays,
Sundays, and holidays. This is in consonance
with the rule that maternity leave should be
availed of in a continuous and uninterrupted
manner.
Paternity leave. As a rule, every married
male employee in the private and public
sectors shall be entitled to a paternity leave of
seven days with full pay for the first four
deliveries of the legitimate spouse with whom
he is cohabiting. Delivery shall include
childbirth or any miscarriage.
Gynecological leave. A female employee
shall be entitled to up to two months of special
leave with full pay following surgery caused by
gynecological disorders. This benefit is in
addition to leave privileges (sick and vacation
leaves, and parental leaves for solo parents)
given to employees under existing law.
Battered woman leave. Women
employees who are victims as defined in RA
9262, are entitled to a leave of up to ten days
with full pay. The said leave shall be extended
when the need arises, as specified in the
protection order issued by the barangay or the
court. The leave benefit shall cover the days
that the woman employee has to attend to
medical and legal concerns.
Sexual harassment in the work
environment
Committed by an employer, employee,
manager, supervisor, agent of the employer,
teacher, instructor, professor, coach, trainor,
or any person who, having authority, influence,
or moral ascendancy over another in a work or
training or education environment, demands,
requests or otherwise requires any sexual
favor from the other, regardless of whether the
demand, request or requirement for
submission is accepted or not.
Duties and liabilities of employers. The
employer or head of office is required by the
law to prevent the occurrence of sexual
harassment acts and to provide the
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procedures for the resolution, settlement, or
prosecution of sexual harassment.
The employer or head of office, educational
or training institution will be held liable (fine or
imprisonment) for the damages arising from
acts of sexual harassment if they are informed
by the offended party of the occurrence of
such acts, yet no action has been undertaken.
Applicable laws: Sexual Harassment
Act. All forms of sexual harassment in the
employment, education or training
environment are hereby declared unlawful.
Sexual Harassment is any unwanted sexual
attention. This attention can be verbal, visual,
gestural, or physical and can range from a
sexist remark to sexual assault. Under RA
7877, the harasser’s intention is irrelevant.
The victim’s perception of the situation as
wanted or unwanted determines whether or
not it is sexual harassment.
Petitioner's insensibility to respondent's
sexual harassment case is a ground for
constructive dismissal. An employee is
considered constructively dismissed if he or
she was sexually harassed by her superior
and her employer failed to act on his or her
complaint with prompt and sensitivity. Batucan
held a supervisory position, which made him
part of the managerial staff. This Court has
held that the gravamen of the offense in
sexual harassment is not the violation of the
employee's sexuality but the abuse of power
by the employer.
Safe Spaces Act. Defines gender–based
sexual harassment in streets, public spaces,
online, workplaces, and educational and
training institutions. The law penalizes all
forms of sexual harassment in streets and
public spaces, as well as in online spaces. The
law protects everyone from sexual harassment
both in physical and online spaces, and not
just by persons in authority.
The gravamen of the offenses punished
under the Safe Spaces Act is the act of
sexually harassing a person on the basis of
the his/her sexual orientation, gender identity
and/or expression, while that of the offense
punished under the Anti-Sexual Harassment
Act of 1995 is abuse of one's authority,
influence or moral ascendancy so as to enable
the sexual harassment of a subordinate. There
is no time period within which a victim is
expected to complain about sexual
harassment.
Courts and administrative bodies should
not hesitate to penalize insidious acts of
sexual harassment, especially when
committed by high-ranking public officers. The
concept of sexual harassment began in the
context of unwanted sexual relations imposed
by superiors on subordinates in the workplace.
Working conditions for special groups
of employees.
Apprentices and learners. Although both
are training programs, apprenticeship is
different from learnership in that in learnership,
the employer undertakes to make the learner a
regular employee, in apprenticeship, no such
undertaking. They differ with respect to period
of training because apprenticeship shall not
exceed six months, while learnership shall not
exceed three months.
Disabled workers. May be hired provided
he does not impede job performance in the
operation for which he is hired. Equal
opportunity. Asserts that all people should
have the right to work and advance on the
bases of merit and ability, regardless of their
race, sex, color, religion, disability, national
origin, or age. Discrimination on
employment. Prohibits discrimination against
a job applicant or an employee during a variety
of work situations including hiring, firing,
promotions, training, wages, and benefits.
Incentives for employers. Employers that
hire PWDs that constitute not less than one
percent of their work complement would be
granted a yearlong “immunity from inspection”
for compliance with labor laws.
Gender. The Magna Carta of Women
provides that the State affirms women’s rights
as human rights and provides the necessary
mechanisms and measures to promote equal
opportunity for women, especially those in the
marginalized sector of society.
Discrimination. Any act or omission, including
by law, policy, administrative measure, or
practice, that directly or indirectly excludes or
restricts women in the recognition and
promotion of their rights and their access to
and enjoyment of opportunities, benefits, or
privileges.
Stipulation against marriage. It is
unlawful to require as a condition of
employment or continuation of employment
that a woman employee shall not get married,
or stipulate expressly or tacitly that upon
getting married, a woman employee shall be
deemed resigned or separated, dismiss,
discharge, discriminate, or otherwise prejudice
a woman employee merely by reason of her
marriage.
Prohibited acts. To deny any woman
employee the benefits provided by Law or to
discharge any woman employed by him for the
purpose of preventing her from enjoying any of
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the benefits provided under the Labor Code.
To discharge such woman on account of her
pregnancy, or while on leave or in confinement
due to her pregnancy. To discharge or refuse
the admission of such woman upon returning
to her work for fear that she may again be
pregnant.
Facilities for women. It shall be the duty
of every employer: to provide seats proper for
women and children and permit them to use
such seats when they are free from work and
during working hours, provided they can
perform their duties in this position without
detriment to efficiency; and to establish
separate and suitable toilet rooms and
lavatories for men and women and provide at
least a dressing room for women and children.
Women working in night clubs, etc.
Women were generally not allowed to work
during nighttime. The measures to ensure an
alternative to night work for women workers
may include transfer to day work where this is
possible, the provision of social security
benefits or an extension of maternity leave. A
woman worker shall not be dismissed or given
notice of dismissal, except for just or
authorized causes provided for in the Labor
Code that are not connected with pregnancy,
childbirth, and childcare responsibilities. A
woman worker shall not lose the benefits
regarding her status, seniority, and access to
promotion which may attach to her regular
night work position.
Minors. As a general rule, children below
15 years of age shall not be employed.
Exceptions: When a child works directly under
the sole responsibility of his parents and legal
guardian and where only members of the
employer’s family are employed. The law
expressly prohibits the employment of persons
below 18 years of age in an undertaking which
is hazardous or deleterious in nature.
Kasambahay. Contemplates one who is
employed in the employer’s home to minister
exclusively to the personal comfort and
enjoyment of the employer’s family.
The law provides that a kasambahay is
entitled to “at least three adequate meals a
day,” humane sleeping arrangements, 13thmonth pay, a daily rest period of eight straight
hours, a day off each week, social security,
and health and Pag-IBIG benefits. It also
seeks to formalize transactions between
employers and workers, with the law requiring
an employment contract, pay slips, and even a
certificate of employment.
Homeworkers. An industrial worker who
works in his or her home processing raw
materials into finished products for an
employer. It is a decentralized form of
production with very limited supervision or
regulation of methods of work.
Solo parents. No employer shall
discriminate against any solo parent employee
with respect to terms and conditions of
employment on account of status. The
employer shall provide for a flexible working
schedule for solo parents. That the same shall
not affect individual and company productivity.
That any employer may request exemption
from the above requirements from the DOLE
on certain meritorious grounds.
Night workers. Are persons whose work
requires performance of a substantial number
of hours of night work which exceeds a
specified limit. The law is applicable to all
persons, who shall be employed or permitted
or suffered to work at night, except those
employed in agriculture, stock raising, fishing,
maritime transport, and inland navigation,
during a period of not less than seven
consecutive hours, including the interval from
midnight to five o’clock in the morning, to be
determined by the Labor Secretary, after
consulting the workers’ representatives or
labor organizations and employers. Night
workers who are certified as unfit for night
work, due to health reasons, shall be
transferred, whenever practicable, to a similar
job for which they are fit to work. The
compensation for night workers in the form of
working time, pay or similar benefits shall
recognize the exceptional nature of night work.
Migrant workers. The State shall allow the
deployment of OFW only in countries where
the rights of Filipino migrant workers are
protected. The government recognizes any of
the following as a guarantee on the part of the
receiving country for the protection of the
rights of OFWs: It has existing labor and social
laws protecting the rights of workers, including
migrant workers; It is a signatory to and/or a
ratifier of multilateral conventions, declarations
or resolutions relating to the protection of
workers, including migrant workers; and It has
concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of OFWs.
Security guards. SGs and other private
security personnel assigned to a person or
company (principal) are considered employees
of the security service contractor or private
security agency. Corollary to this
responsibility, the rules provide that in case a
PSA fails to pay the guards’ wages, the
principal shall be considered their “indirect
Page 9 of 25
employer” and therefore shall become jointly
and severally liable with the PSA in paying the
wages to the extent of the work they have
performed under the agreement.
