J9JC9B0M
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Ba r Reviewer
on
LABOR LAW
Annotation
Based on the Topics in the Supreme CourtPrescribed 2019 Syllabus for Labor Law
By
PROF. JOSELITO GUIANAN CHAN
Legal Practitioner, Professor of Law
& Bar Reviewer
Managing Partner
C h a n R o b le s L aw F irm
www.chanrobles.com *
C h a n R o b le s In te r n e t B ar R e v ie w
www.chanroblesbar.com
4 th R e v is e d E d itio n
2019
J9JC9B0M
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bar
Reviewer o n
Ba r R e v i e w
labor law
er o n
L a b o r La w
4thRevised Edition, 2 0 1 9
© P h ilip p in e C o p y rig h t
2 0 12 ,2 0 1 4 ,2 0 1 7 & 2 0 19
by
PROF. JOSELITO GUIANAN CHAN
All Rights Reserved
ISBN 978-621-8079-02-1
No portion of this book may be copied or reproduced in
books, pamphlets, outlines or notes, w hether printed,-m arbjnecopied, mimeographed, typew ritten, or in^artV other form, for1
.sale, w ithout th e v written adm ission of the author.
Any copy of th isb e q k w ithout theXorresponding num ber and
genuine signature of th e'a n th o r o
representative on this page,
either proceeds from an ill^gitim :e source or is in possession of
;e thereof.
one who has no authority to dl
AuthorizecL$iz
Serial No.'
Published & D istributed by:
ChanRobles P ublishing Company
22nd Floor, Philippine Stock Exchange Centre, Tektite East Tower
Exchange Road, Ortigas Center, Pasig City
Metro Manila, Philippines
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Ta b u OF CONTENTS
111
FOREWORD
To the 4th Revised Edition
2019
Exciting new developments in the field of labor law necessitated
the revision of this book for the fourth time.
Notably, the 2019 Syllabus for Labor Law has undergone a major
overhaul not only in terms of re-arranging the prescribed topics but most
significantly, in the introduction of new topics that have not been
mentioned nor made part of the previous syllabi. Utmost are new topics
such as Bona Fide Occupational Qualifications (BFOQs), Employment of
Non-Resident Aliens, Disability and Death Benefits not only under the
Labor Code but under the POEA-Standard Employment Contract
(POEA-SEC), Employment of Security Guards, Doctrine of Floating
Status, and Judicial Review of Labor Rulings.
The enactment of new laws likewise required the revision of
significant parts of the annotation. Some of these laws with great impact
on labor law are:
(a) R A No. 11199 [February 07,2019], otherwise known as the
"Social Security Act 0/2018";
(b) R A No 11223 [February 20,2019], otherwise known as the
"Universal Health Care Law";1
(c) R A No. 112 10 [February 20,2019], otherwise known as the
“105-Day Expanded Maternity Leave Law";
(d) R A No. 11058 [August 17, 2018], entitled “An Act
Strengthening Compliance with Occupational Safety and
Health Standards and Providing Penalties fo r isolations
Thereof;** and
(e) R A No. 10911 [July 21, 2016], otherwise known as the
“Anti-Age Discrimination in Employment A ct"
Additionally, new rulings of the Supreme Court as well as new
issuances of labor agencies were included in this latest edition.
1 Thefii^cfR A N o.11223feattad»das4ppencfriC *tolhi5booli
* ’RieMGEsxtorRA.No. 11058lspresentBdas^ppende(*A*andttiatcf(is imptenier1ngf%i1es.0epartment0rderNc>. 198.
Senes of 2018, as >Vve«fcr,8 'to (his etffion.
J9JC9B0M
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Bar Reviewer on U bor Law
The author wishes to thank law students and bar reviewees for the
very positive reception they have been giving this book since its first
edition in 2012.
The author likewise would like to express his gratitude to
professors of labor law in various law schools nationwide who graciously
prescribe this book as reference material in the classroom.
It is the fervent hope and prayer of the author that this book, along
with his 3-Volume series cn the Labor Code and his annual Last-Minute
Bar Review Notes, would prove useful to law students and bar
candidates.
Jo s e lito G u ian an C han
Managing Partner
Chan Robles Law Firm
22/F, Philippine Stock Exchange Centre
Tektite East Tower, Exchange Road, Ortigas Center
Pasig City, Metro Manila, Philippines
May 27,2019
J9JC9B0M
Table of Contents
v
FOREWORD
To the 3rd Revised Edition
2017
The issuance of this latest edition of this book becomes imperative
in the light of recent laws, labor issuances and rulings of the Supreme
Court affecting some of the topics prescribed in the Syllabus for labor law
which, earlier this year, was revised by the Supreme Court Bar
Examination Committee for the forthcoming 2017 bar examinations.
The author is grateful for the favorable feedbacks he received from
bar reviewees who have used this book in preparing for the bar
examination in labor law and from undergraduate law students who used
this book as supplement to their curriculum-prescribed labor law
subjects.
The commentaries in this book, though expansive and broad,
remain focused on the topics and sub-topics prescribed in the labor law
syllabus. This, the author believes, is what makes this book unique and
helpful to bar reviewees and law students who are constantly faced with
stressful deadlines and short timelines in their preparation for the
examination in the bar and in the classroom.
This book, together with the updated 3-Volume series by the
author on the Labor Code, would greatly enhance the chances o f its
readers in hurdling the labor law examinations.
joSELiTO Guianan C han
Managing Partner
Chan Robles Law Firm
22/F, Philippine Stock Exchange Centre
Tektite East Tower, Exchange Road, Ortigas Center
Pasig City, Metro Manila, Philippines
July 15,2017
J9JC9B0M
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Bar Reviewer o n U
bor
Law
FOREWORD
To the 2nd Revised Edition
2014
This latest revision of this book was occasioned by the chief
changes introduced in the 20x3 syllabus for Labor Law which were
replicated in toto in the 2014 syllabus and presumably in the next
syllabus for subsequent bar examination in this subject.
'»
Structurally, the eight (8) major topical classifications in the 2011
and 2012 syllabi remain unperturbed. However, some topics and sub­
topics were either expanded or pruned down or merely re-arranged or
relocated.
For better and more effective presentation, the author took the
liberty of re-organizing some topics which, in his view, is extremely
necessary. Appropriate notes pointing out the changes are indicated in
the comments of the author.
Additionally and most significantly, the passage of new
amendatory laws and promulgation of new doctrinal pronouncements by
the Supreme Court in this subject have made this latest revision very
compelling. The author has thus expanded in no small measure his
commentaries on each and every topic in the syllabus, in the hope that
law students and reviewees preparing for the bar examinations of 2014
and beyond will have a comprehensive reference material in Labor Law
that is focused on the syllabus-prescribed topics.
Notably, this book appears to be thus far the first and only attempt
at annotating and commenting on the Supreme Court-prescribed
syllabus for a bar subject. Examinees for the 2012 and 2013 bar exams
who had used this book had given it their stamp of approval as a worthy
reference material for Labor Law. To this, die author expresses his
utmost thanks and sincere appreciation.
Before ending, it bears stressing that unknown to so many
practitioners and students, the Labor Code has been ordered renumbered
in 2011 by Republic Act No. 10 151.1 However, until this writing, only very
few decisions of the Supreme Court have cited the new renumbering
1 Entitled 'An Act Allowing the Employment of Night Workers, Thereby Repealing Articles 130 and 131 oi
Presidential Decree Number Four Hundred Forty-Two. As Amended. Otherwise Known as the Labor Code d
thePtoBpptnes.*Thiswas approvedon June 21,2011.
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scheme prescribed by this law. Labor tribunals have likewise continued
to cite the old numbering— as if the mandate of R A No. 10 151 does not
exist in our statute books.
This led the author to write to the Office of the Secretary of Labor
and Employment in 2013 to suggest that it come out with a definitive
issuance on this matter in order to provide for a uniform re-numbering of
the affected provisions of the Labor Code. A DOLE Undersecretary
promptly replied that the DOLE will look into this matter. However,
almost a year had passed from that letter, and almost three (3) years
from the enactment of R A No. 10 151, but no such issuance has been
made by the DOLE - the government agency primordially tasked to
implement and enforce the Labor Code. Hopefully, an Explanatory
Bulletin, Circular or similar issuance will be released by the DOLE as
soon as possible to dispel the mix-up.
For purposes of guiding the readers of this book on the
renumbering of the Labor Code, the author is reproducing in full his
paper submitted to the Office of the DOLE Secretary, entitled
“CLARIFYING THE NEW RENUMBERING OF THE LABOR CODE." A
copy of this material is presented after this Foreword.
However, to avoid confusion, the new renumbering of the Labor
Code will not be used in this edition. One reason for this hesitancy is that
even the 2014 syllabus for Labor Law does not use or make reference
thereto.
J o se l it o G u ia n a n C h an
Managing Partner
Chan Robles Law Firm
22/F, Philippine Stock Exchange Centre
Tektite East Tower, Exchange Road, Ortigas Center
Pasig City, Metro Manila, Philippines
June 15 ,2 0 14
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Vlll
Bar Reviewer , o n
labor u w
FOREWORD
To the 1st Edition
The dramatic and substantial revision of the format of the 2011 bar
examinations by the Supreme Court triggered the publication of this
book. From the previous open-ended format, the Supreme Court has laid
down a syllabus for every bar subject in the 2011 bar examinations and in
the forthcoming examinations this 2012. With the syllabus prescribing
specific major topics and sub-topics for every point of law, preparation
for the bar exams becomes systematic, precise, clear-cut and welldefined.
This book seeks to discuss in a simple and concise manner, each
topic and sub-topic mentioned in the syllabus for labor law. Pertinent
provisions of law, rules and regulations and other issuances, as well as
the applicable jurisprudential precepts, are cited in the discussion of each
and every major topic and sub-topic. This manner of presenting the
discussions would, in the humble view of the author, assure the bar
reviewee of a broader and more methodical understanding and
comprehension of the important aspects of the topic under
consideration.
The contents of this book are based on the more-than-a-decade of
pre-bar and pre-week review lectures of the author on the subject Some
relevant commentaries of die author in his two (2) volumes on the Labor
Code of the Philippines are likewise cited in this book. For a more
extended and authoritative discussion on the topics prescribed in the
syllabus, his commentaries in these 2 volumes would certainly prove
helpful.
In the light of the introduction of multiple choice questions
(MCQs) in the 2011 bar examinations and in subsequent ones, sample
MCQs for each topic are presented at the end of this book. These MCQs
could well be used by the bar reviewees in honing their skill at answering
this type of questions.
It is hoped that this book would serve as a useful tool of bar
reviewees in hurdling the bar examination in labor law in the
forthcoming bar examinations in 2012 and beyond.
Jo s e l it o G u ia n a n C h a n
Managing Partner
Chan Robles Law Firm
22/F , Philippine Stock Exchange Centre
Tektite East Tower, Exchange Road, Ortigas Center
Pasig City, Metro Manila, Philippines
March 19,2012
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C itin g th e R e n u m b e re d P ro v isio n s
o f th e L a b o r Code
In the light of the renumbering o f certain
provisions of the Labor Code, as mandated under
R A . N o , i o i 5 i l2 and D O LE D e p artm e n t
A d v iso ry N o . 0 1, S e rie s o f 2 0 15 / both the
renum bered and old provisions o f the affected
Labor Code provisions are cited in this book
alongside each other.
Example:
Article 130 [132]3
where “ 13 0 ” is the new renumbering while
“ [ 1 3 2 ] ” is its counterpart old number.
By so presenting together both the new and the old
numbers, the reader would be well guided on the proper
provision to cite.
1 Ttts law wasenacted on June 21.201U is enfiled 'AN ACT ALLOWING THE EMPLOYMENT OF NiGlITW ORKm S.
THEREBY REPEALING ARTICLES 130 AND 131 OF PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTYTWO, AS AMENDED, OTHERWISE KNOWJ AS THE LABOR CODE OF THE PHILIPPINES *
1 &nSSedaRensrbean9arSieljaborCo(Jeof0iePhaip(^nes.3S AfnendaTissuedby9ieIXH£SeoetaryooJid/2<1.2015.
2 T fe a r^ is erSiedTacSies^WcTnen'This is the W aftide affectedby ^fe«M>eringun(JefRA No. 10151.
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Ba r Reviewer o n Labor Law
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TAM E OF CONTENTS
Topics are based on the
Suprem e Court-prescribed
2019 SYLLABUS FOR LABOR LAW
CHAPTER ONE
GENERAL PROVISIONS..............................................................
1
A BASIC POLICY ON LABOR...............................................................................
B. CONSTRUCTION IN FAVOR OF LABOR..................................................
1
2
C. CONSTITUTIONAL AND CIVIL CODE PROVISIONS
RELATING TO LABOR LAW.......................................................
1. CONSTITUTIONAL PROVISIONS
1-A DECLARATION OF PRINCIPLES AND STATE POLICIES
(Article II o f the Constitution)
1-B. BILL OF RIGHTS
(Article III o f the Constitution)
1-C. SOCIAL JUSTICE AND HUMAN RIGHTS
(Article X III o f the Constitution)
1-D. CONSTITUTIONAL RIGHTS THAT
CANNOT BE INVOKED IN
COMPANY-LEVEL ADMINISTRATIVE CASES
A. INAPPLICABILITY OF
RIGHT TO CONSTITUTIONAL DUE PROCESS
B. INAPPLICABILITY OF
RIGHT TO EQUAL PROTECTION OF THE LAWS
C. INAPPLICABILITY OF
RIGHT TO COUNSEL
2 aVIL CODE PROVISIONS
6
CHAPTER TWO
PRE-EMPLOYMENT......................................................................................................... 36
A.
RECRUITMENT AND PLACEMENT OF
LOCAL AND MIGRANT WORKERS
(Labor Code and R A 9042,
as amended b y R A 10022).......................................................................... ................ 36
1.
ILLEGAL RECRUITMENT
AND OTHER PROHIBITED ACTIVITIES
1-A ILLEGAL RECRUITMENT IN LOCAL EMPLOYMENT
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1 -B .'ILLEGAL RECRUITMENT IN OVERSEAS EMPLOYMENT
1-C. 'TYPES OF ILLEGAL RECRUITMENT AND THEIR ELEMENTS
a. SIMPLE ILLEGAL RECRUITMENT
b. ILLEGAL RECRUITMENT INVOLVING
ECONOMIC SABOTAGE
1-D. ILLEGAL RECRUITMENT VS. ESTAFA
2. LIABILITY OF LOCAL RECRUITMENT AGENCY
AND FOREIGN EMPLOYER
a. SOLIDARY LIABILITY
b. THEORY OF IMPUTED KNOWLEDGE
3. TERMINATION OF CONTRACT OF MIGRANT WORKER
WITHOUT JUST OR VAUD CAUSE
I, GENERAL PRINCIPLES ON TERMINATION OF OFWs
II. MONETARY CLAIMS OF OFWs, IN GENERAL
HI. MONETARY CLAIMS OF OFWs ARISING FROM ILLEGAL DISMISSAL
4. BAN ON DIRECT-HIRING
B.
EMPLOYMENT OF NON-RESIDENT ALIENS....................................................... 102
CHAPTER THREE
LABOR STANDARDS........................... . ........................................................ .................. 113
A CONDITIONS OF EMPLOYMENT...............................................................................114
1. COVERAGE
2. HOURS OF WORK
a. NORMAL HOURS OF WORK; HOURS WORKED
b. MEAL PERIODS
c. NIGHT SHIFT DIFFERENTIAL
d. OVERTIMEWORK
e. COMPUTAVON OF ADDITIONAL COMPENSATION
(RATES ONLY)
e-1. FACILITIES VS. SUPPLEMENTS
3. WEEKLY REST PERIODS
4. HOLIDAYS
5. SERVICE INCENTIVE LEAVE
6. SERVICE CHARGES
7.13™ MONTH PAY
B.
WAGES....................................................................................................................... 158
1. PAYMENT OF WAGES
2. PROHIBITIONS REGARDING WAGES
3. WAGE DISTORTION, CONCEPT
a. WAGE ORDER
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4.
WAGE DISTORTION
NON-DIMINUTION OF BENEFITS
C. LEAVES........................................................................
114
1. SERVICE INCENTIVE LEAVE
2 MATERNITY LEAVE
3. PATERNITY LEAVE
4. SOLO PARENT LEAVE
5. LEAVE BENEFITS FOR WOMEN WORKERS
UNDER R A 9710 and R A 9262
a. SPECIAL LEAVES FOR WOMEN WORKERS
(R A No. 9710)
b. LEAVE FOR VICTIMS OF VIOLENCE
AGAINST WOMEN AND CHILDREN
(R.A. No. 9262)
D. SPECIAL GROUPS OF EMPLOYEES........................
114
1. WOMEN
a. DISCRIMINATION
b. STIPULATION AGAINST MARRIAGE
c. PROHIBITED ACTS
d. SEXUAL HARASSMENT
2. MINORS
[R A No. 7610, as Amended by R.A. No. 9231)
3 . KASAMBAHAY
(R.A. No. 10361)
4. HOMEWORKERS
5. NIGHT WORKERS
6. APPRENTICES AND LEARNERS
7. PERSONS WITH DISABILITIES
a. DISCRIMINATION
b. INCENTIVES FOR EMPLOYERS
CHAPTER FOUR
SOCIAL WELFARE LEGISLATION...................................
A.SSSLAW ........................................................................
1. COVERAGE AND EXCLUSIONS
a. COVERAGE
b. EXCLUSIONS
2. DEPENDENTS AND BENEFICIARIES
a. DEPENDENTS
b. BENEFICIARIES
3. BENEFITS
264
264
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a. SOCIAL SECURITY BENEFITS
1. SICKNESS BENEFIT
2. MATERNITY LEAVE BENEFIT
3. RETIREMENT BENEFITS
4. UNEMPLOYMENT INSURANCE
OR INVOLUNTARY SEPARATION BENEFITS
5. DISABILITY BENEFITS
6. DEATH BENEFITS
7. FUNERAL BENEFIT
b. EMPLOYEES’ COMPENSATION BENEFITS
B. GSISLAW ..............................................................................
1. COVERAGE AND EXCLUSIONS
a. COVERAGE
b. EXCLUSIONS
2. DEPENDENTS AND BENEFICIARIES
a. DEPENDENTS
b. BENEFICIARIES
3. BENEFITS
1. COMPULSORY LIFE INSURANCE
2. RETIREMENT BENEFIT
3. SEPARATION BENEFIT
4. UNEMPLOYMENT BENEFIT
5. DISABILITY BENEFITS
6. SURVIVORSHIP BENEFITS
7. FUNERAL BENEFITS
LIMITED PORTABILITY LAW................................................
C. DISABILITY AND DEATH BENEFITS..............................
1. LABOR CODE
a. EMPLOYEES' COMPENSATION PROGRAM
b. EMPLOYEES' COMPENSATION BENEFITS
I. MEDICAL BENEFITS
II. REHABILITATION SERVICES
III. DISABILITY BENEFITS
UFA. TEMPORARY TOTAL DISABILITY
lll-B . PERMANENT TOTAL DISABILITY
lll-C . PERMANENT PARTIAL DISABILITY
IV. DEATH BENEFIT
V. FUNERAL BENEFIT
c. BENEFICIARIES .
2. POEA-STANDARD EMPLOYMENT CONTRACT
(POEA-SEC)
X1U
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Ba r Reviewer o n La bo r Law
/. MONETARY CLAIMS OF SEAFARERS FOR
SICKNESS AND DISABILITY BENEFITS
II. EXISTENCE AND EXTENT OF SEAFARER'S
DISABILITY, HOW DETERMINED AND DECLARED
III. MONETARY CLAIMS OF SEAFARERS
FOR DEATH BENEFITS
CHAPTER FIVE
LABOR RELATIONS.................................................................... .*..................................378
A RIGHT TO SELF-ORGANIZATION.............................................................................. 379
1. COVERAGE
a. PERSONS WHO CAN EXERCISE
RIGHT TO SELF-ORGANIZATION
b. PERSONS WHO CANNOT EXERCISE
RIGHT TO SELF-ORGANIZATION
2. INELIGIBILITY OF MANAGERIAL EMPLOYEES;
RIGHT OF SUPERVISORY EMPLOYEES
a. MANAGERIAL EMPLOYEE RULE
b. SUPERVISORY EMPLOYEE RULE
c. CONFIDENTIAL EMPLOYEE RULE
d. SEPARATION OF UNIONS DOCTRINE
3. EFFECT OF INCLUSION AS MEMBERS OF EMPLOYEES
OUTSIDE OF THE BARGAINING UNIT
4. NON-ABRIDGEMENT
(OF RIGHT TO SELF-ORGANIZATION)
5. HOW AUNIONIS ORGANIZED
6. AFFILIATION AND DISAFFILIATION
B AR G A ININ G UNIT..................................................................................................... 403
C.
BARGAINING REPRESENTATIVE....................................................................... 407
1.
SOLE AND EXCLUSIVE BARGAINING AGENT
(SEBA)
a. REQUEST FOR SEBA CERTIFICATION
(This Mode Repealed and Replaced 'Voluntary Recognition')
b. CERTIFICATION ELECTION
U
CERTIFICATION ELECTION
IN UNORGANIZED ESTABUSHMENTS
b-ii. CERTIFICAVON ELECTION
IN ORGANIZED ESTABLISHMENTS
tH ii. DENIAL OF THE PCE
b-iv. BAR RULES
I. Contract Bar Rule
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II. Statutory Bar Rule
III. Certification Year B ar Rule
IV. Negotiations B ar Rule
V. Bargaining Deadlock B ar Rule
b-v. THE DOUBLE MAJORITY RULE
b-vi. CHALLENGING OF VOTES AND PROTEST
c. CONSENT ELECTION
d RUN-OFF ELECTION
e. RE-RUN ELECTION
D.
RIGHTS OF LABOR ORGANIZATIONS.................................................................. 451
1.
CHECK-OFF, ASSESSMENTS, AND AGENCY FEES
a. CHECK-OFF
b. ASSESSMENTS
c. AGENCYFEES
Z COLLECTIVE BARGAINING
a. DUTYTOBARGAINCOLLECTIVELY
b. DUTYTOBARGAINCOLLECTIVELY
IN THE ABSENCE OF CBA
c. DUTYTOBARGAINCOLLECTIVELY
WHEN THERE EXISTS A CBA
d. COLLECTIVE BARGAINING AGREEMENT (CBA)
e. THE COLLECTIVE BARGAINING PROCESS
E UNFAIR LABOR PRACTICES (U LP s)...................................................................... 483
1. NATURE, ASPECTS
Z ULP B Y EMPLOYERS
I. INTERFERENCE WITH, RESTRAINT OR COERCION
OF EMPLOYEES IN THE EXERCISE OF THEIR
RIGHT TO SELF-ORGANIZATION
II. YELLOW DOG CONTRACT
III. CONTRACTING OUT OF SERVICES AND FUNCTIONS
IV. COMPANY UNION
V. THREE SEPARATE CONCEPTS TREATED
IN PARAGRAPH (E), ARTICLE 259 [248]
V-1. DISCRIMINATION
V-2. UNION SECURITY CLAUSE
V-2-A. DISMISSAL DUE TO VIOLATION OF
UNION SECURITY CLAUSE
V-2-B. DUE PROCESS IN TERMINATION DUE TO
VIOLATION OF UNION SECURITY CLAUSE
VI. FILING OF CHARGES OR GIVING OF TESTIMONY
VII. CBA-RELATED ULPs
Vll-A. VIOLATION OF THE DUTY TO BARGAIN
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COLLECTIVELY
Vll-B. PAYMENT OF NEGOTIATION FEES
OR ATTORNEYS FEES
Vll-C. VIOLATION OF THE CBA
3. ULP BY LABOR ORGANIZATIONS
I. RESTRAINT AND COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT
TO SELF-ORGANIZATION
II. DISCRIMINATION
III. VIOLATION OF DUTY OF UNION TO BARGAIN
COLLECTIVELY
TV. FEATHERBEDDING LAW
V. DEMAND OR ACCEPTANCE OF NEGOTIATION
FEES OR ATTORNEYS FEES
VI. VIOLATION OF THE CBA
F. PEACEFUL CONCERTED ACTIVITIES................
1. STRIKES
I. NATURE AND CONCEPT OF STRIKE
II. VARIOUS FORMS AND CLASSIFICATION
OF STRIKES
III. PROCEDURAL BUT MANDATORY
REQUISITES FOR A VALID STRIKE
IV. UNION-BUSTING
V. STRIKES IN HOSPITALS, CLINICS
AND MEDICAL INSTITUTIONS
VI. STRIKE IN THE GOVERNMENT SERVICE
VII. VARIOUS PROHIBITED ACTS PER LAW,
RULES AND JURISPRUDENCE
VIII. LIABILITY RESULTING FROM THE
CONDUCT OF STRIKE
A. LIABILITY FOR ILLEGAL STRIKE
B. LIABILITY FOR DEFIANCE OF ASSUMPTION/
CERTIFICATION ORDER OR RETURN-TO-WORK ORDER
2. PICKETING
3. LOCKOUTS
4. ASSUMPTION OF JURISDICTION
BY THE DOLE SECRETARY
I. TWO (2) OPTIONS OF DOLE SECRETARY
II. ASSUMPTION OF JURISDICTION
III. CERTIFICATION OF LABOR DISPUTE TO
NLRC FOR COMPULSORY ARBITRATION
IV. RETURN-TO-WORK ORDER
5. INJUNCTIONS
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CHAPTER SIX
POST EMPLOYMENT....................................................................................................... 622
A EMPLOYER-EMPLOYEE RELATIONSHIP......................... ..................................... 621
1. TESTS TO DETERMINE EXISTENCE
OF EMPLOYER-EMPLOYEE RELATIONSHIP
2. KINDS OF EMPLOYMENT
a. REGULAR EMPLOYMENT
b. CASUAL EMPLOYMENT
c. PROBATIONARY EMPLOYMENT
d. PROJECT EMPLOYMENT
e. SEASONAL EMPLOYMENT
f. FIXED-TERM EMPLOYMENT
g. SECURITY GUARDS
h. FLOATING STATUS
3. LEGIVMATE SUBCONTRACTING VS.
LABOR-ONLY CONTRACTING
a. TRILATERAL RELATIONSHIP
b. ELEMENTS
I. LEGITIMATE JOB CONTRACTING ARRANGEMENT
II. LABOR-ONLY CONTRACTING ARRANGEMENT
III. OTHER ILLICIT FORMS O F EMPLOYMENT
IV. EFFECTS OF LABOR-ONLY CONTRACTING AND ENGAGING IN OTHER
ILLICIT FORMS OF EMPLOYMENT
V. LEGITIMATE JOB CONTRACTING VS. LABOR-ONLY CONTRACTING
C. SOLIDARY LIABILITY
B.
TERMINATION BY EMPLOYER.............................................................................683
1.
JUST CAUSES
SERIOUS MISCONDUCT
INSUBORDINATION
OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
III. GROSS AND HABITUAL NEGLECT OF DUTIES
IV. ABANDONMENT OF WORK
V. FRAUD
VI. WIULFUL BREACH OF TRUST AND CONFIDENCE
VII. COMMISSION OF CRIME OR OFFENSE
VIII. OTHER ANALOGOUS CAUSES
l AUTHORIZED CAUSES
I. INSTALLATION OF LABOR-SAVING DEVICE
II. REDUNDANCY
III. RETRENCHMENT
I.
II.
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Ili-A. REDUNDANCY VS. RETRENCHMENT
IV. CLOSURE OR CESSATION OF BUSINESS OPERATIONS
IV- A RETRENCHMENT VS. CLOSURE OF BUSINESS
V. DISEASE
V- 1. SUBSTANTIVE REQUISITES
V-2. PROCEDURAL REQUISITES
3. DUE PROCESS
a. TWIN-NOTICE REQUIREMENT
b. HEARING
I. STANDARD SITUATIONS IN TERMINAVON CASES '
II. VARIATIONS IN PROCEDURAL DUE PROCESS
ll-A JUST CAUSE TERMINATION DUE PROCESS
ll-B. AUTHORIZED CAUSE TERMINATION DUE PROCESS
ll-B-1. DUE PROCESS IN TERMINATION DUE
TO BUSINESS-RELATED CAUSES
ll-B-2. DUE PROCESS IN TERMINATION DUE
TO HEALTH-RELATED CAUSES
ll-C. DUE PROCESS IN OTHER FORMS OF EMPLOYMENT
III. INDEMNITY IN THE FORM OF NOMINAL DAMAGES
C.
TERMINATION BY EMPLOYEE.............................................................................763
/. VOLUNTARY RESIGNATION
(Termination by Employee W ithout Just Cause)
II. INVOLUNTARY RESIGNATION
(Termination by Employee With Just Cause)
III. CONSTRUCTIVE DISMISSAL
D ,PREVENTIVE SUSPENSION....................................................................................... 758
E. RELIEFS FROM ILLEGAL DISMISSAL......................................................................760
/. REINSTATEMENT
II. SEPARATION PAY IN LIEU OF REINSTATEMENT
III. BACKWAGES
IV . D IS T IN C T IO N S (BETWEEN REINSTATEMENT,
SEPARATION PAY IN UEU THEREOF AND BACKWAGES)
F. MONEY CLAIMS ARISING FROM EMPLOYER-EMPLOYEE
RELATIONSHIP............................................................................................................779
G. RETIREMENT...............................................................................................................780
I.
II.
III.
IV.
V.
COVERAGE
REVREMENTAGE
YEARS OF SERVICE
AMOUNT OF RETIREMENT PAY
RETIREMENT OF UNDERGROUND MINE WORKERS
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W. RETIREMENT OF WORKERS PAID BY RESULTS
VII. RETIREMENT OF PART-TIME WORKERS
VIII. RETIREMENT BENEFITS VS. SEPARATION PAY
CHAPTER SEVEN
MANAGEMENT PREROGATIVE........................................................................................798
A. DISCIPLINE
6. TRANSFEROR EMPLOYEES
C. PRODUCTIVITY STANDARD
D. BONUS
E. CHANGE OF WORKING HOURS
F. BONA FIDE OCCUPATIONAL QUALIFICATIONS
G. POST-EMPLOYMENT RESTRICTIONS
C H A P TE R E IG H T
JURISDICTION AND RELIEFS.........................................................................................832
PRELIMINARY CONSIDERATIONS
ON JURISDICTION AND REMEDIES
A LABOR ARBITER......................................................................................................... 834
I. JURISDICTION
1. JURISDICVON OVER ULP CASES
2. JURISDICTION OVER ILLEGAL DISMISSAL CASES
3. JURISDICTION OVER MONEY CLAIMS CASES
3-A JURISDICTION OF LABOR ARBITER
VS. DOLE REGIONAL DIRECTOR
4. JURISDICTION OVER CLAIMS FOR DAMAGES
5. JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
8. JURISDICTION OVER CASES INVOLVING
LEGISLATED WAGE INCREASES AND WAGE DISTORTION
7. JURISDICTION OVER ENFORCEMENT
OR ANNULMENT OF COMPROMISE AGREEMENTS
8. JURISDICTION OVER EXECUTION AND ENFORCEMENT
OF DECISIONS OF VOLUNTARY ARBITRATORS
9. JURISDICTION OVER CASES OF OVERSEAS,
FIUPINO WORKERS (OFWs)
10. OTHER CASES OVER WHICH LABOR ARBITERS
HAVE JURISDICVON
11. OTHER CASES OVER WHICH LABOR ARBITERS
HAVE NO JURISDICVON
II. REQUIREMENTS TO PERFECT APPEAL TO NLRC
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III. REINSTATEMENT PENDING APPEAL
IV. REVERSAL OF LABOR AREITER'S REINSTATEMENT ORDER
BY NLRC OR HIGHER COURTS
1. ROGUERO DOCTRINE
2. GENUINO DOCTRINE
3. GARCIA DOCTRINE
B. NATIONAL LABOR RELATIONS COMMISSION (N LR C).......................................889
C. JUDICIAL REVIEW OF LABOR RULINGS................................................................891
1. JUDICIALREVIEWTHROUGH
RULE 65 PETITION FOR CERTIORARI
2. JUDICIAL REVIEW OF DECISIONS OF VOLUNTARY ARBITRATORS
THROUGH RULE 43 APPEAL
3. JUDICIAL REVIEW BY THE SUPREME COURT
THROUGH RULE 45 PETITION FOR REVIEW ON CERTIORARI
D.
BUREAU OF LABOR RELATIONS..........................................................................908
I. JURISDICTION, IN GENERAL
II. LABOR OFFICIALS HAVING JURISDICTION
OVER ARTICLE 232 [226] CASES
III. CASES PROVIDED UNDER ARTICLE 232 [226J
lll-A . INTER-UNION AND INTRA-UNION DISPUTES
IIIS . OTHER RELATED LABOR RELATIONS DISPUTES
IV. ORIGINALANDEXCLUSIVEJURISDICTION
OFMED-ARBITERS, DOLE DIRECTORS AND BLR DIRECTOR
1. MEDIATOR-ARBITER’S
ORIGINAL AND EXCLUSIVE JURISDICTION
2. DOLE REGIONAL DIRECTOR’S
ORIGINAL AND EXCLUSIVE JURISDICTION
3. BLR DIRECTOR’S
ORIGINAL AND EXCLUSIVE JURISDICTION
V. APPELLATE JURISDICTION OF THE BLR DIRECTOR
AS DISTINGUISHED FROMTHATOF THE DOLE SECRETARY
1. APPEALS FROM DECISIONS OFMED-ARBITERS.
I APPEALS FROM DECISIONS OF DOLE REGIONAL DIRECTORS
3. APPEALS FROM DECISIONS OFMED-ARBITERS.
VI. REMEDIES FROM DECISIONS OF
BLR DIRECTOR AND DOLE SECRETARY
RENDERED IN THEIR APPELLATE JURISDICTION
VII. ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs
E NATIONAL CONCILIATION AND MEDIATION BOARD............................. ............. 935
1. NATURE OF PROCEEDINGS
2. CONCILIATION VS. MEDIAVON
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PREVENTIVE MEDIATION
F. DOLE REGIONAL DIRECTORS...................................................................................942
1. JURISDICTION
EXPANDED DISCUSSION OF IMPORTANT TOPICS
I. VISITORIAL AND ENFORCEMENT POWERS
II. LABOR STANDARDS ENFORCEMENT CASES
III. SMALL MONEY CLAIMS CASES
IV. OCCUPATIONAL SAFETY AND HEALTH VIOLATIONS
V COMPLAINTS AGAINST PRIVATE RECRUITMENT
AND PLACEMENT AGENCIES (PRPAs) FOR LOCAL EMPLOYMENT
VI. CASES SUBMITTED TO REGIONAL DIRECTORS FOR VOLUNTARY
ARBITRATION IN THEIR CAPACITY AS EX-OFFICIO VOLUNTARY
ARBITRATORS (EVAs)
G. DOLE SECRETARY.......................................................................................................961
I. ORIGINAL AND EXCLUSIVE JURISDICTION
1. ASSUMPTION OF JURISDICTION AND CERTIFICATION
BY DOLE SECRETARY OF NATIONAL INTEREST CASES
Z POWER TO SUSPEND EFFECTS OF TERMINATION
3. ADMINISTRATIVE INTERVENTION
FOR DISPUTE AVOIDANCE (AIDA)
4. VOLUNTARY ARBITRATION BYDOLE SECRETARY
II. APPELLATE JURISDICTION
II-A. APPEALS FROM DOLE REGIONAL DIRECTORS
IIS . APPEALS FROM MED-ARBITERS
II S APPEALS FROM BLR DIRECTOR
II S APPEALS FROM POEA
H. GRIEVANCE MACHINERY............................................ ............................. ................ 976
I. GRIEVANCE AND GRIEVANCE PROCEDURE OR MACHINERY
II. INITIATION OF GRIEVANCE THROUGH GRIEVANCE MACHINERY
III. DECISIONS OF GRIEVANCE COMMITTEE
I. VOLUNTARY. ARBITRATOR........................................................................................982
1. VOLUNTARY ARBITRATION IN GENERAL
2. JURISDICTION
I. JURISDICTION OVER UNRESOLVED GRIEVANCES
II. JURISDICTION OVER VIOLATION OF CBA
III. JURISDICTION OVER OTHER LABOR DISPUTES
IV. JURISDICTION OVER NATIONAL INTEREST CASES
V. JURISDICTION OVER WAGE DISTORTION CASES
VI. JURISDICTION OVER DISPUTES INVOLVING
THE PRODUCTIVITY INCENTIVES PROGRAM
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V II SOME PRINCIPLES ON JURISDICTION
PROCEDURES
J. PRESCRIPTION OF ACTIONS...........................
1. MONEY CLAIMS
2. ILLEGAL DISMISSAL
3. UNFAIR LABOR PRACTICE
4. OFFENSES UNDER THE LABOR CODE
5. ILLEGAL RECRUITMENT
T
If
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GENERAL PROVISIONS
TOPICS PER SYLLABUS
I. GENERAL PROVISIONS
A. Basic policy on labor
B. Construction in favor of labor
C. Constitutional and Civil Code provisions relating to Labor Law
A.
BASIC POLICY ON LABOR
1. DECLARATION OF BASIC POLICY.
Article 3 o f the Labor Code declares die State’s basic policy on labor,
thus:
“Article 3. Declaration of Basic ?oBc/. - The State shall afford
protection to labor, promote full employment, ensure equal work
opportunities regardless o f sex, race or creed and regulate the relations
between workers and employers. The State shall assure the tights of
workers to self-organization, collective bargaining, security o f tenure,
and just and humane conditions of work.”
Article 3 is a substantial reiteration o f Section 9, Article II o f the 1973
Constitution1 under whose regime the Labor Code was enacted. The primordial
reason for the passage o f labor laws is social justice. B oth under the Constitution
and Article 3, the State is duty-bound to provide and guarantee the following:
a) Full protection to labor;
b) Promotion o f full employment;
c) Promotion o f equal work opportunities regardless o f sex, race or creed;
d) Regulation o f the relations between workers and employers;
e) Protection o f die rights o f workers to:
i. self-organization;
ii. collective bargaining;
iii. security o f tenure; and
1 SEC. 9. TheSlatsshalifofd protectiontolabw, promoteM employmentandequally inemployment ensureequalwoilc
oppoclnSesregardlessofsex, race, or creed, and regulateDierelafionsbetweenvwiters and employers. The State ste3
assuretherightsofwortos tosefotganizafion, coBedwebagging, securityofteem, andjustandhumaneccnrffionsof
wo*. TheStetemayprawfeforcompulsoryarbiliafion
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iv. just and humane conditions o f work.
The foregoing principles, being constitutionally mandated, should be
treated as the standard guidepost to which all labor laws and social legislations
should conform and upon which their legality and validity should be measured.
2. PO LICE POW ER OF T H E STATE.
Even without die applicable provisions o f die Constitution mandating the
protection and promotion o f the interest o f labor, the State is empowered to enact
labor laws and social legislations based on the immemorially-honored principle o f
police power, one that inheres in the State to protect itself and all its constituents.
It is principally vested in the legislature to make, ordain and establish all manners o f
wholesome and reasonable laws, statutes and ordinances, either with penalties or
without, not repugnant to the Constitution. The presumption is that die exercise
thereof is meant for the good and welfare o f the State and o f the subjects thereof.
This is a settled principle and the validity o f the exercise o f such power is not
affected by the imposition o f certain restrictions and regulations on die pursuit o f
business, occupation or profession.
The right to work, just like the right o f every person to pursue a business,
occupation or profession, is subject to the paramount right o f government,
pursuant to its police power, to impose such regulations and restrictions as the
protection o f the public may require. They are necessary for the orderly conduct o f
society. For as long as such regulations and restrictions are implemented and
enforced in accordance with appropriate limitations, their validity should be upheld
at all times.
B.
CONSTRUCTION IN FAVOR OF LABOR
1. CIVIL C O D E ’S ARTICLE 1702, IN R E L A T IO N T O LA B O R C O D E ’S
A RTICLE 4.
The immemotially honored rule that doubts in labor cases should be
resolved in favor o f labor has a strong basis in civil law and labor law.
Article 1702 o f the Civil Code states:
“Article 1702. In case o f doubt, all labor legislation and all labor
contracts shall be construed in favor o f the safety and decent living for the
laborer.”1
On the other hand, Article 4 o f the Labor Code declares:
PMpptne National Construction Corporation v. NLRC, G R No. 10153$, Jan 22,1993.
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GENERAL PROVISIONS
“Article 4. Construction in Favor oj Labor. - All doubts in the
implementation and interpretation o f the provisions o f this Code, including
its implementing rules and regulations, shall be resolved in favor of labor."
Observably, a discussion o f die Civil Code’s Article 1702 cannot be
complete without correlating it with the Labor Code’s Article 4. While the former
generally speaks o f doubts in labor laws and labor contracts, the latter is specifically
confined to doubts involving the provisions o f the Labor Code and its
Implementing Rules. There is thus a clear delineation between the two provisions
insofar as their respective subject matters are concerned. More definitively, while
Article 1702 is more comprehensive in that it covers all “labor legislations”which
necessarily include the Labor Code and other special laws, as well as all forms o f
“labor contracts” which cover employment contracts and collective agreements,
Article 4 is focused and confined solely on the Labor Code and its Implementing
Rules. This explains the frequent joint invocation by the courts o f these twin
articles in resolving doubts in labor cases.
The rule enunciated in the foregoing articles applies to all workers whether in the government o r in the private sector - in order to give flesh and vigor
to die pro-poor and pro-labor provisions o f the Constitution.1 It is in keeping with
the constitutional mandate o f promoting social justice and affording protection to
labor.2 Thus, when conflicting interests o f labor and capital are to be weighed on
the scales o f social justice, the heavier influence o f the latter should be counter­
balanced by sympathy and compassion die law must accord the underprivileged
worker.3 This is, o f course, no t a harsh rule. T he framers o f the Labor Code and
the Gvil Code had fully taken cognizance o f the disparity in terms o f resources and
standing between labor and capital. In any legal controversy between them, the
former always suffers the most. Hence, the common adage that those who have
less in life should have m ore in law is best exemplified and made real in both
Articles 4 and 1702. The- worker must look up to the law for his protection. The
law regards him with tenderness and even favor and always with faith and hope in
his capacity to help in shaping the nation’s future. He must not be taken for
granted.4
2. DOUBT OR AMBIGUITY IN LABOR CONTRACTS.
a. Rule in case o f em ploym ent contracts.
The general rule remains that where the law speaks in clear and categorical
language, there is no room for interpretation; there is only room for application.5
Contracts which are not ambiguous are to be interpreted according to their literal
1
2
3
4
5
LandandHousingDevetopmertCap.v. EsquBo,GR No. 152012.Sept 30,2005.
SeeSection18,Artide(loflheConsfiu8pn.ManiaBecbicCampanyv.MJ{C.GitNa.76763.JuV 12,1989.
MarcopperMnbg Cc:pofo&nv. NLRC, GJR. No. 103525, March29,1996.
CebuRoyalPtant[SanMiguelCorporation]v. MWsteroflabor, G.R No.58639,Aug. 12.1987.
lecndov.MST MarineServices, Inc., 6.R. No. 230357,06 Dec. 06.2017.
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meaning and not beyond their obvious intendm ent*1 Only when the law is
ambiguous or o f doubtful meaning may the court interpret o r construe its true
intent2 Thus, the liberal interpretation o f the Labor Code and its Implementing
Rules in its Article 4 has been applied to employment contracts3 by virtue o f Article
1702 o f the New Civil Code which mandates that "all labor contracts" shall likewise
be construed in favor o f the laborer.
Insofar as overseas employment is concerned, the PO EA Standard
Employment Contract (POEA-SEQ which is required to be sighted by every O FW
deployed abroad, should be construed liberally in favor o f .the OFW. A strict and
literal construction o f die 2010 POEA-SEC,4 especially when the same would
result into inequitable consequences against labor; is not subscribed to in this
jurisdiction. Concordant with the State’s avowed policy to give maximum aid and
fuQ protection to labor as enshrined in Article XIII o f the 1987 Philippine
Constitution, contracts o f labor, such as the 2010 POEA-SEC, are deemed to be so
impressed with public interest that the more beneficial conditions must be
endeavored in favor of the laborer. The rule therefore is one o f liberal construction,
as enunciated in Philippine Transmarine Carriers, Inc. v. NLR.C:5
“The POEA Standard Employment Contract for Seamen is designed
primarily for the protection and benefit o f Filipino seamen in the
pursuit o f their employment on board ocean-going vessels. Its
provisions m ust [therefore] be construed and applied fairly,
reasonably and liberally in their favor [as it is only] then can its
beneficent provisions be fully carried into effect”6
Applying the rule on liberal construction, the Court is thus brought to the
recognition that medical repatriation cases should be considered as an exception to
Section 20 of the 2000 POEA-SEC. Accordingly, the phrase “w ork-related death
of the seafarer, during the term o f his em ploym ent contract” under Part A (1)
of the said provision should not be strictly and literally construed to mean that the
seafarer’s work-related death should have precisely occurred during the term of bis
employment. Rather, it is enough that the seafarer's work-related injury or illness
which eventually causes his death should have occurred during the term o f his
employment Taking all things into account, the Court reckons that it is by this
method o f construction that undue prejudice to the laborer and his heirs may be
obviated and the State policy on labor protection be championed. For if the
laborer’s death was brought about (whether fully or partially) by the work he had
1
1
1
4
BabcoCMfoctiphis.]. Inc.v. Babcock-HbcNjPMs.]. he. MakaSEmployeesUnion. G il No. 156260. March10.2005.
kt
Id.,citingMatcopperMningCorporationv.NLRC.G.R. No. 103525,March29,1996,255 SCRA322.
IKsisfielatastAmendedSiandaRlTennsandConcEfionsGcHerrfngtieOmiseasEmidoymeniofRviRoSeeSaiasOnBoartOc^vGoingSHps
MerrxmkiraCira^Na 10, Seri®of2010,Ctetober26,2010^1x^.2000 POEASEC(StandardTermsandCondSon$Governing the Employment cf FIjpino Seaferers On BoardOceangoing Vessels,
issuedpuBuarttoOOlEDepartinertOlderNo.4, Seriesof2000 ^ 3 1 ,2000Di
» 6R No. 123891,Feb.28,2001,405 PM.487.
4 Enptasssuppled.
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' GENERAL PROVISIONS
5
harbored for his master's profit, then it is but proper that his demise be
compensated. Hence, if it has been established that (a) the seafarer had been
suffering from a work-related injury or illness during the term of his employment,
(b) his injury o r illness was the cause for his medical repatriation, and (c) it was later
determined that the injury o r illness for which he was medically repatriated was the
proximate cause o f his actual death although the same occurred after the term of
his employment, the above-mentioned rule should squarely apply.
b. R ule in case o f collective agreements.
In the area o f employment bargaining, the employer stands on higher
footing than the employee. The law m ust protect labor to the extent, at least, o f
raising him to equal footing in bargaining relations with capital and to shield him
from abuses brought about by die necessity to survive.1 Thus, the rule is laid that
while a CBA’s terms and conditions constitute the law between the parties, it is not
an ordinary contract to which is applied the principles o f law governing ordinary’
contracts. N o t being an ordinary contract as it is impressed with public interest, a
CBA must be construed liberally rather than narrowly and technically, and the
courts must place a practical and realistic construction upon it, giving due
consideration to the context in which it is negotiated and the purpose for which it
is intended to serve.2
3. DOUBT OR AMBIGUITY IN EVIDENCE.
The rule enunciated in Article 4 and Article 1702 likewise applies in the
appreciation o f evidence in labor proceedings. Consequently, when there is a doubt
between the evidence presented by the employer and the employee, such doubt
should be resolved in favor o f die latter.3 Time and again, the Supreme Court has
pronounced that “if doubt exists between the evidence presented by the employer
and the employee, the scales o f justice must be tilted in favor o f the latter.”4 The
policy is to extend the doctrine to a greater number o f employees who can avail
themselves o f the benefits under the law, which is in consonance with the avowed
policy o f the State to give maximum aid and protection to labor.5
In illegal dismissal cases, the consistent rule is that the employer must
affirmatively show rationally adequate evidence that the dismissal was for a just or
authorized cause. In case it fails, then it would result in having the termination
declared illegal.6
Sanchezv. HanyLyonsConsfcucfonCotporafan,G il No.1-2799, Oct 19,1950.
MarcopperMniigCaporaSonv. NLRC,GR No. 103525, March29,1996.
SouthEastInSemaSonalRattan,be.v, JesusJ. Cccnhg,G.RNo. 186621, March12,2014
BearriandHotelResortv.Johnson,G.R.No.191455, March12,20142,2010.
MetopcfianBankandTrustCompanyv. NLRC,GJlno. 152928,June18,2009.
HatoTrafiig Co, hc.v.CA,GJlftoi 148241,Sept 27,2002.
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4. THE RULE DOES NOT DEPRIVE EMPLOYERS OF FAIR
TREATMENT.
Certainly, this rule o f interpretation and construction in favor o f labor
does not mean that capital should, at all times, be at the losing end o f a
controversy. The law does not say so. For while die Constitution and the law tend
to favor the working man, protection to the employer is also assured. Protection o f
the rights of the laborer authorizes neither the oppression nor self-destruction o f
die employer. While the Constitution is committed to the policy o f social justice
and the protection o f the working class, it should not be supposed that every labor
dispute will be automatically decided in favor o f labor. Management also has its
own tights which as such are entitled to respect and enforcement in the interest o f
simple fair play. Out of its concern for those with less privilege in life, the Court
has inclined more often than not towards the worker and upheld his cause with his
conflicts with the employer. Such favoritism, however, has not blinded the Court
to rule that justice is, in every case, for the deserving, to be dispensed in the light o f
the established facts and applicable law and doctrine.1
The Philippine Constitution, while inexorably committed towards the
protection o f the working dass from exploitation and unfair treatment,
neverthdess mandates the policy o f social justice so as to strike a balance between
an avowed predilection for labor, on the one hand, and the maintenance o f the
legal rights of capital, the proverbial hen that lays the golden egg, on the other. The
Supreme Court, in PLOT v. NLRC,2 underscored that although it is bound by the
social justice mandate of the Constitution and the laws, such policy o f sodal justice
is not intended to countenance wrongdoing.
c.
CONSTITUTIONAL AND CIVIL CODE PROVISIONS
RELATING TO LABOR LAW
1.
CONSTITUTIONAL PROVISIONS
1. N O SPECIFIC C O N S T IT U T IO N A L PR O V ISIO N S R E F E R R E D T O
IN T H E SYLLABUS.
Unlike the previous labor law syllabi, the 2019 Syllabus no longer specifies
the constitutional provisions which bar candidates should focus on. However,
based on past topics prescribed for labor law, the following are the major artides
and sections thereof which relate to labor law:*
* Revidadv.KLRC,GRNO.111105.Juie27,’995.
’ Phippine Long DistanceTelephoneCo. v. NLRC. O R No. L-80G09. Aug. 23.1988.164 SCRA671.
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GENERAL PROVISIONS
(a) Article I I (D eclaration o f P rinciples a n d State P olicies) - Sections 9,
10,18 and 20 thereof;
(b) Article III (Bill o f R ights) - Sections 4,8,10,16 and 18(2) thereof; and
(c) Article X III (Social Ju stic e a n d H u m a n R ights) - Sections 2, 3, 13 and
14 thereof.1
Focus should therefore be m ade only on the above specified provisions.
F or ease in discussion, all the foregoing sections and articles are discussed below in
seriatim.
1-A.
DECLARATION OF PRINCIPLES AND STATE POLICIES
(Article II of the Constitution)
1. A R T IC L E II HAS T W O PA RTS.
Article II o f the Constitution is divided into two (2) parts, tn\.:
(a) Principles covering Sections 1 to 6; and
(b) State Policies covering Sections 7 to 28.
Notably, Sections 9, 10, 18 and 20 o f Article II fall under State Policies.
O ut o f the 28 Sections o f Article II, only these four (4) Sections need to be
discussed herein. These provisions state as follows:
ARTICLE II
DECLARATION OF PRINCIPLES AND STATE POLICIES
STATE POLICIES
Section 9. The State 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 o f life for all
Section 10. The State shall promote social justice in all phases of national
development
Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promoter their welfare.
Section 20. The State recognizes the indispensable role o f the private
sector, encourages private enterprise, and provides incentives to needed
investments.
2. S E C T IO N 9 (P R O M O T IO N O F F U LL E M P L O Y M E N T ).
Section 9’s relevance to labor law is accentuated by the State’s policy to
prom ote full employment to free the people from poverty with the end o f ensuring
the prosperity and independence o f the nation.
' A^Xin'ser^"SocialJusfeand rtjmanRghb.*
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Section 9 is aligned with the policy enunciated in Employment Policy
Convention, 1964 (No. 122)1 o f the International Labor Organization (ILO) which
aims at ensuring that (a) there is work for all who are available for and seeking
work; (b) such work is as productive as possible; (c) there is freedom o f choice o f
employment and the fullest possible opportunity for each worker to qualify for, and
to use his skills and endowments in, a job for which he is well suited, irrespective o f
race, colour, sex, religion, political opinion, national extraction or social origin.2
3. SECTION 10 (SOCIAL JU ST IC E ).
It is a fundamental poiicy o f the State to promote soda! justice in all
phases of national development CentralBank? pronounces that equality is one ideal
which cries out for bold attention and action in the Constitution. The Preamble
proclaims "equality” as an ideal precisely in protest against crushing inequities in
Philippine society. The command to promote social justice in Article II, Section
10, in "allphases ofnationaldevelopment,”further expounded in Article XIII,4 are clear
commands to the State to take affirmative action in the direction o f greater
equality. There is thus in the Philippine Constitution no lack o f doctrinal support
for a more vigorous state effort towards achieving a reasonable measure o f equality
Our present Constitution has gone further in guaranteeing vital social and
economic rights to marginalized groups o f society, including labor. Under the
policy of social justice, the law bends over backward to accommodate the
interests o f the working class cn the humane justification that those with less
privilege in life should have more in law. And the obligation to afford protection to
labor is incumbent not only on the legislative and executive branches but also on
the judiciary to translate this pledge into a living reality. Social justice calls for the
humanization o f laws and the equalization o f social and economic forces by die
State so that justice, in its rational and objectively secular conception, may at least
be approximated.5
4. SECTION 18 (PROTECTION-TO-LABOR CLAUSE).
Among die sections in Article II, it is Section 18 which is often cited in
labor cases as one o f the two ptotection-to-labor clauses in the Constitution, the
other being Section 3 of Article X III thereof infra. It is often invoked in resolving
doubts or ambiguities in die interpretation o f labor laws, employment contracts,
and collective bargaining agreements and in die appreciation o f evidence presented
in labor proceedings. The constitutional tenet embodied in Section 18 is also die
basis for the following provisions in the law; (1) Article 1702 o f the Civil Code,
which provides that all labor legislation and labor contracts should be construed in
1 Convention concerning Employment Pc&y (Eitry into force: 15 July 1966) Adopfon: Geneva,
ILC session (09 Jul
1964). See fitted at HO^ website locatedat tatpsy/wwwjtocf^. Lastaccessed: Mach 18.2019.
1 SeeAifide 1of AOCmptoymenlPoScyConvenOon, 1964(No. 122).
3 Central BankCmpIqveesAssociabon. Inc. v. BangkoSenbatng PQjAias. G.R. No. 148208. Dec. IS. 2004.
4 En^'Social Justiceand Human Rigte.*
5 Catebngv.Wffiams.GRNo.47800.Oet2,1940,70PNL726.
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favor o f the safety and decent living for the laborer; and (2) Article 4 o f the Labor
Code, which states that all doubts in the implementation and interpretation o f its
provisions, including its implementing rules and regulations, shall be resolved in
favor o f labor.1
Thus, when conflicting interests o f labor and capital are to be weighed on
the scales o f social justice, die heavier influence o f the latter should be counter­
balanced by sympathy and compassion the law must accord the underprivileged
worker.2 In interpreting die protection to labor and social justice provisions o f the
Constitution and the labor laws o r rules and regulations implementing the
constitutional mandates, the liberal approach which favors the exercise o f labor
rights should always be adopted.3
The same provision is the constitutional touchstone for the State's
discharge o f its avowed duty o f protecting and prom oting the exercise o f all the
rights granted to workers, such as die right to full employment and equality o f
employment opportunities, self-organization, collective bargaining and
negotiations, strike and other peaceful concerted activities, security o f tenure,
humane conditions o f work, and a living wage, including die tight to participate in
policy and decision-making processes affecting their tights and benefits as may be
provided by law.4
The constitutional policy in Section 18 is n o t meant to be a sword to
oppress employers. T he commitment o f the Court to the cause o f labor does not
prevent it from sustaining die employer when it is in die right F o r instance, an
employer should not be compelled to pay employees for work not actually
performed and in fact abandoned.3 N o r should an employer be compelled to
continue employing a person who is admittedly guilty o f misfeasance or
malfeasance and whose continued employment is patently inimical to the employer.
The law, in protecting the rights o f the laborer, authorizes neither oppression nor
self-destruction o f the employer.4
5. ON SECTION 20 (ROLE OF PRIVATE SECTOR).
Section 207 is the constitutional basis for die enactment o f laws that lay
down a healthy environment which encourages the private sector to put up
businesses that generate employment and provide much-needed goods and
services. It likewise paves the way for local and foreign investors to put their
12,2014.
> MarcopperMningCotpcrafcnv. NLRC,G il No. 103525,Mar** 29,1996.
* Adamson&Adamson,lnc.v.CIR,GJlNo.L-3512l),Jan.31,1984l127SCRA268.
4 SeeSection3, ArtdeXIiJ of &»CofjstfijfionandArtide3 of fie Labor Code. See alsoPl^jpheNaSonal Bankv.Padao.
G il Nos. 180849and 187143, Nov. 18,2011.
* Agabonv. NLRC,G.R. No. 158693,Nw. 17.20O4,ti6rgCapiv. NLRC.GA No. 117378,March26.1997.
< Id,dSngFapro, he.v. NLRC,G il No.1-70546,Oct 16.1986.145SCRA123.
' Section20. The Statsrecognizes tie ndispensable rale of theprivatesector, encouragesprivate enterprise, and pwides
natives toneededhvestmenls.
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investments into the local economy. Indeed, the State cannot do it alone; it needs
the active participation of the private sector as a main engine for national growth
and development1 The State's role is simply to provide the m ost appropriate
favorable incentives to mobilize private resources for this purpose.2 Consequently,
this section has been cited as basis for the enactment o f such major laws as R A
No. 7916, (The Special Economic Zone Act o f 1995),5 R A N o. 9184 (The
Government Procurement Reform Act); R A No. 6957/ as amended by R A No.
7718 (Ihe Amended Bufld-Operate-and-Transfer (BOT| Law], to name but a few.
6. STATE POLICIES, NOT SELF-EXECUTING PROVISIONS.
By its very title, Article II o f the Constitution simply reflects the State’s
'‘declaration efprinciplesandstatepondes. ” As such, the provisions under this article are
not intended to be in the nature o f self-executing principles ready for enforcement
through the courts.5 They are used by die judiciary as aids or guides in die exercise
of its power o f judicial review, and by the legislature, in its enactment o f laws. The
disregard o f these provisions cannot give rise to a cause o f action in the courts. The
reason is that they do not embody judicially enforceable constitutional rights but
mere guidelines for legislation.6 These broad constitutional principles need
legislative enactments to implement them.7 The reasons for denying a cause o f
action based on alleged infringement o f broad constitutional principles are sourced
from basic considerations of due process and the lack o f judicial authority to wade
“into the uncharted ocean o f social and economic policy-making.”8
1-B.
BILL OF RIGHTS
(Article 111 of the Constitution)
t FIV E (5) RELEVANT SE C T IO N S.
O ut of the 22 Sections o f the Bill o f Rights (Article III), only five (5) are
most relevant to labor law, to ait. Sections 4, 8, 10, 16 and 18(2), whose provisions
state as follows:
1 See $«6on 1, R A No. 6957 JJity 9.1990). enteed ’An Act Autoarizing h e Fnanang. Consturion, Operated and
Mattenatioeoftttaslrucauref^c^cfct¥the:siwatBSector1an(Jor01herPmposes.'
2 Id.
3 Asanendedty R A N a874& punef. l99Sl>entifled‘>AnActAmentfngReptfb6cActNo. 7916, O fteiw te Known as h e
■SpeoaJ EconomicZone Ad O f1995.’
4 Supra.
3 Ttfada v. Angaa, GR No. 118295. May 2,1997; Tondo Medical Center Employees Association v. CA, G.R. No.
167324, iuly 17.2007 p Banc).
3 AsheBhheleaitegcasedKtoSb^Incofporatedv.Morato,G JU to . 118910,July 17.1995.
3 Basoov. Paooor, G A No.91649, May 14,1991,197 SCRA52,68.
• T tfad av.JS I^sq p ra: See alsoOposav.?adoran, J r, G.R. No. 101083,Jdy 30.1993.224 SCRA792,817.
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GENERAL PROVISIONS
ARTICLE III
BILL OF RIGHTS
Section 4. No law shall be passed abridging the freedom o f speech, o f
expression, or of the press, or the right of the people peaceably to assemble
and petition the government for redress of grievances.
Section8. 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.
Stdion 10. N o law impairing the obligation of contracts shall be passed.
Stdion 16. All persons shall have die right to a_speedy disposition of
their cases before all judiriaL quasi-judieial- or administrative bodies.
Section 18. xxx (2) No involuntary servitude in any form shall exist
except as a punishment for a crime whereof die party shall have been duly
convicted.
2. SECTION 4 (FREEDOM OF SPEECH).
As far as labor law is concerned, Section 4 is relevant only in connection
with dre exercise o f the right to picket provided in the Labor Code,1 but not in
relation to the exercise o f the right to strike which derives its constitutional mooring
from a different provirion2 thereof. Simply put, these rights, although considered
twins or look-alikes in nature, are not one and die same. Thus, the right toJacket is
based on Section 4, Article III o f the Constitution; while, the right to strike is
anchored on Section 3, Article X III3 thereof.
Picketing may be distinguished from strike in that while the latter centers
on stoppage o f work, the former focuses on publicizing the labor dispute and its
incidents to the public. For its validity, picketing, being a freedom o f speech
activity, is not bound by the mandatory requirements for the conduct o f a strike. It
is simply required to be peaceful for its validity. Picketing thus simply involves the
act o f marching to and fro in front o f the employer’s premises, usually
accompanied by the display o f placards and other signs making known the facts
involved in a labor dispute. It is an activity separate and distinct from a strike.
(NOTE: Fora more comprehensive discussion on picketing and strike,
please read Chapter Five {Labor Relations!, Infra).
3. SECTION 8 (FREEDOM OF ASSOCIATION).
Section 8 generally guarantees the right o f the people to form unions,
associations, or societies for purposes not contrary to law. T he State makes this
right available to both public4 and private5 sector employees. More meaningfully,
' Artcle279 (254],laborCate
2 Mo(eparticiilariy;SQCIian3arA(fScioXBlhe(eof.
3 Oalemv.NaltenriiabffUnion,GJlNaL-7566;Jaa30,1957.
4 See ExbcuAo Order No. ISO. Series of 1987 which provides trie gukf^nes for fiie exercise of the right to organize of
governmentetqiloyees.
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reviewer o n
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law
for purposes o f the exercise o f this freedom o f association, Section 3, Article X III
o f the Constitution guarantees the right o f all workers to self-organization.
T o breathe life to this constitutional tenet, the L abor Code:
(a) protects the right o f w orkers to self-organization and to form , join, o r
assist labor organizations o f their ow n choosing.1
(b) declares as a policy o f the State the fostering o f a free and voluntary
organization o f a strong and united labor m o v em en t2
(c) declares that it shall b e unlawful fo r any person to restrain, coerce,
discriminate against o r unduly interfere with employees and workers in
their exercise o f the right to self-organization, w hich includes the right
to form, join, or assist labor organizations for the purpose o f collective
bargaining through representatives o f their own choosing and to
engage in lawful concerted activities for the sam e purpose o r for their
mutual aid and protection.3
4. SECTION 10 (FREEDOM OF CONTRACT).
The purpose o f the non-im pairm ent clause o f the Constitution is to
safeguard the integrity o f contracts against unw arranted interference by the State.
As a rule, contracts should not b e tam pered w ith by subsequent laws that would
change or modify the rights and obligations o f the parties.4 Im pairm ent is anything
that diminishes the efficacy o f the c o n tra c t T here is an im pairm ent if a subsequent
law changes the terms o f a contract betw een die parties, im poses new conditions,
dispenses with those agreed upon o r withdraw s remedies fo r the enforcem ent o f
the rights o f the parties.s T he non-im pairm ent d a u se is lim ited in application to
laws that derogate from prior acts o r contracts by enlarging, abridging o r in any
manner changing the intention o f th e parties.6 Necessarily, die constitutional
proscription would n o t apply to laws already in effect at the time ofcontractexecution?
A good illustrative case is
Anucension v. National Labor Union * A t
issue in
this case is R.A. N o. 33509 w hich exem pts m em bers o f any religious sects that
prohibit affiliation o f their m em bers in any labor organization, from being covered
by a union securin' dause. T h e union contends th at IL A
N o . 3350 is
unconstitutional for impairing the obligation o f its contract, specifically, the
security clause**embodied
“union
in its Collective Bargaining A greem ent (CBA) w ith the
AiSdes3 and253 [243),laborCode.
Aifide218(^(dP11(A)(c)l. LaborCode.
Ajfcte257p46). laborCode.
GoldenwayMercharxfcing Corporationv. EquitablePCI 8ank, GA Na 196540, March 13,2013.
Id;
BarangayAssod^Son for National Advancement and Tiansparenqr (BANAT) PartjMJst v. Comnusston pn QecSons, GiL
No. 177508, Aug. 7.2009. efingSenanov. Gallant Martime Services, he, GA No. (67614, March24,2009.
HaciendaLuisita, he v. PARC. GA No. 171101. July 5,2011.
GA No. L-26097, Nov. 29.1977.
EnactedonJune 18.1961. amending Section4 (a), paragraph 4 of RA. No. 875.
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13
company, by virtue o f which “membership in die union was required as a condition
for employment for all permanent employees and workers.” Ib is agreement was
already in existence at the time R.A. No. 3350 was enacted on June 18,1961, and it
cannot, therefore, be deemed to have been incorporated into the agreem ent But by
reason o f this amendment, Anucension as well as others similarly situated, could no
longer be dismissed from his job even if he should cease to be a mem ber, o r
disaffiliate from the union, and the company could continue employing him
notwithstanding his disaffiliation from the union. The Act, therefore, introduced a
change into the express to m s o f the union security dause; the company was partly
absolved by law from the contractual obligation it had with the union o f employing
only union members in permanent positions. It cannot be denied, therefore, that
there was indeed an impairment o f said union security clause.
The Supreme Court, however, ruled that the prohibition to impair the
obligation o f contracts is n o t absolute and unqualified. In spite o f the constitutional
prohibition, the State continues to possess authority to safeguard the vital interests
o f its people. Legislation appropriate to safeguard said interest may modify or
abrogate contracts already in effect Otherwise, important and valuable reforms
may be precluded by the simple device o f entering into contracts for the purpose o f
doing that which otherwise may be prohibited. It follows that not all legislations
which have the effect of impairing a contract are obnoxious to the constitutional
prohibition as to impairment, and a statute passed in the legitimate exerdse o f
police power, although it inddentally destroys existing contractual tights, must be
upheld by the courts. This has special application to contracts regulating relations
between capital and labor which are not merely ordinary but impressed with public
interest and therefore must yield to the common good.
What then was the purpose sought to be achieved by R.A. No. 3350? Its
purpose was to insure freedom o f belief and religion, and to promote the general
welfare by preventing discrimination against those members o f religious sects
which prohibit their members from joining labor unions, confirming thereby their
natural, statutory and constitutional right to work. It cannot be gainsaid that said
purpose is legitimate. It may n o t be amiss to point out here that the free exercise o f
religious profession or belief is superior to contract rights. In case o f conflict, the
latter must, therefore, yield to the former.1
As held in the 2009 tn banccast o f Serrano v. Gallant Maritime Services, Inc..2
“The prohibition [against impairment of the obligation o f contracts] is
aligned with the general principle that laws newly enacted have only a
prospective operation*
* and cannot affect acts or contracts already
< See alsoAbelav. NLRC, G .R No. 71813, July 20,1987.
* Serranov. GafentMaritimeServices, Inc, GR No. 1S7614. March24,2009.
» Origas &Co.. Ud. v. CA, GA No. 126102. Dec4.2000.346 SCRA748.
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>4
perfected;1 however, as to laws already in existence, their provisions arc read
into contracts and deemed a part thereof.2 Thus, the non-impairment
clause under Section 10, Article III [of the Constitution] is limited in
application to laws about to be enacted that would in any way derogate
from exisdng acts or contracts by enlarging, abridging or in any
manner changing the intention o f the parties thereto.”3
Thus, in this case, the enactment in 1995 o f R A . No. 8042, otherwise
known as the ‘Migrant Workers and Overseas Filipinos Act of 1995" preceded the
execution of the employment contract between petitioner and respondents in
1998. Hence, it cannot be argued that R A . No. 8042, particularly the subject
clause,4 impaired die employment contract o f the parties. Rather, when the
parties executed their 1998 employment contract, they were deemed to have
incorporated into it all the provisions o f R A . No. 8042.
Police Power vs. Freedom o f C ontract.
It must be borne in mind that police power is superior to the non­
impairment clause.5 In other words, the constitutional guaranty o f non-impairment
of obligations o f contract is limited by the exercise o f the police power o f the State,
in the interest o f public health, safety, morals and general welfare.6
Thus, in Conference ofMaritime ManningAgencies, Inc., v. POEA,7 the Court
did not consider violative o f the constitutional non-impairment clause, Resolution
No. 01, Senes of 1994, of the Governing Board of die PO EA and PO EA
Memorandum Circular No. 05, Series o f 1994s that amended and increased die
rates affecting death and workmen's compensation and other benefits provided in
the POEA Standard Employment Contract (POEA-SEQ for seafarers and
provided that “[u]pon effectivity, the new compensation and other benefits shall
apply to any Filipino seafarer already on-board any vessel provided, that the cause
o f action occurs after die said compensation and benefits take effectf.]”
1 PicopResouces,ltc.v. BaseMetals
Resourcestopoation,GJlNa 163509, Dec. 6,2006,510SCRA400.
1 lt^Assu3nceCoiporatov.RepubBcdtieRi^)p(nes.GRNo.156571,Ju!y9,2008.
5 Undercoolingsuppied.
4 Thesubjeddause68>elastciauseb9>e5r paragraphofSec(ion10cfRANa8042,towt,$ec.10. MoneyCtaims.xxxIncase oftemins&onofnerceas employmentwithoutjust, vaDda autfneed cause as defined by lawor con&act the
waters shaBbe enWedtobe fttBramburcement ofhis placement fee wftfi interestoftwelvepercent (12%) perannum, plus
hissaiaries^irieunexp^portxxirfteerTptoyinemaxtkactorJbf
5
6
!
1
AreM9ryyeartrfff»ur)euiprecf6ef7rL,
wttta/or&fes&xxx (Enni^a^andiaidefSOQnngsuppGedinttnorigmallextoftitedeci^cml.'ntisclausewasdedaed
unconsSufcnal toWscase
PhSppineNational Bankv. Rerrigb, GJl No.78508,21 March 1994.
ThePhSppineAmericanLife
Conrsnyv. TheAuiSa General, GR No. L-19255, Jan. 18,1968.
Corfete«edMarierneManringAgencies,t[C,v;POEA,GJlNo.114714lA(i(a21.1995.
MemorandumOcular No. 05, issuedon 19 January 19942 by POEAAdministrator Fefcisimo Joson and addressed to el
FSpbo seafarers. manning agencies. shjpowvercLmanagers and principals hmg FSpho seafarers, informed fliem .that
Gcweming BoardResolutionNo.01 adjusted l» rates of compensafion andotter benefits h Part II, SectionC. paragraph 1;
Section L, paragraphs 1 and 2; and Appendix 1-Aof the POEA Standard Employment Contracts for Seafarers, which
adjustments tookeffect on 20 Marid) 1994, and fiat "VI Upon etfec&iiy. foe newcompensafion and otoer benefits shal
apply to any Fifpho seafarer already avtoart any vessel prwided, that the case of action occurs after the sadd
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GENERAL PROVISIONS
The challenged Resolution and Memorandum Circular were held to be
valid implementations o f E.O. No. 797, the executive order creating the POEA
which was enacted to further implement the social justice provisions o f the 1973
Constitution and which have been greatly enhanced and expanded in the 1987
Constitution. They were enacted under the police power o f the State and thus, they
cannot be struck down on the ground that they violate the contract clause. T o hold
otherwise is to alter long-established constitutional doctrine and to subordinate the
police power to the contract clause.
This must be so because constitutional prohibition against impairing
contractual obligations is not absolute and is not to b e read with literal exactness. It
is restricted to contracts with respect to property o r some object o f value and
which confer tights that may be asserted in a court o f justice; it has no application
to statutes relating to public subjects within the domain of the general legislative
powers o f the State and involving the public tights and public welfare o f the entire
community affected by i t It does not prevent a proper exercise by the State o f its
police power by enacting regulations reasonably necessary to secure the health,
safety, morals; comfort, or general welfare o f the community, even though
contracts may thereby be affected, for such matters cannot be placed by contract
beyond die power o f die State to regulate and control them.1
Police power legislations adopted by die State to promote the health,
morals, peace, education, good order, safety, and general welfare o f die people are
generally applicable n o t only to future contracts but even to those already in
existence, for all private contracts must yield to the superior and legitimate
measures taken by the State to prom ote public welfare.2
5. SECTION 16 (SPEEDY LABOR JUSTICE).
Section 16 guarantees to all persons, employees and employers alike, the
tight to a speedy disposition o f their labor cases and disputes before all quasijudidal or administrative bodies like the NLRC, Bureau o f Labor Relations, D O L E
and other agencies tasked to dispense labor justice as well as before judicial
tribunals like the Court o f Appeals and the Supreme Court when such labor cases
and disputes are elevated to these superior courts by way o f Rule 6$ certiorari
petition or appeal, as the case may be.
However, “speedy disposition of cast/ ’ or “speedy laborjustici' is a relative term
and a flexible concept It is consistent with delays and depends upon the
dtcumstances o f each case. W hat the Constitution prohibits are unreasonable,
arbitrary and oppressive delays which render tights nugatory.3
1 ConferenceofM ar^ ManningAgencies, Ire, v. POEAGR No. 114714, Aprii2U995.
* Serranov. GaflantMarira Setvioes, he, GR No. 167614, March24.2009.
3 Cad*v.POEANLRC.GRNos. 104776,104911-Hand 105029-32,Dec.05.1994.
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Bar Reviewer on Labor Law
Speedy labor justice, in :erms o f period, is provided under Article 292(i)
[277(i)J of the Labor Code, thus:
“(l) To ensure speedy labor justice, the periods provided in this Code
within which decisions or resolutions of labor relations cases or matters
should be rendered shall be mandatory. For this purpose, a case or matter
shall be deemed submitted for decision or resolution upon the filing of the
last pleading or memorandum required by the rules of the Commission or by
the Commission itself, or the Labor Arbiter, or the Director of the Bureau of
Labor Relations or Med-Arbiter, or the Regional Director."
In the determination of whether or not the right to a “speedy trial' has
been violated, certain factors may be considered and balanced against each other.
These are the length of delay, reason for the delay, assertion o f the right or failure
to assert it, and prejudice caused by the delay. The same factors may also be
considered in answering the judicial inquiry as to whether or not a person officially
charged with the administration o f justice has violated the speedy disposition o f
cases.1
While the speedy disposition o f labor cases may be the policy of the law, it
must be emphasized that speed alone is not the chief objective o f a trial. It is the
careful and deliberate consideration for the administration o f justice, a genuine
respect for the rights of all parties and the requirements o f procedural due process,
and an adherence to the Court’s standing admonition diat the disposition of cases
should always be predicated on the consideration that more than the mere
convenience of the courts and of the parties in the case, the ends o f justice and
fairness would be served thereby. These are more important than a race to end the
trial.2 As eloquently expressed by the US Supreme Court in one case,3 which,
although not legally controlling in this jurisdiction, nevertheless has persuasive
effect ‘The establishment of prompt efficacious procedures to
achieve legitimate state ends is a proper state interest worthy of
cognizance in constitutional adjudication. But the Constitution
recognizes higher values than speed and efficiency. Indeed, one may
fairly say of the Bill of Rights in general, and the Due Process Clause in
particular, that they were designed to protect the fragile values of a
vulnerable citizenry from the overbearing concern for efficiency and
efficacy that may characterize xxx government officials xxx”
6. SECTION 18 [2 ] (INVOLUNTARY SERVITUDE).
A reading of Section 184 indicates that it is obviously applicable to criminal
cases only. This explains why its 2nd paragraph on involuntary servitude is phrased
' Caballero v. Alfonso, Jr., 153SCRA153 (1987; Gonzales v. Sandiganbayan, 199 SCRA 298.
1 Habana v. NLRC, G R No. 129418, Sept 10.1999; See De Guzman v. El&nias, G R No. 57395, AprJ17.1989.
3 Id., ciing Stanley v.lSnois, 405 U.S. 645,658.
4 Section 18. (1) No person shall be detained sotety by reason of his poitical befiefs and aspirations
J9JC9B0M
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in this fashion: “N o involuntary servitude in any form shall exist except as a
punishment for a crime whereof the part)7 shall have been duly convicted.”
However, in at least three (3) labor law situations, the concept o f involuntary
servitude finds application, namely:
(1) Voluntary resignation;
(2) Retum-to-work order in national interest disputes; or
(3) Compulsory fulfillment of military or civic duty.
6 .1.
VOLUNTARY RESIGNATION.
“Involuntary servitude is every condition of enforced or compulsory service
o f one to another, no matter under what form such servitude may be disguised.*1
The constitution categorically prohibits involuntary servitude.2 It is on the basis o f
this constitutional precept that employees are granted the right to resign or to
terminate their employment relationship with their employers under Article 300
[285]3 o f the Labor Code. This article recognizes the equality o f the parties to an
employment relationship. Thus, an employee may resign from employment at any
time he wishes and with or without just cause, subject only to certain minimum
conditions imposed by law.4
The case o f BPI v. BP1 Employees Union,5 is instructive on this point. It
involves the merger o f BPI with FEBTC,6 where the Voluntary Arbitrator ruled
that, in accordance with Section 80 of the Corporation Code, the employees of
FEBTC form part o f the “assets and liabilities” transferred to the surviving bank,
petitioner BPI, by virtue of the merger. The Supreme Court, however, did not
agree to this postulation. In legal parlance, human beings are never embraced in the
term “assets and liabilities.” It is contrary to public policy to declare the former
FEBTC employees as forming part of the assets or liabilities of FEBTC that were
transferred and absorbed by BPI in the Articles o f Merger. Assets and liabilities, in
this instance, should be deemed to refer only to property rights and obligations o f
FEBTC and do not include, the employment contracts o f its personnel. A
corporation cannot unilaterally transfer its employees to another employer like
chattel. Certainly, if BPI as an employer had the right to choose who to retain
among FEBTC’s employees, FEBTC employees had the concomitant right to
choose not to be absorbed by BPI. Even though FEBTC employees had no choice
1
2
3
4
5
6
(2) No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been
duly convicted.
Rubi v. Provincial Board of Muvloro, G R No. L-14078. March 7,1919,39 Phil. 660.
Section 18 [2], Article ill [BS of Rights], 1987 Constitution.
Entitled Temiinaton by Employee." This is commonly known as "resignation * As renumbered pursuant to Section 5, R A
No. 10151, June 21,2011 and DOLE Department ArNisory No. 01, Series ol 2015 (Renumbering of the Labor Code of the
Philippines, as Amended), issued on July 21,2015.
Such as when an employee resigns or terminates without just cause the employee-employer relationship, by serving a
written notice on he employer at least one (1) month in advance (See Article 300 {285], Labcx Code).
BPI v. BPI Employees UrtavOavao Chapter-federation of Unions in BPI Unbank, G.R No. 164301, Aug. 10,2010.
Far East Bank and Trust Company (FEBTC).
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BAR REVIEWER ON UBOR LAW
or control over the merger o f their employer with BPI, they had a choice whether
or not they would allow themselves to be absorbed by BPL Certainly nothing
prevented the FEBTCs employees from resigning o r retiring and seeking
employment elsewhere instead o f going along with the proposed absorption.
Employment is a personal consensual contract and absorption by BPI o f a former
FEBTC employee without the consent o f the employee is in violation o f an
individual's freedom to contract It would have been a different matter if there was
an express provision in the Articles o f Merger that as a condition for the merger,
BPI was being required to assume all the employment cpnttacts o f all existing
FEBTC employees with the conformity o f the employees. In the absence o f such a
provision in the Articles o f Merger, then BPI clearly had die business management
decision as to whether or not to employ FEB TC s employees. FEBTC employees
likewise retained the prerogative to allow themselves to be absorbed or not;
otherwise, that would be tantamount to involuntary servitude.
6.2. RETURN-TO-W ORK O R D E R IN N A T IO N A L IN T E R E S T
DISPUTES.
In national interest cases1 where the D O LE Secretary exercises his
assumption or certification power, returning to work on the part o f die worker by
virtue of a retum-to-work order is not a matter o f option o r voluntariness but o f
obligation.2 It must be discharged as a duty even against the worker’s will. The
worker must return to his job together with his co-workers so that the operation o f
the company can be resumed and it can continue serving the public and promoting
its interest.3 This is the real reason such return can be compelled. So imperative is
the order in fact that it is not even considered violative o f die constitutional right
against involuntary servitude, as held in Gotmco Saw Mi/l* A retum-to-work order
is immediately executory in character and should be stdcdy complied with by die
parties even during the pendency o f any motion o r petition questioning its validity
in order to maintain the status quo while the determination is being made.5 The
obligation so imposed must be discharged as a duty more than as a right that may
be waived. While the workers may choose not to obey, they do so at the risk o f
severing their relationship with their employer.6
6.3. COMPULSORY F U L F IL L M E N T O F M ILITA R Y O R CIVIC DUTY.
Article 301 [286]7 o f the Labor Code which provides for compulsory
fulfillment o f military o r civic duty on the part o f employees, is another instance
' AsptwidedinAttde278(g)(263(g^LaborCode.
1 MartxipperMningCorporaSonv. Britantes, GJt. No. 119381, March11,1996.
> Saniertov.Tuico.6il Nos. 75271*73,June27,1988,162 SCRA676.
4 KasatongMgaMang3ag3vasaKahoysaP^)inasv.GotamooSawNSI,GANo.L-1573tMarct)29ll9«,
4 Marcoooef MninoCorooraSonv, Mantes, suora.
1 PMcomEmployees Unionv. PhJippineGlobal Communications, G il No. 144315,July 17,2006.
7 Enatecf*WhenEmployment NotDeemed Tetmrated.*Uxlerthisarticle, employees maybe caSedtofaffiBcertainmtlitatyor
avicdu^b^ suchshallnrttemv^ employment
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which falls under the exception to this constitutional proscription on involuntary
servitude. This is so because die constitutional prohibition should be subordinated
to the right o f the government to call upon its citizens to protect their State as
provided under Section 4, Article II o f the Constitution. The survival o f the State is
die paramount justification for such involuntary servitude.
1-C.
SOCIAL JUSTICE AND HUMAN RIGHTS
(Article XIII of the Constitution)
1. FO U R (4) R ELEV A N T S E C T IO N S O F A R T IC L E X III.
Article XIII embodies 19 Sections but only four (4) are most relevant to
labor law, w^.: Sections 2 ,3 ,1 3 and 14, whose provisions are as follows:
ARTICLE XIII
SOCIALJUSHCE AND HUMAN RIGHTS
Sedan 2. The promotion of social justice shall include the commitment
to create economic opportunities based on freedom of initiative and selfreliance.
LABOR
Section 3. The State shall afford fall protection to. labor, local and
overseas, organized and unorganized, and promote fall employment and
equality of employment opportunities for all
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 be entided to KCWty-Of
tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including mnriltarinnr and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right o f 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.
WOMEN
Sedan 14. The State shall 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 fall potential in the service of die nation.
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2. SECTIO N 2 (SOCIAL JU STICE).
Section 10 o f Article II o f the Constitution declares that it is a policy o f
die State to promote social justice in all phases o f national development Section 2
o f Article XIII thereof is the amplification o f this policy in that the promotion o f
social justice shall include the commitment to create economic opportunities based
on freedom o f initiative and self-reliance.
The Article on Social Justice was apdy described as the “heart o f the new
Charter” by the President o f the 1986 Constitution Commission, retired JusticeCecilia Munoz-Palma.1Social justice is identified with the broad scope o f the police
power o f the state and requires die extensive use o f such power.2 In Calalang v.
WilBms;3 the Court, speaking through Justice Jose P. Laurel, expounded on social
justice thus:
“Soda) justice is ‘neither communism, nor despotism, nor
atomism, nor anarchy,’ but the humanization of laws and the
equalization of social and economic forces by the State so that justice in
its rational and objectively secular conception may at least be
approximated. Social jusdee means the promotion of the welfare of all
the people, the adoption by the Government of measures calculated to
insure economic stability o f all die competent dements of society,
through the maintenance of a proper economic and social equilibrium
in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extraconstitutionally, through the exercise o f powers underlying the existence
of all governments on die time-honored principle of solus popuB at
supnmakc
“Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among (fivers and diverse units of a
society and of die protection that should be equally and evenly extended
to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of die state of
promoting the health, comfort, and quiet of all persons, and of banging
about ‘the greatest good to die greatest number.”*
In sum and as articulated in the Constitution, the aim o f social justice is to
protect and enhance die right o f all die people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities.4
3. SECTIO N 3 (PR O T E C T IO N -T O -L A B O R CLAUSE).
Section 3 is the principal prottetion-to-bbor clause in the 1987 Constitution,
the other being Section 18 of Article II which declares that “ [tlhe State affirms
>
2
)
4
O rterew edM a^M anniigA gencies,Inc,v.PO EA .G R .N o. 114714,April21,1995.
td.. ca^tgEnnqueM. Femando.TTie CortsStutianorthe Phfippines. ^ e d . (1977], 79-80.
Catafang v. V\ASams, GJL No. 47800. Dec. 2,1540,70 P hi 726.
SeeSecfonl.AifcteXm thereof.
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21
labor as a primary social economic force. It shall protect the lights o f workers and
promote their welfare.” T he underlined keywords in the quoted provisions o f this
section above are worthy to be taken note o f considering that they reflect the rights
and principles that encompass almost all of the provisions o f the Labor Code and
other related laws.
In the workplace, where the relations between capital and labor are often
skewed in favor o f capital, inequality and discrimination by the employer are all die
more reprehensible.1 Section 3 specifically provides that labor is entitled to
"h u m an e conditions o f w ork." These conditions are not restricted to the
physical workplace - the factory, the office o r the field - but include as well the
manner by which employers treat their employees.2 T he same provision o f the
Constitution also directs die State to prom ote "equality o f employment
opportunities for all” Similarly, die Labor Code3 provides that the State shall
"ensure equal work opportunities regardless o f sex, race o r creed." It would be an
affront to both the spirit and letter o f these provisions if the State, in spite o f its
primordial obligation to prom ote and ensure equal employment opportunities,
doses its eyes to unequal and discriminatory terms and conditions o f employment.4*
Discrimination, particularly in terms o f wages, is frowned upon by the
Labor Code. Article 133 [135), for example, prohibits and penalizes3 the payment
o f lesser compensation to a female employee as against a male employee for work
o f equal value. A rtide 259 [248] declares it an unfair labor practice for an employer
to discriminate in regard to wages in order to encourage o r discourage membership
in any labor organization.
It bears noting that unlike all die rights granted under Section 3, die last
paragraph6 thereof has no t been implemented by any provision in die Labor Code
o r in any other laws. I t was, however, d ted in Asia Bm/try, Inc. v. TPMA,1 in
declaring that the D O L E Secretary has gravdy abused her discretion when she
relied on the unaudited financial statements o f petitioner corporation in
determining the wage award because such evidence is sdf-serving and inadmissible.
N ot only did this violate the December 19, 2003 O rder o f the D OLE Secretary
h etsd f to petitioner corporation to submit its complete audited finandal
statements, but this may have resulted to a wage award that is based on an
‘ h S e m a ^ School Affiana of EducaaxspSAEJv.QiiisuTting.GR. No. 128845, June 1,2000.
* ML
3 h A ifc te 3 fo » o t
* IrfemaSonal School ASarce of Educators [ISAEJ v. Quisuntng. supra;
Arfide 133 [135J of lie Labor Code cfecteres if
uitawfiuiiDrfl)eemplcyerfe>rB(|ulnn,notordyasaoon(BBonofenrp)o^nentbutalsoasaoon(fiBonlbr8ieoontinunSonof
un io yn ^ tiataw o n B n sh sin o to etin an iel
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BAR REVIEWER ON LABOR lAW
inaccurate and biased picture o f petitioner corporation's capacity to pay - one o f the
more significant factors in making a wage award. Petitioner corporation has offered
no reason why it failed and/or refused to submit its audited financial statements for
the past five years relevant to this case. This only further casts doubt as to the
veracity and accuracy o f the unaudited financial statements it submitted to the
DOLE Secretary. Verily, this procedure cannot be countenanced because dais could
unduly deprive labor o f its right to a ju s t sh are in th e fruits o f p ro d u ctio n *1 and
provide employers with a means to understate their profitability in order to defeat
the right o f labor to a just wage.
4. SECTION 14 (PR O T E C T IO N O F W O M E N ).
The Constitution, cognizant o f the disparity in tights between men and
women in almost all phases o f social and political life, provides a gamut o f
protective provisions. To die a few o f die primordial ones: Section 14, Article II on
the Declaration o f Principles and State Policies, expressly recognizes the role o f
women in nation-building and commands die State to ensure, at all times, the
fundamental equality before the law o f women and men. Similarly, Section 14 o f
Article X SI mandates that die State shall protect working women through
provisions for opportunities that would enable them to reach their full potential.2
Several laws have been enacted promoting and protecting women
employees before the passage o f the Labor Code on May 1,1974 as P.D. No. 442.1
Corrective labor and social laws on gender inequality have emerged with more
frequency in die years since the Labor Code was enacted, largely due to our
country’s commitment as a signatory to the United Nations Convention on the
Elimination o f All Forms of Discrimination Against Women (CEDAW). Principal
among these laws ate:
(a) R.A. N o. 6725 [May 12, 19891, which expliddy prohibits
discrimination against women with respect to terms and conditions
o f employment, promotion, and training opportunities;
(b) R JL N o. 6955 [June 13, 1990], which bans the “mail-order-bride”
practice for a fee and the export o f female labor to countries that
cannot guarantee protection to die rights o f women workers;
(c) R.A. N o. 7192 (Februaiy 12, 1992], also known as the Women in
Development and Nation building A ct” which affords women equal
enploy^, recogniririg tierightof tabatoisiustsharein tiehinteof producfion and fie r^htof enterprises to reasonabfe
mtiri«oninw8Strnents.aridto€D9ansionaidgrawth.a
1 Id.
Shops^ Factories, Industry. AghcufliBnt and Mercanfie EstabSshments, and 09ier Place of Lsbor in Rv^ppcne Islands,
to f^ F e n aS e sfo rM o b ficn s Hereof and for OherPuposeS,i(2 ) R A No. 679 (April 15,1952), enSted "An A d to
Regulate he Employmentof Women and CMdnen, toftw ife Fenafes torVfcfefion H a w ta d fr0 9 w R a p o e e s *;(3 )
R A No. 1131 (June 16,1954) amending R A No. 679; (4) R A No. 2714 (June 16, I960), creating h e Bureau of Women
and Mnors; and (5) PD . No. 148 (March 13.1973fc fisher amending R A No. 679.
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GENERAL PROVISIONS
opportunities with men to act and to enter into contracts, and for
appointment, admission, training, graduation, and commissioning in
all military or similar schools o f the Armed Forces o f the Philippines
and the Philippine National Police;
(d) R A N o . 7322 [March 30,1992], increasing die maternity benefits
granted to women in the private sector,
(e) R A N o . 7877 (February 14, 1995], which outlaws and punishes
sexual harassment in the workplace and in the education and training
environment;
(f) R A N o . 8042 [June 7, 1995], or die’ "Migrant Workers and Overseas
FilipinosAct o f1995, "which prescribes as a matter o f policy, interalia,
the deployment o f migrant workers, with emphasis on women, only
in countries where their rights are secure. likewise, it would not be
amiss to point out that in the Family Code (Executive Order N o. 209
dated July 6, 1987 [effective on August 3, 1988]), women’s rights in
the field o f dvil law have been gready enhanced and expanded;1
(g) R A N o . 10151 (June 21,2011], an A ct Allowing the Employment o f
Night Workers, Thereby Repealing Articles 130 and 131 o f PJD. N o.
442, as amended, Otherwise Known as the Labor Code o f the
Philippines"; and
(h) R A N o . 11210 [February 20, 2019], otherwise known as the “105Day ExpandedMaternityLeaveLav. ”
Additionally, the following laws were enacted to combat violations against
die rights o f women, including their children:
1)
R A N o . 9208 [May 26, 2003], an Act to institute policies to
eliminate trafficking in persons especially women and children,
establishing the necessary institutional mechanisms for the protection
and support o f trafficked persons, providing penalties for its
violations, and for other purposes, otherwise known as the “AntiTrafficking in VersonsAct of2003. ”
2)
R A N o . 9262 [March 08, 2004], an Act defining violence against
women and their children, providing for protective measures for
victims, prescribing penalties therefor, and for other purposes,
otherwise known as the “Anti-Violence Against Women and Their
ChildrenAct of2004“
5. A R T IC L E X III, N O T S E L F -E X E C U T IN G PR O V ISIO N S.
While all the provisions o f die 1987 Constitution are presumed self­
executing,2 there are some which the Court has declared not judicially
' PMippine Telegraph and Telephone Co. v. NLRC, 6 .R No. 118878, May 23,1997.
2 Seflam v.G aaartM ari^Savces,inc,G JlN o.187614.M arch24.2009.
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BAR REVIEWER ON U B O R lAW
wifAirwhlf Article XIII being one o f them,1particularly the provisions on social
justice,2 labor* and women,4 as pronounced in a number o f cases.5 They ate mere
statements o f principles and policies. As such, they are mere directives addressed
to the executive and the legislative departments. I f unheeded, the remedy will n o t
lie with the courts; but rather, the electorate’s displeasure may be manifested in
their votes.6
More specifically, on Section 3 thereof, the Court, in Agabon v. NLRC,7
explained:
"Thus, the constitutional mandates of protection to labor and security
of tenure may be deemed as self-executing in the sense that these are
automatically acknowledged and observed without need for any enabling
legislation. However, to declare that the constitutional provisions are enough
to guarantee the full exercise of the rights embodied therein, and the
realization of ideals therein expressed, would be impractical, if not
unrealistic The espousal of such view presents the dangerous tendency of
being overbroad and exaggerated. The guarantees of ‘full protection to labor’
and 'security of tenure’, when examined in isolation, are facially unqualified,
and the broadest interpretation possible suggests a blanket shield in favor of
labor against any form o f removal regardless of circumstance. This
interpretation implies an unimpeachable right to continued employment - a
utopian notion, doubtless • but still hardly within the contemplation of the
framers. Subsequent legislation is still needed to define the parameters of
these guaranteed rights to ensure the protection and promotion, not only of
the rights of die labor sector, but of die employers' as wdL Without specific
and pertinent legislation, judicial bodies will be at a loss formulating their
own conclusion to approximate at least the aims of the Constitution.
"Ultimately, therefore, Section 3 o f Article X III cannot, on its
own, be a source o fapositive enforceable right to stave off the dismissal
of an employee for just cause owing to the failure to serve proper notice or
hearing. As manifested .by several framers of the 1987 Constitution, the
provisions on social justice require legislative enactments for their
enforceability.”8
Thus, Section 3 cannot be treated as a principal source o f direct
enforceable rights, for the violation o f which the questioned clause may be
1 kl.d& i98asav.R ippheAniBem enlandG am iigCa|Xxa8on,G ilNo.91M 9.M ay14.1991l 197SCRA52.
3 Sections 1 and 2 (hereof; Agabon v. NLRC, G R . No. 158G93, Non. 17,2004,442 SCRA 573. See Sepaate Opinion of
Juste Dante Toga ii his case.
3 S ecfa3fw eo f; See AgPbonv.NIJRC, supra.
* Section 14 (hereof; See Tondo MetficaiCeftter Employees AssodaSon v. CA, GJ?. No. 167324. Jtiy 17.2007 (En Bate),
s Sixti as tie cases erfBasmv.PhJippraArriisemert aid Gaming Corporation 6 J I No. 91649. ffey 14,1991.
6 Tondo Steical Center Bti^oyeesAssodiionv.CA,GR No. t67324,Jti)f 17,2007 (BiBanci.
1 G.R. No. 158®3, Nov. 17,2004,442 SCRA 573. Ttvs quotation was Ifted from the Separate Opinion cf Justice Dante Tnga
in Agabonv. NLRC.
e Enphasis added in the original decision h Serrano v. Gdant Maritime Services. Inc tr ite quoted this portion of (he
Separate Opinion of Juste Dante Tinga in Agabcnv. NLRC, supra.