Placing security guards on floating status is
a valid exercise of management prerogative.
However, any such placement on off-detail
should not exceed six months. Otherwise,
constructive dismissal shall be deemed to
have occurred. SGs dismissed in this manner
are ordinarily entitled to reinstatement.
Jurisprudence is consistent in its disapproval
of general return-to-work orders as a
justification for failure to timely render
assignments to security guards.
POST-EMPLOYMENT.
An employer-employee relationship
exists because the work is usually necessary
or desirable in the usual, trade or business of
the employer. Repeated hiring of the same
workers shows that he or she is performing
functions that is usual and necessary to the
trade or business of the employer.
Tests to determine existence. The fourfold test of employer-employee relationship
are selection and engagement of employee,
payment of wages, power to dismiss, and
power of control. The control test is the most
important.
Subcontracting as distinguished from
labor-only contracting. Legitimate
Subcontracting directly undertakes a specific
job or service for a principal and employs its
own workers. Labor-only contracting, a
prohibited act, is an arrangement where the
contractor or subcontractor merely recruits,
supplies, or places workers to perform a job,
work, or service for a principal.
The elements of a legitimate
subcontracting or job-contracting are: (1) The
contractor or sub-contractor carries on a
distinct and independent business and
undertakes the job, work, or service on his
own account, under his own responsibility,
using his own manner and method, free from
the control and direction of the principal in all
matters connected with the performance of
work except as to the results thereof. (2) He
has his own substantial capital or investment
in the form of tools, equipment, machinery,
work premises; and (3) With agreement
between the principal and contractor or
subcontractor for the employees’ rights and
benefits.
In labor-only contracting, the elements are:
The contractor or subcontractor does not have
substantial capital or investment to perform the
job, work or service under its own account and
responsibility; and The employees recruited,
supplied, or placed by such contractor or
subcontractor are performing activities which
are directly related to the main business of the
principal. In effect, the employer is deemed the
direct employer and is made liable to the
employees and for all other benefits.
Labor-only contracting is prohibited as it is
seen as a circumvention of labor laws; thus,
the labor-only contractor is treated as a mere
agent or intermediary of its principal. A pakyaw
or task basis arrangement defines the manner
of payment of wages and not the relationship
between the parties. Being regular employees,
petitioners, who were maintenance personnel,
enjoyed security of tenure and the termination
of their services without just cause entitles
them to reinstatement and full backwages,
inclusive of allowances and other benefits. If
an employee has been employed for at least
one (1) year, he or she is considered a regular
employee by operation of law.
In labor only contracting, there is no
principal and contractor; "there is only the
employer's representative who gathers and
supplies people for the employer." Despite
Alternative Network Resources and
Worktrusted Manpower Services' role in the
hiring, disciplining and paying of wages of
petitioners, it is still respondents who
exercised control over petitioners' work
performance and output. Records show that
petitioners are assigned in departments tasked
to accomplish the main business of
respondents in the manufacturing of rope. It is
likewise clear that petitioners perform
functions necessary and directly related to the
main business of respondents as they are
involved in the core operations for the
manufacturing and export of respondents' rope
products.
Trilateral relationship. Refers to the
relationship in a contracting or subcontracting
arrangement where there is a contract for a
specific job, work or service between the
principal and the contractor, and a contract of
employment between the contractor and its
workers.
While an employment relationship is
bilateral in nature, legitimate job contracting
involves a trilateral relationship involving the
principal, the contractor, and the contractor’s
workers.
It is the burden of the employer to prove
that a person whose services it pays for is an
independent contractor rather than a regular
employee with or without a fixed term. There
are different kinds of independent contractors:
Page 10 of 25
those engaged in legitimate job contracting
and those who have unique skills and talents
that set them apart from ordinary employees.
Since no employer-employee relationship
exists between independent contractors and
their principals, their contracts are governed
by the Civil Code provisions on contracts and
other applicable laws.
Arlene was a regular employee with a
fixed-term contract. The test for determining
regular employment is whether there is a
reasonable
connection between the employee’s activities
and the usual business of the employer. As a
regular employee, Arlene was entitled to
security of tenure and could be dismissed only
for just or authorized causes and after the
observance of due process. Thus, on the right
to security of tenure, no employee shall be
dismissed, unless there
are just or authorized causes and only after
compliance with procedural and substantive
due process is conducted. Even probationary
employees are entitled to the right to security
of tenure.
Liabilities. Limited. The mere inability of
the subcontractor to pay wages will only make
the principal jointly and severally liable with the
subcontractor for payment of the employees'
wages to the extent of the work performed
under the contract.
Absolute and direct. Arises when there is
labor only contracting. The principal shall be
responsible to the workers in the same
manner and extent as if it directly employed
these workers.
Kinds of employment.
Regular. Those who are hired for activities
which are necessary or desirable in the usual
trade or business of the employer.
Casual. Employment is casual when it is
irregular, unpredictable, sporadic and brief in
nature, and outside the usual business of the
employer.
Contractual. Includes one employed by a
contractor or subcontractor to perform or
complete a job, work, or service pursuant to an
arrangement between the latter and a
principal.
Project. Assigned to carry out a “specific
project or undertaking,” the duration (and
scope) of which were specified at the time the
employees were engaged for that purpose.
Seasonal. Those who are called to work
from time to time according to the occurrence
of varying need during a season and are laid
off after completion of the required phase of
work for the season.
Fixed-term. Contract of employment for a
definite period terminates by its own terms at
the end of such period. Caselaw recognized
that the Civil Code and the Labor Code allow
the execution of fixed-term employment
contracts. But when periods have been
imposed to prevent an employee from
acquiring his or her security of tenure, the
contract effectively runs counter to public
policy and morals, and must, therefore, be
disregarded. Thus, the existence of a contract
indicating a fixed term does not preclude
regular employment. ER's repeated hiring of
EE for over three years only strengthens the
conclusion that her services are, indeed,
necessary and desirable to its business. Since
the termination of EE's employment was
rendered without regard to due process, the
law finds EE to have been illegally dismissed.
Probationary. Those who are hired
generally for regular positions but are placed
on a probationary status for a period of six
months. Become regular once he has qualified
in accordance with reasonable standards
made known to him at the time of hiring. An
employee who is allowed to work after a
probationary period shall be considered a
regular employee.
The requirement of rendering "at least one
year of service," before an employee is
deemed to have attained regular status, only
applies to casual employees. Employees who
perform functions which are necessary and
desirable to the usual business and trade of
the employer attain regular status from the
time of engagement. As opposed to a regular
employee, a project employee may or may not
perform functions that are usually necessary
or desirable in the usual business or trade of
the employer. In this case, GMA repeatedly
engaged petitioners as camera operators for
its television programs. As regular employees,
petitioners enjoy the right to security of tenure.
Thus, they may only be terminated for just or
authorized cause, and after due notice and
hearing.
Private school teachers. A probationary
period of not more than three years in the case
of the school teaching personnel and not more
than six months for non-teaching personnel
shall be required for employment in all private
schools. A school personnel who has
successfully undergone the probationary
period herein specified and who is fully
qualified under existing rules and standards of
the school shall be considered permanent.
In one case, it was held that the legal
requisites for a teacher to acquire permanent
Page 11 of 25
employment and security of tenure are as
follows: The teacher is a full-time teacher; The
teacher must have rendered three consecutive
years of service; and such service must have
been satisfactory.
Termination by Employer. An employer
may terminate an employment for any of the
following: Serious misconduct or willful
disobedience by the employee of the lawful
orders of his employer or representative in
connection with his work. The employer must
adduce proof of actual involvement in the
alleged misconduct for loss of trust and
confidence to warrant the dismissal of fiduciary
rank-and-file employees. Gross and habitual
neglect by the employee of his duties. Fraud
or willful breach by the employee of the trust
reposed in him by his employer or duly
authorized representative. Commission of a
crime or offense by the employee against the
person of his employer or any immediate
member of his family or his duly authorized
representatives. Other causes analogous to
the foregoing.
To justify termination of employment,
misconduct must be so severe as to make it
evident that no other penalty, but the
termination of the employee's livelihood is
viable. To reiterate, what is involved is a paltry
amount. Thus, it is not enough for an
employee to be found to have engaged in
improper or wrongful conduct. All that has
been proven is the existence of a discrepancy.
No proof has been adduced of ill-motive or
even of gross negligence. As his employment
was illegally and unjustly terminated, petitioner
is entitled to full backwages and benefits from
the time of his termination until the finality of
the Decision. He is likewise entitled to
separation pay in the amount of one month's
salary for every year of service until the finality
of the Decision, with a fraction of a year of at
least six months being counted as one whole
year. As explained in one case, a corporation
has a personality separate and distinct from
those of the persons composing it. Thus, as a
rule, corporate directors and officers are not
liable for the illegal termination of a
corporation's employees. It is only
when they acted in bad faith or with malice
that they become solidarity liable with the
corporation.
That a person has a disease does not per
se entitle the employer to terminate his or her
services. Termination is the last resort. At the
very least, a competent public health authority
must certify that the disease cannot be cured
within six months, even with appropriate
treatment.