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25
declared unconstitutional. It may unwittingly risk opening the floodgates o f
litigation to every worker or union over every conceivable violation o f so broad a
concept as social justice for labor.1 Section 3 merely clothes it with the status o f
a sector for whom die Constitution urges protection through executive or
legislative action and judicial recognition. Its utility is best limited to being an
impetus not just for die executive and legislative departments, but for the
judiciary as well, to protect the welfare o f die working class.2
1-D.
CONSTITUTIONAL RIGHTS THAT CANNOT BE INVOKED IN
COMPANY-LEVEL ADMINISTRATIVE CASES
1. IN A PPLIC A BILITY P E R JU R IS P R U D E N C E .
Certain constitutional rights and precepts may N O T be invoked in labor
cases> particularly in company-level administrative investigations leading to the
termination o f employment because they can only be asserted against the
government or the state but not against a private party like an employer. More
particularly, the following tights, per wdl-entrenched jurisprudence, generally find
no application in company-level administrative cases initiated o r lodged by the
employer against an erring employee:
(a) Right to constitutional due process;
(b) Right to equal protection o f die laws; and
(c) Right to counsel
The above constitutional tights can be invoked only when the labor case
is finally lodged with die labor and judicial courts, in which case, any deprivation
thereof would afford the employee die right to invoke them, this time, against the
government or state as represented by the labor and judicial authorities.
A.
INAPPLICABILITY OF
RIGHT TO CONSTITUTIONAL DUE PROCESS
L STATUTORY D U E PROCESS A PPLIES.
According to Agabon v. NLRC,3 the constitutionaldue process prescribed in
Section 1, Article III o f the Constitution does not apply to company level
administrative investigation that may result in die dismissal o f an employee. W hat
applies is the statutory due process laid down in Article 292(b) (277(b)] o f the Labor *
1 Serrano v. Gailaril Martens Services, Inc., G.R. No. 167614, March 24.2009.
* Id.
J AgSbon v. NLRC, G A No. 156693, Nw. 17,2004.
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Ba r Reviewer o n Labor Law
Code. The Court, in justifying the shift in doctrine, distinguished constitutional due
process from statutory due process in this wise:
process under the Labor Code, like Constitutional due
process, has two aspects: substantive, i.e., the valid and authorized
causes of employment termination under the Labor Code; and
procedural, it., the manner of dismissal. Procedural due process
requirements for dismissal are found in the Implementing Rules o f P.D.
442, as amended, otherwise known as the Labor Code o f the
Philippines in Book VI, Rule I, Sec. 2, as amended by Department
Order Nos. 9 and 10. Breaches of these due process requirements
violate the Labor Code. Therefore statutory due process should be
differentiated from failure to comply with constitutional due
process.
Constitutional due process protects the individual from
the government and assures him of his rights in criminal, civil or
administrative proceedings: while statutory due process found in
the Labor Code and Implementing Rules protects employees
from being unjustly terminated without iust cause after notice and
hearing.”1
In othet words, when the employer, in terminating its employee, does not
afford the latter die procedural due process he deserves, it is not the constitutional
due process that is violated but only the statutory due process provided in die Labor
Code, more specifically, Article 292(b) [277(b)] thereof12
2.
C ON STITUTIO NA L D U E PROCESS, W H E N O BSER V ED .
The observance o f constitutional due process becomes necessary only
when a labor case has already been filed with the labor courts and subsequendy,
when it teaches the superior courts (CA and SC). As distinguished from employer’s
company-level due process, the government is now involved; hence, any
deprivation of due process o f either party - the employee or employer - to the
labor suit by such labor officials/tribunals o r superior courts would constitute a
violation o f the right to constitutional due process under Section 1 o f Article III o f
the Constitution.
B.
INAPPLICABILITY OF
RIGHT TO EQUAL PROTECTION OF THE LAWS
L RATIONALE FOR ITS IN A PPLIC A BILITY .
In earlier rulings o f the High Court, it was declared that the failure o f the
employer to give the employee the benefit o f procedural due process before he is
1 Underscoring suppSed
’ SeelOngtrfrangsTransport. he. v. Martas G.R No. 166208. June 29.2007.
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27
dismissed constitutes an infringement not only o f his constitutional right to due
process o f law but to equal protection o f the laws.‘.However, it is a settled principle
that the commands o f the equal protection clause are addressed only to the state or
those acting under color o f its authority. It has been held in a long array o f U.S.
Supreme Court decisions that the equal protection clause erects no shield against
merely private conduct, however discriminatory or wrongful it may have been.2
The only exception occurs when the State, in any o f its manifestations o r
actions, has been found to have become entwined or involved in a wrongful private
conduct Absent this exception, this constitutional tenet cannot be invoked in
private proceedings such as an administrative case o f an employee leading to
his/her dismissal
For example, such exception has been declared absent in the case o f
Duncan Association of Detailman-PTGWO and Pedro A . Tecson v. Glaxo Welcome
Philippines, Inc.,* where the employer’s policy prohibiting its employees from any
personal or marital relationships with employees o f competitor companies was held
not violative o f die equal protection clause in the Constitution and n o t
unreasonable under the circumstances because relationships o f that nature might
compromise die interests o f the company. SigniOcandy, the company actually
enforced the policy after repeated requests to the employee to comply therewith.
Indeed, the application o f the said policy was made in an impartial and evenhanded manner with due regard for the lot o f the employee. In any event, from the
wordings o f the contractual provision and the policy in its employee handbook, it is
dear that die company does not impose an absolute prohibition against
relationships between its employees and those of competitor companies. Its
employees are free to cultivate relationships with and many persons o f their own
choosing. What the company merely seeks to avoid is a conflict o f interest between
the employees and the company that may arise out of such relationships.
T he same pronouncement was made in Yrasuegui v. Philippine Airlines, Inc.,*
where petitioner was dismissed because o f his failure to measure up to the weight
standards set by respondent airline company. His termination due to obesity was
held legal and not violative o f the equal protection clause in the Constitution. The
High Court observed that the United States Supreme Court, in interpreting the
Fourteenth Amendment which is the source o f the equal protection guarantee in
the 1987 Constitution, is consistent in saying that the equal protection dause
erects no shield against private conduct, however discriminatory or wrongful it may 1
1 W 6npHCoporafionv.NLRC,GANo.80587,Feb.8.1989.
2 District of ColumMav. Cater, 409 US 418,34 LEd.2d 613,93 S. CL 602,35 L.Ed2d 694,93 S. C l 1411; Moose Lodge No.
107 v. bvis, 407 US 163,32 LEcL2d 627,92 S. C l 1965; United States v Price. 383 US 787,16 L Ed. 2d 267,66 S. a
1152.
3 G R N o. 162994,Sept 17.2004.
4 G R N o. 168081,Oct 17,2008.
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be. Private actions, no matter how egregious, cannot violate the equal protection
guarantee.
C.
INAPPLICABILITY OF
RIGHT TO COUNSEL
1. INVOCATION OF R IG H T T O C O U N SE L IN A N A D M IN IST R A T IV E
PROCEED IN G.
The rffif to counsel cannot be invoked in administrative proceedings.
This principle has been enunciated in Manuel v. N. C. Construction Supply} In this
case, petitioners were positively identified as being involved in a series o f thefts at
respondent company. They were thus invited to the Pasig police station for
investigation regarding their alleged involvement in the offense. A t the police
station, the private respondents’ counsel conducted in their behalf an investigation
regarding petitioners' involvement in the theft He interrogated the petitioners on
' their alleged participation in the series o f thefts committed at respondent company.
Petitioners initially denied the charge. However, after being positively identified by
Jay Calso, petitioners admitted their guilt and offered to resign in exchange for the
withdrawal o f any criminal charge against them. The company lawyer accepted their
resignation.
In the illegal dismissal case they filed against private respondents,
petitioners argued that their admission made at die Pasig police station regarding
their involvement in the theft as well as their resignation were not voluntary but
were obtained by private respondents’ lawyer by means o f threat and intimidation.
They contended that their admission is inadmissible as evidence against them under
Section 12 o f Article III [Bill of Rights] o f the 1987 Constitution. In rejecting this
argument and upholding the validity o f their dismissal, die Supreme Court
emphasized that the right to counsel under the said provision o f the 1987
Constitution is meant to protect a suspect in a criminal case who is under custodial
investigation. Custodial investigation is the stage where the police investigation is
no longer a general inquiry into an unsolved crime but has begun to focus on a
particular suspect who has been taken into custody by die police to carry out a
process of interrogation that lends itself to elicit incriminating statements. It is that
point when questions ate initiated by law enforcement officers after a person has
been taken into custody or otherwise deprived o f his freedom o f action in any
significant way. The right to counsel attaches only upon the start o f such
investigation.2 Therefore, die exclusionary rule under said provision o f the Bill o f
Rights o f the 1987 Constitution applies only to admissions made in a criminal
investigation but not to those made in an administrative investigation.
> 6 R Nd 127553,Nw.28.1997,282 SCRA326**
* Peoplev. Bandula, G Jl No.89223, May27,1994,232 SCRA566.
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In the case at bat, the admission was made by petitioners during the
coutse o f the investigation conducted by ptivate respondents' counsel to determine
whether there is sufficient ground to terminate their employment Petitioners were
not under custodial investigation as they were n o t yet accused by the police o f
committing a crime. The investigation was merely an administrative investigation
conducted by the employer, not a criminal investigation. T h e q uestions w ere
p ro p o u n d ed by th e em ployer's law yer, n o t by police officers. T h e fact th a t
the investigation w as conducted a t th e police station d id no t necessarily p u t
petitioners u n d e r custodial investigation as th e venue o f the investigation
w as m erely incidental. H ence, d ie ad m issio n s m ade by p etitioners d u rin g
su ch investigation may be used as evidence to justify th eir dism issal.
2. E F F E C T O F FA ILU R E O F E M P L O Y E R T O IN F O R M E M P L O Y E E
O F H IS R IG H T T O C O U N SEL.
But would the failure o f die employer to inform the employee, who is
undergoing administrative investigation, o f his right to counsel amount to
deprivation o f due process?
This was answered in the affirm ative in Punqal ». ETSI Technologies, Inc.}
where petitioner’s contention that she was denied due process was upheld because
the records do not show that she was informed o f her tight to be represented by
counsel during the conference with her employer.
The protestations o f
respondent-employer that the right to be informed o f the right to counsel does n o t
apply to investigations before administrative bodies and that law and jurisprudence
merely give the employee the option to secure the setvices o f counsel in a hearing
or conference, fall in the light o f the clear provision o f Article 292(b) (277(b)J o f
the Labor Code that “the employerxxx shallafford [the worker whose employment is sought to
be terminatedj ample opportunity to he heard and to defend himself with the assistance of his
representatives if he so desires in accordance with company rules and regulations pursuant to
guidelines set by the Department of Labor and Employment, ” and the Supreme Court’s
explicit pronouncement that “[ajmple opportunity connotes every kind of assistance that
managment mustaccordthe employeeto enablehim toprepareadequatelyfor his defenseincluding
kgal repnsetttation.i' Consequently, the petitioner was awarded nominal damages in
the am ount o f P30,000.00 for violation o f her right to statutory due process.
3. T H E L O P E Z D O C T R IN E .
The Punyal ruling above no longer holds because a new pronouncement
was made in die 2011 case o f Lope%v. A hum Group ofCompanies} to die effect that
the right to counsel and the assistance o f one in investigations involving
termination cases is neither indispensable nor mandatory. It is only under any o f
the following circumstances that such right becomes indispensable and mandatory:*
1 G J l N o t 17038445, March 9.2007.
* G .R No. 191008, April 11,2011,647 SCRA568.
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1) When the employee himself requests for counsel; or
2) When he manifests that he wants a formal heating on the charges
against him.
Consequently, if there is no showing that an employee has requested for a
formal heating to be conducted o r that he be assisted by counsel, there can be no
deprivation o f due process to speak of.
In this case of L opttf the NLRC*2 held that petitioner should have been
afforded, or at least advised o f the right to counsel. It thus held that “any
evaluation which was based only on the explanation to the show-cause letter and
any so-called investigation but without confrontation o f the vital witnesses, do[es]
not suffice.” la reversing this ruling, the Supreme Court pronounced that:
“Parenthetically, the Court finds that it was error for the
NLRC to opine that petitioner should have been afforded counsel or
advised of the right to counsel. The right to counsel and the
assistance of one in investigations involving termination cases is
neither indispensable nor mandatory, except when the employee
himself requests for one or that he manifests that he wants a
formal hearing on the charges against him. In petitioner’s case,
there is no showing that he requested for a formal hearing to be
conducted or that he be assisted bv counsel. Verily, since he was
furnished a second nonce informing him of his dismissal and the
grounds therefor, the twin-notice requirement had been complied with
to call for a deletion of the appellate court’s award of nominal damages
to petitioner.”3
2.
CIVIL CODE PROVISIONS
L RELEVANT PROVISIONS.
There are a number o f provisions o f die Civil Code related to labor law.
However, only four (4) articles thereof are mentioned in die most recent syllabi in
connection with the major topic o f "Fundamental Principles and Concepts” which is
now denominated as 'General Principles” under die 2019 Syllabus. These articles
state:
Art 1700. The relations between capital and labor are not merely
contractual They are so impressed with public interest that labor
contracts must yield to die common good Therefore, such contracts
are subject to the specal laws on labor unions, collective bargaining,
< GR.No. 191008,April 11,2011,647SCRAS68.
2 Offing SBIawv. NLRC,GR. No. 90766, Sept 27,1991,202 SCRA7.
1 Emphasis suppSed.
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31
stokes and lockouts, dosed shop, wages, working conditions, hours of
labor and similar subjects.
A rt 1701. Neither capital nor labor shall act oppressively against the
other, or impair the interest or convenience of the public
Art. 1702. In case o f doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the
laborer.
A rt 1703. No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid.1
Although provided in the Civil Code, the civil law principles reflected in
the afore-quoted articles are often invoked in labor cases.
2. A R T IC L E 1700.
A contract is defined as “a meeting o f minds between two persons
whereby one binds himself, with respect to the other, to give something or to
render some service."2 Parties are free to stipulate on terms and conditions in
contracts as long as these “are not contrary to law, morals, good customs, public
order, or public policy."3 This presupposes that the parties to a contract are on
equal footing. They can bargain on terms and conditions until they are able to reach
an agreement O n the other hand, contracts o f employment are different and have
a higher level o f regulation because they are impressed with public interest The
employer and the employee are not on equal footing.
Thus, employment contracts are subject to regulatory review by the labor
tribunals and courts o f law. The law serves to equalize the unequal The labor force
is a special class that is constitutionally protected because o f the inequality between
capital and labor.4 It is axiomatic that the employer and the employee do not stand
on equal footing, a situation which often causes an employee to act out o f need
instead o f any genuine acquiescence to die employer.5 “Protection to labor" dots not
signify the promotion o f employment alone. W hat concerns the Constitution more
paramountly is that such an employment may be above all, decent, just and
humane.5
T he supremacy o f die law over contracts is explained by die fact that
labor contracts are not ordinary contracts; these ate imbued with public interest
and therefore are subject to the police power o f the State.7 The provision o f Article
1 These provisions are found in Secfion 2 [Contract of Labor], Chapter 3 (Wort and Labor], 1 % VIII [lease] of Book IV
fObfigaficns and C ontact of 9 » C M Code.
2 Article 1305, C M Code.
* Article 1306. Id.
4 Fuj Television Networt, Inc. v. Espcrtu, G il Nos. 2W 54445, Dec. 3,2014.
s Jacufeev.Si&nanUtaeisfy. & R . No. 156934, March 16,2007.
* PhSp^AsscxiaSondSeiviceB(po(te(s.lnav.Hon.Oion,&R-No.81958JuR830.1988.
1 VBav. NLRC.G Jl No. 117043, Jaa 14,19% .
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1700 o f the Civil Code reflects this exercise o f police power.1 Consequently, labor
contracts must yield to the common good and pursuant to the inherent police
power of the State, they are subject to the provisions o f the Labor Code and special
laws on such matters as labor unionism, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours o f labor and similar subjects.
Simply, this means that provisions o f these applicable laws, especially provisions
relating to matters affected with public policy, ate deemed written into the contract.
Put a little diffetendy, die governing principle is that the parties may not contract
away applicable provisions of law especially peremptory provisions dealing with
matters heavily impressed with public interest The law relating to labor and
employment is dearly such an area and parties are n o t at liberty to insulate
themselves and their relationships from the impact o f labor laws and regulations by
simply contracting with each other.2 The private agreement o f the parties cannot
prevail over Article 1700 of the Civil Code.3
2.1. KINDS O F LABOR CON TRA CTS.
The employment contracts referred to in A rttde 1700 may either be
(1) Employment contract; or
(2) Collective bargaining agreement (CBA).
Leyte Geothermal v. P N O C -E D C illustrates a case involving an
employment contract. The issue here is whether the members o f petitioners ate
project employees or regular employees. The Court pronounced that A rdde 295
[280]5 of the Labor Code, as worded, establishes that the nature o f the employment
is determined by law, regardless o f any contract expressing otherwise. The
supremacy o f the law over the nomendaturc o f the contract and die stipulations
contained therein is to bring to life the policy enshrined in the Constitution to
"afford hill protection to labor."6 Thus, labor contracts are placed on a higher plane
than ordinary contracts; these are imbued with public interest and therefore subject
to the police power of the State.7 However, notwithstanding die foregoing
iterations, project employment contracts which fix die employment for a spedfic
project or undertaking remain valid under the law. In the case at bar, the records
reveal that the “officers and the members o f petitioner union signed employment
contracts indicating the specific project or phase o f work for which they were
hired, with a fixed period o f employment As deady shown by petitioner union’s
own admission, both parties had executed the contracts fredy and voluntarily
' ConferenceofMariticneMaradigAgencies.he.,v.F0EA,GJtNo. 114714,April21,1995.
PaJastanArtnesCofpocatnriv.Opte.GR No 61594,Sept 28,1990.
1 Innoda&Kno^eSeniices.lncv.Wng GR No. 211892, Dec. 06,2017.
* Leyte Geofcermal Power Progresswe Employees UraonALU-TUCP v. Ptfipp'ne National Oil. Company-Energy
DevelopmentCorporation,GR No. 1703S1. March30,2011.
5
295(280] - ReguJarandCasial Erx^oyment
* SeeSection3, ArticleXIB, 1987Constitution.
7 SeeArticles1700and 1702oftie Ctf Code; Wav. NLRC, GR No. 117043. Jan. 14,1998,348 PM. 118,140-141.
1
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' GENERAL PROVISIONS
without force, duress or acts tending to vitiate the workers’ consent. Thus, there is
no reason not to honor and give effect to the terms and conditions stipulated
therein.
Davao Integrated Pori Stevedoring Sendees o. Abarquetf illustrates a case
involving a collective bargaining agreement. The CBA in Article 263 [252]2 o f the
Labor Code refers to a contract executed upon request o f either the employer or
die exclusive bargaining representative incorporating the agreement reached after
negotiations with respect to wages, hours o f work and all other terms and
conditions o f employment, including proposals for adjusting any grievances or
questions arising under such agreement While the terms and conditions o f a CBA
constitute the law between the parties, it is not, however, an ordinary contract to
which is applied die principles o f law governing ordinary contracts. A CBA, as a
labor contract within the contemplation o f Article 1700 o f the Civil Code, is not
merely contractual in nature but impressed with public interest, thus, it m ust yield
to the common good.3 As such, it must be construed liberally rather than narrowly
and technically, and the courts must place a practical and realistic construction
upon it, giving due consideration to. the context in which it is negotiated and
purpose which it is intended to serve.4
3. A R T IC L E 1701.
Article 1701 clearly mandates that neither capital n o r labor shall act
oppressively against the other, or impair the interest ox convenience o f the public.
O ur laws provide for a d ear preference for labor. This is in recognition o f the
asymmetrical power o f those with capital when they are left to negotiate w ith their
workers without the standards and protection o f law. The preferential treatment
given by our law to labor, however, is not a license for abuse. I t is not a signal to
commit acts o f unfairness that will unreasonably infringe on the property tights o f
the company. Both labor and employer have social utility, and the law is n o t so
biased that it does not find a middle ground to give each their due.5
For example, in one case,6 the employer was allowed to withhold terminal
pay and benefits pending the employee's return o f its housing property. The
employer daim s that its property is in petitioners’ possession by virtue o f their
status as its employees. It allowed petitioners to use its property as an act o f
liberality. Put in other words, it would n o t have allowed petitioners to use its
property had they no t been its employees. Clearly, in this case, it is for the workers
' GR No. 102132, March 19,1993.
2 Ascenumbered pusuant to Section 5, RA No. 10151. June 21.2011 and DOLE Department Advi90iy No. 01. Series of
2015 (Renumberingof he Labor Codedfte PhSppines,as Amended), issuedon July21.2015.
3 See alsoGrtek Employeesla to U n o > 4W v .(^ B e cto te ,tn c,G R No. 190515, Nov. 15.2010.
4 48AAmJur2d, s. 1800,pp. 255-256.
5 Man v.NLRC,GJlNa 202961,Feb. 4,2015
s Manv.NLRC^upra.
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to return their housing in exchange for the release o f their benefits. This is what
they agreed upon. It is what is fair in the premises.
4. ARTICLE 1702, IN R E L A T IO N T O A R T IC L E 4 O F LA B O R C O D E .
(NOTE: See discussion above on the topic of
“B. CONSTRUCTION IN FAVOR OF LABOR”).
5. A RTICLE 1703.
Article 1703 is very dear in its prohibition that no contract which
practically amounts to involuntary servitude, under any guise whatsoever, shall be
valid. There is likewise a related provision on involuntary servitude in A rdde 32 o f
the Civil Code which holds liable for damages “ [a]ny public officer or employee, or
any private individual, who direcdy o r indirecdy obstructs, defeats, violates or in
any manner impedes or impairs xxx th e rig h t to be free from involuntary
servitude in any form /’1
N ot only is involuntary servitude prohibited and penalized in the Civil
Code, the Revised Penal Code likewise punishes forced labor in some o f its
provisions.2
The Constitution, in paragraph 2, Section 18 o f A rtide IE 3 thereof, is very
categorical in declaring that “[n]o involuntary servitude in any form shall exist
except as a punishment for a crime whereof the party shall have been duly
convicted.”
In 1930, the ELO has passed the Forced L abour C onvention N o. 29
concerning forced or compulsory labour.4 Under this convention, the term forced
or compulsory labour shall mean all work or service which is exacted from any
person under the menace o f any penalty and for which the said person has not
offered himself voluntarily. Nevertheless, for the purposes o f this Convention, the
term forced or compulsory labour shall n o t in d u d e (a) any work or service exacted in virtue o f compulsory military service
laws for work o f a purdy military character,
(b) any work or service which forms part o f the normal rivic obligations
of the atizens of a M y self-governing country;
(c) any work or service exacted from any person as a consequence of a
conviction in a court o f law, provided that the said work or service is
carried out under the supervision and control o f a public authority and
that the said person is not hired to or placed at the disposal o f private
individuals, companies or associations;
(d) any work or service exacted in cases o f emergency, that is to say, in the
event of war or o f a calamity or threatened calamity, such as fire,
' SeeNo. 14hereof.
Such as Artide 272 on Sfever); AiUde 273 on 09ibaaSbn of cWtf labor; Arfide 274 on Serums rendered under
conpufsw ii w m t of(fete. AndAiMe 286on Graeawcfoa
1 BBcfRgMs.
4 Enty intofens 01 May 1932;Adc^: Geneva, 14ft 1C session(KJun 1930).
•
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35
flood, famine, earthquake, violent epidemic or epizootic diseases,
invasion by animal, insect o r vegetable pests, and in general any
circumstance that would endanger the existence or the well-being o f
the whole o r part o f the population;
(e) minor communal services o f a kind which, being performed by the
members o f the community in the direct interest o f die said
community, can therefore be considered as normal civic obligations
incumbent upon the members o f the community, provided that the
members o f die community o r their direct representatives shall have
die right to be consulted in regard to the need for such services.
(NOTE: For more extensive discussion on involuntary servitude, please
read the annotation on Section 18(2), Article II of the Constitution, supra).
0O0
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TOPICS PER SYLLABUS
PRE-EMPLOYMENT
A. Recruitment and placement of local and migrant workers (Labor
Code and R.A. 8042, as amended by R.A. 10022)
1. Illegal recruitment and other prohibited activities
a. Elements
b. Types of illegal recruitment
c. Illegal recruitment vs. estafa
2. Liability of local recruitment agency and foreign employer
a. Solidary liability
b. Theory of imputed knowledge
3. Termination of contract of migrant worker without just or valid
cause
4. Ban on direct hiring
B. Employment of non-resident aliens
A.
RECRUITMENT AND PLACEMENT OF
LOCAL AND MIGRANT WORKERS
(Labor Code and RA. 8042,1as amended by R.A. 10022)
[Note; The topics under this Section will be rearranged
1.
WHAT CON STITUTES R E C R U IT M E N T A N D PL A C E M E N T
ACTIVITIES.
a. As defined in the Labor Code.
The Labor Code, in its Article 13(b), defines "recruitment and
placementMactivity as referring to any act of;
Otherwiseknow asthe W ip a n l W o tto ts a n d OverseasF & p i m s M 0 (1 9 9 5 .'
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(a)
(b)
(c)
(d)
37
canvassing,
enlisting,
contracting,
transporting,
(e) utilizing, o r
(Q hiring procuring workers.
It also includes:
(1)
(2)
(3)
(4)
referrals,
contract services,
promising, or
advertising for employment, locally or abroad, whether for profit or
not
b. N o change in meaning as these terms are defined in special laws
and rules.
B oth the applicable laws for recruitment and placement for local
em ploym ent1 and overseas em ploym ent2 have retained the above definition and
concept o f recruitment and placement as originally rendered in Article 13(b) o f the
Labor Code.3
2. M E A N IN G O F T H E PROVISO IN A R T IC L E 13(b).
Article 13(b) contains a proviso that states: “Provided, T h a t any p erso n
o r entity w hich, in any m anner, offers o r prom ises for a fee, em plo y m en t to
two o r m ore persons shall be d eem e d engaged in recru itm en t and
p la c e m e n t”
The proviso above has been explained by the Supreme Court in People v.
Pam,4 a case involving recruitment for overseas employment The issue o f whether
there is recruitment and placement was raised considering that the four (4) separate
criminal informations filed against the accused for operating a fee-charging
employment agency without being duly licensed to do so, merely mentioned ooe
person in each o f the information as having been recruited by him. The accused
contends that under Article 13(b) o f the Labor Code, there could only be illegal
recruitment when two or more persons in any manner were promised o r offered
any employment for a fee.
1 Secbon42, firstpanagraplvld^Section1, Rule W. OmniMis RulesandRegutafionstm(riemer£ngtheMgrantWortcersand
Overseas FSphos Act of 1995, as Amended by RA No 10022, issued on July8.2010: See also Section 76. Rule X
Revised POEA Rules and RegutaSons Governing the Recruitment and Employment of Land-Based Overseas Flipino
Workers of 2016; Section 72, Ride X 2016 Revised POEA Rides and RegutaSons Governing Die Recruitment and
EmploymentofSeafarersissuedonFebruary26.2016.
2 Section6 ofRA Mo.8042, asamendedbySector 5of RA No. 10022.
3 Noticeably, in the definSon in (he 2014 Rides far beat employment of what constitutes Segal recrutmenL (he word
Transporting’ ismissing. (See Section42, Revised Ridesand RegulationsGoverningRecruitment andPlacementfor Local
Employment, DepartmentOrderNo. 141-14, Seriesof2014 (November20,20140.
4 GJlNos.L-58674-77.Juty 11.1986.142SCRA664.
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The Court declared, however, that the above-quoted proviso in Article
13(b) was intended neither to impose a condition on the basic rule nor to provide
an exception thereto but merely :o create a presumption. The presumption is that
the individual or entity is engaged in recruitment and placement whenever he or it
is dealing with two or more persons to whom, in consideration o f a fee, an offer or
promise o f employment is made in die course o f the “canvassing, enlisting,
contracting, transporting, utilizing, hiring o r procuring o f workers.”
The number o f persons dealt with is not an essential ingredient o f the act
of recruitment and placement o f workers. Any o f the acts mentioned in the basic
rule in Article 13(b) will constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely lays down a rule o f evidence that
where fee is collected in consideration o f a promise or offer o f employment to two
or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act o f recruitment and placement The words “shall be
deemed”should, by the same token, be given the force o f a disputable presumption
or o f a primaJade evidence o f engaging in recruitment and placement
1.
ILLEGAL RECRUITMENT
AND OTHER PROHIBITED ACTIVITIES
1. APPLICATION T O B O T H LOCAL A N D OVERSEAS
EM PLOYM ENT.
The concept o f ' Illegal recruitment” under Article 38l o f the Labor Code
applies to recruitment and placement for both localand overseas employment But a
distinction must be pointed out at the very outset that as far as recruitment for
local employment is concerned, the sole basis thereof is Article 38 and nothing
more, unlike recruitment for overseas employment where new laws2 have been
1 ART.3&fif^recn^iient-(3)Anyreaifitrnentac&^es.incfaidhgeieprohlAedp(acGoesenunnetatediinderAi&le34of
lus Code, tobe undertakentqr nontensees or noivhcUeis of aultoriV, shaDbe deemed Oegaf and pumshsfdeunder
Artde 39 oftfe Code. TheDepartnert ofLaborand Employmentor anylawenforcement officer mayingate complaints
underlitisAiMe.
(b) ISegal recruitioent whencommittedbya syncficateor inlargescale shall beconsideredan offense hvrdvingeconomic
sabotageandshaJbepenaSzedinaccordancewti Aride39hereof.
BegatrecndJTient is deemedcommilEd bya syrafcafe tf earnedout by a groupof tree (3) or more personsconspiring
andtorcontederafingwft oneanothern canyingoutanyuriawlidorOegal transaftn, ertopiise orschemedefinedunder
thefast paragraphhereof. tBegal recnabnenl is deemed conuntted in largosesdoIf oommHtedagainst &vee (3) or mono
peisomintMdtfifiyaasagioup.
(c)TheSecreiaiyoflabor aid Employmentor hisdulyauthorizedrepresentativesshadhavethepowertocauseBlearest
anddetentionotsud»nontcenseeornontdderof authorityI afteriwesjgafai itisdetemdnedthathisaefrSesconstitute
adangerb nationalsecurflyaid pubicorderorwBleadtofather etpfeiialionofjoteeetas TheSecretasyshallorderfoe
seanhottheoSceor premisesandseizureof documents, paaphemaiia, propertiesandotherimplementsusedin Uegaf
reauitmentactivitiesandtheclosureof companies, establishmentsandenSies foundtobe engagedin the recruitment of
votes faromiseasemployment,wftoutharngbeenficensedorauthorizedtodo»
> Suchas1*1995 law,RA. No.8042,anditsamendablylaw,RA. No. 10022,at*hvaspassed'n2010.
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39
enacted to govern and regulate it, if not to supersede i t Under these new laws' as
well as their implementing rules,*2 the concept o f illegal recruitment under the Labor
Code has been broadened.3*Thus, while under the original rendering o f the Labor
Code, the prohibited activities enumerated in Article 34 constitute illegal
recruitment only when undertaken by non-licensees or non-holders of authority* the
commission thereof is now considered illegal recruitment, in cases o f recruitment
for overseas em ploym ent, both under R.A. No. 8042 and its amendatory law,
R_A. No. 10022, when the same are committed by “any person, whether a non­
licensee, non-holder, licensee or holder ofauthority”56
Although there is no similar corresponding amendment to Article 38 that
would have justified the same “broadening” o f its application to illegal
recruitment involving local employment, the 2014 Ruled1 have now likewise
reflected the same broadened coverage as to include prohibited acts when
committed by "any person, w h eth er o r not a holder o f a license or authority.”7
This is as it should be since die intendment o f die law can never be enlivened and
vivified unless such coverage is broadened as is now provided in the prevailing
Rules.
2. L IC E N S E O R A U T H O R IT Y .
a. License vs. authority.
“License" refers to the document issued by the D O LE Secretary
authorizing a person, partnership or corporation to operate a private
recruitment/manning agency.8
“Authority" refers to a document issued by the D O L E Secretary
authorizing the officers, personnel, agents or representatives o f a licensed
’ II
2 Such as the Omnaxjs Rules and Regdadons lmp!emen&ig he MigrantWaters and Qraseas Flpinos Act of 1995, as
Amended by RA No. 10022, issued onJuly 8,2010; Revised POEARules and Regulations Governing tie Recruitment
andEmploymentofLandflasedOverseasFiipnoWorkersof2016;2016RevisedPOHARulesandRegiafions Gowning
he RecnribnentandEmploymentofSeafarersissuedonFebruary26.2016.
3 The SuptemeCout has declared hat R. A. No. 8042 has broadened he concept of 3egal recnftnent under he labor
Code. (Peoplev. TotenGno. G.R. No. 208686, July 01,2015; Peoplev. Daud, GJl No. 197539, June02.2014; Peoplev.
Oaten, GJl No. 173198, June 1,2011; People v. Trinidad, GJl No. 161244, Aug. 09,2010; Peoplev. Nogra, GJl No.
170834,Aug. 29,2008).
* Peoplev. Cabacang.GR No. 113917,July 17,1995,246SCRA530.
5 SeeSec6on6ofRA No. 8042, asamendedbySection5 ofRA No. 10022.
6 RevisedRulesandRegubSoruGowerraigRecrutnnertardPlaoemenj hr IccaJEmployment, Department Order No. 14114,Sedesof2014[November20,2014).
7 SeeSection42hereof.
3 Section 1(w), Rule II, Omnixis Rules and Regulations Impiemerting the Mgrant VMers and Overseas Fiphos Act of
1995,asamendedbyRA No. 10022. issuedonJuly8,2010.
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recruitmcnt/manoing agency to conduct recruitment and placement activities in a
place stated in the license or in a specified place.1
b. “Non-licensee” or “non-holder o f authority.”
The term "non-Kansu” o r "non-holder of authority” refers to any person,
partnership or corporation with no valid license2 o r authority3 to engage in
recruitment and placement o f workers o r whose license o r authority is revoked,
cancelled, terminated, expired o r otherwise delisted from the toll o f licensed
recruitment/manning agencies registered with the P O E A /D O L E .4
The acts mentioned in Article 13(b) o f the Labor Code can lawfully be
undertaken only by licensees o r holders o f authority to engage in the recruitment
and placement o f workers.5 To reiterate for emphasis purposes, non-possession o f
a license or authority to recruit is, under the law, an essential ingredient o f the
crime of illegal recruitment penalized under the law.5
A recruiter may be a natural person o r juridical person like a partnership
or corporation.7
1-A.
ILLEGAL RECRUITMENT IN LOCAL EMPLOYMENT
1. LOCAL ILLEGAL R E C R U IT M E N T .
Local illegal recruitm ent is committed under any o f the following
situations, to mt.
(1) When any of the follow ing acts are u n dertaken by a non-licensee
or non-holder o fauthority;
1 Section 1(b), Rule II, Omribus Rdes and RegulaSons Implementing the Mgrant W aters and Overseas Ffyinos Act of
1995, as amended by R A No. 10022, issued on Jdy 8.2010.
2 Thetolcense'r^lD ihedocutertissuedbytietX X fS eaetayajhoaziTgaperson.partfieshjpofaxpora& ntD
operate a private recruSnoeotfrnanning agency. (Sec6on 1(w), Rule II, Qmnbus Ruies aid Regulations implemenSng the
MgrantW atas and Overseas FIjpinos Act of 1995, as Amended by R A No. 10022, issued on Ju!y8.2010).
3 The tern *authart/ refers to a document issued bv h e DOLE Secretary auhorizhn the officers oeisonnel. acenis or
4
in he fcense or in a speeded place. (Secfion 1(b), Ride It, Omnfcus Rules aid Regulations bnplemenisng the Migrant
Wcrkereand Overseas FEphosArtcf1 9 9 5 ,» Amended by R A No. 10022, issued on Ju!y8,2010).
Only he term ^xn4cmsee'txArd^xx>+x)ber of a u th o r Vituch is d^ned h Section 1(cc), Rule II. Om nixs Rules and
Regulations tmptemenSng h e MgrantWorkers and Ovemeas FSphos Actof 1995, as Amended by R A No. 10022, issued
on JuV 8,2010, See also he definSon of h e term *nontansee* in No. 25, Rub II, Revised POEA Rules and R e g io n s
Governing he Reautment end Employment of land4ased Ovaseas Fip'no Wotkers of 2016; See also h e deSn&nof
he term TnorvfcenseeT h No. 31, R ib 2016 Revised POEA Rules end RegutaSons Governing h e ReenSment and
Employment of Seafarers issued on February 26,2016; See also Secfion 1(d), Rubs tnpbmenfing P.D. No. 1920, July 12.
1984 vtere the terms “rm fensee- and "tm tolder of auhority’ are defined as referring to any person, corporation a
er^Vibichhasndbem issuedavafidfcem euautto^toengagehreautmertmdplacernentbytheDOLESecretery,
orwhose Gcerse or authority has been suspended, revoked or canceBed by he POEA or h e DOLE Secr&ry.
Peopfev.Bodozo.GA No. 96621.Oct 21/9 92.215 SCRA 33.
Peoplev. Taguba. GA. Nos. 95207-17, Jan 10.1994; Peoplev. Sendon, GA. Nos. L-10157W 2, Dec. 15,1993.
People v. Saub, G il No. 125903. Nov. 15,2000.
tl,
3
5
7
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• Any act o f canvassing, enlisting, contracting, utilizing, hiring o r
procuring workers, and includes referrals, contract services,
promising or advertising for localemployment, whether for profit o r
n o t1
(2) W hen any o f the follow ing acts w hich have been declared by law
as prohibited are com m itted by any person, whether or not a
holder o fa license or authority.
a) To charge or accept direcdy or indirecdy any amount or to make a
worker pay die agency or its representatives any amount greater
than that actually loaned or advanced to him;
b) To furnish o r publish any false notice or information in relation to
recruitment o r employment;
c) To give any false notice, testimony, information or document o r
commit any act o f misrepresentation for the purpose o f securing a
license or authority;
d) To induce o r attem pt to induce a worker already employed to quit
his employment in order to offer him another unless the transfer is
designed to liberate a worker from oppressive terms and
conditions o f employment;
e) To influence o r attempt to influence any person or entity not to
employ any worker who has not applied for employment through
his agency;
f) To engage in die recruitment or placement o f workers in jobs
harmful to public health or morality or to the dignity of the
Republic o f the Philippines;
g) To obstruct or attempt to obstruct inspection by the D O L E
Secretary or by h is/her duly authorized representatives;
h) T o substitute o r alter to the prejudice o f die worker, employment
contract prescribed by the D O LE from die time o f actual signing
thereof by die parties up to and including the period o f the
expiration o f the same without the approval o f die DOLE.2
All the foregoing acts are embodied in Article 34 o f the Labor Code, with
die exception o f certain acts which apply exclusively to otmeos employment.3
OnierNo. 141-14, Series of2014 [Ntwember20,2014).
2 w.
3 SuchasteUkjm ngacts:
*(h) To hi to (Da reports on (he status of employment placement vacancies, remSance of ta ig n exchange earnings,
sep atstolim ijobs, d e p a rts and su n o lh e rn u t^ or nkxTna&on as may bereqidredby theSecr^aiyofLabor.
" f t To become an officer or member of h e Board o( any corporation engaged h t a d agency or to be engaged (fitedy or
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2. D IST IN C T IO N B ET W E E N T H E TW O (2) SETS O F ACTS.
The acts described in N o. 1 above are, as a general rule, lawful and valid
acts of recruitment and placement o f workers for local employment when
undertaken by licensees or holders of authority to recruit. What makes it unlawful and
therefore constitutive o f illegal recruitment is when the same acts are undertaken by
any of the following; (a) Non-licensee;or (b) Non-holderofauthority.
The acts enumerated in N o. 2 above, being unlawful, constitute illegal
recruitment when the same are committed by any o f die following; (a) Any person:
(b) A licensee; (c) A holder o f authority; (d) A non-licensee^ o r (e) A non-holder o f
authority.
The word “person” in letter (a) above may refer to an “individual" o r
“entity”pet Article 34 o f the Labor Code.*1
1-B.
ILLEGAL RECRUITMENT IN OVERSEAS EMPLOYMENT
1. ACTS CO N ST IT U T IN G OVERSEAS IL L EG A L R E C R U IT M E N T .
R A No. 8042, as amended by R A N o. 10022,2* classifies the acts
constituting illegal recruitm ent in accordance with die offender,
(1) When any o f the following acts are u n d ertak en by a non-licensee
Ofnon-holder o fauthority*
• Any act o f canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referring, contract
services, promising or advertising for employment abroad, whether
for profit or not.4
ifjOTousffthoMarder^lraveldocumentsfiQmappScant w akes before departure far m onetayy financial consktaaBons
oBierltantiosenulhocizBtfunderlNsCodeanilttsimptemeraingndesandregiiaSons."
1 The cpen^ paragraph of A to 34 (PtohM edPracto) slates: ^ s h a l be unlawM for any individual, enfiy.fcensee, or
holderofaitafyf r
1 Secfion6ofRA No.8042, as amended by Sec6on5ofRANo. 10022.
4 Section 6 of R A No. 8042. as amended by SecSon 5 of R A. No. 10022: See abo SedSon 1. RJe IV, Ocnritofi Rules and
Regulations hplemen&ig the Mgrant Wtxkes and Overseas F3jHnos Act of 1995, as Amended by R A No. 10022, issued
on JutyB, 2010. See also SecSon 76, Rule X. Revised POEA Rules and Regulators Governing file Recruitment and
Employment of Land-Based (Xreseas Ffijpho Workers of 2016; Section 72. Rule X. 2016 Revised POEA Rules and
Regulations Govemiig the Recmitmentand Employmentof Seafares issued on February 26.2016.
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(2) W hen any o f th e follow ing acts w hich have b een declared
prohibited by law ,1 are com m itted by any person, w hether a non-
licensee, wn-b<?ld?r, liwn$ee qr fo lder QCm f a tfte
(a) To charge or accept directly or indirectly any amount greater than
that specified in the schedule o f allowable fees prescribed by the
Secretary o f Labor and Employment, or to make a worker pay o r
acknowledge any amount greater than that actually received by
him as a loan or advance;
(b) To furnish or publish any false notice or information o r
document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or
commit any act o f misrepresentation for the purpose o f securing a
license or authority under the Labor Code, or for the purpose o f
documenting hired workers with the POEA, which include the
act o f reprocessing workers through a job order that pertains to
non-existent work, work different from the actual overseas work,
or work with a different employer, whether registered or not with
the POEA;
(d) To induce or attempt to induce a worker already employed to quit
his employment in order to offer him another unless die transfer
is designed to liberate a worker from oppressive terms and
conditions o f employment;
(e) To influence or attempt to influence any person o r entity n o t to
employ any worker who has not applied for employment through
his agency o r who has formed, joined or supported, o r has
contacted o r is supported by any union or workers' organization;
(f) To engage in the recruitment o r placement o f workers in jobs
harmful to public health or mobility or to the dignity o f the
Republic o f die Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary o f
Labor and Employment or by his duly authorized representative;
(h) To fail to submit reports on the status o f employment, placement
vacancies, remittance o f foreign exchange earnings, separation
from jobs, departures and such other matters or information as
may be required by the Secretary o f Labor and Employment;*
* As enumerated under Aifide 34 cllhe Labor Code and nowpiwided under SecSon 6 of R A No. 8042, as amended by
SecSon 5 of R A No. 10022; See also SecSon 1, Rule IV, Omnibus Rules and Regulations tnptemenfing the M giani
W o tes and Oveiseas Ffynos Act of 1995, as Amended by R A No. 10022, issued on Jity 8,2010. See dso SecSon 76.
Rule X, Revised POEA Rules and Regulations Governing Bie Recruitment and Employment of larx^Based Overseas
Ffipino W rite s ot 2016; SecSon 72. Rule X. 2016 Revised POEA Rules and Regulations Governing t e Recroitmert and
Employment of Seaferos issued on February26,2016.
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(i)
Q
law
To substitute or alter to the prejudice o f the worker, employment
contracts approved and verified by die Department o f Labor and
Employment from the time o f actual signing thereof by the
parties up to and including the period o f the expiration o f the
same without the approval o f the Department o f Labor and
Employment;
For an officer or agent o f a recruitment o r placement agency to
become an officer or member o f the Board o f any corporation
engaged in travel agency or to be engaged directly or indireedy in
the management o f travel agency,
(k) To withhold or deny travel documents from applicant workers
before departure for monetary o r financial considerations, o r for
any other reasons, other than those authorized under the Labor
Code and its implementing rules and regulations;
(D Failure to actually deploy a contracted worker without valid
reason as determined by the Department o f Labor and
Employment;
(m) Failure to reimburse expenses incurred by the worker in
connection wi'h his documentation and processing for purposes
o f deployment, in cases where the deployment does not actually
take place without the worker’s fault; and
(n) To allow a non-Filipino citizen to head o r manage a licensed
recruitment/manning agency.1
An example o f a case where die accused was convicted for committing
the acts enumerated under the provisions o f Section 6 (a), 0 and (m) above is
Suliman o. People} when: (1) they separately charged the private complainants the
amounts of PI 32,460.00, Pi 20,000.00 and P21,400.00 as placement fees [Section 6(a)];
(2) they failed to actually deploy the private complainants without valid reasons
[Section 6(1)}; and (3) they failed to reimburse the said complainants after such failure
to deploy [Section 6(m)].
2. D IST IN C T IO N B E T W E E N T H E TW O (2) SETS O F ACTS.
The distinction applicable to illegal recruitment for local employment
earlier cited equally applies to the above two (2) sets o f acts constituting illegal
recruitment in overseas employment. Consequendy, the acts described in N o . 1
above constitute illegal recruitment only when they are undertaken by any o f the
following: (a) a non-licensee; or (b) a non-holder ofauthority, and the acts enumerated in
No. 2 above, being prohibited, are considered illegal recruitment when they are*
• id.; W.; Id.; Id.; d.
* Sufrnan v. People, G il N a 190970, Nov. 24.2014.
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committed by any o f the following; (a) any person,1 regardless o f whether (b) a
licensee; (c) a holder o f authority; (d) a non-licensee; or (e) a non-holder of
authority.
3. P R O H IB IT E D A CTIV ITIES.
T o the above enumeration o f acts constituting illegal recruitment, the
following prohibited acts were added by R.A. No. 10022:2
(1)
Granting o f a loan to an overseas Filipino worker with interest
exceeding eight percent (8%) per annum, which will be used for
payment o f legal and allowable placement fees and make the
migrant worker issue, either personally o r through a guarantor o r
(2)
Imposition o f a compulsory and exclusive arrangement whereby an
overseas Filipino worker is requited to avail o f a loan only from
specifically designated' institutions, entities or persons;
(3)
Refusal to condone or renegotiate a loan incurred by an overseas
Filipino worker after the latter’s employment contract has been
prematurely terminated through no fault o f his o r her own;
(4)
Imposition o f a compulsory and exclusive arrangement whereby an
overseas Filipino worker is required to undergo health examinations
only from specifically designated medical clinics, institutions, entities
or persons, except in the case o f a seafarer whose medical
examination cost is shouldered by the prindpal/shipowner,
(5)
Imposition o f a compulsory and exclusive arrangement whereby an
overseas Filipino worker is requited to undergo training, seminar,
instruction or schooling o f any kind only from specifically
designated institutions, entities or persons, except
for
recommendatory trainings mandated by principals/shipowners
where the latter shoulder h e cost o f such trainings;
(6)
For a suspended recruitment/manning agency to engage in any kind
accommodation party, post-dated checks in relation to the said loan;
o f recruitment activity, including the processing o f pending workers'
applications; and
(7)
For a recruitment/manning agency o r a foreign prindpal/em ployer
to pass on the overseas Filipino worker or deduct from his or her
salary the payment o f the cost of insurance fees, premium or other
‘ The wxd THSon* may refer to either a n ‘faSwJuaT or 'enB yper Atfcfe 34 of h e Labor Code. TNsis so becausethe
opening paragraph of Ws article (Prohibited Practices) states: ‘ it shall be unlawful for any indcvidual. entity, licensee, or
holderof authoiiyf.r
2 Secfion 6 of R A No. 8042, as amended by Sec&on 5 of R A No. 10022; See also Sec5on1, Rule iV.Om nixjs Rules and
RegidaSons Implemenfing the Mgrant Wbrkeis and Ovaseas Rfphos Act of 1995, as Amended by R A No. 10022, issued
on July 8.2010. See also Section 76, Rule X, Revised POEA Rules and RegtdaSons Govemhg the Recmitment and
Employment of Land-Based Ovaseas F fy iio Woritos of 2016; Section 72. fa te X, 2016 Revised POEA Rides and
Regulations Governing tie Recnritment and Employmentof Sedaros issued on Febnay26,201$.
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insurance related charges, as provided under the compulsory
worker's insurance coverage.1
1-C.
TYPES OF ILLEGAL RECRUITMENT AND THEIR ELEMENTS
1.
TWO (2) TYPES OF ILLEGAL RECRUITMENT.
There are two (2) types o f illegal recruitment, to wit.
(a) Simple illegal recruitment; and
(b) Illegal recruitment involving economic sabotage consisting o f either:
1) Illegal recruitment committed by a syndicate; or
2) Illegal recruitment committed in large scale.
Further discussion o f these topics follows.
a.
SIMPLE ILLEGAL RECRUITMENT
1. CONCEPT.
Simple illegal recruitm ent or simply, illegal recruitment, covers any
recruitment and placement activity undertaken by a non-licensee or a non-holder of
authority. It also includes the commission of prohibited acts as enumerated under
the law,2 not only by a non-licensee or a non-holder of authority but also by a licensee or
holder of authority.
2. ELEMENTS PER JURISPRUDENCE.
Most pieces of jurisprudence3 have, over the years, consistendy declared
that simple illegal recruitment is committed when two (2) essential elements
concur,
(1) That the offender has no valid license4 or authority1 required by law to
enable him to lawfully engage in the recruitment and placement of
workers; and
' Id.; Id.; Id.; Id.
2 Spedfica!y, as enumerated under Article 34 of the labor Code and now provided under Section 6 of R A No. 8042, as
amended by Section 5 of RA. No. 10022; See also Section 1, Rite IV, Omnibus Rules and Regulations Implementing the
Mgrant Workers and Overseas Filipinos Ad of 1995, as Amended by R A No. 10022, issued on July 8,2010. See also
Section 76, Rule X, Revised POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based
Overseas Ffipino Workers of 2016; Section 72, Rule X, 2016 Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Seafarers issued on February 26,2016.
3 Almost all cases where these elements are mentioned iwotve reauitment for overseas employment Most noteworthy of
these cases are People v. Estrada, G.R. No. 225730, Feb. 28,2018; People v. Chua, G.R. No. 187052, Sept 13,2012;
Romero v. People, G.R. No. 171644, Nov. 23,2011; Ritualo v. People, GR. No. 178337, June 25,2009.
4 Defined in Article 13(d) of the Labor Code, as amended, as 'a document issued by the Department of Labor authorizing a
peraon or entity to operate a private employment agency." (See People v. Cabacang, G.R. No. 113917, Juty 17,1995).
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(2) That the offender undertakes any activity within the meaning of
"'recruitment and placement” defined under Article 13(b),12 or any
prohibited practices enumerated under the law.3
3. ADDITITIONAL ELEM ENTS PER LAW.
A survey indicates that the criminal cases where the foregoing elements
were used as the guidepost in determining the culpability of the accused for illegal
recruitment, involve persons who are non-licensees and non-holders of authority.
The above enumeration o f the elements curiously failed to consider that under the
broadened45concept o f illegal recruitment under the 1995s law, R.A. No. 8042,
which, it must be noted, has not been changed by the latest amendment introduced
thereto in 20106 by R.A. No. 10022, the term '!'illegal recruitment”, unlike illegal
recruitment as defined under the Labor Code which is limited to recruitment
activities undertaken by non-licensees or non-holders o f authority,7 now includes
the commission o f the prohibited acts enumerated thereunder, “w h eth er
com m itted by any p erson, w hether a n on-licensee, non-holder, licensee or
holder of authority.”89Therefore, under Section 6 of R.A. No. 8042, as amended,7
illegal recruitment (for overseas employment) may be committed not only by n o n ­
licensees or non-holders o f authority but also by licensees or holders of authority.10
Section 6, as amended,11 enumerates fourteen (14) acts or practices [(a) to (n)] plus
seven (7) additional prohibited acts, which constitute illegal recruitment, whether
committed by any person, whether a non-licensee, non-holder, licensee or holder
of authority. Except for the last three (3) acts [(1), (m) and (n)] as well as the seven
1 Defined in Article 13 (f) of the Labor Code, as amended, as 'a document issued by the Department of Labor authorizing a
person or association to engage ii recruitment and placement activities'as a private recruitment entity’ (See People v.
Cabacang, supra).
2 Artide 13(b) of the labor Code defines ’recruitment and placement" as: Any act of canvassing, enlisting, contracting
transporting, utilzing, hiring, or procuring workers, and ndudes referrals, contract services, promising or advertising for
employment locally or abroad, whether for profit or not Provided, that any person or entity which, in any manrer. offers or
promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement
3 See enumeration under Artide 34 of the Labor Code and new provided under Section 6 of R A No. 8042, as amended by
Section 5 of R A No. 10022; See also Section 1, Rule IV, Omnbus Rules and Regulations implementing the Migrant
Workers and Overseas Rhinos Act of 1995, as Amended by R A No. 10022, issued on July 8,2010. See also Section 76.
Rule X. Revised POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas
FTp'no Workers of 2016; Section 72, Rule X. 2016 Revised POEA Rules and Regulations Governing the Reauiment and
Employment of Seafarers issued on February 26,2016.
* The Supreme Court has declared that R A No. 8042 has broadened the concept of Slegal recruitment under the Labor
Code. (People v. Abela, G R No. 195666, Jan. 20,2016; People v. Daud, G R No. 197539, June 02,2014).
5 June 7,1995.
6 March 10.2010.
2 Peoplev.Totentino.GRNo.208686.July01.2015.
8 See enumeration under Section 6 of R A No. 8042, as amended by Section 5 of RA. No. 10022; See also Section 1, Rule
IV, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as Amended by
RA. No. 10022, issued on July 8,2010. See also Section 76, Rule X, Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Land-Based Overseas FTpino Workers of 2016; Section 72, Rule X, 2016 Revised POEA
Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on February 26,2016.
9 Section 6 of R A No. 8042, as amended by Section 5 of R A No. 10022.
10 People v.Totentino. supra.
” Section 6 of RA. No. 8042, as amended by Section 5 of RA No. 10022.
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(7) additional prohibited acts, on die list under Article 6 o f RA 8042, as amended,1
the first eleven (11) acts or practices are also listed in Article 34 o f the Labor Code
under the heading "Prohibitedpractices” Thus, under Article 34, it is unlawful for any
individual, entity, licensee or holder o f authority to engage in any o f the
enumerated prohibited practices, but such acts or practices do not constitute illegal
recruitment when undertaken by a licensee or holder o f authority.2 However, under
Article 38(a) o f the Labor Code, when a non-licensee or non-holder o f authority
undertakes such “
prohibitedpractices, ” he or she is liable for illegal recruitment. R.A.
No. 8042, as amended, broadened the definition o f illegal recruitment for overseas
employment by including the afore-said prohibited acts or practices which now
constitute as illegal recruitment, whether committed by a non-licensee, non-holder,
licensee or holder o f authority.3
Simply put, under R.A. N o. 8042, as amended, a non-licensee or n o n ­
holder of authority commits illegal recruitment for overseas employment in two
ways:
(1) By any act o f canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers, and includes referring, contract services,
promising or advertising for employment abroad, whether for profit or
not; and
(2) By undertaking any o f die acts enumerated under Section 6 o f R.A.
No. 8042, as amended.
On die other hand, a licensee o r h older o f authority is also liable for
illegal recruitment for overseas employment when he or she undertakes any o f the
prohibited acts or practices listed under Section 6 o f RA 8042, as amended.**
Consequendy, if a recruiter is charged with violation o f any o f the
prohibited acts under Section 6, as amended, there is no more need to prove
whether he is a licensee or holder o f authority or not because it is no longer an
element of the crime.5
And it bears noting that this broadened concept o f illegal recruitment also
applies to recruitment for local employment where die 2014 Revised Rules expliddy
states that the acts enumerated thereunder "sh all be unlaw ful w h en co m m itted
by any person, w hether or not a ho ld er o f a license o r authority.”6
'
*
5
4
s
Id.
Peoplev.TdenSno.G.R No. 208686.JuVOI,2015.
Id.
Id.
People v. Jimmy Ang. G R No. 181245, Aug. 06,2008; People v. Nogra, G A No. 170834, Aug. 29.2008; People v.
Gasacao. G R No. 168445. Nov 11.2005.
1 SeeSectjGn42.R8vsedRule5andRegtiaSonsGoventing RecnstmentaRdPtacementlorLocalErnploymertLOepartiTiem
Order No. 141-14, Series tf 2014 [November 20,2014J, tor locd employment
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Moreover, since illegal recruitment becomes qualified if committed by 3
or more recruiters (syndicated) o r when there ate 3 o r more recruitees (large-scale),
as the case may be, the total number o f recruiters a n d /o r recruitees in order for a
case to remain one for simple illegal recruitment should not be more than two (2)
persons.
In the light o f the foregoing disquisition, the elements o f sim ple illegal
recruitm ent should now be re-stated as follows:
(1) That the offender engages in acts o f recruitment and placement o f
workers as defined under Article 13(b) o f the Labor Code, o r in any
prohibited activities enumerated under die law,1 irrespective o f
whether the offender is a non-licensee, non-holder, licensee or holder
o f authority:
(1) That die offender has no valid license o r authority required by law to
enable him to lawfully engage in die recruitment and placement o f
workers;23and
(3) That the number o f recruiter/s who committed die unlawful acts
an d /o r recruitee/s who fell victim /s thereto should not be more than
two (2) persons.2
N o . 3 above is a significant element o f simple illegal recruitment
considering that in illegal recruitment cases, die total number o f recruiters o r
recruitees is detetminadve o f the nature o f the crime. Thus, where illegal
recruitment is committed by o r against one or two persons only, the accused may
be convicted o f simple illegal recruitment only, which is punishable with a lower
penalty.45Corollady, where the offense is committed by or against three (3) or more
persons, it is qualified as an illegal recruitment involving economic sabotage which
would m eat the imposition o f a higher penalty.s
1 See erem ra to i under Article 34 of he Labv Code and now provided under Sectoi 6 of RA. No. 8042, as amended by
Section 5 of RA. No. 10022; See also SecSon 1, Rub IV, Omribus Rules and Regulafions Implementing he Mgrant
Workers aid G aseasFtybos Actof 1995, as Amended by R A No. 10022, issued on July 8,2010. See also Sectot 76,
Rule X, Revised POEA Rules aid RegriaSons Gcvemhg h e RecruSment and Employment of Land-Based Overseas
FJpiioWbrkers of 2016; Section 72, Ride X, 2016 Revised POEA Rules and RegutaBons Gowning he ReouSment and
B nplopent of S ealers issuedon February26,2016.
7 h People v Velasco. G J l No. 195668, Jkm eB. 2014, N s second element isstafed as M ows:12) that the accused had
not complied vrih h e guideines issued by h e Secretary of labor and Employmentw ft resped to h e requirement to secure
a license or authority to recnA end deployw rkersf
3 Aooonfng to People v.Sadiosa. G Jl No. 107084, May 15,1998: TAhen h e persons recruited are three or more, the ofm e
becomes llegdrecnuhtent in large scale under Art 38 (b)of h e Labor Coda’
4 See People v. Orfe-MyaJce, G R. Nos. 115338-39, Sept 16.1997,344 P h i 598,608609. In this case, h e provision
referred to is paragraph (c) of Article 39 of h e Labor Code, new paragraph (a), Section 7, of R A No. 8042, as amended by
Secfion6ofRA.No. 10022.
5 SeePeoplev.(Mh-Miyake,sup(a.ThepnMMrefe(redtoisparagraph(a)ofArljcle39o(heLaborCodel noiMparagRaph
(b), Section 7, of RA. No. 8042, as amended by Sector 6 of R A . No. 10022.
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4. APPLICABILITY TO B O T H LOCAL AND OVERSEAS
EMPLOYMENT.
Although the cases surveyed where the foregoing elements were invoked by the
High Court involve recruitment and placement activities for overseas employment,
the same concept and principles may well apply with the same force and effect to
those committed for local employment.
b.
ILLEGAL RECRUITMENT INVOLVING ECONOMIC SABOTAGE
1. ELEM ENTS.
The first two (2) elements for simple illegal recruitment as cited and
discussed above likewise apply to illegal recruitment invoking economic sabotage.
A third element is added1 regarding die requirement that there be at least three (2)
recruitees, in the case of large-scale illegal recruitm ent, or at least three (3)
recruiters, in the case of syndicated illegal recru itm en t
2. W H EN CONSIDERED E C O N O M IC SABOTAGE.
To iterate, illegal recruitment is considered a crime involving economic
sabotage when it is committed:
1) By a syndicate; or
2) In large scale.2
2.1. SYNDICATED ILLEGAL R E C R U IT M E N T .
Illegal recruitment is deemed committed by a syndicate if it is carried out by
a group of three (3) or more persons conspiring or confederating with one
another.3 The law, it must be emphasized, does not require that the syndicate
should recruit more than one (1) person in order to constitute this crime.
Recruitment of one (1) person would suffice to qualify the illegal recruitment act as
having been committed by a syndicate.
' See People v. Pascua, GH. No. 125081. Oct 3,2001, where I was stated that There is large-scale illegal recruitment if it is
committed against three (3) or more persons individuaSy or as a gnxip; its etements, therefore, are the two above^nentioned
plus the fact that it is committed against three or more persons.’ See also People v. SaKraferra, G.R No. 200884, June 4,
2014, where it is stated: ‘xxx a fwJ element is addd: that the offender commits any of the acts of recruitment and
placement against three or more persons, individually a as a group.'
2 Article 38(b), labor Code; See also Section 2, Rule IV, Omnbus Rules and Regulations Implementing the Mg rant Workers
and Overseas Ftyhos Act of 1995, as Amended by R A No. 10022, issued on July 8,2010. It bears to point out that there is
no sim2ar provision on iltegai recruitment invoking economic sabotage (large-sc^e or syndcated) in both the Revised POEA
Rules aid Regiiafons Governing the Recruitment and Employment of Land-Based Overseas Fipino Workers of 2016 and
the 2016 Revised POEA Rules and Regulators Governing the Recruitment and Employment of Seafarers issued on
Februay 26,2016. See People v. Nogra, G.R. No. 170834, Aug. 29,2008.
3 Article 38(b), labor Code; Section 6, R A No. 8042, as amended by Section 5, R A No. 10022 (March 8,2010); Section 6,
RA No. 8042, as amended by Section 5, R A No. 10022 [March 8,20101 See also Section 2, Rule IV, Omnbus Rules and
Regulations Implementing Ihe Mgrant Workers and Overseas FUpnos Actcrf 1995. as Amended by RA No. 10022, issued
on July 8,2010; See People v. Lali, GR. No. 195419, O d 12.2011; People v. Gallo, G.R. No. 187730, June 29.2010.
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The core o f this kind of illegal recruitment is the conspiracy among the
perpetrators, without which, no syndicated illegal recruitment could be committed.
Under Article 8 of the Revised Penal Code, there is conspiracy when two or more
persons come to an agreement concerning the commission o f a felony and decide
to commit it.12Thus, in finding the accused-appellants guilty of syndicated illegal
recruitment in People v. Lalli} the High Court noted that Lalli, Aringoy and
Relampagos have conspired and confederated with one another to recruit and place
Lolita for work in Malaysia, without a POEA license. The three elements o f
syndicated illegal recruitment are present in this case, in particular: (1) the accused
have no valid license or authority required by law to enable them to lawfully engage
in the recruitment and placement o f workers; (2) the accused engaged in this
activity o f recruitment and placement by actually recniiting, deploying and
transporting Lolita to Malaysia; and (3) illegal recruitment was committed by three
persons (Aringoy, Lalli and Relampagos), conspiring and confederating with one
another.345
In People v. Guevarra} the accused-appellants3 asserted that the offense
should not have been qualified into illegal recruitment by a syndicate since there
was no proof that they acted in conspiracy’ with one another. However, the acts o f
accused-appellants showed unity o f purpose. Guevarra would visit each of the
complainants in their houses for several times, convincing them to work abroad,
and giving them the impression that she had the capability of sending them abroad.
She would accompany them to the house o f the other accused, spouses Bea, who,
in turn, would collect the placement fees and process the passports and plane
tickets. All these acts o f the appellants established a common criminal design
mutually deliberated upon and accomplished through coordinated moves.
2.2. LARGE-SCALE ILLEGAL R E C R U IT M E N T .
Illegal recruitment is deemed committed in large scale if it is committed
against three (3) or more persons, individually or as a group.6 Therefore, a
conviction for large scale illegal recruitment must be based on a finding in each case
of illegal recruitment o f three (3) or more persons having been reemited, whether
individually or as a group.7 The failure to prove at least three (3) persons reenuted
makes die crime a case of simple illegal recruitment.8 This is so because in
1 People v. Lago, G il No. 121272, June 6,2001.
People v.L a li.G R No. 195419, Oct 12,2011.
3 See also People v. Hernandez, G R Nos. 141221-36. March 7,2002.
4 People v. Guevara; G R No. 120141, Aprt21,1999.
5 The three (3) accused-appetants h this case are Loma B. Guevara, Josie Bea and Pedro Bea, Jr.
6 Article 38(b), Labor Code; Section 6, RA. No. 8042, as amended by Section 5, RA. No. 10022 (March 8,2010); See also
Section 2, R ile IV, Omnbus Rules and Regulations Implementing the Migrant Workers and Overseas Ftipinos Act 0?1995.
as Amended by R A No. 10022, issued on July 8,2010; People v. Cagafingan, G R No 198664. Nov. 23,2016; People v.
Bayker.GRNo. 170192, Feb. 10,2016; People v. AbeOa.GR No. 195666, Jan. 20,2015.
7 People v. Jimmy Ang, G R No. 181245, Aug. 06,2008; People v. Hrxvada, G R Nos. 112178-79. April 21,1995.
• People v. Hu, G R No. 182232, OcL 06,2008.
2
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offenses in w hich the n u m b er o f victim s is essential, failure o f th e
prosecution to prove by convincing evidence th a t th e offense is c o m m itted
sgainst the m inim um num ber o f p erso n s req u ited by law is fatal to its c a u se
of action.1
Moreover, there can be no illegal recruitment in large scale if the same is
based on several informations filed by only one complainant This was the ruling in
People v. Hernandez23where the High Court agreed with the accused-appellants’
argument that the trial court erred in convicting diem o f illegal recruitment in large
scale by cumulating the eight (8) individual informations filed by private
complainants. It noted that each information was filed by only one
complainant As held in People v.Kqes*
“xxx When the Labor Code speaks o f illegal recruitment
‘committed against three (3) or more persons individually or as a group,'
it must be understood as referring to the number o f complainants in
each case who are complainants therein; otherwise, prosecutions for
single crimes of illegal recruitment can be cumulated to make out a case
o f large scale illegal recruitment In other words, a conviction for large
scale illegal recruitment must be based on a finding in each case o f
illegal recruitment of three or more persons whether individually or as a
group."
2.3. SYNDICATED VS. LARGE-SCALE.
As distinguished from illegal recruitment committed by a syndicate, illegal
recruitment in large scale may be committed by only one (1) person. W hat is
important as a qualifying element is that there should be at least three (3) victims o f
such illegal recruitment, individually o r as a group.4
The number of offenders is not material in illegal recruitment in large
scale. As held in People v. Laurel* the number o f offenders, whether an individual or
a syndicate, is clearly not considered a factor in the determination o f the
commission o f illegal recruitment in large scale. Counsel for accused-appellant was
misled by the fact that illegal recruitment in large scale is defined immediately after
illegal recruitment by a syndicate. However, die only reason therefor is that they are
both considered offenses involving economic sabotage as the law itself so provides.
In situations where there are three o r more illegal recruiters and there are
three or more recruitees involved in one case, the Olegal recruiters may be
convicted either as a syndicate o r in large-scale, depending on the evidence
«
*
3
4
s
Id.
G R Nos. 141221-36. March7,2002.
G R No. 105204, Mach9,1995,242SCRA 264.
Peojrfev. Am at^GR No. 205153. Sepl9,2015; Peoptev.Baufista,GRNa 113547,Feb. 9,1995.
G R N a 120353.Feb. 12.1998.
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presented. In any case, the penalty imposable is the same for both since the law1
does not make any distinction between these two.
A n example o f a case where persons were charged with violation o f
Section 6 in relation to Section 7 o f R A No. 8042 for "large scale illegal
recruitment committed by a syndicate” is Peoph v. Trinidad.2*A fter due proceedings,
accused Trinidad was ultimately found “guilty o f illegal recruitment in large scale,
sentencing her to suffer the penalty o f life imprisonment and ordering her to pay a
fine and actual damages.”
3. A PPLIC A B IL IT Y T O B O T H LOCAL A N D OVERSEAS
EM PLOY M ENT.
Albeit the illegal recruitment cases involving economic sabotage studied
and surveyed involve recruitment and placement activities for overseas
employment, the same concept and principles may also apply with the same force
and effect to those committed for local employment. Notably, however, there is no
single provision in the 2014 Rulesfor local employment that treats o f large-scale o r
syndicated illegal recruitment.4 But since the governing law, Article 38 o f the L abor
Code, contains a provision thereon, the same should likewise apply to local illegal
recruitment cases.
1. SO M E P R IN C IP L E S O N ILL EG A L R E C R U IT M E N T .
• M ere im pression is sufficient to co n stitu te illegal re c ru itm e n t T o convict
a person for illegal recruitm ent it suffices to show that he gave the victim die
distinct impression that he had the pow er o r ability to send him abroad for w ork
such that the latter was convinced to part with his money in order to be
employed.5
• M ere prom ise o f em ploym ent a b ro ad am o u n ts to recruitm ent. T o be
engaged in the. practice o f recruitment and placement, it is plain that there
1 Secfim 7(b) of R A N a 8042, as anrended by Secfim 6 of R A No. 10022, p rw ides:^) The p e r ^ of f e imprisonment
andafineofnottessfoanTw o nvGcn pesos (P2£OO,0OOjOO) nor mors than F«re mfion pesos (P5jOOO^XX)iX}) shad be
imposed if aega) reauim ent ccnsfiuSes economic sabotage as defined to rc h ; Provided, however, That h e maximum
2 Tbispronouncemertwasrnadein Peoplev.Trinidad,GRNa181244,Aug.09,2010.
5 R e v i^ Rules and R egiM ]m G ow (^R ecru2m entandP taoem ertfortxcalB TtA yr^O epam ientO rderN o. 14114, Series of 2014 [November20,2014).
4 h Ihesame m annulistaShou^ there isaprovisim m lag&scaleand syra&ca^&galrecruEm e^in Sec&n2, Rule IV
oftie Omnibus Rides and Regulators Implementing tie W grantW otas and Ouoseas Ftymos Actof 1995, as Amended
by R A N a 10022, issued on ,M y 8,2010, there is also no sirdar provision on Segal recadment rooking economic
sabotage (taigescafe a syndicated) in both the Reused POEA Rules and Regiiafions Governing (he Recndment and
Employment of laxffiase d Overseas Fijpho W akes of 2016 and t o 2016 Reused POEA Riles and Regulations
Governing the Reauihient and Employmentof Seatoas issued on February26,201GL
* Peopfev.Fem andez,Gil No. 199211, June04,2014; Peoplev.A bat.G R .Na 168851,March 1$,2011.
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must, at least, be a promise or an offer o f employment from the person posing
as a recruiter whether locally or abroad.1
• There is no need to show th a t accused rep resen ted h im self as a licensed
recruiter. Evidencewise, it suffices that the prosecution has established that
the POEA did not authorize o r license the recruiter to engage in recruitment
activities and that despite the absence o f such authority or license, he still
recruited his victims.2
Referrals may constitute illegal tecruitm ent. Article 13(b) o f the Labor
Code includes ‘‘referrals” in (he definition o f what constitutes “recruitment
and placement"34In convicting the accused-petitioner* in Rodotfo v. People,* the
Supreme Court declared that the act o f referral within the contemplation of
the law, is “the act o f passing along o r forwarding o f an applicant for
employment after an initial interview o f a selected applicant for employment to
a selected employer, placement officer or bureau.” Petitioner's admission that
she brought private complainants to the agency whose owner she knows and
her acceptance o f fees including those for processing betrays her guilt5
Conduct of interviews m ay am o u n t to illegal re c ru itm e n t The conduct o f
interviews by the representatives o f the foreign principal amounts to illegal
recruitment under Section 6 o f R-A. No. 8042.6*
• It is immaterial w hether th e recruitm ent is d o n e for p ro fit o r n o t The
argument o f the accused-appellants that there was no p ro o f that they received
money from the private complainants deserves no credence because money is
not material to a prosecution for illegal recruitment considering that the
definition o f "illegal recruitment" under die law includes the phrase "whetherfor
profit ornot!1
• Actual receipt of fee, n o t a n elem en t o f th e crim e o f illegal recruitm ent.
Thus, even if the accused recruiter did not actually receive any fee, his
representation that he had die capacity to secure employment for private
complainants made him liable for illegal recruitment since he had no authority
or license from the POEA.8 E ven in the absence o f money or other valuables
given as consideration for the "services" o f the recruiter, he is considered as
being engaged in recruitment activities.9
1 Peoplev.laogo,G R No. 176264,Jan. 10,2011;Peopfev.Doningo,GRN& 181475,April7,2Q09.
1 Pieoplev. BaaestenoSvOR- Nos. 11690&808. Aug.6.2002;PeQpte v. Cabacang.GR Nol 113917,July 17.1996.
1 Aifide13(b)of he Labor Cote d eto *recn im en t and placement* as fa )y act of canvassing, en5s*ig, contracting,
transporting, uSizhg, hinng or procuring woikas, and includes n&nals, contract sendees, prarrisng or advertising for
emptayinent.localVorabioad.wheSiertorpraftornoi*
4 G R N o. 146964, Aug. 10,2006.
5 See also Peopfev. Gooe.GR No. 1 t3 1 6 \ Aug. 29,1995; People v.Aiforte, G .R Nos. 91711-15, March 3,1993.
c CF. Sharp Crew Management, hc.v. Hor. Espanoi, Jr., G R No. 155903, Sept 14,2007.
' Ifeoptev.Matoi, G R N o. 198012, Apr! 22,2015; Peopfev. Chua, G R N o. 187052, Sept 13,2012.
• Peoplev. Balestoos, G.R Nos. 116905808, Aug. 6,2002.
* Peopfev.Jamaosa.GR No. 169076,Jan 27,2007.
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• E ffect o f receip t o f p a y m en t after expiration o f license. Receipt o f
payments after the expiration o f the license constitutes, as a general rule, illegal
recruitm ent But, if the receipt o f payment, although after the expiration o f
the license, was meant for services rendered before such expiration, it docs not
constitute illegal recruitment for purposes o f criminal prosecution.1
• A bsence o f receip t n o t essential. Receipt issued by the recruiter is a
documentary evidence that proves that he/she is engaged in recruitment and
placement activities.2 However, the absence o f receipts to prove payment o f
recruitment fees is not material nor fatal.3 The absence o f receipts to evidence
payment to the recruiter would not warrant an acquittal, a receipt not being
fatal to the prosecution’s cause.4
• A bsence of d o cu m en ts evidencing th e recruitm ent
stren g th en s, n o t w eakens, th e case for illegal re c ru itm e n t5
activities
• N on-prosecutio n o f a n o th e r su sp ect, im m aterial. It is well settled that only
one person recruited is sufficient to convict one for illegal recruitment.6 The
non-prosecution o f another suspect provides no ground for an accusedappellant to fault the decision o f the trial court convicting her.7
• E x ecu tio n o f affidavit o f d e sistan ce affects only th e civil liability b u t has
n o effect o n d ie crim inal liability for illegal re c ru itm e n t8
1-D.
ILLEGAL RECRUITMENT VS. ESTAFA
1. ILLEGAL RECRUITMENT, NO BARTO FILING OF ESTAFA.
R A . No. 10022 has introduced an amendment to R A . N o. 8042, which
now statutorily recogni2es the junsprudendally settled fact that die filing o f an
offense punishable under said law, such as for illegal recruitment, “shall be without
prejudice to the filing o f cases punishable under other existing laws, rules o r
regulations”9 such as sw indling or estafa, under Article 315, paragraph 2 (a) o f the
Revised Penal Code, o r trafficking in persons, under R A . No. 9208,10I as
amended by R A . No. 10364,u Clearly, illegal recruitment is an independent action.1
< Aquinov. CA, OR Na91896. Nov.21,1991,204 SCRA240.
* Peopfev.CagafogaaGR. No. 198664,Nov.23.2016.
2 Peoplev. Dorringo.GR. No. 181475,Api 7,2009.
1 Peoplev. Abat, GR. No. 168651.March16,2011; Peoplev. BtRaber,GR. Nos. 114967-68. Jai.26,2004.
6 Peopfev. Pantaloon, GR No. 108107,June19,1997.
6 Peopfev.Raris.G.R.Nos.L-58674'77,July 11,1886,142SCRA664.
I Peopfev.Sendon.GR.Nos. 10157W9,Dec. 15,1993; SeealsoPeoplev.Gooe.G.R No. 113161.Aug. 29,1995
t Peopfev.Laurel. GR. No. 120353,Feb. 12,1998,
9 Sectfen6,R A to . 8042, as amended by Sectfon5,R A Ito. 10022.
* OheflMsetawMas'AnS-Tiafl^
II 0!tew«se knowi as (he'ExpandedArtj-TrafWdng ii PersonsAdof 2012.* It isan Ad expantfng RA. No. 9208 enffled
*AnAd to InstitutePo&Sesto QranafeTraffickingin Persons EspedalyWomenandChildren, Establishingthe Neoessary
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Illegal recruitment and estafa cases may be Bled simultaneously and
separately.2 The filing of charges for illegal recruitment does not bar the filing o f
estafa, and vice versa} Illegal recruitment and estafa are entirely different offenses
and neither one necessarily includes or is necessarily included in die other.4
2. CON VICTIO N FOR B O T H ILLEG A L R E C R U IT M E N T & ESTAFA.
In cases where swindling or estafa is committed in the process o f illegal
recruitment, conviction under the Labor Code, a special law, does n o t preclude
punishment therefor under die Revised Penal Code, a general law.* H ie reason
therefor is not hard to discern: illegal recruitment is malm probibiim, while estafa is
malm in se. In fatfirst, the criminal intent o f the accused is not necessary for
conviction; the fact alone that the accused violated the law warrants his conviction.4
In the second, such an intent is imperative.7 Thus, it is setded that a person, for the
same acts, may be convicted separately o f illegal recruitment, whether simple or
committed in large scale or by a syndicate, under R.A. No. 8042, as amended, or
the Labor Code, and estafa under Article 315 (2) (a) o f the RPC,8 which provides:
“Artide 315. Swindling (estafa). • Any person who shall defraud
another by any of the means mentioned herein below xxx
xxx
2. By meaos of any of die following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
(a) By using fictitious name, or falsely pretending to
possess power, influence, qualifications, property,
credit, agency, business or imaginary transactions, or by
means of other similar deceits.”
Under the above-quoted provision, there are three (3) ways o f committing
estafa: (1) by using a fictitious name; (2) by falsely pretending to possess power,
influence, qualifications, property, credit, agency, business or imaginary
transactions; and (3) by means o f other similar deceits.9
hst&Gonal Mechanismsforbe Profecfon and Supportof Trafficked Persons, Prowling PenaSes (or ttsViotalSonsand for
OtherPurposes.*
1 Sec&n8.F^tV.OfTy^f^£ndRegub6cnslmpiemenfingttie N^tantWcxtersandOvaseasFiipixisAclof1995.
asAmendedbyRA No. 10022,issuedonJuly8,2010.
* Syv. People, G il No. 183879,April 14,2010.
7 Id.
4 Id.
* Peoplev. Fernandez, GR No. 199211,June04,2014; Peoplev. Turda, GR Nos.97044-46.July6,1994.
* Peoplev.Temporada,G il No. 173473, Dec. 17.2008; Peoplev. Gamboa, GR No. 135382. Sept 29.2000.
7 Peoplev. Btfestercs,G il Nos. 116905-908,Aug. 6,2002; SeealsoPeoplev. Enriquez,G il No. 127159, May5,1999.
* Peoplev. Estrada, G il No. 225730, Feb. 28,2018; Peoplev. De Los Reyes, GR No. 198795, June 7,2017; Peoplev.
Bayker, GR No. 170192.Feb. 10,2016; Peoplev. Tdentino. GR No 208686.July1.2015.
> Peopl3v.Gaflo.GRNo. 185277,Utah 18,2010;Peoplev.lnGR No. 175229,Jan29.2009,577 SCRA116,132.
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It must be stressed that n o t all acts which constitute the felony o f estafa
under the Revised Penal Code necessarily establish the crime o f illegal recruitment
under the Labor Code. Estafa is wider in scope and covers deceits, whether related
or no t related to recruitment activities.12This is d ear from the following elements o f
estafa, in general, to unt.
(1) The accused defrauded another by abuse o f confidence or by means
o f deceit; and
(2) ih e ottended party
T he elements o f estafa by means o f deceit under Article 315, paragraph 2
(a) o f die Revised Penal Code are the following,
(a) T hat the accused used fictitious name or false pretense or fraudulent
representation as to his power; influence, qualifications, property,
credit, agency, business or imaginary transactions o r other similar
deceits;
(b ) That he used such deceitful means, fidse pretense or fraudulent
representation prior to or simultaneous with the commission o f the
fraud;
(c) That the offended party relied on such deceitful means, fiilse pretense
and fraudulent act to part with his money o r property; and
(d) That, as a result thereof, the offended party suffered damage.3
T o emphasize, under this class o f estafa, die element o f deceit is
indispensable. It is essential that the fidse statement or fraudulent representation
constitutes the very cause or die only motive which induces die complainant to part
with the thing o f value.4 To convict for this type o f crime, therefore, it is essential
that the fidse statement o r fraudulent representation constitutes the very cause o r
the only motive which induces the complainant to part with the thing o f value.5
Thus, in convicting the accused spouses for estafa in People v. CagaSnganp
the High Court found that private complainants were led to believe by accused
spouses that they possessed the power and qualifications to provide them with
work in Macau when in fact they were neither licensed nor authorized to do so.
Accused spouses made it appear to private complainants that Beatriz was requested
by her employer to hire workers for Macau, when in fact she was not. They even
recruited their own relatives in the guise o f helping them get better jobs with higher
1 Peoplev.Tunla,G il Nos.97044-46,July6,1994,233 SCRA702.
2 Peoplev. De LosReyes, GR Not 198795, June 7,2017; Peoplev. Bayker, GR No. 170192, Feb. 10.20(6; People v.
Amae, GR No.205153,Sept9,2015; Peoplev. Tdenfino,GR No. 208686,July01,201$.
3 Peoplev. Radio, GR No 227505, Oct 02,2017; Subnanv. People, GR No. 190970, Nov. 24, 2014; Lopezv. People,
GR No. 199294,July31,2013; Peoplev. Ctua, GR No. 187052, Sept 13,2012.
4 Peoplev. Cana&wai GR No 198664. Nw. 23.2016.
5 Peoplev. Ga8o,GR No. 185277,March18,2010;Peoplev. Lo, GR No. 175229,Jan. 29,2009,577 SCRA116,132.
4 Peoplev.Cagaingan,GA No. 198664, Now.23,2016.
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pays abroad for them to improve their standard o f living. Likewise, private
complainants were deceived by accused spouses by pretending that the latter could
arrange their employment in Macau, China. With these misrepresentations, false
assurances and deceit, they suffered damages and they were forced to part with
their hard-earned money, as one o f them even testified to have mortgaged her
house and another, to have borrowed money from a lending institution just to raise
the alleged processing fees.
The same deceit was employed in People 9. Gallo} where appellant
Mardr led the private complainants to believe that they possessed the power,
qualifications and means to provide work in Korea. During the trial o f these r av s,
it was clearly shown that, together with Martir, appellant disrpssed with private
complainants the fact of their being deployed abroad for a job if they pay the
processing fee, and that he actually received payments from private complainants.
Thus, it was proven beyond reasonable doubt that the three private complainants
were deceived into believing that there were jobs waiting for them in a factory in
Korea when in fact there were none. Because o f the assurances o f appellant, each
of the private complainants parted with their money and suffered damages as a
result o f their being unable to leave for Korea. T he elements o f estafa - deceit and
damage - are thus indisputably present, making the conviction for estafa
appropriate.
3. ACQUITTAL IN ILLEGAL R E C R U IT M E N T , N O BAR T O
CO N V ICTIO N FOR ESTAFA.
Considering that illegal recruitment and estafa are distinct crimes, a person
acquitted of illegal recruitment may be held liable for estafa.2 A persons acquittal in
the illegal recruitment case does not prove that she is not guilty o f estafa. Double
jeopardy will not set in as discussed below.3
4. C O N V ICTIO N FO R B O T H ILLEGAL R E C R U IT M E N T A ND
ESTAFA, N O T D O U B L E JEO PARDY .
For the same reason as above, that is, that illegal recruitment is malm
prohibitum, whereas estafa is malm in se, there can be no double jeopardy if a person
is convicted for both illegal recruitment and estafa for one and the same ac t4 The
iniriauon of an illegal recruitment case does not bar the filing o f estafa against one
and the same person since these two crimes are entirely different offenses and
neither one necessarily includes or is necessarily included in the other. Double
jeopardy could not result from prosecuting and convicting the accused-appellant
1 Peopfev.Gato.supra.
* Syv People, GA No. 183879.April 14,20**0.
» Id.
Fordoublejeopardytoexist three (3) requisitesmustbepresent (1)a listjeopardymusthaveattachedpriortoIhesecond:
thefirst
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for both crimes considering that they were entirely distinct from each other not
only from their being punished under different statutes but also from their
elements being different1 A person who is convicted o f illegal recruitment may, in
addition, be convicted o f estafa under Article 315 2(a) o f the Revised Penal Code.
There is no problem o f jeopardy in this situation.23
5. USE OF SAME EVIDENCE FOR ILLEGAL RECRUITMENT &
ESTAFA.
To successfully prosecute the illegal recruiter for estafa, die prosecution
needs only to present the very same evidence proving his commission o f the crime
o f illegal recruitment2 Case law holds that die same pieces o f evidence that
establish liability for illegal recruitment confirm culpability for estafa.4 It is thus
enough to show that the recruiter and his cohort acted with unity o f purpose in
defrauding die victims by misrepresenting that they had the power, influence,
agency and business to obtain overseas employment for diem upon payment of a
placement fee, which they did pay and deliver to die recruiter.5
6. C R IM IN A L A C T IO N , N O T A BAR T O A D M IN IST R A T IV E A C T IO N .
The institution o f criminal action for
prejudice to any administrative action against the
cognizable by the POEA, which could proceed
action.6 Simply stated, the administrative action is
action.7
illegal recruitment is without
licensee o r holder o f authority
independently o f the criminal
independent from the criminal
2.
LIABILITY OF LOCAL RECRUITMENT AGENCY
AND FOREIGN EMPLOYER
a.
SOLIDARY LIABILITY
1. APPLICABILITY TO ALL FORMS OF LIABILITY.
T he joint and several nature o f the liability o f the principal/foreign
employer and the local recruitment/placement agency applies to any and all
1 Peoplsv. Bayker,GJLNa 170192, Feb. 10,2016.
2 Feoptev.Bfiaber.GRNos. 114967-68,Jan.26.2004.
3 Peopbv.Satefe^GJlNo.200684,June412014;Peoptev.Chua.GJlNo.187052,Sept 13,2012;CarmenRituaiov.
Peojde,GJl No.178337,June25,2009;Peoptev.Temporada,GRNo.173473,Dec. 17.200S.
4 Peoptev. R adio,G Jl No.227505,O ct02.2017; Peopbv.Chua.G R.Na 187052, Sgrt.13.201Z
5 Peoptev.AfeonaGRNo. 132029,July30,2004.
4 Section77. Rule X, Revised POEA Rulesand RegiMms Governing Ihe Recruitment and Employment of Land-Based
Ovetseas Rjpino Waters of 2016; Section 73, Rule X. 2016 Revised POEA Rifes and Regulations Governing the
Ronriln^ andEnplopedofSeafarersissuedonFeta^
7 kLU
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Bar reviewer o n Labor Law
Monetary A *™ arising out o: the implementation o f the employment contract
involving Filipino workers for overseas deployment.1
^ RATIONALE b e h i n d t h e s o l i d a r y l i a b i l i t y .
R.A. No. 8042 is a police power measure intended to regulate the
Recruitment ^
deployment
OFWs. It aims to curb, if not eliminate, the
injustices and abuses suffered by numerous OFW s seeking to work abroad.2 In
Samar,* it was explained that the provision on joint and several liability in R.A. No.
8042 is in line with the state's policy of affording protection to labor and alleviating
workers' plight It assures overseas workers that their rights will not be frustrated
by difficulties in filing money claims against foreign employers. Hence, in the case
of overseas employment, either the local agency o r the foreign employer may be
sued for all claims arising from the foreign employer's labor law violations. This
way, the overseas workers are assured that someone-at the very least, the foreign
employer's local agent-may be made to answer for violations that the foreign
employer may have committed. By providing that the liability o f the foreign
employer may be "enforced to die foil extent" against die local agent, the overseas
worker is assured o f immediate and sufficient payment o f what is due them. The
local agency that is held to answer for the overseas worker's money claims,
however, is not left without remedy. The law does not preclude it from gping after
the foreign employer for reimbursement o f whatever payment it has made to the
employee to answer for the money claims against the foreign employer.
3. A PRE-QU ALIFICA TION R E Q U IR E M E N T .
It is one o f the pre-qualification requirements, both under die 2016 Revised
Rulesfor Land-based and Sea-Bastd OFWs, that any person applying for a license to
operate a recruitment agency/manning agency, should, together with the written
application, file with the POEA, a duly notarized undertaking by the sole
proprietor, the managing partner, or the president o f the corporation stating that
the applicant4 shall assume full and complete responsibility for all claims and
liabilities which may arise in connection with the use o f the license5 and assumejoint
and several liability with the foreign employer/shipowner/prindpal for all claims and
liabilities which may arise in connection with the implementation o f the contract,
including, but not limited to, unpaid wages, death and disability compensation and
1 Sectiw 10. RAtto. 8042. asamended by Secta 7. RAtto. 10022; Seclim 3, RuteVB,Ornni)iBl^ and Regulations
(mplemenfing the MgrantWaters and Overseas Ffyros Act of 1995, as Amended by RA No. 10022, issued on Juty 8,
2010.
2 Gopcv.Bajfeta,GRNa2O5953,Jun0O6, 2O18.
3 SameerOvereeas PlacementAgency, ha v. NLRC.GR No. 132564, Oct 20, 1999.
4 gyfrn rfl, Ride II. Part B. Revised POEA Rides and Remfefons Gowenvo (he Recruitment and Employment of LandBased Overseas FSpino Waters of 2016: Section 4(F). Rule 0. Part II, 2016 Revised POEA Rules'and Regulations
GoverraigtteReavihiertandEmpbymertofSeafarers is ^
5 jjfrlfri 4(F)(2). Rule 11Part H. 2016Revised POEA Rulesand RegiilaSons Gowerrmg the Recniitiiientand Employmentof
Seafarersissuedon February26, 2016.
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repatriation.1And in case o f a corporation oc partnership, it is further required that
a duly notarized undertaking be executed by the corporate officers and directors, or
partners, that they shall be jointly and severally liable with the corporation or
partnership for claims a n d /o r damages that may be awarded to the workers.2
4. IN C O R P O R A T IO N IN T H E E M P L O Y M E N T C O N T R A C T.
The joint and several obligation must be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval.*
5. W H O A R E L IA B L E I N CASE O F JU R ID IC A L P E R SO N S?
I f the local recruitment/manning agency is a juridical being, the corporate
officers and directors and partners, as the case may be, shall themselves be jointly
and severally liable with die corporation o r partnership for the aforesaid claims and
damages.4 This is so because joint and several liability shall likewise refer to the
nature o f liability o f partners, o r officers and directors with the partnership or
corporation over claims arising from employer-employee relationship.5
6. C O N T IN U IN G LIA BILITY .
The joint and several liabilities discussed above shall continue during the
entire period or duration o f the employment contract and shall not be affected by
any substitution, amendment o r modification made locally o r in a foreign country
o f the said contract6
7. E F F E C T O F C O M PU LSO R Y IN SU R A N C E C OV ERA GE.
Under a new provision7 introduced by R A N o. 10022 to RA. No. 8042,
every O FW should now be compulsorily covered by insurance to answer, among
< S e ria l 4/fVSI Rids 8 P ^ [l
(teR aerii&Tienfandfiiiclovm entfrfLand-
Based Overseas Fipino Workers of 2016; Secfion 4(F)(3), Ride 11, Part El. 2016 Revised POEA Rules and Regtdafions
Governing the Rem anentand Emptajmentof Seaferas issued on Febtuay26.2016.
2
See aisoS ecS ai^), Rub II, F W II, Revised TOEA Rules and Regufefiois&wsmingBteRecnjitn^ and Employmentof
Land-Based Overseas Rfcho Vtakecs of 2016; Secfion 4(0), Rub H, Part 0,2018 Revised POEA Rubs and Regdafions
G w en ty t e Recniinertand E tn p fa ^ ^
3 Secfim 10, R A No. 8042, as amended by Secfim 7, R A fto . 10022; Sedion 3, Ride VB.Otmbus Rules and Regdations
hpbmenftig (he MgrantWbriceis and Overseas Ffyinos Act of 1995. as Amended by R A No. 10022. issued on Juty 8
2010.
4 Secfion 10, R A No.8042, as amended by Secfion 7, R A No. 10022; Secfion 1(s) of Rule II and Secfion 3 .2 ^ paragraph.
Rub VO. OrndNJS R ibs and Regiiaiions Implementing the Mgiant W aters and Overseas Fipinos Ad of 1995. as
AmendedbyRA Nol 10022, issued on July8,2010.
s Mo. 17, Rub IL Rart l Revised POEA Rdes and Regdafions Governing the Reerubnert and Bnptoyment of land& sed
(Verseas Fipno Workers of 2016; No. 20, Rule U, Part l, 2016 Revised POEA Rules and Regubfons Governing the
ReauSmentandBTploymentofSeabrasissuedmFetxuaiyTe^e.
6
Secfion 10, R A N a 8042, as amended by Secfion 7, R A No. 10022; Secfiai 3, Rub VII, <>nnaxis Rides and Regdaiions
Implemenfing the MgrantWoiters and Ovaseas Rfoiros Act of 1995, as Amended by R A No. 10022. issued on July 8.
2010.
1
Section 37-A, R A No. 6042, as added by Secfion 23. R A No. 10022; Secfion 1, Rub XVI. Qmnius Rubs and
Regulations bnpbmenfing tie MgiantWorkers and Overseas Ftyinos Ad of 1995, as Amended by R A N o. 10022, issued
on July 8,2010.
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La bo r La w
others, for his/her monetary claims.1 This compulsory insurance coverage,
however, should not affect the joint and several liability o f the foreign employer
and die local recruitment/manning agency2 as provided in the law.3
b.
THEORY OF IMPUTED KNOWLEDGE
1. CON CEPT.
This theory refers to a cognizance o f a circumstance or feet attributed to a
patty because o f its posidon, or its relationship with o r responsibility for another
party. The relationship of the local recruitment agency/local manning agency vis-avis its foreign principal is that o f agent-principal, the former being die agent and the
latter, die principal. Consequendy, the theory o f im puted know ledge ascribes the
knowledge o f the agent to die principal.
This was, however, not the case in Sunace v. NLR.C,* where die OFW
(Divina), a domestic helper in Taiwan, has extended her 12-month contract after its
expiration for two (2) more years after which she returned to the Philippines. It was
established by evidence that the extension was without the knowledge o f die local
recruitment agency, petitioner Sunace. The CA, however, affirmed the Labor
Arbiter’s and NLRC’s finding that Sunace knew o f and impliedly consented to the
extension o f Divina’s 2-year contract It went on to state that "It is undisputed that
[Sunace] was continually communicating with [Divina’s] foreign employer." It thus
concluded that "[a]s agent o f the foreign principal, ‘petitioner cannot profess
ignorance of such extension as obviously, the act o f the principal extending
complainant (m) employment contract necessarily bound i t ’"
In finding that the application o f this theory o f imputed knowledge was
misplaced, the High Court ruled that this theory ascribes die knowledge o f the
agent, Sunace, to the foreign principal/employer Xiong, not the other way around.
The knowledge of the foreign principal/employer cannot therefore be imputed to
its agent Sunace. There being no substantial proof that Sunace knew o f and
consented to be bound under the 2-year employment contract extension, it cannot
be said to be privy thereto. As such, it and its "omer>' cannot be held solidary
1 See paragraph (f) of Section 37-A.RA No. 8042, as added by Secfon 23, RA. No. 10022; Section 1(f), Rule XVI, Omnfcus
Rties and RegifeSons Implementing 9ie Mg?anl W ortas and Overseas Fgjp'ros Ad of 1995, as Amended by R A No.
10022.issuedonJuV8.2010.
2 See Secfon 37A(jB),RA No. 8042, as added by Section 23, RA. No. 10022; Section 10(6), Rule XVI, Omnlius Rules and
Regulations hplemaifing the hfgiant W aters and O oseas FBpinos Ad of 1995, as Amended by R A No. 10022, issued
onJdy8,2010.