Requisites for validity. The Labor Code
requires employers to comply with both
procedural and substantive due process in
dismissing employees. Substantive Due
Process. The employer must comply with the
following: Twin-notice to inform the employee
of the acts or omissions. Opportunity to be
heard and informing the employee of the
decision. Hearing is complied with as long as
there was an opportunity to be heard, and not
necessarily that an actual hearing was
conducted. "Not every inconvenience,
disruption, difficulty, or disadvantage that an
employee must endure sustains a finding of
constructive dismissal." In the case of
termination of employment for offenses and
misdeeds by employees, i.e., for just causes
under Article 282 of the Labor Code,
employers are required to adhere to the socalled "two-notice rule."
Just causes.
To justify the dismissal of an employee
based on abandonment of work, there must be
a showing of overt acts clearly evidencing the
employee's intention to sever the employer
employee relationship. The first element of
abandonment is the failure of the employee to
report to work without a valid and justifiable
reason. The second element is the existence
of overt acts which show that the employee
has no intention to return to work.
Respondent's act of reporting for work after
being cleared of the charges against him
showed that he had no intention to sever ties
with his employer.
Authorized causes.
To prove serious business losses,
employers must present in evidence financial
statements showing the net losses suffered by
the business within a sufficient period of time.
Generally, it cannot be based on a single
financial statement showing losses. Absent
this proof, employers closing their businesses
must pay the dismissed employees separation
pay equivalent to one-month pay or to at least
one-half-month pay for every year of service,
whichever is higher. The burden of proving
serious business losses is with the employer.
For termination of employment due to an
authorized cause, the employee is dismissed
because the management exercised its
business prerogative, not because the
employee was at fault. As a rule, hearing is an
unnecessary condition in determining the
legality of dismissal due to redundancy or
retrenchment.
Page 12 of 25
Procedural due process. When
dismissing an employee for an authorized
cause, the employer must observe both the
procedural and substantial due process of law.
The employer satisfies procedural due
process, which constitutes compliance with the
procedures laid down in the Labor Code, after
serving a written notice of termination to the
employee concerned. Employers may only
terminate employment for a just or
authorized cause and after complying with
procedural due process requirements.
Preventive Suspension. Disciplinary
measure for a protection of the company’s
property pending investigation of any alleged
malfeasance committed by the employee. It is
not a penalty.
There can be no case for illegal termination
of employment when there was no termination
by the employer. While, in illegal termination
cases, the burden is upon the employer to
show just cause for termination of
employment, such a burden arises only if the
complaining employee has shown, by
substantial evidence, the fact of termination by
the employer. Jurisprudence frowns upon
waivers and quitclaims forced upon
employees. Waivers and quitclaims are,
however, not invalid in themselves. When
shown to be freely executed, they validly
discharge an employer from liability to an
employee.
Illegal dismissal. The surviving
corporation automatically assumes the
employment contracts of the absorbed
corporation, such that the absorbed
corporation's employees become part of the
manpower complement of the surviving
corporation. Whether or not respondent is a
party to the Merger Agreement, there is no
implied dismissal of its employees as a
consequence of the merger. A merger is a
consolidation of two or more corporations,
which results in one or more corporations
being absorbed into one surviving corporation.
The terms do not provide that a merger is one
of the instances where petitioner may claim
separation benefits for its members.
Necessarily, these absorbed employees are
not entitled to separation pay on account of
such merger in the absence of any other
ground for its award. In this case, there is no
dismissal of the employees on account of the
merger.
Kinds. No just or authorized cause. The
employer has the burden of proving that the
dismissal of its employees is with a valid and
authorized cause. The employer's failure to
discharge this burden makes the dismissal
illegal.
All Filipinos are entitled to the protection of
the rights guaranteed in the Constitution.
Respondents contended that the termination
of their employment was illegal. They alleged
that the termination was made solely because
they were pregnant. Summons were validly
served on Saudia and jurisdiction over it
validly acquired. Saudia is vainly splitting hairs
in its effort to absolve itself of liability. Other
than its bare allegation, there is no basis for
concluding that "Saudia Jeddah" is distinct
from "Saudia Manila." A plain application of
the law leads to no other conclusion than that
Saudia is a foreign corporation doing business
in the Philippines. As such, Saudia may be
sued in the Philippines and is subject to the
jurisdiction of Philippine tribunals. Forum non
conveniens finds no application and does not
operate to divest Philippine tribunals of
jurisdiction and to require the application of
foreign law. Our law on contracts recognizes
the validity of contractual choice of law
provisions. Respondents were illegally
terminated.
Constructive dismissal. There is
constructive dismissal when an employee is
compelled by the employer to resign or is
placed in a situation where there would be no
other choice but to resign. An unconditional
and categorical letter of resignation cannot be
considered indicative of constructive dismissal
if it is submitted by an employee fully aware of
its effects and implications. Employees with
special qualifications would be on equal
footing with their employers, and thus, would
need a lesser degree of protection from the
State than an ordinary rank-and-file worker.
Natural expressions of an employer do not
automatically make for a hostile work
atmosphere. The totality of circumstances in
this case negates petitioner's claim of
constructive dismissal.
The courage of a Filipina to work as a
household helper in a foreign land deserves
much more than a cursory evaluation of the
evidence on record. Failure of the CA to
appreciate the totality of the evidence which
supports the claim of sexual harassment,
maltreatment, and involuntary escape is
definitely grave abuse of discretion correctible
by this Court. Constructive dismissal does not
necessarily entail a "forthright dismissal or
diminution in rank, compensation, benefit and
privileges." Accordingly, as aptly ruled by the
Labor Arbiter, petitioner is entitled to her
Page 13 of 25
salaries for the unexpired portion of her
employment contract.
Burden of proof. In illegal dismissal cases,
the burden of proof that employees were
validly dismissed rests on the employers.
Failure to discharge this burden means that
the dismissal is illegal.
Liability of officers. Respondent failed to
present clear and convincing evidence that the
petitioner acted in bad faith or with malice.
They did not breach any duty or were
motivated by ill will. Absent proof, the
corporation's separate and distinct personality
must be respected.
Reliefs from Illegal Dismissal:
Reinstatement: (a) Pending appeal.
Decisions, awards, or orders of the LA are
final and executory unless appealed to the
Commission by any or both parties within ten
calendar days from receipt. (b) Separation pay
in lieu of reinstatement. Payment of separation
pay as a substitute for reinstatement is
allowed only under exceptional circumstances.
For instance, claim of strained relations
between employer-employee have rendered
reinstatement not feasible. Backwages. Full
backwages (computation) inclusive of
allowances and other benefits or their
monetary equivalent, computed from the time
his compensation was withheld from him up to
the time of his reinstatement.
Limited backwages. Employee is entitled
to backwages for the period covered from the
time the LA rendered a decision in his favor
until said decision was reversed by the NLRC.
4. All money claims arising from
employer-employee relations accruing
during the effectivity of the LC shall be filed
within three years from the time the cause of
action accrued otherwise, they shall be forever
barred.
For petitioner to be liable for private
respondents' money claims arising from an
employer-employee relationship, it must
specifically and categorically agree to be liable
for these claims. In this instance, private
respondents' separation benefits may be
released to them without filing a separate
money claim before the Commission on Audit.
It would be unjust and a violation of private
respondents' right to equal protection if they
were not allowed to claim, under the same
conditions as their fellow workers, what is
rightfully due to them.
When not deemed dismissed, employee
on floating status. Illegally suspended
employees, similar to illegally dismissed
employees, are entitled to moral damages
when their suspension was attended by bad
faith or fraud, oppressive to labor, or done in a
manner contrary to morals, good customs, or
public policy.
Termination by Employee. The Labor
Code states that an employee can be
terminated due to business reasons such as:
installation of labor-saving devices;
redundancy; retrenchment (reduction of costs)
to prevent losses; or the closing or cessation
of operation. When termination of employment
is occasioned by retrenchment to prevent
losses, an employer must declare a
reasonable cause or criterion for retrenching
an employee. Retrenchment that disregards
an employee's record and length of service is
an illegal termination of employment.
Employer's disregard of respondent's seniority
and preferred status relative to a part-time
employee indicates its resort to an unfair and
unreasonable criterion for retrenchment.
Retrenchment is, therefore, not a tool to be
wielded and used nonchalantly. To justify
retrenchment, it “must be due to business
losses or reverses which are serious, actual
and real.” While it is true that Am-Phil gave
Padilla separation pay, compliance with none
but one of the many requisites for a valid
retrenchment does not absolve Am-Phil of
liability. Padilla’s quitclaim and release does
not negate his having been illegally dismissed.
As a rule, deeds of release or quitclaim cannot
bar employees from demanding benefits to
which they are legally entitled or from
contesting the legality of their dismissal.
All the requisites for a valid retrenchment
must be present in order for a dismissal to be
lawful. The employer must not only show that
it incurred substantial and serious business
losses but must also prove that the
retrenchment was done in good faith and the
retrenched employees were selected through
fair and reasonable criteria. This Court
likewise holds that respondent was not barred
by estoppel. Neither accepting separation pay
nor signing a waiver and quitclaim bars the
employee from contesting the legality of the
dismissal.