1 Section 10, RA. No. 8042, as amended by Secfon 7, R A No. 10022; Sedan 3, RuteVH,OmribusRUtes and Regulations
ImplemenSng the Migrant Vfalcers and O w seas Rhinos Act of 1995, as Amended by RA. N ql 10022, issued on JuV 8.
2010; Seeaiso No. 17, Rule D, PartI. Revised POEA Rules and Regulations Gouemiig h e Recrutowft and Employmentof
Land-Based Oveseas RQpino Workers of 201ft Not 20. Ride It. Part 1.2016 Revised POEA Rules aid Regubfons
Govendng theReouibnentand Em ployn^of Seaferes
4 SUnaoeW e»nafiondManagemenlSe(v^hcv.NU?C,&RNo. 161757,Jan 25.2006.
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liable foe any o f Divina’s claims arising from the 2-year employment extension. A s
the New Civil Code provides: “Contracts take effect only between the parties, their
assigns, and heirs, except in case where the rights and obligations arising from the
contract are not transmissible by their nature, or by stipulation or by provision o f
law.”
Furthermore, as Sunace correcdy points out, there was an implied
revocation o f its agency relationship with its foreign principal when, alter the
termination o f the original employment contract, die foreign principal direedy
negotiated with Divina and entered into a new and separate employment contract
in Taiwan. Article 1924 o f the N ew Civil Code reading: “ [t]he agency is revoked if
die principal direedy manages the business entrusted to the agent, dealing direedy
with third persons” thus applies. As defined, a "prinapal" refers to a foreign
employer or foreign placement agency hiring or engaging Filipino workers for
overseas employment through a licensed local private recruitment/manning
agency.1
3.
TERMINATION OF CONTRACT OF MIGRANT WORKER
WITHOUT JUST OR VALID CAUSE
1. O R D E R O F T O P IC A L D ISC U SSIO N .
The discussion o f this topic is divided into the following sections:
I. GENERAL PRINCIPLES ON TERMINATION OF OFWs
II. MONETARY CLAIMS OF OFWs, IN GENERAL
III. MONETARY CLAIMS OF OFWs ARISING FROM ILLEGAL DISMISSAL
Note; Monetary claims of OFWs arising from work-related disability, sickness or
death is discussed in Chapter Four [Social Welfare Legislation] under the
topic of “C. Disability and Death Benefits m l POEA-Standard
Employment Contract, ” infra.
GENERAL PRINCIPLES ON TERMINATION OF OFWs
1. OFW s D ESE R V E T O B E P R O T E C T E D BY O U R LAWS.
OFWs belong to a disadvantaged class. M ost o f them come from the
poorest sectors o f our society. Their profile shows they live in suffocating slums,
trapped in an environment o f crimes. Hardly literate and in ill health, their only
hope lies in jobs they can hardly find with difficulty in our country. Their
1 Section 1(oc} Rub 11. Qmntous Rdes and Regulations Implementing he Mgrart Woctas and Overseas Riphos Ad of
t 9S5,A sfe m J^ 6yRAN o.t0022^ferchC8. 201Ci.
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Bar R eviewer on Labo r Law
unfortunate circumstance makes them easy prey to avaricious employers. They will
climb mountains, cross the seas, endure slave treatment in foreign lands just to
survive. Out of despondence, they will work under sub-human conditions and
accept salaries below the minimum. The least we can do is to protect them with our
laws.1
There is an extreme need for the strict enforcement o f the law and the
rules and regulations governing Filipino contract workers abroad. Many hapless
citizens of this country who have sought foreign employment to earn a few dollars
to ensure for their families a life worthy o f human dignity and provide proper
education and a decent future for their children have found themselves enslaved by
foreign masters, harassed or abused and deprived of their employment for tire
slightest cause. No one should be made to unjustly profit from their
suffering. Hence, recruiting agencies must not only faithfully comply with
government-prescribed responsibilities; they must impose upon themselves the
duty, borne out of a social conscience, to help citizens of this country sent abroad
to work for foreign principals. They must keep in mind that this country is not
exporting slaves but human beings, and above all, fellow Filipinos seeking merely
to improve their lives.2
2. APPLICABILITY OF T H E SECURITY OF TENU RE DOCTRIN E.
OFWs, regardless of their classifications, have the right to security of
tenure guaranteed under the Constitution,3 notwithstanding the fact that their place
of work is overseas.4 Thus, even if a Filipino is employed abroad, he or she is
entided to security of tenure, among other constitutional rights.5 For the entire
duration of employment agreed upon in their contracts, their security o f tenure
remains even if they work in a different jurisdiction. This is so since their
employment contracts are perfected in the Philippines, and following the principle
of lex loci contractus (the law of the place where the contract is made), these contracts
are governed by our laws, primarily the Labor Code o f the Philippines and its
implementing rules and regulations.67At the same time, our laws generally apply
even to employment contracts o f OFWs as our Constitution explicidy provides
that the State shall afford full protection to labor, whether local or overseas.1 Thus,
even if a Filipino is employed abroad, he or she is entided to security o f tenure,
'
2
3
4
Yap v. Thenamaris Ships Management, G.R No. 179532, May 30,2011.
JSS Indochina Corp. v. Fener, G il No. 156381, Oct 14,2005.
Section 3, Artide XIII, PhSppine ConsbtLidon.
Sameer Overseas Placement Agency, Inc. v. Joy C. Cab3es, G.R. No. 170139, Aug. 05,2014; Gopio v. Bautista, G.R. No.
205953, June 06,2018.
5 Dagasdas v. Grand Placement and General Services Corporation, G.R. No. 205727, Jan. 18,2017,814SCRA 529,541.
6 Dagasdas v. Grand Placement and General Services, supra, citng Sameer Overseas Placement Agency, Inc. v.Cabiles,
supra.
7 Id., Per Section 3, ArideXIII of liie Constitution: ‘Section 3. The State shall afford ful protection to labor, local and overseas,
orgarized and unorganized, and promote full employment and equality of employment opportunities for all.'
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among other constitutional rights.1 Consequently, OFWs cannot be dismissed
without observing both substantive and procedural due process. If they were
illegally dismissed, their right to security o f tenure is violated.2
3. PO EA STAN DA RD E M P L O Y M E N T C O N T R A C T (POEA-SEC).
Under the POEA Pules, all foreign employers and principals are required
to adopt the POEA-SEC. The provisions, however, differ for land-based and seabased OFWs. They are discussed hereunder.
a. Minimum provisions o f employment contracts.
Consistent with welfare promotion thrusts of the POEA, the following
shall be the minimum provisions in employment contracts for OFWs:
a. Complete name and address o f the employer/companv;
b. Position and jobsite of the OFW;
c. Basic monthly salary, including benefits and allowances and mode o f
payment. The salary shall not be lower than the prescribed minimum
wage in the host country or prevailing minimum wage in the National
Capital Region of the Philippines, whichever is higher;
d. Food and accommodation or the monetary equivalent which shall be
commensurate to the cost o f living in the host country, or off-setting
benefits;
e. Commencement and duration o f contract;
f. Free transportation from and back to the point of hire, or off-setting
benefits, and free inland transportation at the jobsite or off-setting
benefits;
g. Regular work hours and day off;
h. Overtime pay for services rendered beyond the regular working hours,
rest days and holidays;
i. Vacation leave and sick leave for every year of service;
j. Free emergency medical and dental treatment;
k. Just/valid/authorized causes for termination o f the contract or o f the
services o f the workers, taking into consideration the customs,
traditions, norms, mores, practices, company policies and the labor
laws and social legislations o f the host country;
l. Settlement o f disputes;
m. Repatriation o f worker in case of imminent danger due to war,
calamity, and other analogous circumstances, at the expense o f
employer; and
n. In case o f an OFW’s death/repatriation of his human remains and
personal belongings, at the expense of the employer.1
'
Id., Industrial Personnel & Management Services, Inc. v. De Vera, G.R. No. 205703, March 7,2016.
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Bar Reviewer o n Labor Law
The POEA may formulate country- or skills-spedfic policies and
guidelines based on the following: (a) Existing labor and social laws o f the host
country; (b) Relevant bilateral and multilateral agreements or arrangements with the
host country; and (c) Prevailing condidons/realities in the market.12
b. Freedom to stipulate.
The parties to overseas employment contracts are allowed to stipulate
other terms and conditions and other benefits than those provided in the POEASEC.3 These benefits should be over and above the minimum standards; provided,
that the stipulations are mutually beneficial to both parties and are not contrary to
law, public policy and morals.4 Consequently, a contract freely entered into is
considered die law between the parties.5
c. Disclosure o f terms and conditions o f employment.
As far as land-based OFWs are concerned, the rule states that the licensed
recruitment agency shall, prior to the signing o f the employment contract, inform
the OFWs o f their rights and obligations, and disclose die full terms and conditions
of employment The licensed recruitment agency shall likewise ensure that the
OFW is provided with a copy o f the POEA-approved contract, to give him /her
ample opportunity to examine the same.6 This same rule applies to sea-based
OFWs where die licensed manning agency and the seafarer are required to fully
disclose all relevant information in relation to the recruitment and employment o f
the seafarer.7
d. Interpretation o f overseas employment contract
Any ambiguity in the overseas employment contract shall be interpreted
against the parties that drafted i t 8 Labor contracts must be interpreted liberally in
favor o f the worker.9 T he provisions contained in the POEA-SEC are
manifestations o f the State in favor o f the working class, consistent with the social
justice and protection of the working class provisions o f the Constitution.10
1 Secfon135. Rule I, Part V, Revised POEA Rules and R eguM oreG w aniighe Reauamert and Employment of LandBased OvereeasFlphoWwkasof201$.
2 kt
2 DebsSankBv.JebseaM aftne,he,G U N a 154185,N w .22,2005.
4 Secfion 136. Ride I. Part V. Jd.; Section 116. Rute I. Part IV. 2016 Revised POEA Rules and Regulafions Govenvng the
Reauitmentand&npbyment of Seafsos issued on Febnoy 26,2016.
5 ATC! Overseas CorporaBon v. Bchn, O R No. 178551. OcL 11.2010.
6 Secfon 137, Rule I, Part V, Revised POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas F i^ W o te s of 2016.
1 Section 117, RuSe t. Part IV, 2016 Revised POEA Rules and ReguiaSons Governing foe Recurrent and Employment of
Seafarers issued on Febcuay26.2016.
8 Cadafnv.POEA’sAdnw istrator.G ilNa 104776.0ec5,1995.238SCRA721.
8 Ditanv. POEA, G il No.79560, Dec. 3.1990,191 SCRA823.
» Eastern Shipping Lines, Inc. v. POEA, G il No. L-76633, O c ll8,1988,166 SCRA533.
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4. U N A U T H O R IZ E D S U B S T IT U T IO N /A L T E R A T IO N O F
E M PL O Y M E N T C O N T R A C T.
ILA. N o. 8042 explicitly prohibits the substitution o r alteration, to the
prejudice o f the worker, o f employment contracts already approved and verified by
the PO E A from the time o f actual signing thereof by die parties up to and
including the period o f their expiration without the approval o f the PO EA .1
Thus, if prior to his deployment and while still in the Philippines, the
OFW was made to sign a POEA-approved contract with a licensed recruitment or
placement agency in die Philippines, on behalf o f a foreign employer, and, upon
arrival in die foreign country, the foreign employer made him sign a new
employment contract, this new contract is void.2 T o be valid, the new contract
must be shown to have been processed through the P O E A Under our Labor
Code, employers hiring OFWs may only do so through entities authorized by the
D O L E Secretary.3 Unless the employment contract o f an OFW is processed
through the POEA, the same does not bind the concerned O FW because if the
contract is not reviewed by the PO EA , certainly the State has no means o f
determining die suitability o f foreign laws to our overseas workers.4 Moreover, this
new contract also breached die O F W s original contract as it was entered into even
before the expiration o f the original contract approved by die POEA. Therefore, it
cannot supersede die original contract; its terms and conditions being void.5
T he same voidness holds true in a case where the subsequently executed
side agreement o f an OFW with her foreign employer reduced her salary below die
amount approved by die P O E A The reason is that such scheme is against our
existing laws, morals and public policy. T h e side agreement cannot supersede her
standard employment contract approved by the POEA.6 In addition to such
voiding, disciplinary sanctions may be imposed upon the errant
employer/prindpaL7
1 S m Sen 60 , R A N& 8042, as amended tySecGm 5, R A to . 10022; See Section 10 , Rule IV, Omnbus Riles and
Ragubfions tnplemenGrig the ImpartVtafcasand Overseas Rphos Actof 1995, as Amended ty R A N a 10022, issued
on July 8,2010.
7 Daga^v.GrandPtaoem entandGen6ralSeivices,GAto.205727l Jan.18,2017.
3 Id , See Article 18. Ban onO recfrtw g.-N o employer may hire a Flipino worker to weiseasem plopent accept trough
S>e Boarris and ertilfes athhoiized by the Secretary of Labor. Direct-hinng by members of Sie diptomatic corps, irtcmafional
organizaSons and such olher employers as may be atowed by the Secretary of Labors exempted from t e p ro e m
(L^»rCodeof0iePh2ippines,Amenc(ed&Renim*ered, JuJy21,2015).
1 Id , Industrial Peisonrd&lybfagementSeMces, h a v.D e Vera, 6 R No. 205703. M a d i7 ,2016
3 Id^D aljm m v.FW & isnw potoM aniow andProm otim Savioes.he,G R .N o. 156029, Nw 14,2008,591 P h t662.
5 C havK V .B ontoftfez.6A No. 103808, Match 1,1995,242 SCRA 73,82; 312 PM. 88; See also PtacweBIntemafional
Services C op.v.C am cie,G A to. 189973,June26,2006.
7 FortancH)asedOFWs,suchsubs&£onoraneraSanoftiePOEA«|]fxowedoontracttoOiepfqutSceoftheOFWwOmefft
ffie impcsfBoo of the penaiy erf permanent rfisquafi5ca5on and deSsSng from the roster of accrafced pmcipals/emptayas.
(Section 144{Q(i), Ride IV, Revised POEA Rides and Regulations Governing he Recruitment and Employment of LandBased Ovetseas F^pino Workers of 2016). For seatoased OFWs, such subsShrfion or aOeraSon of Hie POEArapprwed
contract wffl be penaEzed as fotows: 1* OSertse - Rrte of PSOJOOOXIO; 2nd Offense - Fine of P100.000.00; 3s1Oflense Suspension to n pariripaSon in h e overseas employment program (Sx months b One year); 4 * Offense • Permanent
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5. D OCTRINE O F PROCESSUAL PR ESU M PT IO N .
It is a hornbook principle that the party invoking the application o f a
foreign law has die burden o f proving such law under the doctrine o f protessual
presumption or "presmei-identity approach,M This is an International Law doctrine
which dictates that where a foreign law is not pleaded or, even if pleaded, is not
proved, the presumption is that such foreign law is the same as Philippine law.
Thus, under this situation, Philippine labor laws should apply in determining the
issues presented in a case.2
It must be noted that the Philippines does not take judicial notice o f
foreign laws, hence, they must not only be alleged; they must be proven. This is so
because in international law, the party who wants to have a foreign law applied to a
dispute or case has the burden o f proving the foreign law. The foreign law is
treated as a question o f feet to be properly pleaded and proved as the judge or
Labor Arbiter cannot take judicial notice o f a foreign law. He is presumed to know
only domestic or forum law.3 To prove a foreign law, the party invoking it must
present a copy thereof and comply with Sections 244 and 25s o f Rule 132 o f the
Revised Rules o f Court
In EDl-Stafjbmldcrs,6 die employment contract signed by the private
respondent OFW specifically states that the Saudi Labor Laws will govern matters
not provided for in the contract (eg, specific causes for termination, termination
procedures, etc.). Being the law intended by the parties (lex loci iritentiones) to apply
to the contract, Saudi Labor Laws should govern all matters relating to the
termination o f the employment o f the OFW. Unfortunately for petitioner, it did
not prove the pertinent Saudi Labor Laws on the matter, thus, the International
Law doctrine o f pnsumed-identitf approachor processualpresumption comes into play.
Petitioners in ATCI Overseas1 contend that Philippine labor laws on
probationary employment arc not applicable since it was expressly provided in
DisquaScaSon and deCs&ng tom the roster of arxrerfited prindpatsfempbyers. (Section 127(B)(2), Rule IV, 2016 R ased
POEA Rules and R e g u la r (kweming the Reautnent and EniptoymertotSeafeieis issued on February26,2016).
1 tt
2 Id., cSng ED^Ssftcldeis Memafanal. Inc. v. t&RC, G il No. 14558. Oct 26,2007.
3 EDI^tatoddefslnlBmafional,tnev.NLRCtsupra.
4 This prewsion states: "SEC. 24. Proof of official record.— The record of pubfc documents referred to in paragraph (£0 of
Section 19, when adrrisstile tor any purpose, may be evidenced by an official publication thereof a by a copy attested by
9)3 officer hawing the legal custody of Bie record, a by life deputy, and accompanied, I h e recced is not kept b tie
PhSppines.
a certScate Qiat such officer has the custixly. If tie oSice n Mhicti Sie record is kept is in a foreign county,
tie cerfficate may be made by a secretary of Bte embassy or legation, const! general, consd. vice cored, or oonsdaragent
or by any officer in tie foreign service of the PtiSppnes stafioned in the foreign county in which tie record is kept, and
autienlicatadbylhesealofhisoffice.
5 This sedan provides: *$EC. 25.
attestation of copy must state. - Whenever a copy of a document or record is
attested Jar he purpose of the evidence, fie attestation must slab, in substance. Sot the copy fc,a correct copy of the
original, aa sp ^ p a rtth e re o t, as fie case may be. The attestabon must be under iheotSdal seal of the attesting officer,
ffie re be any,aJhe be the detkofacatrthaviigaseai. underthe seal of such court.’
* Supra.
3 ATCI Owrseas Corporationv. GcNn, GjR. No. 178551, Oct 11.2010.
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respondent’s employment contract, which she voluntadly entered into, that the
terms o f her engagement shall be governed by prevailing Kuwaiti Civil Service
Laws and Regulations, as in fact PO EA Rules accord respect to such rules, customs
and practices o f the host country. T o prove the Kuwaiti law, petitioners submitted
the following: MOA between respondent and her foreign employer, the Ministry o f
Public Health o f Kuwait (the Ministry), as represented by ATCI, which provides
that the employee is subject to a probationary period o f one (1) year and that d ie
host country’s Civil Service Laws and Regulations apply; a translated copy (Arabic
to English) o f die termination letter to respondent stating that she did not pass th e
probation terms, without specifying die grounds therefor, and a translated copy o f
die certificate o f termination, both o f which documents were certified by M l
Mustapha Alawi, Head o f die Departm ent o f Foreign Affairs-Office o f Consular
Affairs Islamic Certification and Translation Unit; and respondent’s letter o f
reconsideration to the Ministry, wherein she noted that in her first eight (8) m onths
o f employment, she was given a rating o f “Excellent” albeit it changed due to
changes in her shift o f work schedule. The Supreme Court, however, ruled that
these documents, whether taken singly o r as a whole, do n o t suffidentiy prove th at
respondent was validly terminated as a probationary employee under Kuwaiti civil
service laws. Instead o f submitting a copy o f the pertinent Kuwaiti labor laws duly
authenticated and translated by Embassy officials thereat, as required under d ie
Rules, what petitioners submitted were mere certifications attesting only to the
correctness of the translations o f the M OA and the termination letter which does
not prove at all that Kuwaiti civil service laws differ from Philippine laws and th at
under such Kuwaiti laws, respondent was validly terminated.
Indeed, the parties to an overseas employment contract may select the law
by which it is to be governed. A basic policy o f contract is to protect the
expectation o f the parties and such party expectation is protected by giving effect
to the parties’ own choice o f the applicable law. In such a case, the foreign law is
adopted as a “system"to regulate the relations o f the parties, including questions o f
their capacity to enter into the contract, die formalities to be observed by the
parties, matters o f performance and die like. Instead o f adopting the entire mass o f
the foreign law, the parties may just agree that specific provisions o f a foreign
statute ate to be deemed incorporated in their contract “as a set of Urns. ” By such
reference to the provisions o f die foreign law, the contract does not become a
foreign contract to be governed by such foreign law since the said law does n o t
operate as a statute but merely as a set o f contractual terms deemed written in die
contract
The choice o f law must, however, bear some relationship to the parties o r
their transaction. For instance, as CadaM pronounced, where the services o f the
claimants were rendered in Bahrain, there is no question that the contracts sought
to be enforced have a direct connection with Bahrain. Consequently, where the 1
1 C adafov.PO ER !sA ihinarate,G ilN a 104775, D ec.5,1895,238 SCRA 721.
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claims are for benefits granted under the Bahrain law, only die claimants who
worked in Bahrain should be entitled to file their claims in a class suit, excluding
those who worked elsewhere.
6. OFWs MAY B E T ER M IN A T E D O N L Y A F T E R D U E PROCESS.
As earlier discussed, OFWs are entitled to security o f tenure as
guaranteed under die Constitution and die laws o f die Philippines.*1 Thus, OFW s
may only be terminated for a just or authorized cause (substantive due process)
and after compliance with procedural due process requirements.2 Article 297 [282]
of the Libor Code enumerates the just causes o f terminatiftn by die employer3 and
Articles 298 [283] and 299 [284] thereof enumerate die authorised causes. The
fundamental procedural rights afforded under Philippine laws to workers equally
apply to OFWs.4 This means that the employer must give the concerned employee
at least two (2) notices before his or her termination. Specifically, the employer
must inform the employee o f the cause or causes for his or her termination, and
thereafter, the employer’s decision to dismiss him. Aside from the notice
requirement, the employee must be accorded the opportunity to be heard.5
The 2014 en banc case o f Sameer v. Cabiles? is a classic example o f illegal
dismissal o f an OFW. Respondent’s dismissal grounded on inefficiency and
negligence less than one year from hiring and her repatriation on the same day
show not only failure on the part o f petitioner to comply with die requirement o f
the existence o f just cause for termination; they patendy show that the employers
did not comply with the due process requirement Thusly:
“A valid dismissal requires both a valid cause and adherence
to the valid procedure of dismissal.7 The employer is required to give
the charged employee at least two written notices before termination.8
One of the written notices must inform the employee of the particular
acts that may cause his or her dismissal.9 The other notice must
‘[inform] the employee of the employer’s decision.’10 Aside from the
notice requirement, the employee must also be given ‘an opportunity to
beheard.’11
' Gopiov.Bautista,GR No. 205953,June06,2016.
7 SameerOvemeas PlacementAgency, be. v JoyC .& H es,G R N o. 170139,Aug.05,2014.
* Id.
* M.
5 Dagasdas v. Grand Placement and General Services, G il No. 205727, Jan. 18,2017, cSng EDI-SMxiSders International,
be. v.NLRC.GR No. 14558. Oct 26,2007.563 P N .1 ,28-29.
( Sameer Overseas Placement Agency, be. v. Joy C. Catties, G J l No. 170139, Aug. 05,2014. The foreign employer
afleged r bis case that respondents dismissal was due b inefficiency b herwxk and negligence b her duties.
1 H c^SK ppem Unfed Patiffc, h e v. Data, G R No. 175558, F e tn » y 8,2012,665 SCRA412,426.
«
Id.
» Id., Id.
* H id .
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“Petitioner failed to comply with the twin notices and
hearing requirements. Respondent started working on June 26, 1997.
She was told that she was terminated on July 14,1997 effective on the
same day and barely a month from her first workday. She was also
repatriated on die same day that die was informed of her termination.
The abruptness o f the termination negated any finding that she was
properly notified and given the opportunity to be heard. Her
constitutional right to due process of law was violated.”
In PCL Shipping,1petitioners contend that the twin requirements o f notice
and heating apply strictly only when the employment is within the Philippines and
that the same need no t be strictly observed in cases o f international maritime o r
overseas employment The Supreme Court, however, disagreed. The provisions o f
the Constitution as well as the Labor Code which afford protection to labor apply
to Filipino employees whether working within the Philippines o r
abroad. Moreover, the principle o f lex lod contractus (the law o f the place where the
contract is made) governs in this jurisdiction. In the present case, it is not disputed
that the Contract o f Employment entered into by and between petitioners and
private respondent was executed here in the Philippines with the approval o f the
POEA. Hence, the Labor Code, together with its implementing rules and
regulations and other laws affecting labor, apply in this case. Accordingly, as to the
requirement o f notice and hearing in die case o f a seafarer, the Court has already
ruled in a number o f cases that before a seaman can be dismissed and discharged
from the vessel, it is required that he be given a written notice regarding die charges
against him and that he be afforded a formal investigation where he could defend
himself personally or through a representative. Hence, the employer should stricdy
comply with the twin requirements o f notice and hearing without regard to the
nature and situs o f employment or the nationality o f the employer. Petitioners
failed to comply with these twin requirements.
TaSdano1 also declares that the minimum requirement o f due process in
termination proceedings must be complied with even with respect to seamen on
board a foreign vesseL3 Centennial Transmarine,4 however, is mote categorical in
declaring that for officers and crew who are working in foreign vessels involved in
overseas shipping, there must be compliance with the applicable laws on overseas
employment as well as with the regulations issued by the POEA, such as those
embodied in die Standard Contract for Seafarers Employed Abroad (Standard
Contract).5
'
2
3
4
5
P a Shipping Ptippines, Inc. v. NLRC, G R No. 153031, Dec. 14,2005.
T afid atw v.F alO T M ato & A ^S avices.ln a.G JlN o . 172031.July 14,2008.
See eboDe la Crwv.MaerskFfynasCrewing, h o , G il No. 172038, April 14,2008.
Centeni^Transn«^,lnc.v.DdaCiuz,G .R.No.180719,Aug.22,2008.
Now deromrafed as ^Revised Standard Terms and Corxfions Governing the Ovaseas Employment of FEpiio Seafares
OaGoard Oceangoing Ships,* issued on October 4,2010 by virtue of POEA Gowning Board Resrtufon No. 09, Senes of
2010.
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In Dagudas,1 petitioner OFW’s termination on the basis o f a void
substituted employment contract which was subsequently executed upon his artival
in Saudi Arabia, in replacement o f the POEA-approved employment contract
which he earlier executed in the Philippines, was declared illegal. More so when
there is no dear justification for the dismissal o f Dagasdas other than the exerdse
of the foreign employer’s right to terminate him within the probationary period.
While our Civil Code recognizes that parties may stipulate in their contracts such
terms and conditions as they may deem convenient, these terms and conditions
must not be contrary to law, morals, good customs, public order or policy.2 The
right granted to the foreign employer to terminate the employment contract
without serving any notice to petitioner OFW is contrary to law because our
Constitution guarantees that employees, local o r overseas, are entitled to security o f
tenure. To allow employers to reserve a right to terminate employees without cause
is violative o f this guarantee o f security o f tenure.
In Gopio? the Court declared that respondent Bautista's incompetence as
the alleged just cause for his dismissal was not proven by substantial evidence
because die evaluation report o f his superior was made only on August 22, 2009,
and the declaration o f Paul Thompson, Supervising Engineer o f the Project to
which Bautista was assigned, was executed only on October 1,2009, which dates
are beyond the date o f termination o f Bautista's employment on July 10,2009. The
CA correctly concluded that these were made as an afterthought in order to lend
credence to the claim that die termination o f Bautista's employment was for a valid
reason. In Skippers United,* it was held that the Master’s Statement Report presented
by therein petitioners to corroborate their claim that the dismissal o f therein
respondents was for just cause, i.e., incompetence, was issued 78 days after therein
respondents were repatriated to Manila and two months after die latter instituted a
complaint for illegal dismissal before the NLRC. Such report can no longer be a
fur and accurate assessment o f therein respondents' competence as the same was
presented only after the complaint was filed Its execution was a mere afterthought
in order to justify the discussal o f therein respondents which had long been
effected before the report was made; hence, such report is a self-serving one.
6 .1 STIPULATED P R E -T E R M IN A T IO N W IT H O U T N E E D F O R D U E
PROCESS, ILLEGAL.
In the same case o f Gopio, respondent Bautista's employment was
terminated on the basis o f Article 4.3 o f the employment contract by giving him
one-month salary in lieu o f one month's written notice. The said provision states:
( Dagasdasv. Grand Placement and Genoa! Setvices. G.R. No. 205727, Jan. 18,2017.
2 The CM Code of tie Ptippnes, in its Article 1306. provides: "The contracting pasties may estabfish such stipulations,
clauses; terns and conditions as they may deem convenient provided they are not oonfiay to law. morals, good customs,
puMc order,crpubfepofcy.*
1 Gopbv.Baufista.GJR.Na 205953,Ju»06,2016.
4 Skipperstti8edPacfc,hc.v.Maguad.GRNa 166363,Aug. 15,2006.
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“4.3 The Employer or Employee may terminate this contract on other
grounds. The Employer should give one month's written notice of
his intention to terminate or in lieu thereof pay the Employee a
sum equivalent to one month's salary. The Employee may likewise
terminate this Contract by giving three months' notice to the
Employer.”
In holding that Bautista’s termination was illegal as it was based on said
paragraph 4 3, the High Court pronounced that the due process requirement is n o t
a mere formality that may be dispensed with at will. Its disregard is a matter o f
serious concern since it constitutes a safeguard o f the highest order in response to
man's innate sense o f justice. To meet the requirements o f due process, the
employer must furnish the worker sought to be dismissed with two written notices
before termination o f employment can be legally effected,
(1) a notice which
apprises the employee o f the particular acts or omissions for wltich his dismissal is
sought; and (2) the subsequent notice after due hearing which informs the
employee o f the employer’s decision to dismiss him.
Here, Bautista was dismissed under Article 4.3 o f the employment
contract which allegedly permits his employer, Shorncliffe, to terminate die
contract on unspecified "other grounds" by giving one month's written nodee o f its
intendon to terminate, or in lieu thereof to pay the employee a sum equivalent to
one month's salary. Baudsta was notified on July 6, 2009 that his services will be
terminated effective on die close o f business hours on July 10, 2009, allegedly
because his performance was "unsatisfactory and did not meet die standards o f die
Company." He was also paid one-month salary in lieu o f one month's notice o f die
termination o f his employment. Surely, this cannot be considered compliance with
die two-notice requirement mandated by the Labor Code in effecting a valid
dismissal The Labor Code requires both notice and hearing; notice alone will n o t
suffice. The requirement o f notice is intended to inform the employee concerned
o f die employer's intent to dismiss him and die reason for the proposed dismissal.
O n the other hand, the requirement o f hearing affords the employee an
opportunity to answer his employer’s charges against him and accordingly defend
himself therefrom before dismissal is effected. In this case, Bautista was not given a
chance to defend himself. Five days after the notice was served, he was repatriated.
Clearly, he was denied his right to due process.
Article 4 3 deprives the employee o f his right to due process o f law as it
gives the employer die option to do away with the notice requirement provided
that it grants one-month salary to the employee in lieu thereof. It denies the
employee o f the right to be apprised o f the grounds for the termination o f his
employment without giving him an opportunity to defend himself and refute the
charges against him. Moreover, the term "other grounds" is all-encompassing. It
makes the employee susceptible to arbitrary dismissal. T he employee may be
terminated not only for just or authorized causes but also for anything under die
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sun that may suit his employer. Thus, the employee is left unprotected and at die
mercy of his employer, subjected to the latter's whims.
The validity o f Article 4.3 o f the employment contract cannot be
sustained as it contravenes the constitutionally-protected right o f every w o rk e r to
security o f tenure. Bautista's employment was for a fixed period o f 31 months.
Article 4.3 took back this period from him by tendering it in effect a facultative one
at die opdon o f Shomdiffe, which may shorten that term at any time and for any
cause satisfactory to itself, to a one-month period or even less, by simply paying
Bautista a month's salary. The net effect o f Article 4i3 is to tender Bautista's
employment basically employment a t the pleasure o f Shomdiffe. The Court
coadders that the provision is intended to prevent any security o f tenure from
accruing in favor o f Bautista even during the limited period o f 31 months.
6.2. TER M IN A T IO N O F E M P L O Y M E N T O F SEAFARERS.
a. Different set o f rules.
The 2010 POEA-SEC provides in its Section 18, the following rules on
termination o f employment o f seafarers:
A. The employment o f the seafarer shall cease when the seafarer
completes his period of contractual service aboard die ship, signs-off from the ship
and arrives at die point o f hire.
B. The employment o f the seafarer is also terminated effective upon
arrival at the point of hire for any o f the following reasons:
1. When the seafarer signs-off and is disembarked for medical reasons
pursuant to Section 20 (A) (5)1o f the POEA-SEC.
2. When the seafarer signs-off due to shipwreck, ship’s sale, lay-up of
ship, discontinuance o f voyage or change o f ship prindpal in
accordance with the following provisions o f the POEA-SEC:
(a) Section 22 {Termination Due to Sbipmtck and Ship's Foundering);2
(b) Section 23 (Termination Due to Sale ofShip, Lay-Up or Discontinuance of
Voryayfy} and
(c) Section 26 (Change ofPrincipal}.4
3. When die seafarer, in writing, voluntarily resigns and signs o ff prior to
expiration o f contract pursuant to Section 19 (G)1o f die POEA-SEC.
' SecSm 20 (A X 5 )d te 2010 POEA-SEC states:‘5. Incase a seafarer is tisembarted fa n the shfc f a medicaJ reasons,
the employer shaB beer ths i d cost of repatriation fri the went he seafarer is declared (1) fttorrepalr&fion; cr (2) ft to wok
buthe enp byerfeu iateb fin d en p li^^teth eseafaferm b o ari hfcfamer sh b w an o tersfyd tteem p tyer.'
2 Seedscusdon below.
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4. When the seafarer is discharged for just cause as provided for in
Section 3312 o f the POEA-SEC.
b. Grounds uniquely applicable to seafarers.
The POEA-SEC enumerates the following grounds for termination that
apply to seafarers:
(1) T erm in atio n d u e to shipw reck an d sh ip 's foundering.
Where the ship is wrecked necessitating the termination o f employment
before the date indicated in the contract, die seafarer shall be endded to earned
wages, medical examination at employer's expense to determine his fitness to
work, repatriation at employer’s cost and one month basic wage as termination
pay.3
In case o f termination o f employment o f the seafarer before the
expiration o f the term o f his contract due to shipwreck, actual or constructive total
toss or foundering o f the ship, the seafarer shall be entided to earned wages,
medical examination at employer’s expense to determine his fitness to work,
repatriation at employer's cost and one month basic wage as termination pay.4
(2) T erm ination due to sale o f ship, lay-up or discontinuance o f
voyage.
Where the ship is sold, laid-up, o r the voyage is discontinued
necessitating die termination o f employment before die date indicated in the
contract, the seafarer shall be entided to earned wages, repatriation at employer’s
cost and one (1) month basic wage as termination pay, unless arrangements have
been made for the seafarer to join another ship belonging to the same principal to
complete his contract in which case, die seafarer shall be entided to basic wages
until the date o f joining the other ship.5
1 Secfion 19 (6 ) provides: ‘SECTION 19. REPATRIATION. Xxx 6 A seafarer who requests for early lamination of his
contact shaD be iabfe for his repatriation cost as wel as the transportafion cost of his replacement The employer may, h
case of compassionate grounds, assume (he transportation costof Ihe seafarers replacement.'
2 Section 33 contains flie table defenses and oonesponr^ arkrirasliaSve penaBies. Tlia Mroductny part of file section
states:‘SerTlO N 33. TABLE OF O R R IS E S AND (XTRRESPONDWGAOMSTRATlVEPBtALTES.
‘A. Pursuantto Section 17 and 18 of the Contact the tfcdptnary grounds feted h the Table of OSenses and AdmMstafive
PenaSes hereunder or analogous acts tierelo shat be penalized according to it> grovfy and frequency of cormtssioa
imposed by fte Master ot the shfa. Such ofenses shafi be penaized as indicated.
*8. Gomrrission of a seafarer of ary of the offenses enumerated n tee Table of OIEenses and A dnftsbdto PeraKes
hoeunder or ot sinifer offenses shall be ground tor (fisq p tay adnuds&aGve acton at the POEA where the Mowing
conespomfing penafyshaD be imposed.
"C. The penalties for admirestra&/e actons by the Master andtor the POEA prowled herein shat be separala and distinct
tom whateverappropriate criminal action fia t may betted againsttie seafarer.*
3 Section22.2010POEA-SEC.
4 Id.
3 Section 23, Id.
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(?) Termination d u e to unseaw orthiness.
If die ship is declared unseaworthy by a classification society, poet state
or flag state, the seafarer shall not be forced to sail with (be ship.1
If the ship's unseaworthiness necessitates the termination o f employment
before the date indicated in the Contract, die seafarer shall be endded to earned
wages, repatriation at cost to the employer and termination pay equivalent to one
(1) month basic wage.2
(4) Term ination d u e to R egulation 1/4. control procedures o f the
1978 STCW convention, as am ended.
If the seafarer is terminated an d /o r repatriated as a result o f port state
control procedures/acdons in compliance with Regulation 1 /4 o f the 1978
STCW Convention, as amended, his termination shall be considered valid.
However, he shall be entided to repatriation and earned wages and benefits only.3
(51 C hange of principal.
Where there is a change o f Principal o f the ship necessitating the pretermination of employment o f the seafarer, the seafarer should be entided to
earned wages and repatriation at employer's expense. H e shall also be entided to
one (1) month basic pay as termination pay.4
In case arrangements have been made for the seafarer to direedy join
another ship o f the same. Principal to complete his contract, he shall only be
entided to basic wage from die date o f his disembarkation from his former ship
until the date of his joining die new ship.5
c. Disciplinaryprocedures.
The 2010 POEA-SEC prescribes in its Section 17, a complete set o f
disciplinary procedural rules insofar as seafarers who are undergoing administrative
investigations are concerned. Thus, it is provided therein that the Master shall
comply with the following disciplinary procolures against an erring seafarer
A.
the following:
The Master shall furnish die seafarer with a written notice containing
1. Grounds for the charges as listed in Section 33*
* o f the Contract or
analogous act constituting die same.
2. Date, time and place for a formal investigation o f die charges
against the seafarer concerned.
>
*
»
<
*
Secfion 24 (A), Id.
Secfion 24(B), Id.
Secfion 25, Id.
Section 26(A). Id.
Secfion 26(B), Id.
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B. The Master or his authorized representative shall conduct the
investigation or hearing, giving the seafarer the opportunity to explain or defend
himself against the charges. These procedures must be duly documented and
entered into the ship's logbook.
C. I f after the investigation or hearing, the Master is convinced that
imposition or a penalty is justified, the Master shall issue a written notice o f penalty
and the reasons for it to the seafarer, with copies furnished to the Philippine agent.
D . Dismissal for just cause may be effected by the Master without
furnishing the seafarer with a notice o f dismissal if there is a clear and existing
danger to the safety o f the crew or the ship. The Master shall send a complete
report to the manning agency substantiated by witnesses, testimonies and any other
documents in support thereof.1
Explaining the foregoing rules, the Court in Skippers Pacific} held:
“Note that under Section 17 of what is termed the Standard
Format, the ‘two - notice rule* is indicated. An erring seaman is given a
written notice of the charge against him and is afforded an opportunity
to explain or defend himself. Should sanctions be imposed, then a
written notice o f penalty and the reasons for it shall be furnished the
erring seafarer. It is only in the exceptional case o f d e a r and
existing danger to the safety o f the crew or vessel that the required
notices are dispensed with; but just the same, a complete report
should be seot to the manning agency, supported by substantia] evidence
o f the findings.”
In holding that respondent’s dismissal was illegal in Evic? die Court
emphasized that the records axe bereft o f any evidence showing that respondent
was given a written notice o f die charges against him, or that he was given an
opportunity to explain or defend him self Neither is there proof that respondent
was furnished with a written notice o f the penalty imposed against him and the
reasons for its imposition. Indeed, petitioners admit that these required notices
were dispensed with because, according to them, there was a d ear and existing
dangier to the safety o f the crew o r vessel. Unfortunately for petitioners, however,
there is, again, no evidence that was presented to prove such was the situation
when respondent was terminated.
7. BURDEN OF PROOF.
In term ination cases, where the employer-employee relationship has
been established, the onus probandi (burden o f proof) that die dismissal o f an
employee is for a just cause, lies with the employer.4 The employer must
1
1
1
4
SeeTiansglobal Maritene Aeency, lnc.v. Chu% Jr.,G Jl.N o. 22243Q,Aug. 30,2017.
Sappers PacSc,he.v. Mra, 6 J I No. 144314, Nov.21,2002,392SCRA 371.
EvicHjmanResourceMana9ementlnc.v.Pandion.GJlNo.2O609O.July31.2O17.
StoWtfetsen Marine Services (Phas i he. v. NLRC, G.R. No. 105396, Nov. 19,1996.
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affirmatively show rationally adequate evidence that die dismissal was for a
justifiable cause.1 Failure to show that there was valid or just cause for termination
would necessarily mean that the dismissal was illegal.2
In monetary claims cases, the rule was reiterated in the case o f G &
that the burden o f proving payment of monetary claims rests on herein petitioner
employer, it being die employment agency or recruitment entity and agent o f the
foreign principal which recruited respondent4
Because of the joint and solidary nature o f the liability o f the foreignbased employer and the local recruitment agency, the burden o f proof to show that
the dismissal o f the OFW is legal and valid devolves upon the both o f them.
Hence, in the case o f EDl-Stofjbmldm? it was held that even though E D I a n d /o r
ESI were merely die local employment or recruitment agencies and not the foreign
employer, they should have adduced additional evidence to convincingly show that
the O FW s employment was validly and legally terminated. The burden devolves
not only upon the foreign-based employer but also on the recruitment agency for
the latter is not only an agent o f the former but is also solidarity liable with the
foreign principal for any claims or liabilities arising from the dismissal o f the
worker.
8. QUANTUM OF EVIDENCE IN OFW CASES.
a. Substantial evidence required.
A fact may be deemed established in cases filed before administrative or
quasi-judicial bodies like die PO EA and NLRC, if it is supported by substantial
evidence. POEA and NLRC are not bound by the technical rules o f procedure and
evidence and the rules obtaining in die courts o f law. Their proceedings are nonlitigious in nature.5
b. E ffect o f absence ofsubstantial evidence.
In Panganibem? it was held that while the Court commiserated with die
petitioner who suffered from brief psychotic disorder, but absent substantial
evidence from which reasonable basis for the grant o f benefits prayed for can be
drawn, the Court is left with no choice but to deny his petition, lest an injustice be
caused to the employer. Otherwise stated, while it is true that labor contracts are
impressed with public interest and the provisions o f the POEA-SEC must be
construed logically and liberally in favor o f Filipino seamen in the pursuit o f their
1 Sameer Overseas Ptacemeot Agency, be. v. Joy C. Cables, G.R. No. 170139. Aug 05.2014, ding Hiton Heavy
EqidpmentCapocaSon v. 0y.GjR.No. 1648G0, Feb. 2.2010.611 SCRA329,338.
7 SfcMiefcen Marine Services [Phk], Inc v. NLRC. G Jl No. 105396. Nw 19.1996.
3 G & M (Ptias.1, kw. v. Ctuz, G.R. No. 140495, Apd 15.2005.
*
^Engineering,kxxv.N LR C .G R N aH 2314,Jiaie28,2001.
s EDWtafibuiiasIntemafionaL he. v.W JC , G J l N a 14558, Oct 26.2007.
5 Rase v. NLRC, G.R. No. 110637, Oct 7,1994; ManSbv. RoUarvConfesor, G.R. No. 102358. Nov. 19,1992.
7 Panganfcanv.Tara Trading Shipmanagenent, Inc., G.R. No. 187032. O d 18,2010.
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employment on board ocean-going vessels, still the rule is that justice is, in every
case, for the deserving, to be dispensed with in the light o f established facts, the
applicable law and existing jurisprudence. It need not be overemphasized that in
the absence o f substantial evidence, working conditions cannot be accepted to have
caused or at least increased the risk of contracting the disease o f brief psychotic
disorder. Substantial evidence is more than a mere scintilla. The evidence must be
real and substantial and not merely apparent; for the duty to prove work-causation
or work-aggravation imposed by law is real and not merely apparent
c. Ship's or Captain's logbook; evidentiary value thereof.
The ship’s logbook is the official record o f a ship’s voyage which its
captain is obligated by law to keep. It is the official repository o f the day-to-day
transactions and occurrences on board the vessel.1 It is where the captain records
the decisions he has adopted, a summary o f the performance o f the vessel and
other daily events.2 The entries made in the ship’s logbook by a person performing
a duty required by law are prim foot evidence o f the facts stated therein.3 However,
such entries constitute primajade evidence o f the incident only if the logbook itself,
containing such entries or photocopies o f the pertinent pages thereof, is presented
in evidence. The logbook is a respectable record that can be relied upon to
authenticate die charges filed and the procedure taken against the employees prior
to their dismissal4 It is a vital evidence since Article 612 o f the Code o f Commerce
requires the captain to keep a record o f the decisions he had adopted as the vessel’s
head. Thus, in Walltm Maritime,56die Supreme Court held that a copy o f an official
entry in die logbook is legally binding and serves as an exception to the hearsay
rule.3
MONETARY CLAIMS OF OFWS, IN GENERAL
L M O N E Y CLAIMS CASES.
a. Bases o f claims.
The money claims o f OFW s over which Labor Arbiters have jurisdiction
may arise from any o f die following:
(1) From employer-employee relationship;
(2) By virtue o f any law, and
1
2
2
1
5
6
Transgtobat M arifre Agency, Inc. v. Chua, Jr., G .R. No. 222430, Aug. 30.2017.
W ,S a d a ^ v .R ^ P a < ^ In te r n a l Sttpping, he.. G.R No. 152636mAug. 8,2007.
Sadagnctv. Reinef Pacific Inlema5onal Shipping, Inc., G R No. 152636, Aug. 8,2007.
StotNBsen Marine Services {P ttisl Inc. v. NLRC. G R No. 105386, Nw . 19.1996.
WaJemMauffimeSeivioes, (nc. v. NLRC.cShg Haverton Sapping Ltd. v. NLRC, G.R No. L-65442. Apr915.1S85.
SeealsoMagsaysayMolMarine,lnc.v.A!r^e,G^.No.22919ZJuly23,2018.
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(3) By reason o f contract1
Any resultant or related claims for actual, moral, exemplary and other
forms o f damages necessarily will have to be litigated in the same proceeding
initiated before die Labor Arbiter.2
From the foregoing, it is clear that Labor Arbiters may exercise
jurisdicdon over an OFW case even absent the employment relationship, such as
when the cause o f action arose from violation o f law or breach o f c o n tra c t This
is an exception to the general rule that the existence o f employer-employee
relationship between die parties-Utigants is a pre-requisite for the exercise o f
jurisdicdon over labor disputes by the Labor Arbiters, the NLRC and the other
labor agencies.3
b. Law as basis.
The pertinent laws and issuances that may give rise to a cause o f action
refer to R A No. 8042, as lately amended by R.A. N o. 10022 and its Omnibus
Implementing Rules,4 as well as the Rules and Regulations Governing Overseas
Employment for land-based OFWs and seafarers.5
c. Contract as basis.
The applicable contracts, the breach o f which may give rise to a cause o f
action cognizable by the Labor Arbiters, vary between a land-based OFW and a
seafarer, to wit.
1. For land-based OFW .
The following contracts apply to land-based OFWs:
0) Em ploym ent C o n tract/O ffer o f E m ploym ent, which refers to an
individual written agreement between the principal/employer and the
worker who is hired through a licensed recruitment agency or
1 Section tO, R A No. 8042, as amended by R A No. 10022; Section 1, Rule VB, Omribus Rides and Regulations
Implementing he MgrafllVfokers and Overcieas R atios Act of 1995, as Amended by R A N a 10022, issued on July 8.
2010; See also the previous Section 58, Rules and Regulations tnptemenSng the Mjgmnt V M e ts and Oweiseas Flphos
Act of 1995; Secfcn 62, Omnhus Rides and Regutatons ImpfemenJing file Mgrant Workers and Overseas Rfphos Ad of
1995issued on’Feb.29,1996; SecSon 1, KLRC en banc Resolution No. 1-05, Series erf 1995.
1 Ibid.; Id. tt is father stated under Ws provision that “consistent wth tus mandabs, the NLRC shaS endeavor to update and
keep abreastwititiedoielopments h the global sendees indusby.'
1 HawaBaivFHEppinetkinipanyv.GiAnato. GA. Na 106231.Nov. 16.1^4.
4 RefeningrxwtolheiatestveisiondtieOm ntus Rides and R e g U ^ o n s h p ie rB ^ he MgrantWakeis and Overseas
ffpnos Actof1895. as Amended by R A N a 10022, issued on July 8,2010.