With notice to the employer. By serving a
written notice on the workers and the DOLE at
least 1 month before the intended date
thereof. There is no contention that the
employer notified both employee and the
DOLE at least a month before the planned
redundancy. However, in redundancy, an
employer must also show that it applied fair
and reasonable criteria in determining what
positions have to be declared redundant.
Page 14 of 25
Otherwise, it will be held liable for illegally
dismissing the employee affected by the
redundancy.
Without notice to the employer.
Distinguish. In voluntary resignation, the
employee is compelled by personal reason/s
to disassociate himself from employment. It is
done with the intention of relinquishing an
office, accompanied by the act of
abandonment. To determine whether the
employee indeed intended to relinquish such
employment, the act of the employee before
and after the alleged resignation must be
considered. Thus, essential to the act of
resignation is voluntariness. It must be the
result of an employee's exercise of his or her
own will.
There is constructive dismissal when an
employer's act of clear discrimination,
insensibility or disdain becomes so unbearable
on the part of the employee so as to foreclose
any choice on his part except to resign from
such employment.
Retirement. By retirement, the
employment is terminated when the employee
has reached a certain age, or after he has
completed a certain number of years of
service as established in the CBA or other
applicable employment contract.
In the absence of such agreement, the
employee may retire upon reaching the age of
60 or more, but not more than 65, provided he
has served at least five years or more in the
same establishment.
An employee who has already qualified for
optional retirement but dies before the option
to retire could be exercised is entitled to his or
her optional retirement benefits, which may be
claimed by the qualified employee's
beneficiaries on his or her behalf.
Jurisprudence characterizes retirement as "the
result of a bilateral act of the parties, a
voluntary agreement between the employer
and the employee whereby the latter, after
reaching a certain age, agrees to sever his or
her employment with the former." Thus, the
grant of insurance proceeds will not
necessarily bar the grant of retirement
benefits. These are two separate and distinct
benefits that an employer may provide to its
employees. The CA correctly held that parttime employees with fixed-term employment
are among the employees entitled to
retirement benefits under RA 7641. The law
specifically states that "any employee may be
retired upon reaching the retirement age," and
that in case of retirement, in the absence of a
retirement agreement, an employee who
reaches the retirement age "who has served at
least five years may retire and shall be entitled
to retirement pay”. No exception is made for
part-time employees.
Retirement Pay. Equivalent to at least
one-half month salary for every year of
service, a fraction of at least six months being
considered as one whole year. The term onehalf month salary shall mean 15 days plus
1/12 of the 13th month pay and the cash
equivalent of not more than 5 days of service
incentive leaves. Consequently, if “the intent to
retire is not clearly established or if the
retirement is involuntary, it is to be treated as a
discharge.” Petitioner Paz never abandoned
her argument of illegal dismissal despite the
amendment of her Complaint. This implied
lack of intent to retire until she reached the
compulsory age of 65. Thus, she should be
considered as illegally dismissed from May 18,
2003 until she reached the compulsory
retirement age of 65 in 2005 and should be
entitled to full backwages for this period.
LABOR RELATIONS.
Regulates the employer-employee
relationship.
RTSO. It is the right of workers and
employees (private or public) to form, join (not
to join) or assist unions, organizations, or
associations for purposes of collective
bargaining and negotiation and for mutual aid
and protection. It also refers to the right to
engage in peaceful concerted activities or to
participate in policy and decision-making
processes affecting their rights and benefits.
Who may or may not exercise the right.
The following may join a labor organization: all
employees employed in commercial, industrial
and agricultural enterprises and in religious,
charitable, medical or educational institutions
whether operating for profit or not; government
employees in the civil service; supervisory
personnel; security personnel; and aliens with
valid working permit provided there are
nationals of a country which grants the same
or similar rights to Filipino workers as certified
by the DFA.
Managerial employees are not eligible to
join, assist or form any labor organization. The
reason being is that there is a conflict of
interest as managerial employees represent
the employer. Supervisory employees shall
not be eligible for membership in a labor
organization of the rank-and-file employees
but may join, assist, or form separate labor
organizations of their own. Any employee,
whether employed for a definite period or not,
shall beginning on the first day of service, be
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eligible for membership in any labor
organization.
Doctrine of necessary implication.
States that every statutory grant of power,
right or privilege is deemed to include all
incidental power, right or privilege.
Commingling or mixture of membership.
Rank-and-file and supervisory employees in a
labor union does not nullify its legal personality
as a legitimate labor organization.
Rights and conditions of membership.
Right to information on the increased
membership dues, right to appeal his
suspension and expulsion according to CBL
provisions, and right to vote and be voted on
are essentially intra-union disputes.
Nature of relationship. Member-Labor
union. A labor union represents the collective
interests of workers, bargaining with
employers over such concerns as wages and
working conditions. Labor union federation.
A large organization representing workers, that
consists of many smaller labor unions.
Disaffiliation. The right of a local union to
disaffiliate from its mother union is well-settled.
In previous cases, it has been repeatedly held
that a local union, being a separate and
voluntary association, is free to serve the
interest of all its members including the
freedom to disaffiliate when circumstances
warrant. This right is consistent with the
Constitutional guarantee of freedom of
association. Substitution doctrine. Provides
that the employees cannot revoke the validly
executed collective bargaining contract with
their employer by the simple expedient of
changing their bargaining agent.
Bargaining unit. A group of employees of
a given employer, comprised of all or less than
all the entire body of employees, which the
collective interest of all the employees,
consistent with equity to the employer, indicate
to be the best suited to serve the reciprocal
rights and duties of the parties under the
collective bargaining provisions of the law. In
cases of bargaining deadlocks, the notice
shall, as far as practicable, further state the
unresolved issues in the bargaining
negotiations and be accompanied by the
written proposals of the union, the counterproposals of the employer and the proof of a
request for conference to settle differences.
In cases of unfair labor practices, the notice
shall, as far as practicable, state the acts
complained of, and efforts taken to resolve the
dispute amicably. Any notice which does not
conform with the requirements of this and the
foregoing section shall be deemed as not
having been filed and the party concerned
shall be so informed by the regional branch of
the Board.
The fundamental factors in determining the
appropriate collective bargaining unit are: the
will of the employees (globe doctrine); affinity
and unity of the employees’ interest, such as
substantial similarity of work and duties, or
similarity of compensation and working
conditions (substantial mutual interest rule);
prior collective bargaining history; and
similarity of employment status. The
community of mutuality of interest test
provides the standard in determining the
proper constituency of a collective bargaining
unit.
Bargaining representative. Refers to a
legitimate labor union duly recognized or
certified as the sole and exclusive bargaining
representative or agent of all employees in a
bargaining unit.
Determination of representation status.
The modes of determining an exclusive
bargaining agreement (agent) are: There is
voluntary recognition when in an
unorganized establishment with only one
legitimate labor organization, the employer
voluntarily recognizes the representation
status of such a union. Within thirty days from
such recognition, the employer and union shall
submit a notice of voluntary recognition with
the Regional Office of the DOLE which issued
the recognized labor union’s certificate of
registration or certificate of creation of a
chartered local.
Certification election refers to the process
of determining through secret ballot the sole
and exclusive representative of the employees
in an appropriate bargaining unit for purposes
of collective bargaining or negotiation. A
certification election is ordered by the DOLE,
while a consent election is voluntarily agreed
upon by the parties, with or without the
intervention by the Department.
Consent Election. When the process of
determining through secret ballot the sole and
exclusive representative of the employees in
an appropriate bargaining unit is not ordered
by the DOLE but has been voluntarily agreed
upon by the parties with or without the
intervention of the DOLE, then the process is a
consent election.
Run-off election refers to an election
between the two labor unions receiving the
highest number votes. To have a run-off
election, all the contending unions (3 or more
choices required) must have garnered 50% of
the number of votes cast.
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Re-run election may be justified if certain
irregularities have been committed during the
conduct of the certification election such as,
inter alia, disenfranchisement of the voters,
lack of secrecy in the voting, fraud, or bribery,
in which case the certification election should
be invalidated.
According to the LC, in any establishment
where there is no certified bargaining agent, a
certification election shall automatically be
conducted by the Med-Arbiter upon the filing of
a petition by a legitimate labor organization. In
the above-described situation, a certification
election is made mandatory because if there is
no certified bargaining agent as determined by
a certification election, there could be no
collective bargaining in the said unorganized
establishment. The LC provides that the union
receiving the majority of the valid votes cast
shall be certified as the exclusive bargaining
agent of all the workers in the unit.
Rights of labor organizations
Check off, assessments, and agency
fees. Check-off. A method of deducting from
an employee's pay at prescribed periods, the
amounts due the union for fees, fines, or
assessments. Assessments to be upheld as
valid, the requisites are: authorization by a
written resolution of the majority of all the
members at the general membership meeting
duly called for the purpose; secretary's record
of the meeting; and individual written
authorization for the check-off duly signed by
the employee concerned. Agency fees must
specify that the employee is part of the
bargaining unit, he is not a member of the
union and that he partook of the benefits of the
CBA.
Collective bargaining refers to the
negotiated contract between legitimate labor
organization and the employer concerning
wages, hours of work and all other terms and
conditions of employment in a bargaining unit.
Duty to bargain collectively. Means the
performance of a mutual obligation to meet
and convene promptly and expeditiously in
good faith for the purpose of negotiating an
agreement with respect to wages, hours of
work and all other terms and conditions of
employment including proposals for adjusting
any grievances or questions arising under
such agreement and executing a contract
incorporating such agreements if requested by
either party but such duty does not compel any
party to agree to a proposal or to make any
concession.
Collective Bargaining Agreement. The
duty to bargain collectively shall also mean
that neither party shall terminate or modify
such agreement during its lifetime. However,
either party can serve a written notice to
terminate or modify the CBA at least 60 days
prior to the expiration date (freedom period). In
the absence of an agreement or other
voluntary arrangement providing for a more
expeditious manner of collective bargaining, it
shall be the duty of employer and the
representatives of the employees to bargain
collectively in accordance with the provisions
of the Labor Code.
Mandatory provisions in a CBA: Wages,
hours of work and other terms and conditions
of employment. Should not provide for benefits
below the standard prescribed by law, award,
or order (sub-minimum CBA). Includes the
provisions such as grievance procedure,
family planning, “no strike-no lock-out” clause,
cooperative scheme.
Unfair Labor Practices. Refers to acts that
violate the worker’s right to organize as
provided in the Constitution. The prohibited
acts are related to the workers’ right to selforganization, and to the observance of a CBA.
Without the element, the acts, even if unfair,
are not ULP.
By employers. There is ULP where there
is gross violation of the CBA. For a charge of
ULP to prosper, it must be shown that the
company (employer) was motivated by ill will,
bad faith, or fraud, or was oppressive to labor,
or done in a manner contrary to morals, good
customs, or public policy, in the following
situations: Suspending negotiations with the
union. Refusal to bargain. Interfering with the
free exercise of employee’s rights to selforganization.
An employer is guilty of unfair labor
practice when it fails in its duty to bargain in
good faith. An employer who refuses to
bargain with the union and tries to restrict its
bargaining power is guilty of unfair labor
practice. In determining whether an employer
has not bargained in good faith, the totality of
all the acts of the employer at the time of
negotiations must be taken into account.
By labor organizations. It shall be ULP for
its officers, agents, or representatives to:
Restrain or coerce employees in the exercise
of their right to self-organization. Cause or
attempt to cause an employer to discriminate
against an employee, including discrimination
against an employee with respect to whom
membership in such organization has been
denied or to terminate an employee on any
ground other than the usual terms and
conditions under which membership or
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continuation of membership is made available
to other members. Violate the duty, or refuse
to bargain collectively with the employer,
provided it is the representative of the
employees. Cause or attempt to cause an
employer to pay or deliver or agree to pay or
deliver any money or other things of value, in
an exaction, for services which are not
performed or not to be performed, including
the demand for fee for union negotiations. Ask
for or accept negotiation or attorney’s fees
from employers as part of the settlement of
any issue in collective bargaining or any other
dispute. Violate a collective bargaining
agreement. Only the officers, board members,
representatives or agents or members of labor
associations or organizations who have
participated in, authorized, or ratified unfair
labor practices shall be held criminally liable.
Peaceful concerted activities. The means
must be peaceful and in accordance with law.
By labor organization. As general rule,
any certified or duly recognized bargaining
representative may declare a strike in cases of
bargaining deadlocks or ULP. The exception
provides that in the absence of a certified or
duly recognized bargaining representative, any
legitimate labor organization may declare a
strike, but only on the ground of ULP.
Strike. To be legitimate, a strike should not
be antithetical to public welfare, and must be
pursued within legal bounds. Strike refers to
any temporary stoppage of work by the
concerted action of employees because of a
labor or industrial dispute.
Valid strikes as distinguished from
illegal strikes. For a strike to be valid, it must
have a lawful purpose, conducted through
lawful means, and must be in compliance with
the procedural requirements under the Labor
Code. These requirements are mandatory,
and the union’s failure to comply renders the
strike illegal. Illegal Strike is a strike that is
called in violation of law. An illegal
strike ignores cooling-off period restrictions or
an absolute statutory ban. Such strike is
entered without regard to the nostrike agreement of the union. The 15 to 30day cooling-off period is designed to afford the
parties the opportunity to amicably resolve the
dispute with the assistance of the NCMB
conciliator or mediator, while the seven-day
strike ban is intended to give the DOLE an
opportunity to verify whether the projected
strike really carries the imprimatur of the
majority of the union members.
Picket. Consists in walking or patrolling the
vicinity of a place of business involved in a
labor dispute conducted peacefully without
force, violence or intimidation to inform the
public about the dispute. The right to picket as
a means of communicating the facts of a labor
dispute is a phase of the freedom of speech
guarantee by the Constitution.
By employer. The employer may declare a
lockout in the same cases.
Lockouts refers to the temporary refusal of
an employer to furnish work as a result of a
labor or industrial dispute. The means must be
peaceful and in accordance with law with the
following requisites: GF bargaining conducted
in accordance with law. Compliance with
procedural requirements. Must be based on
valid grounds. Must be pursued within the
bounds of the law. Statutory prohibition as to
striking workers (government employees can
organize but cannot strike). If an injunction is
subsequently ordered, strike or lockout must
cease. No-Strike clause in CBA affects only
economic strikes, not strikes based on ULP.
Assumption of jurisdiction by Labor
Secretary. The Labor Secretary is not
precluded from assuming jurisdiction over a
labor dispute in a vital industry even if there is
no notice of strike or a formal complaint.
Industry indispensable to the national
interest. The following are industries
recognized as deemed indispensable to the
national interest: Hospital Sector; Electric
Power Industry; Water Supply Services, to
exclude small water supply services, such as
bottling and refilling stations; Air Traffic
Control; and such other industries as may be
recommended by the National Tripartite
Industrial Peace Council.”
Effects of assumption of jurisdiction.
Such assumption shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in the
assumption order. If one had already taken
place at the time of assumption, all striking, or
lockout employees shall immediately return to
work and the employer shall immediately
resume operations and re-admit all workers
under the same terms and conditions
prevailing before the strike or lockout.
Under the LC, no strike or lockout shall be
declared after the assumption of jurisdiction by
the Secretary.
Those who violate the foregoing shall be
subject to disciplinary action or even criminal
prosecution. Illegal strike. Union officers
(liability) may lose employment status if he
knowingly participates in an illegal strike, such
as non-compliance with purposes and
process, or knowingly participates in the
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commission of illegal activities, whether the
strike is legal or illegal.
Union members or ordinary worker
(liability). May lose employment status only if
knowingly participates in illegal activities.
There must be proof that he committed illegal
acts during a strike.
MANAGEMENT PREROGATIVE.
Our laws respect and recognize the right of
management in exercising its prerogative.
Discipline. Cannot be exercised wantonly
but must be controlled by substantive due
process and tempered by the fundamental
policy of protection to labor enshrined in the
Constitution.
Transfer of employees. The inherent right
of employer to transfer or assign an employee
in the pursuance of its legitimate business
interest subject only to condition that it be not
motivated by discrimination or bad faith.
Jurisprudence has long recognized that
transferring employees, to the extent that it is
done fairly and in good faith, is a valid exercise
of management prerogative and will not, in
and of itself, sustain a charge of constructive
dismissal. Not every inconvenience,
disruption, difficulty, or disadvantage that an
employee must endure sustains a finding of
constructive dismissal.
Productivity standards. An employer is
entitled to impose productivity standards for its
workers, and in fact, noncompliance may be
visited with a penalty even more severe than
demotion.
Grant of bonus. Given in addition to what
is ordinarily received by or strictly due the
recipient. It is not demandable, except when it
is made part of wage, salary, or compensation
of the employee.
Change of working hours. At the
discretion of the company necessary for its
efficient operations.
Bona Fide Occupational Qualifications.
The employment qualifications imposed by an
employer such as sex, religion, or national
origin as a limiting factor in performing a
certain job. To justify a BFOQ, the employer
must prove two factors: that the employment
qualification is reasonably related to the
essential operation of the job involved; and
that there is a factual basis for believing that
all or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job.
Post-employment restrictions; noncompete and confidentiality clauses. A
clause under which one party (employee)
agrees not to enter or start a similar profession
or trade in competition against another party
(employer).
Marriage between employees of
competitor-employers. The SC, ruled, inter
alia, that the employer has a right to guard its
trade secrets, manufacturing formulas, etc.
from competitors. What the employer merely
seeks to avoid is a conflict of interest between
the employee and the company that may arise
out of such relationships.
While this Court recognizes the inherent
right of employers to discipline their
employees, the penalties imposed must be
commensurate to the infractions committed.
Dismissal of employees for minor and
negligible offenses may be considered as
illegal dismissal. While an employer is free to
regulate all aspects of employment, the
exercise of management prerogatives must be
in good faith and must not defeat or
circumvent the rights of its employees.
SOCIAL LEGISLATION
Social Security System. The compulsory
coverage of employers and employees under
the SSS law is a legal imposition on the
employers and employees, designed to
provide social security to workingmen.