5 Refeoing now to too (2) issuances, namely: Revised POEA Rules and Regulations Goweming tie RecwSment and
Employment of LandCased Oiraseas Flpino W o te s of 2016 and 2016 Revised POEA Rides end RegiiaScns Governing
tie Recnftnentand EmploymentofSeaferers issued on Febnay 26,2016.
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through the Administration (POEA), containing the minimum terms
and conditions o f employment1
(ii) PO E A -Standard E m ploym ent C ontract (POEA-SEC), which
refers to the POEA-prescribed contract containing the minimum
terms and conditions o f employment2
Additionally, there is a M aster E m ploym ent C ontract, which refers to
die model employment agreement submitted by the ptindpal/employer,
containing the terms and conditions o f employment o f each worker to be
hired by such ptindpal/employer, with such contract to be duly verified
by the PO LO 3 o r authenticated by die Philippine Embassy/Consulate and
approved by the POEA.4
2. F o r seafarers.
The following contracts apply to seafarers:
0
Individual E m ploym ent C ontract, which refers to the contract
containing the terms and conditions o f the employment o f the
contracted seafarer3 which die parties stipulated and mutually agreed
upon over and above die minimum standards set forth in the PO EA SEC, provided that the stipulations therein are mutually beneficial to
both parities and are not contrary to law, public policy and morals.6
(ii) PO E A -Standard E m ploym ent C ontract (PO EA-SEC), which
refers to the POEA-prescribed contract containing the minimum
terms and conditions o f employment, which shall commence upon
actual departure o f the seafarer from the Philippine airport or seaport
in die point o f hire.7
In addition to the foregoing, a seafarer, who is a member o f a labor union,
is also covered by the Collective B argaining A greem ent (CBA) which
operates as a supplement to the POEA-SEC and the Individual
< No. 12. Rule 0. Revised POEA Rides and RegdaGons Governing tie Recruitment and Empbymen! of landfiased
Overseas FSpiio Wooers of 2016.
3 No. 44, Rule II, Ibid.
3 Ptffip|teOvuseastaborOffice(POLO).
4 No. 22, Ride Q, Revised POEA Rules and Regulations Governing tie Recruitment and Employment of Land-Based
Overseas FBpiw WWters of 2016.
5 A ‘contracted seafarer* refers to a Fflpino sedarer vrfiose employment contract has been processed by the POEA for
overseas deployment (No. 8* Rule II, 2016 Revised POEA Rules and Regulations Governing (he Recruitment and
Employmentof Seafarers issued on February26,2016).
« Section 11 6,ftd e1, Part W, 2016 Revised POEA Rules and Regriafcns Governing tie Recndment and Employment of
Seafarers issued on February 26,2016. ft is provided herein, thus: *SecSon 116. Freedom to Stipulate.— Parties to the
ixlividualen^loymentcontrad are flowed tos^pulate and mtduaSyagreebotierterms and conr£dons over and above the
minimum s ta r x l^ provided. Ihat h e s&puiaSons are r r u U ^ b e n ^ Id botipardes and are not contray to l»/.pubSc
poky and morals.'
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Employment Contract and whose terms shall prevail to the extent that
they give better benefits to the seafarer.1
d. Pertinent jurisprudence.
The case o f Santiagp- is the best example o f die exception to die general
rule that die existence of employer-employee relationship between the partieslitigants is a pre-requisite for the exercise o f jurisdiction over labor disputes by the
Labor Arbiters, the NLRC and the other labor agencies.3 Here, petitioner seafarer
has already sighed a POEA-approved employment contract but was no t deployed
overseas. Consequendy, it was ruled that despite the absence o f an employeremployee relationship between petitioner and respondent, the Labor Arbiter has
jurisdiction over petitioner’s complaint because his jurisdiction is n o t limited to
claims arising from such relationship based on Section 10 o f H A. No. 8042, as
amended, but also “hy virtue of any law or contract involving Filipino workers for
overseas deployment, including claims for actual, moral, exemplary and other forms
of damage m .” Considering that petitioner was not able to depart from the airport
or seaport in the point o f hire, the employment contract did not commence to be
effective and thus, no employer-employee relationship was created between the
parties. However, a distinction must be made between die perfection o f the
employment contract and the commencement o f the employer-employee
relationship. The perfection of the contract, which in this case coincided with the
date of execution thereof, occurred when petitioner and respondent agreed on the
object and the cause, as well as the rest o f the terms and conditions set forth
therein. The commencement o f the employer-employee relationship would have
taken place had petitioner been actually deployed horn the point o f hire. Thus,
even before the start o f any employer-employee relationship, contemporaneous
with the perfection of the employment contract was die birth o f certain tights and
obligations, the breach o f which may give rise to a cause o f action against the erring
party. Thus, if the reverse had happened, that is, die seafater failed o r refused to be
deployed as agreed upon, he would have been held liable for damages.
Consequendy, respondent here was held liable to pay petitioner actual and
compensatory damages of US$4,635.00 in the form o f the loss o f nine (9) months’
worth o f salary as provided in the contract
This case o f Santiago was cited in the 2012 case o f BrightMaritime,4where it
was ruled that while respondent seafarer cannot be deemed as having been illegally
dismissed considering that the employer-employee relationship has no t yet
commenced, nevertheless, petitioners’ act o f preventing respondent from leaving
1 The most common CBA for FZjpoo crew s
# * one negotiated between AM0SUP (Associated Marine Offioas and
Seanrn'sl^oft»R i£ppgries)am eniptcyas.
* Santiago* CF ShaipGrewManagement tnc.. G.R. No. 162419.Ally 10.2007.
1 Hawaiian-Ph^ppineCoRipan]rv.GUkraSoo.6.RNo. 106231, Nov. 16.1994.
4 BrightMaiiSmeCorporafionv.Fartonial. G.R No. 165935, Feb. 8,2012.
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and complying with his contract o f employment*1constitutes breach o f contract for
which petitioner company is liable for actual damages to respondent for the loss o f
one-year salary as provided in the contract2 Additionally, respondent was awarded
moral damages in the amount o f P30,000.00, exemplary damages o f P50,000.00 and
10% o f all recoverable amounts as attorney’s fees.3
2. CLAIMS O F O FW s T H A T A RE M O N E T A R Y I N N A T U R E .
An O FW s monetary claims may be brought about by any o f the
following events:
(a) Illegal dismissal;
(b) Disability;
(c) Death; or
(d) Other benefits.
The foregoing monetary claims are not rooted upon any o f the provisions
o f the Labor Code.4 It is Section 10 o f R.A. No. 8042,5*which is the appropriate
legal basis for such claims. And as earlier discussed, all o f the foregoing money
claims fall under the jurisdiction o f the Labor Arbiters, regardless o f whether they
arose from (1) employer-employee relationship; (2) by virtue o f any law, or (3) by
reason o f contract.4
MONETARY CLAIMS OF OFWs
ARISING FROM ILLEGAL DISMISSAL
1. A R T IC L E 294 [279] R E L IE F S N O T AVAILABLE T O OFW s.
The provision o f Article 294 [279|7 o f the Labor Code is not the proper
basis for the money claims that may be asserted by OFWs as a result o f their illegal
dismissal It is Section 10 o f R.A. No. 8042, a plain reading o f which readily shows
* lntecase,l^w asavaM P O & \-appro^(X )f^be& veenpe51ionefS and respondent
1 The maiSily salary s S p d ^ r9 ie a rtra d 's US$670, in ctsw of sDcwanca
3 This award is based on b e fact that because of peffioners" failure to deploy respondent based on an unjjsffied ground,
resoondentwas forced to fie (his case.
4 N Y K fl Slip Management h a v. The NLRC.G.R. No. 161104. Sepl 27,2006.
5 O fem ise known as he'M grant Workers and Overseas RfoinosActof 1995,* which was amended on March 8,2010 by
Sec6on7ofRA No. 10022.
8 Section 10, R A No. 8042, as amended by R A No. 10022; Section 1, Rule VH, Omnibus Riles end Regulations
Implementing he kfigrant Workers and Overseas FSphos Ad of 1996, as Amended by R A No. 10022, issued on July 8.
2010; See dso (he pnwous Sector 58, Rules and Regttafions Implementing he Mgrant Workers and Overseas FEpfoos
Adof1995; Section 62, Qmribus Rules and Regulations Implementing the Migrant Workers and Owenseas raphes Act of
1995issued on Feb. 29,1996; Secfionl.N IR C en banc Resolution No. 1-95, Series o f1995.
7 Iptw ides/A itide 279. Securiy of Tenure ~ h cases d regular employment tte employer shal not tenmhatelhe services
of an employee except for a jud cause or when authorized by his Tite. An employee who is unjusBy (Ssmissed turn work
sftal be enSSed to rerelatement wBiouf bss of seniority rights and oher privfleges and to his U badwages. ndustoe of
aflowances, and to his o!hef benefits or tie r monerary equvaiert computed from (he time his oompensaSon was w&iteJd
tom him up to the time of Ns actual reinstatement'
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that it applies only to cases o f illegal dismissal and finds no application in ras**?
where the OFW was not illegally dismissed.*1 Resultandy, the remedies provided for
under Article 294 [279], such as reinstatement or its altemadve remedy o f
separation pay in lieu thereof, or full backwages, are not available to OFWs. This is
as it should be since OFWs are contractor’s employees whose rights and
obligations are governed primarily by the POEA Standard Employment Contract
(POEA-SEC), the Rules and Regulations Governing Overseas Employment2 and
more importantly, by said RA. No. 8042, as lately amended by R A . No. 100223
and its Omnibus Implementing Rules.4
Moreover, another justification for not granting the Labor Code's reliefs
to illegally dismissed OFWs is the fact that the same are available only to regular
employees, as this term is understood within the context o f the Labor Code. Under
well-established jurisprudence, it has been consistently declared, except in one rare
case,5 that OFWs can never acquire regularity o f employment, their employment
being always fixed term in nature.6
2. SE C T IO N 10 O F R A N O . 8042 AS BASIS O F M O N E T A R Y AWARDS.
The legal basis for the reckoning o f die monetary awards in case o f illegal
dismissal o f OFWs is the 5th paragraph o f Section 10 o f R A . N o. 8042, which
provides as follows:
“In case of termination of overseas employment without just,
valid or authorized cause as defined by law or contract, the workers
shall be entitled to the full reimbursement of his placement fee with
interest of twdve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three ft) months
for every year of the unexpired term, whichever is less.”7
’ Poseidon bfemafcnal M arine Sennoes. he. v. Tamab, G R No. 186475, June 26.2013; See also htemaSonal
Management Semcesv. Legate, G R No. 163657. Apt! 18.2012.
1 Referring now to two (2) issuances, namely Revised POEA Rules and RegulaSons Governing the Recnriment and
Employment of Land-Based Otoseas Rfeho V M e is of2016 and2016 Raised POEA Rules and RegubBonsGwemhg
heRecrnmientandEnfr)lcynieriofSeaferersissuedcnFebnja(y26,2016.
1 Skippers Unfed Pacific, he. v. MRC, G.R. No. 148893, July 12,2006.
4
R e f^ n o w b ^ !3 te s tv « 5 io n o lttie 0 n rh is Rules and RegulaSons (mptenefdnglheWgrant WofkasarxJOvefseas
Fljpinos Actof 1995, as Amended byRA. No. 10022, issued on July 8,2010.
5 The only Bme that OFWs were declared regular emplciyees and frws enf9ed to backwages and separafion pay in leu of
rehsbtement was in the 2001 easecfATO Overseas CotporaSonv. CA, G R No. 143940, Aug.9,2001.
1 This was significanfiy made vay dear in he second 2002 resolution in M2ares v. NLRC, G R N o 110524, Juty 29,2002,
385 SCRA 306, neversrigte firs!nAig in h e same case promulgaJed on March 14.2000 (328 SCRA 79 (2000)), where Ihe
Supreme Court cted as reason fcr its holding hat OFWs cannot aajiine regular employment, h e bet hat employment of
seafarers is governed by he cortacb hey sign every fime hey are relied and h e r employment is termhated when he
oorriaclexpves.Ttieren^cyTnentisoontnacluafyfeQBdfbracertamperiodofGme.'nieyfalluiNferlheescoepfionbAifide
295[280)whoseeniploymerthasbemfxedfofaspedBcprejedaimdertald(igheconyle6cinatemiria6on(ifwtBdihas
been detenrined at he fine of engagement of h e enployee or where he stork or sendee to be performed is seasonal h
nature and h e employment is hr he duration of h e season. Indeed, as early as h e 1990 case of Scent School, he. v.
Zamora and Alegre, G R No. 48494, Feb. 5,1990, he Kgh Court had already pronounced hat seamen and overseas
contractworkers ate notcoveredby h e termTegutar empfaymenTas defined h Artcb 295 (280) of the Labor Code
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3. SE R R A N O D O C T R IN E - PA RT O F PAR. 5, SEC. 10 O F R A N O .
8042 D E C L A R E D U N C O N S T IT U T IO N A L .
T he above-quoted underlined phrase • "orfor three monthsfor mmyear qfthe
unexpired term, whichever is less” - has been declared unconstitutional in Serrunfl for
being discriminatory, among other significant reasons cited therein. Consequent to
this ruling, illegally dismissed OFW s are now entitled to all the salaries for the
entire unexpired portion o f their employment contracts, irrespective o f the
stipulated term or duration th ereo f In other words, the Supreme Court reverted to
the old rule prior to the effectivity o f R A . No. 8042 on August 25, 1995 as
discussed in die Edi-Staffbuilders1-4
32case.
M ost significandy, although the subject clause was declared not violative
o f Section 10f Article IIP o f die Constitution on non-impairment o f contracts
because the enactment o f R A . N o. 8042 in 1995 preceded the execution o f the
employment contract between petitioner and respondents in 1998,5 it was,
however, pronounced that it violated Section I,6 Article HI; Section 18,7Article II; and
1 Anton»M.SeJT3im .GaEanlftMirneServioes, h e and Marlow NavigaSon C o, U d^G R hto. 167614, March 24,2009.
PeSk)nerSeaanowa5lnredtv(espon(lent5iin(leraP(£A-approv9dConCiactofEiupioymentlbrape(iodof12nio(t86or
torn Match 19,1938 up to hferch 19.1999. On March 19 .1S98, die dais of his d ep atre. peSoner was constrained to
accept a downgraded employment contact tor the posffion of Second Officer wSi a monthly salary of US$1 jOOOJOO.upon
the assurance and rapresertafon of respondents hat he would be made Chief Officer by the end of April 1998.
Respondent did not defter on heir promise to make petitioner Chief Officer. Hence, petitioner refused to stay on as
Second Officer and was rep&iated to the Ptippines on May 26,1998. PeSioner's 12-morth employment contract was
thus cut short henoa, at (he Sme of his repatriation on May 26,1998, he had sewed only 2 months and 7 days of his
contract, leavhg an ueqared portion of 9 (norths and 23 days. Peffioner Bed with tie labor A rtier (LA) a Complaint
against respondents for constucSve cSsnisssl and for payment of his money darns in the total amount of US$26,442A1,
represenfng a ! his salaries for the unexpred portal of te contract The LA rendered a Decision dated Jdy 15,1999,
dedaring tie (fisnussed of peGSoner Segal and awarding Km monetae benefits in h e amount of US S8,770jOO. representing
h e comp&nants salary for three (3) months of he unexpired portion of h e contract of employment. In awarding this
amount, h e LA based Ms computation on h e salay period of 3 monhs ortff - raher han h e enSre unexpired portion of 9
monhs and 23 days of pefilfoneft employment contract - applying h e subjectdause. On appeal, h e NLRC corrected he
LA's computation of he lumpsum salary awarded to peffioner by reducing h e appicabte salay rate form US$2390.00 to
US$1,400.00because RANo.8042M oesnot provide ferhe award of overtime pay.vutnch should be proven t> have been
aefoafy performed, and for vacation leave pay.’ On cerfaad h e CA affirmed h e NLRC riding on he reduefion of he
applicable salary rate; howewr, heC A sttted heconsSufional issue raised by peffioner.
2 EDI-Staflbuiklers international, he. v. NLRC, G R No. 145587, Oct 28,2007, instructs hat in temhabon cases arising
before the effecSvfy of R A No. 8042, on August 25,1995 [approved on June 7,1995] v,tere the OFWs are dismissed
wfth(xftjustc3use,tit^areenS9edtothepaymentoftheirsafMe5COCPeq}ondingtoOieuR»pirBdpon5onofthe{rfKe(Remi
cortrad.C ^insequenSy,^heO FW hhis case was dismissed priortoherifec&r^ of R A No. 8042, he is enfitiedtoail
his salaries for h e uneqrked potion ofNs contract wtdxUheqMaSHQSonncwfbundiriSecSon lOofsatd law.
3 SecSonlOprovidesItolawirripaihgheObEigaGonofoonlractsshaabepassed.'
4 69 of Rights.
5 The prohbfionis aligned wBt h e general principle that laws newty enacted haw orty a prospec&re operate, and cannot
aflect acts or contacts already perfected; however, as to laws already h existence, heir provisions are read into contracts
and deemed a part hereof. This, h e rm im pannent clause under Sector 10, Arfide U is Ended in appication to laws
about to be enacted h at would in any way derogate from existing ads or contracts by eferghg. abridging or h any mamer
changing h e in tenteo f Slepaties thereto.
6 SecSon 1N o person s h d te deprived of tte,aerV , aproperty vv^nout due process (flaw n as h ^ any person be denied
he equal protection of h e law.
1 Section 18. The State affirms tabaasaphnary social eexyromic farce. Ishall protecthe rights ofwotkecs and pronxte (her
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Section 3} Article XIU o f the Constitution on labor as a protected sector. To Filipino
workers, the rights guaranteed under these constitutional provisions translate to
economic security and parity: all monetary benefits should be equally enjoyed by
workers o f similar category, while all monetary obligations should be borne by
them in equal degree; none should be denied the protection o f the laws which is
enjoyed by, or spared the burden imposed on, others in like circumstances.2 A
doser examination o f the subject clause reveals that it has a discriminatory intent
against, and ah invidious impact on, OFWs at the following levels: First, OFWs
with employment contracts
rh a n o n e v e a f w -a-w O F W s with employment
contracts A fn n ey ^ n r more: Second, among OFWs with employment contracts
o f m ote than one year, and Third, OFWs vis-a-vis local workers with fixgdPcriod e m p lo y m en t
On the first, it is plain that prior to R A No. 8042, all OFWs, regardless
o f contract periods or the unexpired portions thereof, were treated alike in terms o f
the computation o f their monetary benefits in case o f illegal dismissal. Their claims
were subjected to a uniform rule o f computation: their basic salaries multiplied by
the entire unexpired portion o f their employment contracts. The enactment o f the
subject clause in R.A. No. 8042 introduced a differentiated rule o f computation of
the money claims o f illegally dismissed OFWs based on their employment periods,
in die process singling out one category whose contracts have an unexpired portion
o f one year or more and subjecting diem to the peculiar disadvantage o f having
their monetary awards limited to their salaries for 3 months or for the unexpired
portion thereof whichever is less, but all the while sparing the other category from
such prejudice, simply because the latter's unexpired contracts fall short o f one
year.
On the second, the subject clause “orfor three (I) monthsfor everyyear ojthe
unexpired tern, whichever is less" contains the qualifying phrases “every year” and
"untxpind Urn." By its ordinary meaning, the word “term" means a limited or
definite extent o f time. Corollarily, that “everyyear”is but part o f an “unexpired tern"
is significant in many ways: ftrst, the unexpired term must be at least one year, for if
it were any shorter, there would be no occasion for such unexpired term to be
measured by every year, and second, the original term must be more than one year,
for otherwise, whatever would be die unexpired term thereof will not reach even a
year. Consequendy, the m ote decisive factor in the determination o f when the
subject clause ‘for three (3) monthsfor everyyear ofthe unexpired term, whicheveris less” shall
apply is not the length o f the original contract period, b u t the length o f die
unexpired portion of the contract period - the subject clause applies in cases when
the unexpired portion o f the contract period is at least one year, which
arithmetically requires that the original contract period be more than one year.
t S ec9m 3.1heStatesha3aM U protacSontolaba,l(x^and()veiseas.O Q ai^a(xltirK xg<riizaj.andpnxnctey
en^foymentandequafi^ofemployTneritopporluniSesfbraL
> Q tn g o fM a ife v .la g w o .G J lN o . 118127,A jxi 12,2005,455S C R A M
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Viewed in that light, the subject clause creates a sub-layer o f discrimination among
OFWs whose contract periods are for mote than one year those who are illegally
dismissed with less than one year left in their contracts shall be entided to their
salaries for the entire unexpired pordon thereof, while those who arc illegally
dismissed with one year or more remaining in their contracts shall be covered by
the subject clause, and their monetary benefits limited to their salaries for three
months only.
O n the third, prior to R A . No. 8042, a uniform system o f computation
o f the monetary awards o f illegally dismissed OFWs was in place. This uniform
system was applicable even to local workers with fixed-term employment. In sum,
prior to R A . No. 8042, OFWs and local workers with fixed-term employment who
were illegally discharged were treated alike in terms o f the computation o f their
money claims: they were uniformly entided to their salaries for the entire unexpired
portions o f their contracts. But with the enactment o f R A . No. 8042, specifically
the adoption o f the subject clause, illegally dismissed OFWs with an unexpired
portion o f one year or more in their employment contract have since been
differendy treated in that their money claims are subject to a 3-month cap, whereas
no such limitation is imposed on local workers with fixed-term employment T h e
Court concludes that the subject clause contains a suspect classification in that, in
the computation o f the monetary benefits o f fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim o f OFWs with an uncxpired
portion o f one year or more in their contracts, but none on the claims o f other
OFWs o r local workers with fixed-term employment. T he subject clause singles o u t
one classification o f OFWs and burdens it with a peculiar disadvantageIn addition to the foregoing, the subject clause is not supported by the
existence o f a compelling state interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause. The Court dug deep into the
records o f this case but found no compelling state interest that the subject clause
may possibly serve. Assuming that, as advanced by the OSG, the purpose o f the
subject clause is to protect the employment o f OFW s by mitigating the solidary
liability o f placement agencies, such callous and cavalier rationale will have to be
rejected. There can never be a justification for any form o f government action that
alleviates the burden o f one sector, but imposes the same burden on another
sector, especially when the favored sector is composed o f private businesses such
as placement agencies, while the disadvantaged sector is composed o f OFW s
whose protection no less than the Constitution commands. The idea that private
business interest can be elevated to the level o f a compelling state interest is odious.
Moreover, the subject clause violates petitioner's right to substantive due
process, for it deprives him o f property, consisting o f monetary benefits, without
any existing valid governmental purpose. T he argument o f the Solicitor General is
that die actual purpose o f the subject clause o f limiting die entitlement o f OFW s to
their three-month salary in case o f illegal dismissal is to give them a better chance
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of getting hired by foreign employers. This is plain speculation. As earlier
discussed, there is nothing in the text o f the law o r the records o f the deliberations
leading to its enactment or the pleadings o f respondent that would indicate that
there is an existing governmental purpose for the subject clause, or even just a
pretext o f one. The subject clause does not state o r imply any definitive
governmental purpose; and it is for that precise reason that the dause violates not
just petitioner's right to equal protection, but also her right to substantive due
process under Section 1, Article III o f the Constitution.
The subject clause being unconstitutional, petitioner Serrano was declared
entided to his salaries for the entire unexpixed period o f 9 months and 23 days o f
his employment contract, pursuant to law and jurisprudence prior to the enactment
o f R.A. No. 8042.
Prior to Serrano, as a form o f relief, the amount o f monetary award to
which an illegally dismissed OFW is entided under Section 10 o f R-A. No. 8042,
was made dependent on the duration o f his contract o f employment1 Thus, for
purposes of simplification:
1) I f the duration o f the employment contract is less than one (1) year, an
illegally dismissed OFW shall be entided to all his salaries for the
unexpired portion thereof;2 or
2) If the duration o f the employment contract is at least one (1) year3 or
more,4 an illegally dismissed OFW shall be entided to 'Whicheveris less”
between his "salariesfor (be unexpiredportion ofIris employment contract” or
his salaries for three (3) monthsfor evesyjear ofthe unedited term.”
' See Skippers Pacific, Inc. v.M ra,G R No. 144314,N w .21,2002,392 SCRA371.
2 Examples of cases wriere fre cfurESon of the emptoyment cxxitract is below one (1) year are Supers United PaciSc, tnc. v.
Maguad, G R No. 186363, Aug. 15,2006 where he period mvotved b nhe (9) monte pbts or rranus one (1) month by
mutual consent; and Skippers PacSc, he. v. M ra, supra, where he durafon of h e overseas contract was only for sbe (5)
monfits. (See also Pfd. Bnpiay Senices snd Resources, tnc.v. Parantio, G R No. 144786, Apif 15,2004).
1 Examples* cases vritera the duraSon of h e employment ccnSact h a t least one (1) year ate M ental Shjpmanagement
Co^ Inc. v. Hon. GA, GlR No. 153750, Jaa 25,2006 where respondents Cuesta and Gorcsaga tuars separately con&scted
for oroyear savioe as seafarer but when repatriated to Mania, Ihey had each been employed fix erfy a BSe over too (2)
moots and less than one (1) monft raspeefiveftr, of foe oneyear contract d a te v.‘ ffyena, G R No. 148407, Nov. 12,
2003 where Sw OFW had worked for only 21 days af the onoyear corttrad; and Tafidano v. Falcon MariSme & AEQed
Sennces.tnc.GRNo. 172031. July 14,2008, where die OFW (seafarer) worfeed from October 15,1996 to Janua^ 21,
1997oraperiod of afiliew er tree (3) mentis.
4 Examples of cases where foe duration of fte employment contract is mere than one year are Athenna Wemsfional
Manpower Services, tnc v. Vffinos. G R No. 151303, April 15,2005, where In O FW w s engaged fa rt year, tOmonths
and 28 days btd was temninatBEj after ont/ a monh of serine^ Floulsh MariBrhe St^^^9 v. Ahtanor, QJR No. 177948,
M a rt 14.2006, where Ite O W w a h irtfc ra h tD y e a r contract but actually worked for only 26 days prior to his illegal
dismissal There is a t ^ a simiar factual
between IheFlouish case aid (Xartejsupral T in only dSerencefes in
(he length of 8ie subject employment contact Oarfe involved a om year centred; wide h e erpptoymertin tiiscase
covets a twoyear period. However. Ihey bolh fed under tee three monte’ salary rule sihoe lie term of In contract is fat
least one year or more* tn (Xarte as well as in JSS Indochina Caporpfion v. Ferrer, G R N a 156381, O ct 14,2005,473
SCRA120 and Universal Staffing Services, Inc v. M RC, G R No. 177576, July 21,2008, the employer of (he flegafy
dismissed OFW was ordered topay tee amount equivalentto tvee (3) months? salary.
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In other words, in the computation o f the lump-sum salary due an illegally
dismissed overseas employee, there are two (2) clauses as points o f reckoning: first
is the cumulative salary for the unexpired portion o f his employment; and second
is the grant o f three (3) months’ salary for every year o f the unexpired term,
whicheveris lesser.1
By reason o f this latest Serrano doctrine, all past decisions subjecting the
monetary award to the afore-mendoned qualifying clause no longer apply.
4. T H E SAME U N C O N S T IT U T IO N A L CLAUSE R E -E N A C T E D IN R.A.
N O . 10022.
It is, however, baffling that despite the March 24,2009 e« bancdeclaration
o f unconsdtudonality o f the said qualifying provision in Serrano, R.A. No. 10022,
which was enacted barely a year later on March 8, 2010, replicated it verbatim} The
insistence by Congress of foisting this unconstitutional provision in the law created
a constitutional issue. Did such replication in the newly minted Section 10 o f R.A.
No. 10022 result in curing its patent nullity and unconstitutionality?
5. SC’S REFUSAL T O R U L E O N R E -E N A C T E D
U N C O N S T IT U T IO N A L LAW.
Notably, for a time, the Supreme Court, in the following cases, refused to
rule on the constitutionality o f the amendment by RA. No. 10022 o f the 5th
paragraph o f Section 10 o f FLA. N o. 8042:
(1) The 2012 case o f Steppers* vAlere die said unconstitutionality was
invoked and cited and the amendatory reiteration o f die same provision was
acknowledged. “Nevertheless,” said the Supreme Court, “since die termination
occurred in January 1999 before the passage o f die amendatory R A 10022, we shall
apply RA 8042, as u n am en d e d , without touching on the constitutionality o f
Section 7 o f RA 10022.”
(2) In another 2012 case, Pert/CPM,* where die same issue was raised b u t
the Supreme Court refused to rule thereon, thus:
“Whether or not RA. 10022 is constitutional is not for us to
rule upon in die present case as this is an issue that is not squarely before
us. In other words, this is an issue that awaits its proper day in court: in
the meanwhile, we make no pronouncement on it”
1 AtoralntemaSonalMaR(XMerSeivices, Inc. v.V S anos,G JlN a 151303, Apnl 15,2005; See also Marsaman Manning
Agency, Inc. v. NLRC, G R No. 127195, Aug. 25,1999,313SCRA 88.
2 The same 5 * paragraph of Secfioo 10 states: Tn case of ternwiation of w aseas employment w ftcut just, vafid or
au9n(ized(ajseasd^nedbylawaax^aanyunaiitxnzeddeducSomtotnni^wn^stia^,9iewo(ker
shai be eniied to h e id reimUssement of his placement fee and (he deducSons made v S i interest at twelve percent
(12%) per amum, ptis Ks salaries far (he unexpired portion of hb employment contact or for three (3) months every
year o fh e unexpired term, whatever s less.’
3 SdpperelW tedPactfc,lnc.v.Ooza,6RNo.175558.Feb.8,2012.
far
4 PertCPMManpoMW&pORentCo^ln&v.VinuyaGRN0.197K8,Sept5,2012.
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6. T H E SAMEER D O C T R IN E REAFFIRMS SERRANO.
That prftppr Am in co u rt arrived when, in 2014, the Supreme Court en
banc held in Sameer,' that the unconstitutionality o f the said reinstated clause1
2
remains. Thus, limiting wages that should be recovered by an illegally dismissed
OFW to three (3) months is both a violation o f due process and the equal
protection clauses o f the Constitution.3
The following ratiocinations were cited:
(1) O n violation o f th e equal p rotection clause:
The reinstated clause does not satisfy die requirement o f reasonable
classification. A reasonable classification “(1) must rest on substantial distinctions;
0 must be germane to the purposes o f die law, (3) must not be limited to existing
conditions only; and (4) must apply equally to all members o f the same class.” A
law is void if classifications are made arbitrarily.
In Serrano, the classifications made by the reinstated clause were identified.
It distinguished between fixed-period overseas workers and fixed-period local
workers. It also distinguished between overseas workers with employment
contracts o f less than one year and overseas workers with employment contracts o f
at least one year. 'Within the class o f overseas workers with at least one-year
employment contracts, there was a distinction between those with at least a year
left in their contracts and those with less than a year left in their contracts when
they were illegally dismissed. There is here a “legislative classification which
impermissibly interferes with the exercise o f a fundamental right o r operates to the
1 Sameer (Xerseas Placement Agency, he. v. Joy C. Cattles, G A No. 170139, Aug. 05,2014. Respondent Joy Cattles
K»scecnx(edbypet6onerSam^teaon&yearemployR^oontiactinTawan.Herinonfliiysalafy«(a5Nr$1$^60XX).
She atleged fliat Sameer required her to pay a placement fee of P70 jOOOjOOwhen she sfcned fte employment contract
She was deployed b wort for Taiwan Vfaooal, Co. LkL (WacoaO on June 26,1997. She aieged (hat h her employment
contract, she agreed to woik as quaE^ control for one year. In Taiwan, however, she was asked to w o * as a cutter.
Accortflng to Sameer, she was later (fentissed due to her lieflidency, negligence in her dufes. and her “lailurB to comply
wflh he vmk requirements M l her foreign {employe^* On October 15,1997, Joy Bed a complaint w ft he NLRC against
peSSoner and Waooat She claimed that she *a s Begaty rfismissed. She asked lor flie return of her placement fee, he
w S M I amount ftr repatriation costs, p^m ert of her salary tor 23 monlhs as wefl as moral and exempiaiy damages. She
idenffied Wacoal as Sameer Overseas Placement Agency'S foreign prinqpaL The labor Aib&r tfismissed Joy’s oomptaitt
because 1 was based on mere aBegations. On appeal, h e NLRC declared that Joy was tegafy dsrissed. th e NUtC
asManledJayonly3(nonSisrwo(tiofsabBymQieamountflfNT$4GijOaaL1herdmbwsementofaieNT(3jOOO^Bihdclfioni
her, and a to n e d fees of NT5300. On cetforari, h e CA affirmed h e decision of the NLRC v*8i respect to the finfiig of
Begat cferrissal, Jo/s enfflement to (he equivalent of 3 m onte1w aft of safety, rerrtxusemert of wftiheld repatriation
expense, and attane/S tees. Before the Supreme Court, petitioner rased the issue of whether the Court of Appeals ened
when l affkmed tie ruling of he NLRC finding respondent Joy Eegafy dismissed and avartfng her 3 mores' worth of
sateuy. the reirrtorsement of ihe cost other repatriaSon, and attorney’s fees despite the atteged existence of just causes o(
tennination.
2 The d ispose portion of die decision in M s case party states: T l» clause, fer for hree{J)m onhs fo r e w y year of the
un»pjpedtenR «lvd^B les$, 'n S e c iim 7 riR A 1^10022 amending Section 1 0 riR e^ A n N o .8tM 2 h d ec b red
uncmsGbtiond aid, h ere to , nul and void.*
3 Section 1 ,A ^ iO of 8x3 ConsStito provides: ^ p e e m s h a fl be depivedet Be, 3 ) ^ , or property wfiiout due pnxess
offew, nor sheBany person be denied h e equal protection of h e laws.*
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peculiar disadvantage o f a suspect class” because “the subject clause creates a sub­
layer o f disctiminadon among OFWs whose contract periods are for more than
one yean those who are illegally dismissed with less than one year left in their
contracts shall be entided to their salaries for the entire unexpired portion thereof,
while those who are illegally dismissed with one year or more remaining in their
contracts shall be covered by die reinstated clause, and their monetary benefits
limited to their salaries for three months only.” These dassificadons do not rest on
any real o r substantial distinctions that would justify different treatments in terms
o f the computation o f money claims resulting from illegal termination. Moreover,
these classifications are not relevant to die purpose o f the law, which is to
“establish a higher standard o f protection and promotion o f the welfare o f migrant
workers, their families and overseas Filipinos in distress, and for other purposes.”
Further, it is specious to argue that reducing die liability o f placement agencies
“redounds to the benefit o f the [overseas] workers.”
Putting a cap o n die money claims o f certain overseas workers does no t
increase die standard o f protection afforded to them. O n die other hand, foreign
employers are more incentivized by the reinstated clause to enter into contracts o f
at least a year because it gives them more flexibility to violate ou r overseas workers’
rights. Their liability for arbitrarily terminating overseas workers is decreased at the
expense o f the workers whose rights they violated. Meanwhile, these overseas
workers who are impressed with an expectation o f a stable job pverseas for- the
longer contract period disregard other opportunities only to be terminated earlier.
They are left with claims that are less than what others in die same situation would
receive. T he reinstated clause, therefore, creates a situation w here die law meant to
protect them makes violation o f rights easier and simply benign to the violator.
Further, “[t]here can never be a justification for any form of government
action that alleviates die burden o f one sector, but imposes the same burden on
another sector, especially when the favored sector is composed o f private
businesses such as placement agencies, while the disadvantaged sector is composed
o f OFWs whose protection n o less than die Constitution commands. The idea that
private business interest can be elevated to die level o f a compelling state interest is
odious.”
(2) On vidatfrtLQphfiAie psofiggs-ctewsa
Along the same line, it was held that the reinstated clause violates due
process rights. It is arbitrary as it deprives overseas workers o f their monetary
claims without any discemable valid purpose.
(3) Final disposition o f th e case.
Respondent Joy Cabiles was declared entided to her salary for the
unexpired portion o f her contract, in accordance with Section 10 of R.A. No. 8042.
The award o f the three-month equivalence o f respondent’s salary has been thus
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modified accordingly. Since she started working on June 26, 1997 and was
terminated on July 14, 1997, respondent was declared entitled to her salary from
July 15,1997 tojune 2 5 , 199a
•j APPLICATION OF THE SERRANO AND SAMEER RUUNGS.
The clause "orfo r thne monthsfor ever/year of the untxpired term, whichever is
Its? having been declared unconstitutional in Serrano and Sameerafter the provision
found its way again in HA. No. 10022 which took effect in 2010, the proper
indemnity in illegal dismissal cases, according to Gopio,1 should be the amount
equivalent to the unexpired term o f the employment contract In this
since
respondent Bautista’s contract is for 31 months with a monthly salary o f
PI 15,850.00 and he was illegally dismissed just nine (9) months after his
deployment in Papua New Guinea, therefore, there remain 22 months o f his
unexpired contract Hence, said amount should be simply multiplied by 22 months,
the remaining term o f his employment contract, or a total amount o f
P2,548,700.00.2
8. C O M PO N E N T OF C O N TRA C T’S U N E X P IR E D P O R T IO N .
In the computation o f the amount due to an illegally dismissed OFW,
only the salaries for the unexpired portion o f the employment contract should be
included, as pronounced in Serrano? thus:
T h e word salaries in Section 10 (5) does not include
overtime and leave pay. For seafarers like petitioner, DOLE
Department Order No. 33, series of 1996, provides a Standard
Employment Contract of Seafarers, in which salary is understood as
the basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work
‘performed’ in excess of the regular eight hours, and holiday pay is
compensation for any work ‘performed’ on designated rest days and
holidays.”4
As far as entitlement to overtim e pay is concerned, the correct criterion
in determining whether or not sailors are entitled to overtime pay is not whether
they were on board and cannot leave ship beyond the tegular eight (8) working
hours a day, but whether they actually rendered service in excess o f said number o f
hour$.s In PCL Shippingf the High Tribunal found that private respondent OFW
was not entitled to overtime pay because he failed to present any evidence to prove
that he tendered service in excess o f the regular eight working hours a day.7 This
1 Gopb v. Bautista, G R No. 205953, J ira 06,2018.
2 See alsoEvicKumanResouroe Management Inc. v.Panahcn, G il No. 206890, July 31,2017.
3 Aidocfo lA Senarov.G aSartM artirraSeivte, Inc, G J tN a 167614,March 24,2009.
4 SeedsoP hib ^TiansfnanieC am as.inav.C aiia.G R N a 157975,June26,2007.
s StoWfelsen Ivbrbe Services (FWs.). tnc.v. NLRC, G A No. 105396. Nw . 19.1996,264 SCRA307; 332 P hi 340,352,
4 PCL Stepping PHppines,!nc.v. KIRC, 3.R . No. 153031, Dec. 14,2006.
1 Seealso CentennialTransmarine, tnc.v.De)aCric,aR. No. 180719, Aug. 22,2008.
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holds true even iii cases o f guaranteed overtime pay as held in several cases.1 But in
Acuna,2 die claim foe overtime pay was allowed despite the failure o f petitionerOFWs to substantiate diem on die ratiocination that the claim o f overseas workers
against foreign employers could not be subjected to the same rules o f evidence and.
procedure easily obtained by complainants whose employers ate locally
based. While normally the presentation o f payrolls, daily time records and similar
documents before allowing claims for overtime pay may be requited, however; in
this case, that would be requiring the near-impossible.
Here, it is private
respondents who could have obtained the records o f their principal to refute
petitioners’ claim for overtime pay. By their M u re to do so, private respondents
waived their defense and in effect admitted the allegations o f the
petitioners. Accordingly, it was ruled that private respondents were solidarity liable
with die foreign principal for the claims for overtime pay o f petitioners.
In regard to allowances, they are also not included in such computation.3
However, this rule on exclusion o f allowances does not apply in case they are
encapsulated in the basic salary clause.4
9. N A T U R E O F M O N E T A R Y AWARD T O A N ILLEG A LLY D ISM ISSED
OFW.
The monetary award consisting o f the illegally dismissed OFW*s salaries
for tile unexpired portion o f his employment contract is n o t in the nature o f
backwages or separation pay in lieu of.reinstatement but a form o f indemnity which
tile law grants to him by reason o f the illegality o f his dismissal5
10. O T H E R M O N E T A R Y AWARDS C O N S E Q U E N T S ILLEG A L
DISMISSAL.
In addition to the monetary award discussed above, an OFW is entitled to
the following monetary awards as a result o f illegal termination o f his employment:
(a) R eim bursem ent o f placem en t fee.
Full reimbursement o f his placement fee is subject to twelve percent
(12%) interest per annum, under any o f the following:
1
'
*
3
4
5
Such as the cases of Bahia Shipping Setvices, Inc. v. Chua, G.R. No. 162195, April 8,2009; Santiago v. C f Sharp Crew
Management h e , G.R. No. 162419. Jidy 10.2007.
A anav.K oaC A .G ilN a1SS332.M ay5.2006.
P a S tip ^ P h 5 p (» ie ^ ln c .v .h lR C ,G J l No. 153031, Oec. 14,2006.
fi was heUhYap v.ThenamafisShqs Management G R N a 179532, May 30,2011, thus: *A dose pemsaioih e contract
neveab that the lanto ettawance of US$130jQ0 wes not categorized as a bonus but was rather encapsul^ed h 8b base
safety ctause, hence, taming part of the basic salay ol petitioner. Respondents hemsetves h heir pefi&on for cato ari
before the CA averred that petfioner’s bade safety, pursuant to the contract was US$1,300.00 + US$130.00 tanker
SWppets United Pacific, he. v .N U £ ,G J l to . 148893, Juty 12,2006.
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(1) In case of termination o f overseas employment without just, valid or
authorized cause as defined by law or contract; or
(2)
In case of any unauthorized deduction or withholding from the
migrant worker’s salary.1
(b) Refund of un<wthorize(*iteflMfiftQM frppt salary,
In case of No. 2 above, the OFW is entitled to the full reimbursement or
refund o f the deductions made, with interest o f twelve percent (12%) per annum,
reckoned from the date the deduction was made. To iterate, this remedy is in
addition to the full reimbursement o f his placement fee as*discussed above.2
It bears noting that said 12% interest is not affected by die latest Circular
No. 799, Series of 2013,3 issued by the Bangko Sentral ng Pilipinas Monetary
Board (BSP-MB), which reduced the legal interest to 6% effective July 1,2013. The
reason is that such reduced 6% is applicable only in the absence o f a stipulation or
a law that sets a different rate. Since it is the law itself Section 10 o f R A . No. 8042,
as amended, which sets die rate at 12%, the same shall be the rate that should apply
and not the BSP-Monetary Board-prescribed rate o f 6%4
(c) £p_st of repatriatjonjind tran sp o rt of personal belongings.
The repatriation o f the worker and die transport o f his personal
belongings shall be the primary responsibility o f the agency which recruited or
deployed the worker overseas. All costs attendant to repatriation shall be borne by,
or charged to, die agency concerned a n d /o r its principal However, in cases where
the termination of employment is due solely to the fault o f the worker, die
principal/employer or agency shall not in any manner be responsible for the
repatriation o f the former an d /o r his belongings.5
1 Section 10, R A N a 8042, as amended by Sec&on 7. R A No. 1tX)22; Section 5, Rule VH,0mni»us Rides and Regulations
ImpJemenfing he Mgrant Workers and Overseas F$hos Act of 1995, as Amended by R A No. 10022, issued on Jtiy 8,
2010; See also Afterma tntemaSonai Manpower Sovioes. h a v. VBanos, G J l No. 151303, Apfl 15; 2005; P hi Employ
Savioes am Resources, h a v.Pafaro,G JlN o.14478Sl A (ri 15,2004.
2 Id; Id; SameerOvefseasRaoernertMQency.h&v.JoyC.&Hes, G J l N a 170139,Aig. 06,2014.
} Dated June 21,2013.
4 1 was e n ^ h a ^ h he 2014 en bam r i^ h t h e case cfSameer Overseas Placanent Agency, he. v. Joy C.CaUes,
G Jl No. 170139, Aug. 05,2014,that Circular No. 799 is not applicable when hero isalaw thatstatesothemise. While he
Bangko Sentral ng PSphas has he power to set a 6n i Interest rates; hese Merest rates do not a p ft when h e law
provides hatadrSerenthlerestrateshal be app6ed.^C ental Bank Ocular cannot repeal a law. O nyabw can repeal
anotherlaw'(See also See PaIancav.CA.G.R No. 106685,Dec. 2,1994,238 SCRA593,601).
5 See Section 15, R A No. 8042; Section 1, Rule XH1, O rm fos Rules and RegUaSons kuptemenfog h e Mgrant W ato s
and Overseas FipinosAclof 1995, as Amended b yR A . No. 10022, issued on Jify 8,2010; Section 213, W e ll, Revised
P0EA Rules and Regulafions Governing Vie Recniftnent aid Bnfdoymentof Land^ased Ouoseas F^moWoilcers of
2016; Section 197, R iie H 2016 Revised POEA Rules and R eg iM n s Gowning h e Recnflnerti.and Employment d
Seafarers issued on February 26,2016; See SevBana v. I.T. [IntemaSonal) ta p , G J l No. 99047, Aprt 16.2001; Sam e*
Overseas RaoementAgency. he. v. Joy C. Cables, G J l No. 170139, Aug. 05,2014. Kbears noting hat this responsbfily
hchdesheiepabiaSonoliemahs and transport of the personal brionghgsofadeceased worker. P u s, aloo6ts attendant
her^shaa be borne by the principal arxlAx beat agency.
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I t must be noted that R A . N o. 10022 has introduced a new provision in
R A N o. 8042,1 denominated as A rticle 37-A, which requites compulsory
insurance coverage for agency-hired workers deployed by a recruitment/manning
agency, to be secured at no cost to the said workers. Such insurance policy is
required to be effecdve for the duration o f the migrant worker’s employment and
among its coverage is the repatriation cost o f the worker, including the tran sm it o f
his or her personal belongings, when h is/her employment is terminated without
any valid cause, or when he/she terminates such employment with cause.2
However, notwithstanding the provisions o f said Section 37-A, the
primary responsibility to repatriate entails the obligation on the part o f the principal
or agency to advance the repatriation and other attendant costs, including plane
hire, deployment cost of the principal, and immigration fines and penalties, and to
immediately repatriate the worker, should the need for it arise, without a prior
determination of the cause o f the termination o f the worker's employment.
However, after the worker has returned to the country, the principal or agency may
recover the cost of repatriation from the worker if the termination o f employment
was due solely to his/her fault3 Every contract for overseas employment shall
provide for the primary responsibility o f the principal or employer and agency to
advance the cost of plane fare, and the obligation o f the worker to refund the cost
thereof in case his/her fault is determined by the Labor Arbiter.4
H ie right o f the employer to recover the cost o f repatriation from the
wages and earnings o f the OFW hinges on whether die latter was legally o r illegally
dismissed. As held in PCL Shipping? die employer has die right to recover the cost
o f repatriation from the seaman’s wages and other earnings only if the concerned
seaman is validly discharged for disciplinary measures. In the present case,
however, since petitioners failed to prove that private respondent OFW was validly
terminated from employment on the ground o f desertion, it only follows that they
do not have the right to deduct the cost o f private-respondent’s repatriation from
his wages and other earnings.
1 See S e c ^ 23 th e re c tv ^ added a new prevision, SecSon 37-A, enSDed'CompuisQcylnsuraneCweragefcr^efXYHired W akes.’ This is in addSon to the perfbonanoe bond reqused Is be Sed by (he (Baiflmenttriannhg agency under
SecSan10ofRANo.8042.asanend8dbvSecSon7ofRANo.10022.
2 See Secdon 37-A (d). R A No. 8042, as amended by SecSon 23. R A No. 10Q22; Section 1(d), Ride XVI, Omnlwjs Rules
and Regiiafions Impiefnertjng the Mgrant W aters and Overseas FSpJnos Act of 1995, as Amended by R A No. 10022,
BoensedfitneralhQni^nwmjafyadirectdispos^bdQt/toproparothebodylbrbanspoit.contpledrigaldocumenlaSon,
obtaining legal clearances, procuring consular services, providing neoessay cmket or air transport container, as wefl as
transporGng (he remains, hdufiig retrieval from site of death and defray to the reoeMngijnefalhome.
3 S ec tim ^ R u fc M il,O ro & sR ite arx iR eg u la rh jilem en S n g th eM g rartW ^ ^
as Amended by R A No. 10022, issued on Jut/ 8.2010.
4 Id; n is further provided in this Section (hat in countries where here is a need to secure an exit visa for (he w ake's
repatriafon, the principal or employer shal be primarily responsHetwsecuring h e visa atnocosttofte woriter. The agency
shal ooonfinate with the principal or employerin securing the visa
5 PCL Shipping fMppines. Inc. v. NLRC. 6 R No. 153031, Dec 14,2006.
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11. AWARD O F DAMAGES A N D A TTO RN EY ’S FE ES.