Membership in SSS follows a lawful exercise
of the police power of the State and may not
be waived by agreement of any party.
Coverage and exclusions. Employees not
over 60 years of age and their employers.
Domestic Helpers (Kasambahay) provided
their monthly income shall not be less than
P1K. Self-employed persons as provided by
law and as determined by the Commission.
Spouse that is fully devoted to management of
household and family affairs, on voluntary
basis. Filipinos recruited by foreign based
employers abroad, on voluntary basis. There
are 2 types of coverage under the regular SSS
Program: compulsory and voluntary.
The dependents shall be the following:
The legal spouse entitled by law to receive
support from the member; The legitimate,
legitimated or legally adopted, and illegitimate
child who is unmarried, not gainfully employed,
and has not reached 21 years of age, or if over
21 years of age, he is congenitally or while still
a minor has been permanently incapacitated
and incapable of self-support, physically or
mentally; and The parent who is receiving
regular support from the member.
Beneficiaries. The dependent spouse until
he or she remarries, the dependent legitimate,
legitimated or legally adopted, and illegitimate
children, who shall be the primary
beneficiaries of the member. In the absence of
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any legal beneficiary, any other person
designated by the member as his/her
secondary beneficiary.
Benefits. Members can avail of maternity,
sickness, disability, retirement, funeral, and
death benefits. SSS also allows qualified
members to take up salary, housing, business,
educational loans.
Government Service Insurance System.
A social insurance program that aims to
provide protection to its members who work in
government and its beneficiaries.
Coverage and exclusions. Membership in
the GSIS shall be compulsory for all
government employees receiving
compensation who have not reached the
compulsory retirement age.
GSIS covers all government workers
irrespective of their employment status,
except: members of the judiciary and
constitutional commissions who are covered
by separated retirement laws. Contractual
employees who have no employee-employer
relationship with their agencies; and uniformed
members of the AFP and the PNP, including
the BJMP and the BFP.
Dependents are the legitimate, legitimated,
legally adopted, acknowledged natural or
illegitimate child who is unmarried, not
gainfully employed, and not over twenty-one
years of age or is over twenty-one years of
age but physically or mentally incapacitated
and incapable of self-support; the legitimate
spouse dependent for support upon the
member, and the legitimate parent/s wholly
dependent upon the member for support.
Primary beneficiaries are the dependent
spouse until he marries and the dependent
children. Secondary beneficiaries are the
dependent parents and legitimate
descendants other than dependent children. A
member who is an old age pensioner; a retiree
who at the time of his retirement was of
pensionable age under the law but who opted
to retire early, and a member who retired with
at least 20 years of service, regardless of age.
Benefits. Members are entitled to an array
of social security benefits, such as life
insurance benefits, separation or retirement
benefits, and disability benefits.
Limited portability law. Retirees may
combine their years of service in the private
sector represented by contributions to the SSS
with their government service and
contributions to the GSIS to satisfy the
required years of service. However, if retirees
have already satisfied the required years of
service under the GSIS retirement option they
have chosen, they would not be allowed to
incorporate their contributions to the SSS
anymore for availment of additional benefits. In
case of death, disability and old age, the
periods of creditable services or contributions
to the SSS and GSIS shall be added to entitle
retirees to receive the benefits.
Disability and death benefits. Under the
Labor Code, employees’ compensation
benefits are granted to employees or their
dependents for work-connected disability or
death, particularly those resulting from
accident arising out of and in the course of the
employment. Similar to the SSS Law, the
Labor Code also provides compensation, a
monthly income benefit to be precise, to
employees who suffer permanent total
disability.
Employees Compensation and State
Insurance Fund. Established to carry out the
State’s policy to promote and develop a taxexempt employees compensation program in
which employees and their dependents, in the
event of work-related disability or death, may
promptly secure adequate income, medical
and other related benefits. Shall be
compulsory upon all employers and their
employees not over 60 years of age. That an
employee who is over 60 years of age and
paying contributions to qualify for the
retirement or life insurance benefit
administered by the System shall be subject to
compulsory coverage. The employer or
employee may either belong to the public or
private sector as covered by their own
respective systems.
POEA-Standard Employment Contract.
A reasonable connection between the disease
and work undertaken already suffices. For
disability or death to be compensable, it is
sufficient that the illness occurred during the
effectivity of the employment contract. The
cause of illness or death is immaterial. To be
deemed "work-related," there must be a
reasonable linkage between the disease or
injury suffered by the employee and his work.
In this case, petitioner does not dispute the
fact that her husband died after the term of his
contract. Instead, she emphasizes that her
husband died due to a work-related illness. It
is true that labor contracts are construed in
favor of the employee. However, the facts of
this case and the applicable laws show that
the grant of death benefits cannot be justified.
The POEA-SEC bars the compensability of
disability arising from a pre-existing illness
when attended by an employee's fraudulent
misrepresentation. For a disability claim to
Page 20 of 25
prosper, a seaman only needs to show that his
work and contracted illness have a reasonable
linkage that must lead a rational mind to
conclude that the seaman's occupation may
have contributed or aggravated the disease.
Illnesses not listed as an occupational
disease under the law are disputably
presumed to be work related. However,
seafarers must prove through substantial
evidence the correlation between their illness
and the nature of their work for their claim for
disability benefits to prosper. Indeed, because
petitioners' employment contracts were
executed in the Philippines, Philippine laws
govern them. Respondents, then, must answer
and be held liable under our laws. The clause
"or for three months for every year of the
unexpired term, whichever is
less" as reinstated in Sec. 7 of RA 10022 is
unconstitutional and has no force and effect of
law. It violates due process as it deprives
overseas workers of their monetary claims
without any discernable valid purpose.
Disability ratings should be adequately
established in a conclusive medical
assessment by a company-designated
physician. To be conclusive, a medical
assessment must be complete and definite to
reflect the seafarer's true condition and give
the correct corresponding disability benefits.
When a company-designated physician
fails to arrive at a final and definite
assessment of a seafarer's fitness to work or
level of disability within the prescribed periods,
a presumption arises that the seafarer's
disability is total and permanent. Absent a
final, definite disability assessment from a
company-designated physician, the mandatory
rule on a third doctor referral will not apply.
Thus, petitioner's failure to refer the
assessment to a third doctor is not fatal to his
disability claim. The third doctor rule does not
apply when there is no final and definitive
assessment by the company-designated
physicians. The physician who has personal
knowledge of a seafarer's actual medical
condition after closely monitoring and regularly
treating that seafarer is more credible than
another physician who only saw such seafarer
once.
The law mandates seafarers to see a
company-designated physician for a postemployment medical examination, which must
be done within three working days from their
arrival. Failure to comply shall result in the
forfeiture of the right to claim disability
benefits. The petitioner posited a narrative of
indifference and oppression but to adduce
even an iota of evidence. He asked the SC to
overturn the consistent findings of the three
tribunals but offered nothing other than his
word as proof. Finally, he averred a medical
condition from which no causal connection can
be drawn to his brief engagement as chief
cook. He would have the SC sustain an
imputation grounded on coincidence and
conjecture.
While the Constitution provides for "full
protection to labor, employers have the
right to determine whether a seafarer's illness
or injury is work-related, or work aggravated.
This is one of the reasons behind the 3-day
reportorial requirement. There is no doubt that
sexual harassment occurred on board the M/V
Mineral, and that petitioner was a victim of it.
But the pieces of evidence he submitted are
not sufficient to convince this Court that he has
been rendered permanently and totally
disabled. Thus, this Court is precluded from
awarding disability benefits, not because of his
non-compliance with the 3-day reportorial
requirement, but because there is barely any
evidence to support the claim for disability
benefits. By no means can petitioner's
repatriation be considered as voluntary, for he
had been pushed against the wall with no
other recourse. Hence, he is entitled to his
salary for the unexpired portion of his contract.
Intentional concealment of a pre-existing
illness or injury is a ground for disqualification
for compensation and benefits under the
POEA Standard Employment Contract. The
conduct of the post-employment medical
examination is a reciprocal obligation shared
by the seafarer and the employer. The
seafarer is 'obliged to submit to an
examination within three (3) working days from
his or her arrival, and the employer is
correspondingly obliged 'to conduct a
meaningful and timely examination of the
seafarer.'" Clemente's willful concealment of
his medical history disqualified him from
claiming disability benefits pursuant to Section
20(E) of the POEA Standard Employment
Contract.
Solo Parents. Provides for benefits and
privileges to solo parents and their children,
that can be obtained only if there is a Solo
Parent ID. A woman who gives birth as a
result of rape and other crimes against chastity
even without a final conviction of the offender,
provided that mother keeps and raises the
child. Single parent is provided with benefits
and privileges such as solo parent leave,
housing, and educational benefits as
assistance. Solo parents are entitled to 10
Page 21 of 25
percent discounts and exemption from the
VAT on the sale of basic necessities of their
child or children such as clothing, baby's milk
and food, and children's medicine, among
others.
Kasambahay has an employment contract
with his or her employer. This employeeemployer relationship mandates that
a kasambahay be registered by his or her
employer as a worker to SSS within 30 days
from first day of employment. As a member of
SSS, a kasambahay is entitled to seven
benefits, including sickness, maternity,
unemployment, disability, retirement, funeral
and death claims. Kasambahays are also
covered by the Employees’ Compensation
Program for work-related illnesses or
accidents. The household employer shoulders
the full SSS contribution when the
kasambahay earns a monthly income of P5K
or less.
Agrarian Relations. Concept. Govern the
relationship between landholders and tenants
of agricultural lands for the share system,
leasehold tenancy, and security of tenure.
Agricultural tenancy is classified into leasehold
tenancy and share tenancy. Share tenancy is
a system of joint undertaking where one party
furnishes land and the other party labor. Lands
foreclosed by the GSIS, a government
financial institution, are subject to agrarian
reform and are not among the CARL's
exclusive list of exemptions and exclusions.
Existence and concept of agricultural
tenancy. The existence of tenancy
relationship provides that the: parties are the
landholder and tenant, object of the
relationship is an agricultural land, is consent
freely given either orally or in writing, express
or implied, the purpose of the relationship is
agricultural production, and there is personal
cultivation, and there is consideration given to
the lessor either in a form of share of the
harvest or payment of fixed amount in money
or produce or both. Hipolito's status as the
acknowledged tenant did not clothe him with
the capacity to designate respondent as a
tenant. Tenancy relations cannot be an
expedient artifice for vesting in the tenant
rights over the landholding which far exceed
those of the landowner. It cannot be a means
for vesting a tenant with security of tenure,
such that he or she is effectively the
landowner. Even while agrarian reform laws
are pieces of social legislation, landowners are
equally entitled to protection.
Rights of agricultural tenants. A tenant in
an agricultural land enjoys security of tenure.
This security of tenure entitles the tenants
continuous enjoyment of their landholding
even if the same has been sold or alienated
and even upon death of the landowner. In fact,
the death or incapacity of the tenant shall
transfer the tenancy right thereof to one of the
members of his immediate farm household
who is related to him within the second degree
of consanguinity.
Concept of farmworkers. The agrarian
reform program is founded on the right of
farmers and regular farmworkers, who are
landless, to own directly or collectively the
lands they till or, in the case of other farm
workers, to receive a just share of the fruits
thereof. Farmworker is a natural person who
renders service for value as an employee or
laborer in an agricultural enterprise or farm
regardless of whether his compensation is
paid on a daily, weekly, monthly or "pakyaw"
basis. The term includes an individual whose
work has ceased as a consequence of, or in
connection with, a pending agrarian dispute
and who has not obtained a substantially
equivalent and regular farm employment.
Regular Farmworker is a natural person who
is employed on a permanent basis by an
agricultural enterprise or farm. Seasonal
Farmworker is a natural person who is
employed on a recurrent, periodic or
intermittent basis by an agricultural enterprise
or farm, whether as a permanent or a nonpermanent laborer, such as "dumaan",
"sacada", and the like. Other Farmworker is a
farmworker who does not fall under the
foregoing.
UNIVERSAL HEALTH CARE. Policy.
Means all Filipinos are guaranteed equitable
access to quality and affordable health
care goods and services and protected
against financial risk.
Coverage. The program classified
membership into two types: Direct
contributors those who pay PhilHealth
premiums, are employed and bound by an
"employer-employee relationship," selfearning, professional practitioners, and
migrant workers. Members’ qualified
dependents and lifetime members are also
included. Indirect contributors those not
considered as direct contributors, along with
their qualified dependents, whose health
premiums are subsidized by the government.
National Health Insurance Program.
Every single Filipino citizen is automatically
enrolled into the newly-created NHIP. All
Filipinos will be granted “immediate eligibility”
and access to the full spectrum of health care
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which includes preventive, promotive, curative,
rehabilitative, and palliative care. This can be
expected for medical, dental, mental, and
emergency health services. The law outlines
that basic services accommodations will be
covered by PhilHealth.
JURISDICTION AND REMEDIES.
Preliminary Considerations and
Procedure. Existence of employer-employee
relationship between the parties-litigants, or a
reasonable causal connection to such
relationship is a jurisdictional pre-requisite for
the exercise of jurisdiction over a labor dispute
by the Labor Arbiters or any other labor
tribunals.
Cause of action must arise from the
employer-employee relationship. Actions
between employers and employees where the
employer-employee relationship is merely
incidental are within the exclusive original
jurisdiction of the regular courts.
Reasonable causal connection. The rule
in case of conflict of jurisdiction between labor
court and regular court. If there is a
reasonable causal connection between the
claim asserted and the employer-employee
relations, then the case is within the
jurisdiction of labor courts. In the absence of
such nexus, it is the regular courts that have
jurisdiction.
The power to determine existence of
employment relationship. The LAs and the
NLRC are not only vested with the power to
determine the existence of employeremployee relationship. The Labor Secretary
and the RDs, Med-Arbiter, and the SSS have
also the power to make similar determination.
In cases filed by OFWs, LAs may
exercise jurisdiction even absent the
employment relationship. This is because
the jurisdiction of LAs is not limited to claims
arising from employer-employee relationships.
Under Migrant Workers and Overseas
Filipinos Act of 1995, as amended, the LA may
exercise jurisdiction over the claims of OFWs
arising out of an employer-employee
relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment, including claims for actual, moral,
exemplary, and other forms of damage.
LAs have jurisdiction even in the case is
filed by the heirs of the OFW. The SC held
that the heirs of the deceased OFW, have the
personality to file the claim for death
compensation, reimbursement of medical
expenses, damages, and attorney's fees
before the Labor Arbiter of the NLRC.
Labor disputes, not subject to Barangay
Conciliation. Labor cases are not subject to
the barangay conciliation because it would
only duplicate the proceedings and unduly
delay the disposition of labor cases.
Labor Arbiters shall have EOJ to hear and
decide the following cases involving all
workers, whether agricultural or nonagricultural: ULP cases. Termination
disputes. Those cases that workers may file
involving wages, rates of pay, hours of work
and other terms and conditions of employment
accompanied with a claim for reinstatement.
Claims for actual, moral, exemplary and other
forms of damages arising from employeremployee relations. Cases arising from
violation of (return-to-work order) under the
LC, as amended, including questions involving
the legality of strikes and lockouts. Except
claims for employee’s compensation, social
security, medicare, and maternity benefits, all
other claims arising from employer-employee
relations, including those of persons in
domestic or household service (kasambahay),
involving an amount exceeding P5K, whether
or not accompanied with a claim for
reinstatement. Wage distortion disputes in
unorganized establishments not voluntarily
settled by the parties. Enforcement of
compromise agreements when there is noncompliance by any of the parties. Money
claims arising out of employer-employee
relationship or by virtue of any law or contract,
involving Filipino workers for overseas
deployment, including claims for actual, moral,
exemplary and other forms of damages. Other
cases as may be provided by law.
Cases arising from the interpretation or
implementation of CBA and those arising from
the interpretation or enforcement of company
personnel policies shall be disposed of by the
LA by referring the same to the grievance
machinery and VA, as may be provided in said
agreements.
Distinctions. The Labor Arbiter is an
official in the Arbitration Branch of the NLRC
who hears and decides cases falling under his
original and exclusive jurisdiction as provided
by law.
The RD exercises jurisdiction both visitorial
and enforcement power over labor standard
cases and is therefore empowered to
adjudicate uncontested money claims of
persons still employed.
Requirements to perfect appeal to
NLRC. Appeal, decisions, awards, or orders of
the LA are final and executory unless
appealed to the NLRC by any or both parties
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within ten calendar days from receipt of such
decisions, awards, or orders.
An appeal to the NLRC is perfected once
an appellant file the memorandum of appeal,
pays the required appeal fee and, where an
employer appeals and a monetary award is
involved, the latter shall post an appeal bond
or submits a surety bond issued by a reputable
bonding company.
Reinstatement and/or execution pending
appeal. Under Article 223 of the Labor Code,
"the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall
immediately be executory, even pending
appeal. The employee shall either be admitted
back to work under the same terms and
conditions prevailing prior to his dismissal or
separation, or at the option of the employer,
merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the
execution for reinstatement."
Employer must pay for the salary of
employee, as if he was reinstated. While writ
of execution is not required in case
reinstatement is ordered by the Labor Arbiter,
it is necessary in case reinstatement is
ordered by the NLRC on appeal. The SC finds
that the principles allowing execution pending
appeal are equally applicable here as
petitioners are poor employees, deprived of
their only source of livelihood for years and
reduced to begging on the streets. In view of
their dire straits and since the NLRC has
already ruled twice on the case in a way that
supports the release of the supersedeas bond,
it is proper to continue with execution
proceedings in this case despite a pending
motion for reconsideration.
NLRC. Reviews decisions rendered by the
LA, decisions or orders rendered by the RD
under the Labor Code and conducts
compulsory arbitration in certified cases. The
errors in the findings of fact that will justify a
modification or reversal of the Labor Arbiter's
decision must be "serious" and, if left
uncorrected, would lead to "grave or
irreparable damage or injury to the appellant."