Recruitment agencies, as part o f their bounden duty to protect the welfare
o f the Filipino workers sent abroad from whom they take their profit,1 should in
conscience not add to the misery o f maltreated and abused Filipino workers by
denying them the reparation to which they are entided. Instead, they must
"faithfully comply with their government prescribed responsibilities"2 and be the
first to ensure the welfare o f die very people upon whose patronage their industry
thrives.3
As a result o f illegality o f dismissal, an OFW is,entided to the following
damages:
(■)
and com pensatory dam ages.
“Actualorcompensatorydamag? except as provided by law o r by stipulation,
is an adequate compensation for pecuniary loss suffered by a person as he has duly
proved.4 Its award is based on the Civil Code and not on the Labor Code.5 The
following cases illustrate when an O FW has b e a t awarded actual and compensatory
damages:
(1) Sooting v. CF Sharp Cm> Management, Inc.,* where it was ruled that
respondent recruitment agency which failed to deploy petitioner overseas after a
POEA-approved employment contract was signed by diem is liable to the latter for
actual damages. Respondent’s act o f preventing petitioner from departing the port
of Manila and boarding ‘M SV Seaspread" constitutes a breach o f contract, giving
rise to petitioner’s cause o f action. Respondent unilaterally and unreasonably
reneged on its obligation to deploy petitioner and must therefore answer for the
actual damages he suffered. Respondent is thus liable to pay petitioner actual and
compensatory damages o f US$4,635.00 in the form o f the loss o f nine (9) months’
worth o f salary as provided in the contract
(2) Bright Maritime Corporation v. Fantonial,1*where, based on the same
principles cited in Santiago, a similar award o f actual and compensatory damages
was made on the basis o f the finding that while respondent, who was not deployed
overseas, cannot be deemed as having been illegally dismissed considering that the
employer-employee relationship has not yet commenced, nonetheless, petitioners’
act o f preventing respondent from leaving and complying with his contract o f
employment8 constitutes breach o f contract for which petitioner company should
1 Nahasv. (tale, GK. No.169247,June2,2014.
ld.:dtng AsiaVy^RocaBhientlna v. l^tfionaltUbvRetafionsCommissicin. G R No. 113363. Aug.24.1999.
1 M.; effing Datumsi v. Fast Cosmopoftan Manpowerand PromotionServices, he., supra.
1
4 Article2199,CM Code.
5 Id.
8 GR.No. 162419,JUyiO,2007.
' G il No. 165935, Feb. 8,2012.
6 h Sits case, (here was a vafid POEAappraied contact between peioners and respondent who was employed as
b o ^ s ^ o f ^fixeignvessdW V AUKfxoneyear, v^abasicm onSifysatay of USJ450, plus anatowanceof US$220.
Respondent was made to undergo a medical examiraeon at In Cfflsfian Medcal CSnic, wWch was peffionei’S accredited
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be held liable foe actual damages for the loss o f respondent’s one-year salary as
provided in the contract^
(b) M oral and exem plary dam ages an d anomevls.fe.es.
The twin awards o f moral2 and exemplary3 damages ate also based o n the
Civil Code and not on the Labor Code. Hence, the general civil law principles
behind such awards are equally applicable to OFW cases. Notably, evidence o f bad
faith, fraud or 31 motive on the part o f the recruitment agency a n d /o r its principal
is necessary to successfully assert any claim for moral damages, the absence o f
which will not merit such an award. Thus, in Acuna* the mere allegation o f
petitioners that they suffered humiliation, sleepless nights and mental anguish,
thinking how they would pay the money they borrowed for their placement fees,
was not considered sufficient justification for the award o f moral damages, absent
any evidence to prove bad frith, fraud or ill motive on the part o f private
respondents.
As far as exemplary damages are concerned, they cannot generally be
awarded if there is no award o f moral damages. Exemplary or corrective damages are
imposed by way o f example o r correction for die public good.s They cannot be
recovered as a matter o f right The court will have to decide whether or n o t they
should be adjudicated.6 Under Article 2232 o f the Gvil Code, exemplary damages
may be awarded if the defendant acted in a wanton, fraudulent, reckless, oppressive
or malevolent manner. As applied to labor cases, the same standards should be
followed. Thus, an award for exemplary damages is only justified when the
dismissal was made in a wanton, fraudulent, oppressive or malevolent manner.
Absent any adequate evidence thereof, exemplary damages should not be awarded.7
The basis o f die 10% attorney’s fees is the Labor Code,8 more particularly,
Article 111 thereof, and also Article 2208 o f the Civ3 Code, which cites the
instances where attorney’s fees and expenses o f litigation may be awarded.9
1
2
J
<
5
'
1
8
»
uneqfted portion of he employment contract and for tie a ta ri of moral, exemplary, and aerial damages as n el as
attorney's fees.
11minon9i^sa^sQputatecllitieoontFactisUSS670,inclusNeof£iowanoe.
See A ^ 2 2 2 0 d h e CM
lxnxxal damages. M d e 2219 enumerates the cases underfttwh moral damages may
berecovered. See Ctuzv. KLRC, GK. N a 116334, Feb. 7,2000.
Under Ai&fe 2232 of the CM Cod^exem pfeydaiages may be a v a rie d l the defiendarriactedha wmnton. (raudidenl
reddess,oppcessYeama)ewlertmaim.
A caftav.Hon.CA.G JlNo. 159832.May5,2006.
This ts g ta ^ h a d c S ^ to toe moral, tenperato,&qudated a conpensatory damages that may be awarded in a case.
See Article 2229, Civ9 Code; PhfyptoeAeote Automotive United Gotporetion v. NLRC, G J l No. 124617, A p t 28,2000.
Aride 2233, CM Code.
National Bookstore, he.V.C A .G R N o. 146741,Feb.27.2002.
Sameer Overseas P taaren t Agency, kcv.Jo yC . Cables, G J l Na170139.Aug.05,2014,citing Article111of the Labor
Code, thus ‘Affide 111. Atarayfc Fees - (a) h cases of unlawU wtihok&ig of wages, h e culpable party may be
assessed attome/s fees e ip iv ^ to tm peroertd h e a n w rt ofwages recovefed.’
SeeVjem es,daLv.NLRC,G JlNa 108405,Apri!4,2003.
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Attorney's fees awarded in labor cases are deemed part o f damages.1Attorney’s fees
should be granted as soon as it is established that legal services have been rendered
by the lawyer,2 or if the employee is compelled to litigate in order to seek redress,3
or if the dismissal is attended with bad faith.4*
More importandy, in addition to the foregoing grounds for the grant o f
damages and attorney’s fees, examination o f cases involving OFWs indicates that
die mere breach of the employment contract would suffice for such awards. Thus,
in the same case o f Bright Maritime* respondent, because o f such breach, was
likewise granted, in addition to the award o f actual and. compensatory damages,
moral damages o f P30,000.00, exemplary damages o f P50,000.00 and 10% o f all
recoverable amounts as attorney’s fees.6*In Athenna,1 the same breach o f contract
and bad faith merited the award o f P50,000, in moral damages and P50,000, in
exemplary damages, in addition to attorney’s fees o f 10% o f the aggregate
monetary awards.89Also, in the case o (A T G Overseas? die award o f attorney’s fees
equivalent to 10% o f the total award was held legally and morally justified as die
OFWs were compelled to litigate and thus incur expenses to protect their tights
and interests.10
In the 2018 case o f Gopio,u the Labor Arbiter’s award o f moral and
exemplary damages to Bautista was upheld based on the finding that his dismissal
was without just and authorized cause, in complete disregard o f his right to due
process of law, and done in bad faith, in ad d itio n to b ein g anti-Filipino an d
capricious. Likewise, the award o f attorney's fees was held proper since it is setded
that when an action is instituted for die recovery o f wages, or when employees are
forced to litigate and consequendy incur expenses to protect their tights and
interests, the grant o f attorney’s fees is legally justifiable.
fc) Indem nity in the form of n o m in al d am ages.
As earlier asserted, if an OFW is dismissed for a just o r authorized cause
and after affording him procedural due process, his dismissal is considered
perfeedy valid and legal and, therefore, he is no t entided to any salary for the
• Parffla Machine Stop v.Jadgas.G R No. 175960. Feb. 19.2008.
2 tBoquaGroiJpofGorr9aniesv.Vigan.GJR.No.143723,June2Bw2001.
1 P h ^ ^ S p ^ V to Resources, h a v.C A and M ahaurn,G RNa 205278, Juie 11,2014; Zu e lig F rei^ ato Cargo
Systansv. NLRCandSanMguetGA No. 157900, July22,2013.
4 ASviadov.ProctefiGarnWe Phis, fn c,G A No. 160506,M ay9,2010.
s B ^ > fe ^ C o ip (x a iio n v .F a n ^ G R N a 1 6 5 9 3 5 .F e b .8 ,2 0 1 2
6 This award is based on the fedhat because ofpefiSonecS'feflure to deploy respondent based on an unjustified ground,
respondentwas forced to fle N s case.
1 A fo en rah fem a^ Manpower Sewices, he. v.V2anos,G R to151303,A pd 15,2005.
8 T h e s e s also tie a rim fe awarded by way ofmoral and exemplary damages and afaney’sfe e s ii h e case of Oriental
SKpmanagementCo, he. v. Hon. CA, G A No. 153750, Jan. 25,2006.
9 ATaOueiseasCorporaSonv.CA.GJR No. 143949. Aug. 9.2001.4U PhL883w893.
* See ato S an S a jo v.ff Sharp Crew Management h a , G R No. 152419, July 10.2007; P a Shaping PHfojhes, h a v.
faP C .G R No. 153031, Dec. 14.2006.
« Gopiov. Baufista.GR No. 205953,JuneOS,2018.
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99
unexpired portion o f his employment contract or any other form of relief.
However, if there is just or authorized cause but procedural due process was not
afforded to him, the rule that applies is the Agabon doctrine,1 thus, his dismissal is
considered valid and legal but he shall be awarded an indemnity in the form o f
nominal damages for lade or procedural due process.2 Following Agabon, indemnity
in die form o f nominal damages has been consistently awarded in cases involving
termination o f OFWs.3*
12. LEGAL IN T E R E S T O N M O N ETA R Y AWARDS.
Legal interest should be imposed upon the monetary awards granted to
OFWs. But it bears stressing that in the absence o f stipulation, legal interest is no
longer 12% but 6% effective July 1,2013. This was pointed out in the 2013 tn banc
decision in Nacar,* which recognized the validity o f the change in reckoning the
legal interest in the absence o f stipulation thereon. This was based on the latest
issuance o f the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB),5
particularly its Resolution No. 796 dated May 16,2013.6
13. E X E C U T IO N O F W AIVER O R Q U IT C L A IM .
The execution o f a waiver or quitclaim by an OFW in favor o f his
employer does not preclude him from subsequendy filing a suit demanding benefits
to which he is entitled and from filing an illegal dismissal case.7 This is because
waiver or quitclaim is looked upon with disfavor, and is frowned upon for being
contrary to public policy. Unless it can be established that the person executing the
* Agabon v. f&RC, G Jt No. 158693, Nov. 17.2004.
2 Deb Rosa v.MchaelmarfMpjrines. Inc, [G R N a 182262, Aprt 13.2011.
3 Foriistanoo, Qie amountof indeaiiay of P30JOOOJOOwas auwanfed in DMA Shviwg Pl^pphes. Inc. v. Cabilar. G.R. No.
155389, Feb. 28,2005 and PIOjOOOJDOh fee case of P C I Shipping Ph3ppines.!nc.v. NLRC.G R No. 148418, July 28.
2005.
< Nacarv.Gafay Frames. G R N a 189871,Aug. 13,2013.
5 in tie raced
ofAdvocales for T ^ n L e n ^ , Inc. and Eduardo B.OIaguerv. Bangko SerdralM one(a^6osd,[GJl
No. 192988. Jan. 15,201% 668 SCRA 53 0,5471*8 Sqjreme Gout afim ed (he atdhofy of tie BSP-MB to set interest
rates andtoissue and enforaaQ niasw hm S niledM tK B S P M B cn^prascrtrateinagdnunraletf rates of interest
for all bans or renewals hereofor tie (abearance of any money, {oods or crerfis. iKkxSng Ouse for bans of b v priority
such as oonsuner bans, as wet as sudi bans made by pawnshops, finance oompanes and sntiarcnxfiinsSkjGons. S
even a u fc ra s the BSP-MJ to prescribe ty ra n t madman rate or rates for tffe rert types of borrowings, iid u & ig
OepQSQSWO(KpOSSSUDSQBJIBStOTuanSOIfranCa ItisCn^
5 Ths R e s o ld apptwedflio amendmentof Sec6on2ofCtuJar No. 905, Series of 1982 and, acconfingV,issued O railar
No. 799, Series of 2013 dated June 21,2013. This section provides: -SECTION 2. The rate oT foterast for tie loan v
forbearance ofany money,goodsorcnxBs and (ho rate slowed In judgments, h tie absenceof express contractas to such
rate of interest, shall confine to be taeto percent (12%) per annum.* As datffied filte r in foe 2014 en banc nifing in foe
C3seof$am eerO w se3sP tacenienlA ge^,lncv.JcyaC aM es,G R Ifo.170139,A u9.05,2014,C irnilarN o.799is
appicable only ti bans and fixbaaranoa of money, goods or crecHSt and h judgmerte vtften there is no sQptdafion on tie
appicable irderest ratB. Rafter, 81s only applicable? tie judgmentdid not become final and oteculMy before Jdy 1,2013.
Further, t was emphasized h foe same case of Sameer, that C iu fer No. 799 is not appGeafale when here is a tew tia t
1
apply when tie (aw provides fia t a dfiarant Merest rate shat be appSed.VI Cental Bank Circular cannot repeal a law.
Ontyalawcan repealanotherlaw.*(SeePalancav.CA,GJl No. 106685, O ee2,1994^ 238 SCRA593,601).
Dagasdasv. Grand PtacementandGeneral Seivfoes,GJl No.205727, Jan. 18,2017.
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waiver voluntarily did so, with full understanding o f its contents, and with
reasonable and credible consideration, the same is not a valid and binding
undertaking.1
Moreover, the burden to prove that the waiver or quitclaim was
voluntarily executed is with the employer.2 Thus, in case neither the recruitment
and placement agency nor its foreign principal successfully discharged its burden,
both shall be held solidarity liable for the claims o f the OFW. Indeed, even if the
OFW has signed a quitclaim, it does not necessarily follow that he freely and
voluntarily agreed to waive all his claims against his employer.3
4.
BAN ON DIRECT-HIRING
1.
DEFINITION.
“Direct hiring" refers to the process of directly hiring workers by employers
for overseas employment as authorized by the DOLE Secretary and processed by
the POEA, including:
1. Those hired by international organizations;
2. Those hired by members o f the diplomatic corps;
3. Name hires or workers who are able to secure overseas employment
opportunity with an employer without the assistance or participation
of any agency.45
2.
BAN ON DIRECT-HIRING; EXEM PTION.
It is the general rule under Article 18s that no employer shall direedy hire
an OFW for overseas employment6 The following, however, are exempted from
this ban on direct luring:
a) Members of the diplomatic corps;
b) International organizations;
c) Heads of state and government officials with the rank o f at least
deputy minister; or
• Id.
3 Id.. Urwersal Steffhg S eries, Inc. v. NLRC, G.R. No. 177576, July 21.2008,581 Phi. 199,209-210.
3 Id.
* Section 1[i), Rule II, Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act
of 1995, as Amended by R. A. No. 10022 (March 08,2010).
5 Article 18 provides as foiews 'Artide 18. Ban on Direct-Hiring. - No employer may hire a FSpoo worker for overseas
employment except through the Boards and entities authorized by the Secretary of Labor. Drecthiring by members of the
diplomatic corps, international organuaSons and such other employers as may be allowed by the Secretary of Labor is
exempted from this provision *
s Artide 18, Labor Code; See also Section 123. Rule II, Part III, Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Land-Based Overseas Ffipino Workers of 2016.
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101
d) O ther em ployers as may be allowed by the D O L E Secretary, such
as:
1) Those provided in (a), (b) and (c) above, who bear a lesser rank, if
endorsed by the POLO,1or Head o f Mission in the absence o f the
POLO;
2) Professionals and skilled workers with duly executed/authenticated
contracts containing terms and conditions over and above the
standards set by the POEA. The number of professional and
skilled OFWs hired for the first time by the employer shall not
exceed five (5). For the purpose o f determining the number,
workers hired as a group shall be counted as one; or
3) Workers hired by a relativc/family member who is a permanent
resident o f the host country.2
3. RATIO NA LE FO R T H E BAN.
The reason for banning direct hiring o f Filipinos for overseas
employment is to ensure that such employment is fully regulated by the
government through its agencies, such as the POEA. In this way, adverse
exploitation of the migrant workers by foreign employers is minimized, if not
eradicated.
4. N A T IO N A LIT Y O F E M PL O Y E R N O T M A TERIA L.
It must be emphasized that pertinent laws and regulations generally make
reference to employment o f Filipinos overseas, /.*., outside the Philippines. They do
not limit the coverage to non-Filipino employers. Filipinos working overseas share
the same risks and burdens whether their employers be Filipino or foreign.3 For
instance, it is well-known that foreign-owned and foreign-registered vessels have
frequently also secured Philippine registration where the interest o f convenience o f
the owners dictated such second or dual registration. The undedying regulatory
policy is that Filipino seamen working in ocean-going vessels should receive the
’ ThePti5ppheOi,er5easLaborOffce(POLO)oftfieDepartmentofLaborand &nptoyment(DOLE).
2 Article 18. Id.; See also Section 124, Rule II. Part III, Id; H ie OFWs hired by those employers exempted from the ban on
direct hiring may be registered by the Administrafion upon submission of the following documents:
a) VenSed/authenticated original employment oontract which is over and above the POEA-presafced employment contract;
b) Passportvalid at least six (6) months from the date of 'ntended departure;
c) VaDd and appropriate visa or work permit;
d) Certificate of medical fitness;
e) Proof of certificate of insurance average covering at least the benefits provided under Section 37-A of RA 8042, as
amended;
0 Certificate of attendance to the required employment otientataVbriefing; and
g) Clearance from the DOLE Secretary for those covered under Section 124 (d) of these Rules. The Administration shall
ensure that the w riter is made Wty aware cf tie terms and conditions of the employment contract and fie advantages and
disadvantages of tfrect-hiring. (Section 125, Rule II, Part III, Revised POEA Rules and Regulations Governing the
Recruitment and Employment of Land-Based Overseas Ffyho Walters of 2016.).
3 Phfippine-Singapore Ports Corporation v NLRC, G il No. 67035, Jan. 29,1993,218 SCRA 77. Eastern Slipping Lines,
Inc. v. POEA, G.R. No. 77828, Feb. 8,1989,170 SCRA 54.
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same wages and benefits without regard to the nationality or nationalities o f the
vessels on which they serve.1
5. SUABILITY O F F O R E IG N C O R PO R A TIO N S D IR EC TLY H IR IN G
FIL IPIN O WORKERS.
A non-resident foreign corporation domiciled outside o f the Philippines
which recruits Filipino workers for employment abroad is, in law, doing business in
the Philipp*"*** Indeed, if a foreign corporation not engaged in business in the
Philippines is not barred from seeking redress from courts in the Philippines, a
fortiori, that same corporation cannot claim exemption from being sued in
Philippine courts for acts done against a person or persons in the Philippines.2
B.
EMPLOYMENT OF
NON-RESIDENT ALIENS
1. POLICY DECLARATION.
Article 403 o f the Labor Code imposes the requirement that any alien
seeking admission to the Philippines for employment purposes and any domestic
or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an Alien Employment Permit (AEP) from the Department
o f Labor and Employment The AEP is n o t an exclusive authority for a foreign
national to work in the Philippines. It is just one o f the requirements in the
issuance o f a work visa (9g) to legally engage in gainful employment in the country.
The foreign national must obtain the required Special Temporary Permit (STP) from
the Professional Regulation Commission (PRC), in case the employment involves
practice o f profession and Authority to EmployAlien (AEA) from die Department o f
Justice (DOJ) where die employment is in a nationalized or partially nationalized
industry and Department o f Environment and Natural Resources (DENR) in case
o f mining.4
1 Eastern Shipping Unes, Inc v.P O E A G A N a 77828, Feb. 8,1989,170 SCRAM.
2 FacSfesManagemerltGoiporaSonv.OelaRosa.GA.No.L-38649,March26.1979.89SCRA 131.
3 A(ficie40. &rtpb^n^Asrm}ofNbr>^l9SiierdAiansL -Anyafiensedang admission toihe PhiEppinesIbremployinont
puiposesandarydomesfcafareigneRployawhottesirestoengagematafafemptoyirerthlheRiSppiiesste!
o b tom enpbyi^pem ifonl?»O ep af6nent of Labor.
farwhich(heafeflisdesired.
Fa an enterprise registered h preferred areas of investments, said employment pemtt may be issued upon
recontnendata offtegovemmertagencydiatgedwft^
4 SeePtfcyDedaaBon, DepartmentOlder Na 188j Series of 2017 (Nov. 16,2017), Revised Rules fa the Issuance of
Employment Permits to Foreign Nationals. This latest issuance repeals or modifies ecccriingty, Ta]H guMe2nes,
rules end regulations, procedures and agreements Inconsistent herewith xxx* (per its Section 19. Repealing
Clause).
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2. A L IE N E M PL O Y M E N T P E R M IT (A E P), D E F IN E D .
. An Alien Employment Permit (AEP) is a document issued by the D O L E
Secretary through the DOLE-Regional Director who has jurisdiction over the
intended place o f wodc o f the foreign national, authorizing the foreign national to
work in the Philippines.
3. COVERAGE.
All foreign nationals who intend to engage in gainful em ploym ent in the
Philippines shall apply for AEP. The term “ gain fu l employment** shall refer to a
state o r condition that creates an employer-employee relationship between the
Philippine-based employer and the foreign national where the former has the
power to hire o r dismiss the foreign national from employment, pays die salaries o r
wages thereof and has authority to control die performance o r conduct o f the tasks
and dudes.1
4. E X E M P T IO N .
The following categories o f foreign nationals are exem pt from securing
an AEP:
a. AH members o f die diplomatic service and foreign governm ent
officials accredited by and with reciprocity arrangement with d ie
Philippine government;
b. Officers and staff .of international organizations o f which the
Philippine government is a member, and their legitimate spouses
desiring to work in the Philippines;
c. Owners and representatives o f foreign principals whose companies are
accredited by the POEA, who come to the Philippines for a limited
period and solely for the purpose o f interviewing Filipino applicants
for employment abroad;
d. Foreign nationals who come to the Philippines to teach, present
a n d /o r conduct research studies in universities and colleges as visiting,
exchange or adjunct professors under formal agreements between th e
universities or colleges in the Philippines and foreign universities o r
colleges; or between the Philippine government and foreign
government, provided that the exemption is on a reciprocal basis;
e. Permanent resident foreign nationals and probationary or temporary
resident visa holders under Section 13 (a-f) o f the Philippine
Immigration Act o f 1940 and Section 3 o f the Alien S ocial
Integratio n A ct o f 1995 (R.A. 7917);2
1 Section 1, DepartmentOrderto . 186,Series of2017{Nov. 16,2017), Revised RuSesfor the Issuanceof Employment
Pantis to ForeignNationals.
* Referenoe to Ous prowsian of **Secfion 3 of die ASen Soad tntegi^on Act of 1995 (R A 7917)T was not found in the
enumerator! of exempted persons r i the previous Department Order to . 146-15. Series of 2015 (August 20,2015),
Revised Rules for the Issuance of Employment Permits to Foreign Nationals. Foreign nationals under this
provision are now expressly exempted from AEP coverage.
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f. Refugees and Stateless Persons recognized by D OJ pursuant to Article
17 o f die UN Convention and Protocol Relating to status o f Refugees
and Stateless Persons;1and
g. All foreign nationals granted exem ption by law.2
5. EXCLUSION.
The following categories o f foreign nationals are excluded from securing
an AEP:
a. Members o f the governing board with votidg tights only and do not
intervene in the management o f the corporation or in the day to day
operation o f the enterprise.
b. President and Treasurer, who are part-owners o f the company.3
c. Those providing consultancy services who do not have employers in
the Philippines.
d. Intra-corporate transferee who is a manager, executive or specialist as
defined below in accordance with Trade Agreements and an employee
o f the foreign service supplier for at least one (1) year continuous
employment prior to deployment to a branch, subsidiary, affiliate or
representative office in the Philippines.
i.
an Executive: a natural person within the organisation who
primarily directs the management o f the organisation and exercises
wide latitude in decision-making and receives only general
supervision or direction from higher level executives, the board o f
directors, or stockholders o f the business; an executive would not
directly perform tasks related to the actual provision o f the service
or services o f the organisation;
ii. a M anager a natural person within the organisation who primarily
directs the organisation/department/subdivision and exercises
supervisory and control functions over other supervisory,
managerial or professional staff; does not include first-line
supervisors unless employees supervised are professionals; does
not include employees who primarily perform tasks necessary for
die provision o f the service; or
Juste fo d f) pumant to Article 17 of the UN ConwnBoh and tolacol ReMng b Status of Refugees and
3 ttbeas noBngtatundertie previous2015 AEP 1 ^ p . 0 . 146-15), corporateoffices asproviteuntatetaporalion
Code of he Rffippines, /teles of honporaSon, and Bylaw of 8» CaporaSon such as Resident, Secrcteiy and
Treason amexcludedtomsecurityan AEP (Section3|b) ftereol). Hcwerar. the Secretay andoter corporateofficers.
pravidedunderthe CoqxxaSonCotfe, Articles of tncorpomtion and By-Lawshave been removed inBie 2017 AB5Rules
(D.0. No. 186-17).
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iil a S p ecialist a natural person within the organisation w ho
possesses knowledge at an advanced level o f expertise essential to
die estabiishment/provision o f the service and/or possesses
proprietary knowledge o f the organisation's service, research
equipment, techniques o r management; may include, but is n o t
limited to, members o f a licensed profession.
All other intra-corporate transferees not within these categories as
defined above are required to secure an AEP prior to their
employment in the Philippines.
e. Contractual service supplier who is a manager, executive or specialist
and an employee o f a foreign service supplier which has no
commercial presence in the Philippines:
i. who enters the Philippines temporarily to supply a service pursuant
to a contract between h is/h er employer and a service consum er in
the Philippines;
ii. m ust possess the appropriate educational and professional
qualifications; and
iii. must be employed by the foreign service supplier for at least one
year prior to the supply o f service in the Philippines.
f. Representative o f the Foreign Principal/Employer assigned in the
Office o f Licensed Manning Agency (OLMA) in accordance with the
PO EA law, rules and regulations.1
6. PR O C E SSIN G A N D ISSUANCE O F C E R T IF IC A T E O F E X C L U SIO N .
All foreign nationals excluded from securing AEP shall secure Certificate
o f Exclusion from the Regional Office. Further, Regional Offices shall issue the
Certificate o f Exclusion within two (2) working days after receipt o f complete
documentary requirements and fees.
A foreign national requesting for the issuance o f a Certificate o f Exclusion
shall submit the following
1. Letter request addressed to the D O L E Regional Director,
2. Valid business/Mayor's permit o f the Philippine-based company o r
enterprise;
3. Photocopy o f passport (bio page) with valid visa; and
Additional documents shall be required for specific categories, such as the
follow ing
a.
ForPresident, Treasurer, and Members ofGoverning Boards (excluding those listed
in the Foreign Investment Negative List):
1 Section3, DepartmentOrderNo. 188, Series of2017(Nov. 16,2017), Revised Rules forthe Issuanceof Employment
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- Certified true copy o f the updated General Information Sheet (GIS)
showing the name and position o f the foreign national;
- Certification that the requesting foreign national is a member o f the
governing board with voting rights only, will not in any manner
intervene in the management and operation o f enterprise and with no
intention to obtain gainful employment;
- Board Secretary's Certificate o f Election.
b. ForIntra-corporate Transferee:
- Contract o f Employment from the Origin Company including proof
of salary;
- Secondment Agreement.
c. For ContractualServiceSupplier.
- Contract of Employment from the Origin company including proof
of salary;
- Service contract between the Philippine based company and the
foreign company
d. For Consultant.
• Service Contract between the Philippine based company and the
consultant or foreign consulting company.
e. For Representative ofthe Foreign Principal/Employerassignedin OLMA.
- Letter of Acknowledgment from POEA
In case an authorised representative will file/claim die Certificate, an
Authorization Letter must be required.*1
7.
PROCEDURE IN T H E PR O C E SSIN G O F A PPLIC A T IO N S F O R A EP.
a.
All applications for AEP shall be filed and processed at the D O L E
Regional Office or Field Office having jurisdiction over the intended place o f work.
A duly accomplished application form with the following complete
documentary requirements must be submitted:
1. Photocopy o f Passport with valid visa, except for temporary viator's
visa in case o f renewal or Certificate o f Recognition for Refugees or
Stateless Persons;
2. Original copy o f notarized appointment or contract o f employment
enumerating the duties and responsibilities, annual salary, and other
benefits of the foreign national;
3. Photocopy o f Mayor's Permit to operate business, in case o f locators
in economic zones, Certification from the PEZA2 or. the Ecozone
1 Sectioo4,ld.
1 Philippine EconomicZona Authority |PEZA).
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Authority that the company is located and operating within the
ecozone, while in case o f a construction company, photocopy o f
license from PCAB1or D .0.174-172 Registration should be submitted
in lieu o f Mayor's Permit; and
4. Business Name Registration and Application Form with Department
o f Trade and Industry (DTI) or SEC Registration and GIS3;
5. If the position tide o f the foreign national is included in the list o f
regulated professions, a Special Temporary Permit (STP) from the
Professional Regulation Commission (PRC); and
6. If die employer is covered by the Anti-Dummy Law,4 an Authority to
Employ Foreign National (ATEFN) from the DOJ or from the
DENR, in case o f mining.
b. In the case o f foreign nadonals to be assigned in related companies,
applications may be hied in the Regional Office or Field Office having jurisdiction
over any o f the applicant's intended places o f work.
c. Additional position o f the foreign national in the same company or
subsequent assignment in related companies during the validity or renewal o f the
AEP will be subject for publication requirement. A change o f position or employer
shall require an application for new AEP.
d. At any given time only one AEP shall be issued to a foreign national5
8. F E E S .
Upon filing o f application, the applicant shall pay a fee o f P9,000.00 for
an A EP with a validity o f one year. In case the period o f employment is more than
one year, an additional P4,000.00 shall be charged for every additional year or
fraction thereof. In case o f renewal, the applicant shall pay a permit fee o f
P4,000.00 for each year o f validity or fraction thereof.
A courier fee o f P200.00 shall be charged to die foreign national upon the
implementation o f the AEP online application system.
Loss o f A EP or change o f information o r entries in the AEP shall be
subject to payment o f P i ,500.00 for A EP replacement. In case o f loss, the request
for replacement shall be supported by a duly notarized Affidavit o f Loss.
Processing and issuance o f certificate o f exclusion shall be subject to
payment o f P500.00 per application.
1 PhSippine Contractors Accreditation Board (PCAB).
2 OepffitmentOiderNo. 174,Seriesol2017l theRulestai(demefttSngAificJen106to109oftheLaborCods,asAmended.
1 General Information Sheet(GIS).
4 Commonweal Act No. 108. An Act to Amish Acts of Evasion of (he law s on toe ttefonaizafion of Certain Rights,
Franchises or Privfeges, Approved on October 30.1936.
5 Section 5, Department Older No. 186, Series of 2017 (Nov. 16,2017), Revised Rules tor the Issuance of Employment
Peim te to Foreign Nationals.
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All fees covered by official receipt issued by the Regional Office are nonrefiindable.1
9. LABOR MARKET TEST & O T H E R O B JE C T IO N A GA INST T H E
FO REIG N NATIONAL.
The DOLE Regional Office shall publish in a newspaper2 o f general
circulation all applications for new AEP, change o r additional position in the same
company or subsequent assignment in related companies within (2) two work days
from receipt o f application.
The same shall be published in the D O LE website and posted in the
PESO,3 such publication and p o stin g shall b e for a p eriod o f thirty (30) day6
and shall contain the name, position, employer and address, a brief description o f
the functions to be performed by the foreign national, qualifications, monthly
salary range and other benefits, if there are any.
It shall also indicate in the same notice o f publication that any person in
die Philippines who is competent, able and willing at the time o f application to
perform die services for which the foreign national is desired may file an objection
at the DOLE Regional Office.
Any objection or information against the employment o f the foreign
national relative to labor market test m ust be filed with the Regional Office within
thirty (30) days after publication.
The DOLE Regional Office shall refer to the D OLE's Philjobnet and
PESO Employment Information System (PEIS), the PRC Registry o f
professionals, and the Technical Education and Skills Development Authority
(IESDA) registry o f certified workers to establish availability or non-availability o f
able and qualified Filipino worker.
Information or criminal offense and grave misconduct in dealing with or
ill treatment o f workers may be filed with the Regional Offices any time.4
10. PROCESSING PE R IO D .
Applications for new AEP shall be processed and an AEP shall be issued
within three (3) working days after publication and payment o f required fees and
fines, if there are any. Applications for renewal o f AEP shall be processed within
one (1) day after receipt3
1 Sec6on6,li
2 Bonnemvs.C(utofAppeai$>G R N o.L49101l Oct24,1983,12$SCRA122.where9washdd:Tqbeanewspapero(
9enemlciruibSon.ftisenoughBiat1tispubishedlbr1he<fisseminafionoflocalneiMsarKlgeneralWbnnaSon:QiatRhasa
1 Pubfc EmploymentServiceOffice(PESO).
4 Sec6on7.DepartmentOrderNo. 188, Series of2017 (Nov.16,2017),Revised Rules torthe Issuance ofEmployment
PemtfetoFbreign National
5 Section 8, id.
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11. V E R IF IC A T IO N IN S P E C T IO N .
The authorized representatives o f the Regional Director may conduct
inspection to verify legitimacy o f employment o f the foreign national as deemed
necessary, based on the documents submitted within two (2) working days upon
payment o f fees.1
12. V ALID ITY O F A EP.
The AEP shall be valid for the position and the company for which it was
issued for a period o f one (1) year, unless the employment contract, or other modes
o f engagement provides otherwise, which in no case shall exceed three (3) years.2
13. REN EW A L O F AEP.
An application for renewal o f A EP shall be filed not earlier than sixty (60)
days before its expiration. In case die foreign national needs to leave the country or
in other similar circumstances that will hinder the filling o f renewal within this
prescribed period, the application may be filed earlier.
Expired AEP shall be processed as a new application subject to the
payment o f required fees and penalties in relation to Section 17 (Penalty for
Working without AEP) o f this Department O rder No. 186, Series o f 2017.
In the case o f officers whose appointment or election takes place before
the expiration o f AEP, the application must be filed not later than fifteen (15)
working days after appointment, o r before its expiration, whichever comes later.
In case the appointment o r election will take place after the expiration o f
the AEP, the application for renewal m ust be filed before the expiration o f the
AEP which can be renewed for one (1) year. Within fifteen (15) working days after
the date o f appointment or election, the foreign national shall submit to the issuing
Regional Office the Board Secretary's Certification. The Regional Director shall
revoke the AEP after one (1) m onth from its issuance, if no Certification is filed.3
14. D E N IA L O F A P P L IC A T IO N F O R N E W O R R EN E W A L O F A EP.
An application for A EP o r die renewal thereof may be denied by the
Regional Director based on any o f die following grounds:
a. Misrepresentation o f facts in the application, including fraudulent
misrepresentation L t, false statement that has a negative effect in the
evaluation o f the application made knowingly, or without belief in its
truth, or recklessly whether it is true or false
b. Submission o f falsified documents;
c. Conviction o f a criminal offense or a fugitive from justice in the
country o r abroad;
d. Grave misconduct in dealing with or ill treatment o f workers;
• Section 9, Id.
* SecSon10.il
3 Sec6on11.il
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e. Availability o f a Filipino who is competent, able and willing to do die
job intended for or being performed by the foreign national based on
data in die PEIS, PRC Registry o f Professional and TESDA Registry
o f Certified Workers;
f. Worked without valid AEP for more thaa a year, or
g. Application for renewal with expired visa or with temporary visitor's
visa.
The Regional Director shall issue an O rder denying the application for
new or renewal o f AEP which shall have the effect o f forfeiture o f the fees paid by
die applicant1
15. C A N C EL L A T IO N /R EV O C A TIO N O F A EP.
The Regional Director may, motuproprio o r upon petition, cancel or revoke
an AEP after due process, based on any o f the following grounds:
a. Non-compliance with any o f the requirements o r conditions for which
the AEP was issued;
b. Misrepresentation o f facts in the application including fraudulent
misrepresentation Le., false statement that has a negative effect in the
evaluation o f the application made knowingly, or without belief in its
truth, or recklessly whether it is true or false;
c. Submission o f falsified or tampered documents;
d. Meritorious objection or information against the employment o f the
foreign national;
e. Foreign national has been convicted o f a criminal offense or a fugitive
from justice;
L Employer terminated the employment o f foreign national; and
g. Grave misconduct in dealing with o r ill treatment o f workers.
In such cases, the Regional Director shall issue an Order cancelling or
revoking die AEP.2
16. A DD ITION A L G R O U N D U N D E R A R T IC L E 41.
Paragraph (a) of Article 41 enunciates another ground for the cancellation
o f the employment permit issued to an alien. Here, the alien, without the prior
approval o f die DOLE Secretary, is prohibited from committing any o f the
following acts:
a) To transfer to another job; or
b) To change his employer.
Such transfer to another job or change in position or in employer requires
die filing o f an application for new AEP.1*
• Section 12. Id.
* Section 13, Id.
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17. E F F E C T O F D E N IA L /C A N C E L L A T IO N O R REV O CA TIO N O F
A EP.
A foreign national whose AEP has been denied or cancelled is disqualified
to re-apply within a period o f ten (10) years in case the grounds for denial or
cancellation is any o f die following:
a) Conviction o f criminal offense or fugitive from justice in the country or
abroad; or
b) Grave misconduct in dealing with or ill treatment o f workers.
Correspondingly, a foreign national whose AEP has been denied or
cancelled due to misrepresentation o f facts or submission o f falsified documents
with the intent to deceive, conceal or omit to state matedal facts and, by reason o f
such omission or concealment, the DOLE was prompted to approve/issue the
AEP that would not otherwise have been approved/issued, shall be disqualified to
re-apply within a period o f five (5) years.2
18. E F F E C T O F FR A U D U L E N T A PPLICA TIO N FO R AEP.
Employers, employer's or foreign national's representatives, and/or agents
acting in behalf o f the applicant found to have filed fraudulent application for AEP
for three (3) counts shall be barred from filing application for a period o f five (5)
years after due process.3
19. APPEAL.
T he aggrieved foreign national or his authorized representative may file an
appeal with the D O L E Secretary within ten (10) days after receipt o f the copy o f
denial/cancellation/revocation order.
T he decision o f the D O L E Secretary shall be final and executory unless a
motion for reconsideration is filed within ten (10) days after receipt o f the decision.
N o second motion for reconsideration shall be allowed.4
20. PE N A L TY F O R W O R K IN G W IT H O U T A EP.
T he Regional Director shall impose a fine o f Ten Thousand Pesos (P10,
000.00) for every year ox a fraction thereof to foreign nationals found woxking
without a valid AEP. Employers found employing foreign nationals without a valid
A EP shall also pay a fine o f Ten Thousand Pesos (P10,000.00) for every year o r a
fraction thereof Providedfurther, that an employer found to have failed to pay the
penalty provided herein shall n o t be allowed to employ any foreign national for any
1
Section 4{c), Department Order No. 146-15, Series of 2015 (August 20, 2015), Revised Rides for tie Issuance of
Employment P a m * to Foreign NaSonals. TNs paragraph states: ^ AdtfSonal postion of file foreign rvaSonal h the same
compaiy or subsequent ass&nment h related companies during tie vafidfy or renewal of (he AEP wiU be subject for
refinem ent Achange of postxn or employersh aflrec^ an appfeadon for AEP*
* Sec& »14,U .
1 8ecSm 15bli
4 Section 16, Id.
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Newly hired or appointed officers may file the application for new AEP
without penalty thereof within fifteen (15) working days after signing o f contract or
appointment
If the commencement o f employment is later than the fifteen (15)
working days grace period, the application for new AEP may be filed before the
commencement o f employment without penalty.1
21 MONITORING AND EVALUATION.
The Regional Offices shall submit a monthly repprt on the issuance o f
AEP to the Bureau o f Local Employment (BLE).2
< Section 17. W.
’ Section 18, Id.
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LABOR STANDARDS
TOPICS PER SYLLABUS
III.
LABOR STANDARDS
A. Conditions of employment
1. Coverage
2. Hours of work
a. Normal hours of work; hours worked
b. Meal periods
c. Night-shift differential
d. Overtimework
e. Computation of additional compensation (rates only);
facilities vs. supplements
3. Weekly rest periods
4. Holidays
5. Service Incentive leaves
6. Service charges
7 . 13th month pay
B. Wages
1. Payment of wages
2. Prohibitions regarding wages
3. Wage distortion; concept
4. Non-diminution of benefits
C. Leaves
1. Service incentive leave
2. Maternity leave
3. Paternity leave
4. Solo parent leave
5. Leave benefits for women workers under R.A. 9710 and R.A.
9262
D. Special groups of employees
1. Women
a. Discrimination
b. Stipulation against marriage
c. Prohibited acts
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d. Sexual harassment (R.A. 7877)
2. Minors (R.A. 7610, as amended by R.A. 9231)
3.
Kasambahay(R.A. 10361 )
4.
5.
6.
7.
Homeworkers
Night workers
Apprentices and learners
Persons with disabilities
a. Discrimination
b. Incentives for employers
A.
CONDITIONS OF EMPLOYMENT
.
1
COVERAGE
1. EMPLOYEES COVERED.
As a general rule, the provisions o f Tide 1 {Working Conditions and Rest
Periods], Book III [Conditions o f Employment] and die corresponding provisions
in the Rules to Implement the Labor Cade, are applicable to all employees in all
establishments and undertakings, whether operated for profit o r n o t*1
2. EM PLOYEES N O T C O V ERED .
Article 82 o f the Labor Code and its Implementing Rules2 expressly
exclude die foDowing persons or employees from the coverage o f Tide I, Book ID
thereof, to mk
1)
2)
3)
4)
5)
6)
7)
8)
Government employees;
Managerial employees;
Other officers or members o f a managerial staff,
Domestic servants (now Kasmbabayfy
Persoos in the personal service o f another;
Workers paid by results;
Field personnel; and
Members o f the family o f die employer.
Notably, in addition to the foregoing Arricle 82 exemptions, a 9th
exemption is provided under the I.abor Code’s Article 94 (Right to Holiday Pay)
and Article 95 (Right to Service Incentive Leave), covering retail an d service
establishm ents regularly em ploying less th a n te n (10) w orkers. A similar
exemption o f retail and service establishments is also provided for under the Labor
1 Artx*82,LafaorCo(fe;Sectjon1.Rutel.Book[tLRidestotn¥fementtheLat)orCode.
1 SeeSecGon2.Rulel.6ook[QortheRiilstolmplementtheLat>orCo(te.
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Code’s IRR on night shift differential pay but the number of regular employees
required for exemption is "n o t m ore than five (5) w orkers.” 1
2.
HOURS OF WORK
1. COMPENSABLE HOURS WORKED.
The following shall be considered as compensable hours worked:
a) All time during which an employee is required to be on duty o r to be
at the employer’s premises or to be at a prescribed workplace; and
b) AO time during which an employee is suffered or permitted to w ork2
2 . SOME PRINCIPLES IN DETERMINING HOURS WORKED.
The foUowing general principles shaU govern in determining whether die
time spent by an employee is considered hours worked:
a) AO hours are hours worked which the employee is required to give to
his employer, regardless o f whether or no t such hours are spent in
productive labor o r involve physical or mental exertion;
b) An employee need n o t leave the premises o f die workplace in order
that his rest period shall not be counted, it being enough that he stops
working, tests completely and leaves his workplace to gp elsewhere,
whether within or outside the premises o f his workplace;
c) If the work performed was necessary or it benefited the employer or
the employee could not abandon his work at the end o f his normal
working hours because he had no replacement, aQ time spent for such
work shall be considered as hours worked if the work was with the
knowledge o f his employer or immediate supervisor;
d) The time during which an employee is inactive by reason o f
interruptions in his work beyond his control shall be considered
working time either if the imminence o f the resumption o f work
requires the employee’s presence at die place o f work or if die interval
is too brief to be utilized effectively and gainfully in the employee’s
own interest3
It bears emphasizing that the employer retains the management
prerogative, whenever exigencies o f the service so require, to change the working
hours o f its employees.4 Moreover, the age-old rule which governs the relationship
1 Section 1 (b). Ride tl {Night Shfft DiffefEntiat), Book t!) of Ihe Rules to fn^ifement the Labor Code.
2 Arfde 84, Labor Code; Section 3, Rule I, Book III, Rules to Implement Ihe Labor Code; Rada v. NLRC, G R No. 96078, Jan.
9.1992.205 SCRA69.
3 Secfcn4, Rule I, Book [II. Rules to ImpJemenl the LaborCode.
< Union Carbide Labor Union v. Union Carbide PhSppines, toe., 215 SCRA 654 [1992].
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between labor and capital or management and employee o f “no work, nopay”or a
'Jar day's wag for a fair day's labor," remains the basic factor in determining the
employees’ wages and backwages.1
a.
NORMAL HOURS OF WORK; HOURS WORKED
t NORMAL HOURS OF WORK OF EMPLOYEES.
The purpose o f die law in limiting the number o f working hours in each
day is ptincipaUy to protect the health and welfare o f the employees. It is also for
the purpose o f affording adequate time to employees to lead richer and more
fruitful, meaningful lives and to be able to participate intelligently in public
concerns. Article 83 o f die Labor Code enunciates die general rule that the total
number o f working hours o f a worker o r employee shall not exceed eight (8) hours.
This eight (8) hour period is called die normalhoursofwork.
Any work in excess o f eight (8) hours is considered overtime work.
Consequendy, the employee who is permitted or required to work beyond the
eight-hour period deserves to be paid an additional compensation for the overtime
work rendered.2
2 . WORK DAY, HOW RECKONED.
The term "work day" means the twenty-four consecutive-hour period
which commences from the time the employee regularly starts to work. Hence, the
24-hour period, in the case o f employees working from 8:00 a.m. to 5:00 p.m., is
from 8:00 a.m. to 8:00 a.m. o f the following day and the period from 8:00 a.m. to
5:00 p.m. is called the "rtgdar working hours" o r "shift" Work rendered beyond the
regular working hours within the "work day" is considered overtime. It must be
emphasized that "work day” does not necessarily mean the ordinary calendar day
from 12:00 midnight to 12:00 midnight unless die employee starts working at the
unusual hour of 12:00 midnight, in which case, his "work day"\s> the calendar day.
3. WORK WEEK; HOW RECKONED.
A "work wttk"\s a week consisting o f 168 consecutive hours or seven (7)
consecutive 24-hour work days, beginning at the same hour and on the same
calendar day each calendar week.
4. HOURS OF WORK OF PART-TIME WORKERS.
The rules implementing the different Wage Orders issued by the Regional
Tripartite Wages and Productivity Boards (RTWPBs) in the various regions in the
country cany a uniform provision to die effect that wages and allowances o f part-*
' DurafaSRecappingPbntCompanyv. NLRC, 6 A No.1-76746,July 27,1987,152SCRA32S.
* Artx^87, LatxxCode; Secfion8, Rite I, Boohto, F?ulestotmptement ff>eLaborCo0e.
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time workers shall not be less than the compensable time that they actually
rendered work. Hence, in the case o f cost-of-living allowance (COLA), if the
worker rendered work for less than the prescribed eight (8) hours, say, for four (4)
hours only, the employer may validly make proportionate payment o f COLA, if it
has granted a proportionate payment in the worker's basic wage. Following the
principle o f “no work, no pay, no allowance, ” the workers are not entided to said
benefits for the four-hour period that they did not render work. It is important to
stress, however, that the employees should have entered into an agreement with the
employer that they will be employed as part-time workers.
In view o f the foregoing, on die issue o f whether the company should
give the part-time employees concerned only fifty percent (50%) o f the wages and
other benefits that die employer may pay the workers who will work for four (4)
hours a day, say, from 6:00 to 10:00 in the evening it was opined in die Advisory
Opinion on Conditions ofEmployment ofPart-time Workers issued by the D O L E ’S Bureau
o f Working Conditions, that compensation in proportion to the time they actually
rendered work or equivalent to only four (4) hours a day must be given to part-time
workers. This is, however, without prejudice to any individual or collective
agreement or company practice or policy that provides higher basis o f computation
o f wages.