Serious errors refer to inferences of facts
without evidence, or mistakes in the
interpretation of the evidence that border on
arbitrariness or similar circumstances.
The injunctive power of the NLRC is
ancillary in nature; hence, it requires a
principal case. In appeals of illegal dismissal
cases, employers are strictly mandated to file
an appeal bond to perfect their appeals.
Substantial compliance, however, may merit
liberality in its application. The LA and the
NLRC only exercise jurisdiction over
termination disputes between an employer and
an employee. They do not exercise jurisdiction
over termination disputes between a
corporation and a corporate officer. Under
Section 25 of the Corporation Code, the
President of a corporation is considered a
corporate officer. The dismissal of a corporate
officer is considered an intra-corporate
dispute, not a labor dispute. The CA held that
there was no employer-employee relationship
between them since he was a corporate
officer. Thus, he should have filed his
complaint with the RTC, not with the LA, since
his dismissal from service was an intracorporate dispute.
EOJ: Certified labor disputes causing or
likely to cause a strike or lockout in an industry
indispensable to national interest, certified to it
by the Labor Secretary or the President for
compulsory arbitration. Injunction in ordinary
labor disputes to enjoin or restrain any actual
or threatened commission of any or all
prohibited or unlawful acts or to require the
performance of a particular act in any labor
dispute which, if not restrained or performed
forthwith may cause grave or irreparable
damage to any party. Injunction in strikes or
lockouts. Contempt cases. Claims arising out
of an employer-employee relationship or by
virtue of any law or contract involving Filipino
workers for overseas deployment including
claims for actual, moral, exemplary and other
forms of damage.
EAJ: All cases decided by the LAs. Cases
decided by the ROs of DOLE in the exercise of
its adjudicatory function.
Respondent cannot now profit from her
own inaction. She actively participated in the
proceedings and vigorously argued her case
before the NLRC without the slightest
indication that she found anything
objectionable to the conduct of those
proceedings. It is thus but appropriate to
consider her as acceding to and bound by how
the NLRC was to resolve and ultimately did
resolve, petitioner's appeal. Its findings that
the requisites of substantive and procedural
due process were satisfied in terminating
respondent's employment now stand
undisturbed. In a long line of cases, this court
has held that "although the issue of jurisdiction
may be raised at any stage of the proceedings
as the same is conferred by law, it is
nonetheless settled that a party may be barred
from raising it on ground of laches or
estoppel." The wisdom that underlies this was
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explained at length in Tijam v. Sibonghanoy: A
party may be estopped or barred from raising
a question in different ways and for different
reasons. Thus, we speak of estoppel in pais,
of estoppel by deed or by record, and of
estoppel by laches. The rationale that
animates the rule on estoppel vis-a-vis
jurisdiction applies with equal force to quasijudicial agencies as it does to courts. The
public policy consideration that frowns upon
the undesirable practice of submitting a case
for decision only to subsequently decry the
supposed lack of jurisdiction is as compelling
in cases concerning the NLRC as it is to courts
of law.
Court of Appeals. The aggrieved party
may file an appropriate special civil action
under Rule 65. PFR under Rule 65, ROC
pursuant to the ruling in the case of St. Martin
Funeral Homes v. NLRC. It states that the
“petition may be filed not later than 60 days
from notice of the judgement, or resolution
sought to be assailed.” No extension of time to
file the petition shall be granted except for
compelling reason and in no case exceeding
15 days.
Supreme Court. Appeal by Certiorari to
the SC. A party desiring to appeal by certiorari
from a judgment or final order or resolution of
the CA, may file with the SC a verified petition
for review on certiorari. The petition shall raise
only questions of law which must be distinctly
set forth.
Bureau of Labor Relations. Original and
exclusive authority to act, at their own initiative
or upon request of either or both parties, on all
inter-union and intra-union conflicts, and all
disputes, grievances or problems arising from
or affecting labor-management relations in all
workplaces, whether agricultural or
nonagricultural, except those arising from the
implementation or interpretation of CBAs
which shall be the subject of grievance
procedure and/or voluntary arbitration. Intraunion and Inter-union dispute are within the
original and exclusive jurisdiction of the MedArbiter of the BLR. Petitions for cancellation of
union registration. As a rule, the jurisdiction to
review the decision of the RD lies with the
BLR.
The Labor Code provides only for a
certification election as the mode for
determining the exclusive collective bargaining
representative if there is a question of
representation in an appropriate bargaining
unit.
National Conciliation and Mediation
Board. Jurisdiction. Promote and emphasize
the primacy of free collective bargaining and
negotiations, including voluntary arbitration,
mediation, and conciliation, as modes of
setting labor or industrial disputes.
Conciliation as distinguished from
mediation. Conciliation is an alternative
dispute resolution method in which an expert
is appointed to resolve a dispute by convincing
the parties to agree upon an agreement.
Mediation refers to a process of settling
disputes by independent and impartial third
party who assists the parties to reach a
common outcome.
Preventive mediation is a non-legislated
assistance to management and labor. Any
party to a labor dispute, either the union or
management, may seek the assistance of
NCMB by means of formal request for
conciliation and preventive mediation. It helps
labor and management in finding common
solutions to problems affecting their
relationship.
DOLE Regional Directors. RD exercises
jurisdiction both visitorial and enforcement
power over labor standard cases and is
therefore empowered to adjudicate
uncontested money claims of persons still
employed. It has also jurisdiction over: Labor
standards enforcement, Occupational, Safety
and Health Violations, and Money Claims
arising from Labor Standards violations not
exceeding P5K per individual and w/o claims
for reinstatement.
DOLE Secretary. When, in his opinion,
there exists a labor dispute causing or likely to
cause a strike or lockout in an industry
indispensable to the national interest, the
Secretary may assume jurisdiction over the
dispute and decide it or certify the same to the
Commission for compulsory arbitration. Such
assumption or certification shall have the
effect of automatically enjoining the intended
or impending strike or lockout as specified in
the assumption or certification order.
Visitorial and enforcement powers.
These two powers to administer and to
enforce the law are conferred by the LC, on
the Labor Secretary or his duly authorized
representatives.
Power to suspend effects of termination.
The Labor Secretary may suspend the effects
of the termination pending resolution of the
dispute in the event of a prima facie finding by
the appropriate official of the DOLE before
whom such dispute is pending that the
termination may cause a serious labor dispute
or is in implementation of a mass lay-off.
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Remedies. The proper remedy to question
the decisions or orders of the Labor Secretary
is via PFC under Rule 65, not via an appeal to
the OP. For appeals to the OP in labor cases
have indeed been eliminated, except those
involving national interest over which the
President may assume jurisdiction.
Motions for reconsideration not served on
the adverse party do not toll the running of the
reglementary period for filing an appeal. Upon
lapse of the reglementary period, the judgment
sought to be reconsidered becomes
immutable. The law consists of rules issued
under the quasi-legislative power delegated by
the legislative branch to the Labor Secretary.
The Labor Secretary should have strictly
followed the rules on appeal under the Rules
on the Disposition of Labor Standards Cases
in the Regional Offices.
Voluntary Arbitrator. The VA or panel of
VAs shall have original and exclusive
jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or
implementation of the CBA and those arising
from the interpretation or enforcement of
company personnel policies referred to in the
immediately preceding article. The VA or panel
of VAs, upon agreement of the parties, shall
also hear and decide all other labor disputes
including ULPs and bargaining deadlocks. The
proper remedy to reverse or modify a VA or
panel of VAs decision or award is to appeal
the award or decision before the CA.
PRESCRIPTION OF ACTIONS.
Period for Money Claims. All money
claims arising from employer-employee
relations accruing during the effectivity of the
Labor Code shall be filed within three years
from the time the cause of action accrued;
otherwise, they shall be forever barred. The
prescriptive period applies to all kinds of
money claims arising from employer-employee
relations including claims for retirement
benefits.
Arriola’s claim for unpaid salaries was filed
beyond the three-year prescriptive period.
However, his claims for backwages, damages,
and attorney’s fees arising from his claim of
illegal dismissal have not yet prescribed when
he filed his
complaint. As discussed, the prescriptive
period for filing an illegal dismissal complaint is
four years from the time the cause of action
accrued. Since an award of backwages is
merely consequent to a declaration of illegal
dismissal, a claim for backwages likewise
prescribes in four years. The CA ruled that
Arriola was not illegally dismissed. Pilipino
Star Ngayon, Inc. had the management
prerogative to determine which columns to
maintain in its newspaper. Similar to the ruling
of the Labor Arbiter and the National Labor
Relations Commission, the CA ruled that it
was Arriola who abandoned his employment.
Period for Illegal Dismissal. The
prescriptive period for filing an illegal dismissal
complaint is four years from the time the cause
of action accrued.
Offenses under the Labor Code.
Offenses penalized under the Labor Code and
the RRs issued pursuant thereto shall
prescribe in three years.
Unfair labor practice. All ULP arising from
the Labor Cade shall be filed with the
appropriate agency within one year from
accrual of such ULP; otherwise, they shall be
forever barred.
Illegal recruitment shall prescribe in 5
years. Illegal recruitment cases involving
economic sabotage as defined under the law
shall prescribe in 20 years.