5. B R O K E N H O U RS.
The normal eight (8) working hours mandated by law do not always mean
continuous and uninterrupted eight (8) hours o f work. As may be required by
peculiar circumstances o f employment, it may mean broken hours of, say, four
hours in the morning and four hours in the evening or a variation thereof, provided
the total o f eight (8) hours is accomplished within one “work day” as this term is
understood in law. Hence, the 4-hour work done in the evening as in the example
above, should not be considered overtime work since the eight-hour period has not
yet been exceeded.
6. R E D U C T IO N O F E IG H T -H O U R W O R K IN G DAY.
The employer, in the lawful exercise o f its prerogative, is not prohibited
from reducing the 8-hour normal working time per day provided that no
corresponding reduction is made on the employee’s wag? or salary equivalent to an
eight-hour work day. In instances where the number o f hours required by the
nature o f work is less than eight (8) hours, such number o f hours should be
regarded as die employee’s full wotking day.
7. W ORK IN D IF F E R E N T SH IF T S .
In establishments where work is in different shifts, work done by the
employee beyond his eight-hour shift is considered overtime work which should be
compensated accordingly. For example, if there are three (3) eight-hour shifts in a
“work day” say, the first shift is from 6:00 a.m. to 2:00 p.m.; the second shift from
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2:00 p.m. to 10:00 p.m.; and the third shift from 10:00 p.m. to 6:00 a.m. o f the
following day, the employee whose regular eight-hour work is in the first shift (6:00
a.m. to 2:00 p.ra.), once required to work in the second o r third shift, should be
given additional compensation for such work done beyond his regular working
hours which legally is considered overtime work.
8. COMPRESSED WORK W E E K (CWW).
a.
C o n c e p t.
The Labor Code provides that the normal wor^ hours per day shall be
eight (8) hours. Work may be performed beyond eight hours a day provided the
employee is paid for the overtime work. O n the other hand, the normal number of
workdays per week shall be six (6) days, or a total of forty-eight (48) hours based
on the normal workday of eight (8) hours. This is without prejudice to firms whose
normal workweek is five (5) days, o r a total o f forty (40) hours based on the normal
workday o f eight (8) hours.1
*'Compressed Workweek *’ o r 'XSWW" refers to a situation where die normal
workweek is reduced to less than six (6) days but the total number o f work-hours
o f 48 hours per week remains. The normal workday is increased to more than eight
(8) hours but not to exceed twelve (12) hours, without corresponding overtime
premium.2 This concept can be adjusted accordingly in cases where die normal
workweek o f the firm is five (5) days.5
CWW is a kind o f flexible w ork arran g em en t which is considered as
better alternative to the outright termination o f the services o f the employees or the
total closure of the establishment Anchored on voluntary basis and conditions
mutually acceptable to both die employer and the employees, it is recognized as
beneficial in terms o f reduction o f business costs and helps in saving jobs while
maintaining competitiveness and productivity in industries.4
‘Flexible work arrangements” refer to alternative arrangements or schedules
other than the traditional or standard work hours, workdays and workweek. The
effectivity and implementation o f any o f the flexible work arrangements should be
temporary in nature.5
Under R A No. 8972, otherwise known as ‘The Solo Parents' Welfare Act of
2000, "solo parents are allowed to work on a flexible schedule, thus:
1 DepartmentAcMsofyNo.2l Senes(tf20(K-.issuedbyti)8DOLESecre^a(yonDecenfiber2.2004imptemen&ngcantpressed
workweek (CWW) schemes.
2 DepartmentAdvisoiy No. 2. Series of 2009. issued on January 29,2009 by DOLE Secrdaiy Mananito 0 . Roque enunciating
QieGuideBnesonQieAdOfiGonarFlexlileVVbikAnangements.
2 DepartmentAdvisory Na 2. Series of2004. supra
< DepartmentAdvisoryNo. 2, Series ot2009, supra
* W.
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“Sec 6. Flexible Work Schedule. - The employer shall provide
for a flexible working schedule for solo parents: Provided, That the same
shall not affect individual and company productivity: Provided, farther,
That any employer may request exemption horn the above
requirements from the DOLE on certain meritorious grounds.”*1
The phrase *'flexible work schedule" is defined in the same law as the tight
granted to a solo parent employee to vary his/her anival and departure time
without affecting the core work hours as defined by the employer.2
b. Other forms o f flexible work arrangements.
O ther than the CWW, the following are flexible work arrangements which
may be considered, among others:
1. '"Reduction of Workdays" refers to one where the normal workdays per
week are reduced but should no t last for more than six (6) months.
2. "Potation of Workers" refers to one where the employees are rotated or
alternately provided work within the workweek.
3. 'forcedLeave" refers to one where the employees are required to go on
leave for several days or weeks utilizing their leave credits, if there are
any.
4. “Broken-time schedule" refers to one where the work schedule is n o t
continuous but the work-hours within the day or week remain.
5. “Flexi-hoBdaysschedule"refers to one where the employees agree to avail
o f die holidays at some other days provided there is no diminudon o f
existing benefits as a result o f such arrangement.3
U nder these flexible work arrangements, die employers and the
employees are encouraged to explore alternative schemes under any agreement and
company policy or practice in order to cushion and mitigate the effect o f the loss o f
income o f the employees.4
c. Conditions for availment.
D O L E shall recognize CWW schemes adopted in accordance with the
following:
1.
The CWW scheme is undertaken as a result o f an express a n d
voluntary agreem en t o f m ajority o f th e covered em ployees or their d u ly
authorized representatives. This agreement may be expressed through collective
bargaining or other legitimate workplace mechanisms o f participation such as
labor-management councils, employee assemblies or referenda.
* Section 6. R A N a 8972.
1 See Secfon3{e] thereof.
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2. In firms using substances, chemicals and processes or operating under
conditions where there are airborne contaminants, human carcinogens or noise
prolonged exposure to which may pose hazards to the employees health and
safety, there must be a certification from an accredited health and safety
organization or practitioner or from the firm’s safety committee that work beyond
eight (8) hours is within the threshold limits or tolerable levels of exposure, as set in
the Occupational Safety and Health Standards (OSHS).
3. The employer shall notify the DOLE, through its Regional Office
having jurisdiction over the workplace, of the adoption o f the CWW scheme. The
notice should be made in DOLE CWW Report F orm .*1
d. Effects.
A CWW scheme which complies with the foregoing conditions shall have
the following effects:
L Unless there is a more favorable practice existing in the firm, w ork
beyond eight (8) hours will not be com pensable by overtime prem ium
provided the total num ber of hours w orked p e t day shall not exceed twelve
(12) hours. In any case, any work performed beyond twelve (12) hours a day or
forty-eight (48) hours a week shall be subject to overtim e pay.
2. Consistent with Article 852 of die Labor Code, employees under a
CWW scheme are entided to m eal periods of n o t less than sixty (60) m inutes.
Nothing, however, shall impair the right of employees to rest days as well as to
holiday pay, rest day pay or leaves in accordance with law or applicable CBA or
company practice.
3. Adoption of the CWW scheme shall in no case result in dim inution
of existing benefits. Reversion to the norm al eight-hour workday shall not
constitute a dim inution of benefits. The reversion shall be considered a
legitimate exercise of management prerogative provided that the employer shall
give the employees prior notice of such reversion within a reasonable period o f
time.3
A case in point is Bisig Manggagam sa Tiyco v. NLRC,4 where private
respondent Tryco and the petitioners signed separate Memorandja] of Agreement
(MOA), providing for a compressed workweek schedule to be implemented in the
company effective May 20,1995. The MOA was entered into pursuant to DOLE
Department Order (D.O.) No. 2\ Series of 1990 enunciating the Guidelines on the
Implementation of Compressed Workweek. As provided in the MOA, 8:00 a.m. to 6:12
’ Department Advisory No. 2, Series of 2004, supra.
1 It provides: 'Artide 85. Nteal Periods. - Sut>ect to such regulations as 1he Secretary erf Labor may prescribe, it shal be the
duty of every employer to give his employees not less than sixty (60) minutes timeoff for their tegular meals.*
3 Department Advisory No. 2, Series cf 200-1, supra.
< G.R. No. 151309. Oct 15.2008.
r
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p.m., from Monday to Friday, shall be considered as the regular working hours, and
no overtime pay shall be due and payable to the employee for work rendered
during those hours. The MOA specifically stated that the employee waives the right
to claim overtime pay for work rendered after 5:00 p.m. until 6:12 p.m. from
Monday to Friday considering that the compressed workweek schedule is adopted
in lieu o f the regular workweek schedule which also consists o f forty-six (46) hours.
However, should an employee be permitted or required to work beyond 6:12 p.m.,
such employee shall be entided to overtime pay.
Tryco informed the Bureau o f Working Conditions (BWC) of the
Department of Labor and Employment o f the implementation of the said
compressed workweek in the company.
In upholding the validity o f the compressed workweek, it was noted that
Department Order No. 21 sanctions the waiver of overtime pay in consideration o f
the benefits that the employees will derive from the adoption o f a compressed
workweek scheme, thus:
“The compressed workweek scheme was originally conceived for
establishments wishing to save on energy costs, promote greater work efficiency
and lower the rate of employee absenteeism, among others. Workers favor die
scheme considering that it would mean savings on the increasing cost of
transportation fares for at least one (1) day a week; savings on meal and snack
expenses; longer weekends, or an additional 52 off-days a year, that can be
devoted to rest, leisure, family responsibilities, studies and other personal matters,
and that it will spare diem for at least another day in a week from certain
inconveniences that are the normal incidents of employment, such as commuting
to and from the workplace, travel time spent, exposure to dust and motor vehicle
fumes, dressing up for work, etc Thus, under this scheme, the generally observed
workweek of six (6) days is shortened to five (5) days but prolonging the working
hours from Monday to Friday without the employer being obliged for pay
overtime premium compensation for work performed in excess of eight (8) hours
on weekdays, in exchange for the benefits above-cited that will accrue to the
employees.”
In declaring the compressed workweek arrangement in the 2007 case o f
Linton Commercial Co., Inc. v. HeHera} as unjustified and illegal and in holding that
petitioners are guilty o f illegal reduction o f work hours, the Supreme Court found
specious the petitioners attempt to justify their action by alleging that the company
was suffering from financial losses owing to the Asian currency crisis. Petitioners’
claim o f financial losses was not supported by evidence. A close examination o f
petitioners’ financial reports for 1997-1998 shows that while the company suffered
a loss of P3,645,422.00 in 1997, it retained a considerable amount o f earnings and
operating income. Clearly then, while Linton suffered from losses for that year,
there remained enough earnings to sufficiendy sustain its operations. In business,1
1 G.R. No. 163147, Oct 10,2007.
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sustained operations in the black is the ideal but being in the red is a cruel reality.
However, a year o f financial losses would not warrant the immolation o f the
welfare o f the employees which in this case was done through a reduced workweek
that resulted in an unsettling diminution o f the periodic pay for a protracted period.
Permitting reduction o f work and pay at the slightest indication o f losses would be
contrary to the State’s policy to afford protection to labor and provide full
employment All taken into account, the compressed workweek arrangement was
unjustified and illegal. Thus, petitioners committed illegal reduction o f work
hours.”
9. R ED U C T IO N O F W ORKING DAYS D U E T O LOSSES.
An Explanatory bulletin1 enunciated the rules in determining when an
employer can validly reduce the regular number o f working days. It states that a
reduction of the number o f tegular working days is valid where the arrangement is
resorted to by the employer to prevent serious losses due to causes beyond his
control, such as when there is a substantial slump in the demand for his goods or
services or when there is lack of taw materials. This is more humane and in keeping
with sound business operations than the outright termination o f the services or the
total closure o f die enterprise.2 Consequendy, the employer may deduct the wages
and living allowances corresponding to the days taken off from the workweek, in
the absence o f an agreement specifically providing that a reduction in the number
of workdays will not adversely affect the remuneration o f the employees. This view
is consistent with the principle o f “no-work-no-pay. ” Furthermore, since the
reduction of workdays is resorted to as a cost-saving measure, it would be unfair to
require the employer to pay the wages and living allowances even on unworked
days that were taken off from the regular workweek.3
In Philippine Graphic Arts, Inc. v. NLRC,4 the High Court upheld the
validity o f the reduction o f working hours, taking into consideration die following:
the arrangement was temporary; it was a mote humane solution instead o f the
retrenchment o f personnel; there were notices and consultations with the workers
and supervisors; a consensus was reached on how to deal with the deteriorating
economic conditions; and it was sufficiendy proven that the company was suffering
from losses.
Notably, although the said Explanatory Bulletin stands more as a set o f
directory guidelines than a binding set o f implementing rules, it has one main
consideration, consistent with the ruling in Phitippine Graphic Arts, in determining
1 TheEqianakxyBu9^mtnBectrfReductoo(W o(1«laysm W a9es/lJvingAS(MancesdatedJu!y23.1985 issued by
0 0 t£ DirectorAugusbG. Sanchez.
* ML
} bid.; See also No. 1 [F], 2019 Handbook on Workers’ Salutary Monetary Benefits, issued by the Bureau of Working
O riSons, DOLE
4 6 R No. L-80737. Sept 29,1988,166 SCRA118.
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the validity o f reduction o f working hours, U , that the company was suffering
from losses.
In declaring die compressed workweek arrangement in Linton Commercial
Co., Inc. ». Helltra,l as unjustified and illegal and in holding that petitioners are guilty
o f illegal reduction o f work hours, the Supreme Court found specious the
petitioners attempt to justify their action by alleging that the company was suffering
from financial losses owing to the Asian currency crisis. Petitioners’ claim o f
financial losses was n o t supported by evidence. A close examination o f petitioners’
financial reports for 1997-1998 shows that while the company suffered a loss o f
P3,645,422.00 in 1997, it retained a considerable amount o f earnings and operating
income. Clearly then, while die company suffered from losses for that year, there
remained enough earnings to sufficiendy sustain its operations. In business,
sustained operations in the black is the ideal but being in the ted is a cruel reality.
However, a year o f financial losses would not warrant the immolation o f the
welfare o f die employees which in this case was done through a reduced workweek
that resulted in an unsetding diminution o f the periodic pay for a protracted period.
Permitting reduction o f work and pay at the slightest indication o f losses would be
contrary to the State’s policy to afford protection to labor and provide full
employment.
It bears stressing, however, that work reduction scheme sans proof o f
losses may amount to constructive dismissal F or instance, in Fe la Rosa ».
Ambassador Hotel?- die records fail to show any documentary proof that the work
reduction
scheme
was
adopted
due
to
respondent’s
business
reverses. Respondent’s memorandum dated April 5, 2000 (sict should be 2002)
informing petitioners o f die adoption o f a two-day w odt scheme effective April 5,
2002, made no mention why such scheme was being adopted. Neither do die
records show any documentary proof that respondent suffered financial losses to
justify its adoption o f the said scheme to stabilize its operations. W hat is
undisputed, as found by both the Labor Arbiter and the NLRC and admitted by
respondent itself, is that die complaints for violation o f labor standards laws were
filed by petitioners against respondent at die DOLE-NCR, some o f which
complaints were partially settled; and that almost immediately after the partial
settlement o f the said complaints, the work reduction/rotation scheme was
implemented.
Case law holds that constructive dismissal occurs when there is cessation
o f work because continued employment is rendered impossible, unreasonable o r
unlikely; when there is a demotion in rank o r diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an employer becomes unbearable to
the employee. Respondent’s sudden, arbitrary and unfounded adoption o f the
• G-R.No. 163147, Oct 10,2007.
2 G il No. 177059, March 13,2009.
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two-day work scheme which greatly reduced petitioners’ salaries renders it liable for
constructive dismissal.
10. REGULAR WORKING DAYS O F H O SPIT A L O R C L IN IC
PERSO N N EL
The regular working days o f covered employees shall not be more than
five (5) days in a workweek. The workweek may begin at any hour and on any day,
including Saturday or Sunday, designated by the employer. Employers are not
precluded from changing the time at which the workday or workweek begins
provided that the change is not intended to evade the requirements o f die Rules.*
The DOLE Secretary issued Policy Instructions No. 54 {Subject. Working
Hours and Compensation of Hospital!(Me Personnel^ on April 12, 1988 to clarify the
enforcement policy of the D OLE on the working hours and compensation o f
personnel employed by hospitals or clinics with a bed capacity o f 100 or more and
those located in cities and municipalities with a population o f one million or more.
It was recognized in this issuance that the Labor Code, in its Article 83, has
adopted and incorporated the basic provisions o f R~A. 59012 and retained its spirit
and intent which is to shorten die workweek o f covered hospital personnel and at
the same time assure them o f a frill weekly wage. Consequently, consistent with
such spirit and intent, it was declared that personnel in subject hospitals and clinics
are endded to a full weekly wage for seven (7) days if they have completed the 40hour/5-day workweek in any given workweek.
The Supreme Court, however, has voided Policy Instructions No. 54 in the
case of SanJuan de Dios Hospital EmployeesAssociation ». NLRO thereby voiding the
rule that hospital employees who worked for onfy 40 h ours/5 days in any given
workweek should be compensated for full weekly wage for seven (7) days. The
reliance upon R.A. No. 5901 is misplaced for this law has long been repealed with
die passage o f the Labor Code on May 1,1974. The governing law is now A rdde
83 o f the Labor Code. A cursory reading o f this ardde betrays petitioners’ position
that “hospital employees” are entitled to “a full weekly salary with paid two (2)
days’ off if they have completed die 40-hour/5-day workweek.” W hat Article 83
merdy provides are: (1) the regular office hour o f eight hours a day, five days per
week for health personnel; and (2) where die exigencies o f service requite that
health personnd work for six days o r forty-eight hours then such health personnd
shall be entided to an additional compensation o f at least thirty percent (30%) o f
1 Secfim6,Ri^lABook 111oitie^tobnptemert6ieLabaCoda
* Repubfc Act 5901, *An Act Presetting Forty Homs a Week of Labor for Gwemment and R vate Hospitals or C&fc
PorsonneI,*enactedonJune21.1969,prescA)esa4(Hioutf5Klayw«1med(farhospltaVcGnoepersormeiAt8iosan»6ne.
fie Act fxohtts the (firrarwtion of fie compensaSon of ftese w okas who would suffer a reduction h therweeldywageby
reason o( fie shortened ankweek prescribed fay Ihe Act fo e fe c tR A 5901 r a ^ B ia t the r a ^ h o s p y w riters
wto used to work se«n (7) days a week should be paid for such number of days far waking only 5 days or 40 hours a
3 G.R. No. 126383.Nw. 28.1997.
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their regular wage for work on the sixth day. There is nothing in the law that
supports then Secretary o f Labor’s assertion that “personnel in subject hospitals
and clinics are entided to a full weekly wage for seven (7) days if they have
completed the 40-hour/5-day workweek in any given workweek.” Needless to say,
die Secretary o f Labor exceeded his authority by including a two days o ff with pay
in contravention o f the clear mandate o f the statute. Administrative interpretation
o f the law is at best merely advisory and the Court will not hesitate to strike down
an administrative interpretation that deviates from the provision o f the statute.
11. P O W E R IN T E R R U P T IO N S /B R O W N O U T S
The following are the effects o f work interruption due to brownouts:1
1. Brown-outs o f short duration but not exceeding twenty (20) minutes
shall be treated as worked or compensable hours whether used
productively by the employees or n o t
2. Brown-outs running for more than twenty (20) minutes may not be
treated as hours worked provided any o f die following conditions are
present:
a) The employees can-leave their workplace or go elsewhere w hether
within or without the work premises; or
b) The employees can use the time effectively for their own interest
3. In each case, the employer may extend the working hours o f his
employees outside the regular schedules to compensate for the loss o f
productive man-hours without befog liable for overtime pay.
4. Industrial-enterprises with one or two workshifts may adopt any o f the
workshifts prescribed for enterprises with three (3) workshifts to
prevent serious loss or damage to materials, machineries o r equipment
that may result in case o f power interruptions.2
5. The days when work was n o t required and no work could be done
because o f shutdown due to electrical power foterfuptions, lack o f raw
materials and repair o f machines, are not deemed hours worked.3
b.
MEAL PERIODS
1. G E N E R A L R U L E O N M EA L P E R IO D .
As a general rule, every employer is required to give his employees,
regardless o f sex, not less than one (1) hour (or 60 minutes) time-off for regular
1 PoG9lndnKtoto.36da^May22,l978was'EsuedbytheUnde(secr^ofUhorandErq)loperabda%lhe
^ctsrfptwrtefrup^abfOwna^OTproduc^mai^xius.
3 PoScy InstmcSons No. 36. May 22.1978.
3 DufaMt Recapping PlarJConpanyv.NlRC. G il No. L-76746, July 27,1987,152 SCRA328.
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meals.1 Being time-off, it is not compensable hours worked. In this case, die
employee is free to do anything he wants, except to work. If he is required,
however, to work while eating, he should be compensated therefor.
2 . SHORTENING
OF MEAL TIM E TO NOT LESS THAN
MINUTES, WHEN COMPENSABLE.
20
In the following cases, a meal period of not less than twenty (20) minutes
may be given by the employer provided that such shorter meal period is credited as
compensable hours worked of the employee:
a) Where the work is non-m anual work in nature or does not involve
strenuous physical exertion;
b) Where the establishment regularly operates for not less than
sixteen (16) hours a day;
c) In cases of actual or im pending em ergencies or when there is
urgent work to be performed on machineries, equipment or
installations to avoid serious losses which the employer would
otherwise suffer; and
d) Where the work is necessary to prevent serious loss o f perishable
goods.2
3.
SHORTENING OF MEAL TIM E TO NOT LESS THAN
MINUTES, WHEN NOT COMPENSABLE.
20
The law allows a situation where the employees themselves request for the
shortening of meal period to not less than twenty (20) minutes (say, thirty minutes,
or from 12:00 to 12:30 p.m. instead of 12:00 to 1:00 p.m.) for the purpose of
allowing them to leave work earlier than the lapse of the eight (8) hours required by
law (say, 4:30 p.m. instead of 5:00 p.m.). This shortened period, however, shall not
be considered compensable working time provided the following conditions arc
complied with:
a) The employees voluntarily agree in w riting to a shortened meal
period of thirty (30) minutes and are willing to waive the overtime pay
for such shortened meal period;
b) There should be no dim inution in the benefits o f the employees
which they receive prior to the effectivity o f the shortened meal
period;
c) The work of the employees does not involve strenuous physical
exertion and thev are provided with adequate coffee breaks in the
m orning and afternoon;*
1 Article 85, Labor Code; Section 7, Rule I, Book III, Rules to Implement the labor Code.
* Section 7, Rule I, Book III, Ibid.
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d) The value of the benefits derived by the employees from the
proposed work arrangement is equal to or com m ensurate with the
compensation due diem for the shortened meal period as well as the
overtime pay for 30 minutes as determined by the employees
concerned;
e) The overtim e pay of the employees will become due and demandable
if ever they arc permitted or made to work beyond 4:30 p.m.; and
f) The effectivity o f the proposed working time arrangement shall be for
a tem porary duration as determined by the D O LE Secretary.1
4. S H O R T E N IN G O F MEAL T IM E T O LESS T H A N 20 M IN U TES,
EFFECT.
The law does not allow that meal time be shortened to less than twenty
(20) minutes. If so reduced, die same shall no longer be considered as meal time
but merely as rest period or coffee break and, therefore, becomes compensable
working time.2
5. C O F F E E BREAKS AND R EST P E R IO D S O F SH O R T D U R A T IO N .
Rest periods o f short duration during working hours are considered and
counted as hours worked.3 Rest periods or coffee breaks running from five (5) to
twenty (20) minutes are considered compensable working time.4
6. C H A N G IN G FR O M 30-M IN U T E PAID “ O N CALL” L U N C H BREAK
T O O N E (1) H O U R MEAL T IM E W IT H O U T PAY, E F F E C T .
The case of Sim Darby Pilipinas, Inc. v. NLRC,5 is illustrative o f this point.
Prior to the present controversy, all company factory7workers in Mankina including
members of private respondent union worked from 7:45 a.m. to 3:45 p.m. with a
30-minute paid "on call” lunch break. Petitioner, by way o f a memorandum,
changed die meal time schedule from 30 minutes to one (1) hour without pay.
Since private respondent union felt affected adversely by the change in the work
schedule and discontinuance o f the 30-minute paid "on call” lunch break, it filed on
behalf of its members a complaint with the Labor Arbiter for unfair labor practice,
discrimination and evasion of liability. Tn declaring the change in the work schedule
as valid, the Supreme Court held:
“(The petitioner) rationalizes that while the old work schedule included a
30-minute paid lunch break, the employees could be called upon to do jobs during
that period as they were 'on call. ' Even if denominated as iunch break, this period
could very well be considered as working time because the factory employees were
1 Letter-Opinion dated Nov. 27,1989 of Secretay Frankln Dribn to Kodak Philippines.
3 Id.
3 Artide 84, Labor Code.
1 Section 7, Rule I, Book III, Rules to Implement the Labor Code.
5 G il No. 119205, April 15,1998,289 SCRA 86.
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required to work if necessary and were paid accordingly for working. With the new
work schedule, the employees arc now given a one-hour lunch break without any
interruption from their employer. For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this hour not only for eating but also for
their rest and comfort which are conducive to more efficiency and better
performance in their work. Since the employees are no longer required to work
during this one-hour lunch break, there is no more need for them to be
compensated for this period. We agree with the Labor Arbiter that the new work
schedule fully complies with the daily work period of eight (8) hours without
violating the Labor Code. Besides, the new schedule applies to all employees in the
factory similarly situated whether they are union members or not”
7. M E A L T IM E INVOLVING SEVERAL SH IFTS.
In a company where work is continuous for several shifts, the mealtime
breaks should be counted as working time for purposes of overtime compensation.
Consequendy, the workers who are required to work in two (2) full successive
shifts should be paid for sixteen (16) hours and not fourteen (14), the two hours
for rest or mealtime breaks being included as compensable working time. The idle
time that an employee may spend for resting wherein he may leave the work area
should not be counted as workmg time only when the work is not continuous.1
C.
NIGHT SHIFT DIFFERENTIAL
1. HOW RECKONED.
Night shift differential is equivalent to 10% of employee's regular wage
for each hour o f work performed between 10:00 p.m. and 6:00 a.m. of the
following day.2
2. COVERAGE.
Night shift differential pay applies to all employees except.
1) Government employees, whether employed by die National
Government or any o f its political subdivisions, including those
employed in government-owned and/or controlled corporations with
original charters or created under special laws;
2) Those of retail and service establishments regularly employing not
more than five (5) workers;
3) Kasambahay and persons in the personal service of another,
4) Managerial employees, if they meet all o f the following conditions:
4.1 Their primary' duty is to manage the establishment in which they
are employed or o f a department or subdivision thereof;
’ National Development Company v. Court of Industrial Retabons, G.R. No. L-15422, Nov. 30.1962.
? No. 5 (A), 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE
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4.2 They customarily and regularly direct the work o f two or more
employees therein; and
4.3 They have the authority to hire or fire other employees o f lower
rank; or their suggestions and recommendations as to hiring,
firing, and promotion, or any other change o f status of other
employees are given particular weight.
5) Officers or members o f a managerial staff, if they perform the
following duties and responsibilities:
5.1 Primarily perform work directly related to management policies
of their employer,
5.2 Customarily and regularly exercise discretion and independent
judgment;
5.3 (a) Regularly and directly assist a proprietor or managerial
employee in the management of the establishment or
subdivision thereof in which he or she is employed; or (b)
execute, under general supervision, work along specialized or
technical lines requiring special training, experience, or
knowledge; or (c) execute, under general supervision, special
assignments and tasks; and
5.4 Do not devote more than twenty percent (20%) of their hours
worked in a workweek to activities which are not dirccdy and
closely related to the performance of the work described in
paragraphs 5.1,5.2, and 5.3 above;
6) Field personnel and those whose time and performance are
unsupervised by the employer,1 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 o f the time
consumed in the performance thereof.2
3. R EA SO N FO R A D D IT IO N A L C O M PEN SA T IO N .
Night shift differential pay is given as a premium for working at a time
when the employee is supposed to sleep and rest in accordance with tire law of
nature. Night work cannot be regarded as desirable. The lack o f sunlight tends to
produce anemia and tuberculosis and a predisposition to other illness. Night work
brings increased liability to eyestrain and accident. Serious moral dangers are also
likely to result from the necessity o f traveling the streets alone at night, and from
the interference with normal home life.
Moreover, from an economic point of view, investigations show that
night work is unprofitable, being inferior to day work both in quality and in
quantity. Wherever it had been abolished, in the long run, the efficiency both of
' No. 5 [B], Id.; See also Section 1, Rule II (Night Shift Differential), Book III of the Rules to Implement the labor Code.
2 Section 1 (e), Rule II (Night Shift Differentia!). Book III. Rules to Implement the labor Code.
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the management and of the workers was raised. Furthermore, it was found that
nightwork laws are a valuable aid in enforcing acts fixing the maximum period of
employment.1
Additional compensation for nighttime work is founded on public policy.
Therefore, the same cannot be waived.2
3. PERCENTAGE OF N IG H T SH IFT D IF F E R E N T IA L PAY.
A covered employee should be paid night shift differential pay of no less
than ten percent (10%) of his regular wage for each hour of work performed
between ten (10) o’clock in the evening and six (6) o’clock in the morning of the
following day.3
4. N IG H T SH IFT D IFFE R E N TIA L PAY VS. O V E R TIM E PAY.
When the work of an employee falls at night time, the receipt of overtime
pay shall not preclude the right to receive night differential pay. The reason is the
payment of the night differential pay is for the work done during the night; while
the payment of the overtime pay is for work in excess of the regular eight (8)
working hours.
5. COM PUTATION OF N IG H T S H IFT D IF F E R E N T IA L PAY.
1) Where night shift (10p.m. to 6 a.m.) work is regular work.
a. On an ordinary day: Plus 10% o f the basic hourly rate or a total
o f 110% of the basic hourly rate.
b. On a rest day, special holiday or regular holiday: Plus 10% of
the regular hourly rate on a rest day, special day or regular holiday
or a total o f 110% o f the regular hourly rate.
2) Where night shift (10 p.m. to 6 a.m.) work is overtime work.
a. On an ordinary day: Plus 10% o f the overtime hourly rate on an
ordinary day or a total of 110% o f the overtime hourly rate on an
ordinary day.
b. O il a rest day or special holiday or regular holiday: Plus 10%
of the overtime hourly rate on a rest day or special day or regular
holiday.
3) For overtime work in the night shift. Since overtime work is not
usually eight (8) hours, the compensation for overtime night shift
work is also computed on the basis of the hourly rate.
' Shell Company of the Philippine 'Blands, IH . v. National Labor Union, G.R No 1-1309, July 26,1946,81 Phil. 315, quoting
Principles of labor Legislation, Commons and Andrews, 4th Rev. Ed., p. 142].
J Article 6, Civil Code; Mercury Drug Co., Inc. v. Dayao, G.R. No. L-30452, Sept 30,1982.
3 Section 2. Rule II, Book III, Rules to Implement the labor Code; No. 5 (A), 2019 Handbook on Workers’ Statutory Monetary
Benefits, issued by the Bureau of Woridng Conditions, DOLE; See GMA Network, Inc. v. Pabriga, G.R No. 176419, Nov. 27,
2013
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a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a
total o f 110% o f 125% of basic hourly rate,
h. On a rest day or special holiday or regular holiday. Plus 10% o f
130% o f regular hourly rate on said days or a total o f 110% of 130%
of the applicable regular hourly rate.
d.
OVERTIMEWORK
1. M EA N IN G .
Work rendered after or beyond die normal eight (8) hours of work is
called “overtime w ork.”
2. BASIS.
In computing overtime work, "regular wage" or "basic salary" means "cash"
wage only without deduction for facilities provided by the employer.
3. PREM IU M PAY VS. O V E R T IM E PAY.
"Premium pay" refers to the additional compensation required by law for
work performed within eig h t (8) hours on non-working days, such as rest days
and regular and special holidays.1 On the other hand, "overtime pay ” refers to the
additional compensation for work performed beyond eig h t (8) hours a day. Ever)'
employee who is entided to premium pay may likewise be entided to the benefit of
overtime pay if he/she has rendered overtime work on such premium days as rest
days and regular and special holidays.2
4. EXCLUSION O F COLA FR O M O V ER TIM E PAY C O M PU T A T IO N .
In computing overtime pay, the cost-of-living allowance (COLA)
provided under the Wage Orders is not to be included.3 For instance, the P I0.00
COLA granted under W age O rder N o. NCR-21 [October 05, 2017],4 for the
1 No. ill. DOLE Handbook on Workers Statutory Monetary Benefits.
No. IV, Ibid.
3 Per Labor Advisory dafed 7 July 2011 issued by former DOLE Secretary RosafmdaDimapi5s-Baldoz.lt was declared therein
that while COLA is hduded in the computation of the regular holidays, it is not inebded in the oomputadon of other wagerelated benefits such as overtime pay, premium pay, night-shit differential pay, 13* month pay and retirement pay. See also
No. 4 (CJ, 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE;
See also discussion on Chapter II (WEEKLY REST PERIODS), Labor Code [infra].
4 Wage Order No. NCR-21 fa the National Capital Region which took effect on October 05,2017, granted a basic wage
increase of P21.00 per day and maintained the P10.00 COLA under the previous wage order, thus-___________
2
New
I
Minimum
S edorflndustry
Basic Wage Basic Wage Increase jNew Basic Wage
COLA
Non-Agriculture
P481.00
P21U0
|P50200
P10.00 P 51200
Agriculture (PlarlaSon and Non Plantation) [P444.0Q
P21.00
jP465.00
P10.00 P 47500
Wage
Rates
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National Capital Region, is not included in its computation. The basis should,
therefore be the New Basic Wage o f 1*502.00 and not die New Minimum Wage Rate of
P512.00.
5. H O W T O COM PUTE O V E R TIM E PAY.
a) For overtime w ork perform ed on an ordinary day, the overtime
pay is plus 25% of the basic hourh rate.
b) For overtime work perform ed on a rest day or on a special day,
the overtime pay is plus 30% of the basic hourh rate which includes 30%
additional compensation as provided in Article 95 [a] of the Labor Code.
c) For overtime w ork perform ed on a rest day w hich falls on a
special day, the overtime pay is plus 30% of the basic hourh rate which
includes 50% additional compensation as provided in Article 93 [c] of the Labor
Code.
d) For overtime work perform ed on a regular holiday, the overtime
pay is plus 30% of the basic hourly rate which includes 100% additional
compensation asprovided in Article 94 [b] of the Labor Code.
e) For overtime work perform ed on a rest day w hich falls on a
regular holiday, the overtime pay is plus 30% of the basic hourh rate
which includes 160% additional compensation.
6. BUILT-IN OVERTIM E PAY.
In case the employment contract stipulates that the compensation
includes built-in overtime pay and the same is duly approved by the Director of the
Bureau of Employment Services (now Bureau of Local Employment), the non­
payment by the employer o f any overtime pay for overtime work is justified and
valid.1
In PtiSALA v. NLRC,2 where the period of normal working hours per
day was increased to twelve (12) hours, it was held that the employer remains liable
for whatever deficiency in the amount for overtime work in excess of the first eight
(8) hours, after recomputation shows such deficiency.
7. EM ERGENCY O V ERTIM E W O R K
The general rule remains that no employee may be compelled to render
overtime work against his wifi. The following are the exceptions when employee
may be compelled to render overtime work:
1. When the country is at war or when any other national or local
emergency has been declared by the National Assembly or the Chief
Executive;
' Engheemg Equipment Inc. v. Mnister of .aba, G.R. No. L-64967, Sept 23,1985
2 PAL Employees Savings and Loan Association, Inc. [PESALA] v. NLRC, G.R. No. 105963, August 22,1996.
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2. When overtime work is necessary to prevent loss of life or property
or in case of imminent danger to public safety due to actual or
impending emergency in the locality caused by serious accident, fire,
floods, typhoons, earthquake, epidemic or other disasters or
calamities;
3. When there is urgent work to be performed on machines,
installations or equipment, or in order to avoid serious loss or
damage to the employer or some other causes o f similar nature;
4. When the work is necessary to prevent loss or damage to perishable
goods;
5. When the completion or continuation o f work started before the 8th
hour is necessary to prevent serious obstruction or prejudice to the
business or operations o f the employer; and
6. When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
It must be emphasized that an employee cannot validly refuse to render
overtime work under any of the foregoing circumstances. When an employee
refuses to render emergency overtime work under any o f the foregoing conditions,
he may be dismissed on the ground o f insubordination or willful disobedience o f
die lawful order of the employer.
8. U N D E R T IM E N O T O FFSET BY O V E R T IM E .
The following rules shall apply:
a) Undertime work on any particular day shall not be offset by overtime
on any other day.
b) Permission given to the employee to go on leave on some other day o f
the week shall not exempt the employer from paying the additional
compensation required by law such as overtime pay or night shift
differential pay.
9. WAIVER O F O V E R T IM E PAY.
The right to claim overtime pay is not subject to a waiver. Such right is
governed by law and not merely by the agreement o f the parties.1
While rights may be waived, the same must not be contrary to law, public
order, public policy, morals or good customs or prejudicial to a third person with a
right recognized by law.2
' Mercader v. MaiSa Polo Club, G.R No. L-8373, Sept 28,1956; Ciuz v. Yee Sing, G il No. t-12046. Oct 1959; Manila
Tenranal Co., Inc. v. CR. G .R No. L-9265, Apr! 29,1957,48 0 . G. 7, p. 2725,91 P h i 625.
2 Article 6, Civil Code; Pampanga Sugar Development Co, Inc. v. OR, G il No. L-39387, June 29,1982.
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But if the waiver is done in exchange for and in consideration of certain
valuable privileges, among them that of being given tips when doing overtime
work, there being no proof that the value of said privileges did not compensate for
such work, such waiver may be considered valid.1
10. E N T IT L E M E N T OF SEAFARERS T O O V E R TIM E PAY.
a. Actual overtime service necessary.
The correct criterion in determining whether or not seafarers are entitled
to overtime pay is not whether they were on board and cannot leave ship beyond
the regular eight (8) working hours a day, but whether they actually rendered
service in excess of said number of hours.2
In Sto/t-Nielsen? invoking the illegal dismissal o f a seaman whose contract
stipulates the payment of ‘fixed overtime, ” the Supreme Court, in reversing the
NLRC ruling that the seaman is entided thereto even for the remaining six (6)
months and three (3) days o f his contract, at which time he was no longer
rendering services as he had already been repatriated, cited its holding in the earlier
case of Cagatnpan? where it was ruled that the contract provision means that the
fixed overtime pay of 30% would be the basis for computing the overtime pay if
and when overtime work would be rendered. Simply stated, the rendition of
overtime work and the submission of sufficient proof that said work was actually
performed are conditions to be satisfied before a seaman could be entided to
overtime pay which should be computed on the basis o f 30% o f the basic monthly
salary. In short, the contract provision guarantees the right to overtime pay but the
entitlement to such benefit must first be established. Realistically speaking, a
seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for
the extra hours when he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair and unreasonable.”
In PCL Shipping* the Supreme Court found that private respondent was
not entided to overtime pay because he failed to present any evidence to prove that
he rendered service in excess o f the regular eight (8) working hours a day. But in
Acuna? petitioners’ claims for overtime pay were allowed despite their failure to
substantiate them. It was declared in this case that the claims o f OFWs against
foreign employers could not be subjected to the same rules o f evidence and
procedure applicable to complainants whose employers are locally based. While
normally, the Court would require the presentation o f payrolls, daily time records*35
’
’
3
1
5
8
Meralco Workers Union v. Mania Bedric Co, G.R. No. L-11876, May 29,1959.
SW-Nietsen Marne Servces (Phils.), Inc. v. NLRC, G.R. No. 105396, Nov. 19.1996,264 SCRA 307; 332 Phi. 340,352.
Siot-Nielsen Marine Services [Phfe.], Inc. v. NLRC, G.R. No. 109156, July 11,1996.
Caganpan v. NLRC, G.R. Nos. 85122-24, March 22,1991,195 SCRA 533.
PCL Shpping Philippines, Inc. v. NLRC, G.R No. 153031, Dec. 14,2006.'
Acuna v. Hon. CA, G.R. No. 159832, May 5.2006.
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and similar documents before allowing claims for overtime pay, in this case, that
would be requiring the near impossible. Here, it is private respondents who could
have obtained the records of their principal to refute petitioners’ claims for
overtime pay. By their failure to do so, private respondents waived their defense
and in effect admitted the allegations o f the petitioners. Accordingly, it was ruled
that private respondents were solidarily liable with their foreign principal for the
claims for overtime pay of petitioners.
b. Guaranteed overtime pay, not included in computation o f salary
for unexpired portion.
In the computation o f the monetary award to an illegally dismissed OFW,
the “guaranteed overtime” pay should not be included as part o f his salary for the
unexpired portion o f his contract.1 This is so because it is improbable that the
OI1*37W has rendered overtime work during the unexpired term of his contract.
Consequently, there is no factual or legal basis therefor.2
11. O V E R T IM E PAY C A N N O T CAUSE WAGE D IST O R T IO N .
In PAL Employees Savings,3 the petitioner’s contention that the agreed
salary rate in the employment contract which provides for twelve (12) normal
working hours per day should be deemed to cover overtime pay (although the
amount thereof was not suffleient to include overtime pay), otherwise serious
distortions in wages would result “since a mere company guard will be receiving a
salary much more than the salaries o f other employees who are much higher in
rank and position than him in the company,” is a flimsy argument, undeserving o f
consideration. Said the Supreme Court: “How can paying an employee the
overtime pay due him cause serious distortions in salary rates or scales? And how
can ‘other employees’ be aggrieved when they did not render any overtime
service?”
e.
COMPUTATION OF ADDITIONAL COMPENSATION
(RATES ONLY)
1. PR EM IU M PAY.
Article 934 o f the Labor Code enunciates the premium pay which refers to
the additional compensation for work performed w ithin eig h t (8) hours on non-
1 Bahia Shipping Services, Inc. v. Chua, G.R. No. 162195, April 8,2008.
* Stoft-Nietsen Marine Services [Phis.], Inc. v. NLRC, G R. No. 109156, July 11, 1996; Santiago v. CF Sharp Crew
Management, Inc., G.R. No. 162419, July 10,2007.
3 PAL Employees Savings and Loan Association, Inc. [PESALAJv. NLRC, G.R. No. 105963, August 22,1996.
1 Article 93. Compensation for Rest Day, Sunday a Holiday W ork-(a) Where an employee is made or permitted to work on
hs scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shat be entitled to such additional compensation fpr work performed on Sunday only when it is his established
rest day.
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work days, such as rest days and special days (or special holidays)1or regular
holidays.2
2. COVERAGE.
The premium pay benefit applies to all employees except.
1) Government employees, whether employed bv the National
Government or any of its political subdivisions, including those
employed in government-owned and/or controlled corporations with
origmal charters or created under special laws;
2) Managerial employees, if they meet all of the following conditions:
2.1. Their primary duty is to manage the establishment in which they
are employed or o f a department or subdivision thereof;
2.2. They customarily and regularly direct the work of two or more
employees therein;
2.3. They have the authority to hire or fire other employees of lower
rank; or their suggestions and recommendations as to hiring,
firing, and promotion, or any other change o f status of other
employees are given particular weight.
3) Officers or members o f a managerial staff, if they perform the
following duties and responsibilities:
3.1. Primarily perform work direedy related to management policies of
their employer,
3.2. Customarily and regulady independent judgment;
3.3. (a) Regularly and direedy assist a proprietor or managerial
employee in the management o f the establishment or subdivision
thereof in which he or she is employed; or (b) execute, under
general supervision, work along specialized or exercise discretion
and technical lines requiring special training, experience, or
knowledge; or (c) execute, under general supervision, special
assignments and tasks; and
3.4. Do not devote more than twenty percent (20%) of their hours
worked in a workweek to activities which are not direedy and
(b) When the nature of the wort: of the employee is such lhat he has no regular workdays and no regular rest days can be
scheduled he shal be paid an additional compensation of at least thirty percent (30%) of his regular wage for work
performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the
regular wage of the employee. Where such holiday work fals on the employee’s scheduled rest day, he shal be entitled to
an additions compensation of at least fifly per cent (50%) of his regular wage.
(d) Where te cotectve ba/gariing agreement or other appfcable employment contract stipulates the payment of a higher
premium pay than lhat prescribed under this Article, the emptoyer shall pay such higher rate.
’ No. 3 (A). 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
? Article 94. Labor Code on regular hoSday pay.
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closely related to the performance of the work desenbed in
paragraphs 3.1, 3.2, and 3.3 above.
4) Kasambahays and persons in the personal service o f another;
5) Workers who are paid by results, including those who are paid on
piece rate, takay.pakyaw or task basis, and other non-time work, if their
output rates are in accordance with the standards prescribed in the
regulations, or where such rates have been fixed by the DOLE
Secretary; and
6) Field personnel, if they regularly perform their duties away from the
principal or branch office or place o f business o f the employer and
whose actual hours o f work in the field cannot be determined with
reasonable certainty.1
3. D IST IN C T IO N S.
a. Regular holidays vs. special days/special holidays.
The principal distinctions2 between regular holiday, on the one hand,
and special day/special holiday, on the other hand, are as follows:
1. A covered employee who does not work during a regular holiday is paid
100% of his regular daily wage; while a covered employee who does not work
during a special day/special holiday does not receive any compensation under the
principle of “no work, nopay. ”
2. A covered employee who works during a regular holiday is paid 200% of
his regular daily wage; while a covered employee who works during a special
day/special holiday is only paid an additional compensation of not less than 30% of
the basic pay or a total of 130% and at least 50% over and above the basic pay or a
total o f 150%, if the worker is permitted or suffered to work on a special da//spedal
holiday which falls on his scheduled rest day.
Unless otherwise modified by law, order or proclamation, the following
are the four (4) special days or special holidays in a year under the law3 that shall be
observed in the Philippines:4
• Ninoy Aquino Day
-
Monday nearest August 21
• All Saints Day
-
November 1
• Feast of Immaculate
Conception o f Mary -
December 8
’ No. 3(B), Id.
3 It bears noting that under Section 2 of Executive Order No. 203 (June 30,1987], it is prwided that '[h]enceforth, the terms
legal a regular holiday" and 'special hoSda/, as used in laws, orders, rules and regulations a other issuances shall now be
referred to as ‘regular hofday" and 'special d a /, respectively.'
3 Executive Order No. 292, as amended by RA. No. 9849, and as further amended by R A No. 10956.
4 No. 3 [C], 2019 Handbook on Workers' Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
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b. Special days/special holidays vs. special working days or special
working holidays.
As distinguished from special days/special holidays as discussed above,
for work performed on a declared special working day or special working holiday, an
employee is entided only to his/her daily wage rate. No premium pay is required
since work performed on said day is considered work on an ordinary workday.2
An example of a special working holiday is the National Bible Day
prescribed under R.A. No. 11163, otherwise known as the ‘National Bible Day Act,”
which was signed into law on December 20,2018 by President Rodrigo R. Duterte.
It declared the last Monday of every year as National Bible Day. Another example
is the National Women’s Day provided for under R.A. No. 6949 [April 10, 1990]
which declared March 8th of every year as a special working holiday to celebrate it.345
c. Inclusion/non-inclusion o f COLA in the computation.
According to a Labor Advisor/ issued by the DOLE Secretary, while
COLA is included in the computation of the regular holidays, it is n o t included
in the computation of other wage-related benefits such as prem ium pay, overtim e
pay, night-shift differential pay, 13th m o n th pay and retirem ent pay.
4. COM PUTATIO N OF PREM IUM PAY F O R HOLIDAYS.
Iuibor Advisory No. 06, Series oj 2013? on the Payment of Wages for the
Regular Holidays, Special (Non-working) Days and Special Holiday, specifically
promulgated the following rules that shall apply:
1. REGULAR HOLIDAYS
* I f the employee did not work he/she shall be paid 100 percent of
his/her salary for that day. Computation: (Daily rate + Cost of Living
Allowance) x 100%. T he COLA is included in the com putation
of regular holiday pay.
• I f the employee worked, he/she shall be paid 200 percent o f
his/her regular salary for that day for the first eight hours.
Computation: (Daily rate + COLA) x 200%. T he COLA is also
included in com putation of regular holiday pay.
' Id.
7 CXXE Menxxandum Circular No. 1, March 8.2004.
3 Section 2. R A No. 6949.
4 Per Labor Advisory dated 7 July 2011 issued by former DOLE Secretary Rosalinda D'mapfe-Baidoz; See atso No. 3 [D],
2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
5 lssuedmOctober1,2013byAdingSecretayDanitoP.Cnjz.
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• I f the em ployee w orked in excess o f eight hours (overtime
work), he/she shall be paid an additional 30 percent of his/her
hourly rate on said day. Computation: Hourly rate o f the basic daily
wage x 200% x 130% x number o f hours worked.
• I f the em ployee w orked during a regular holiday that also falls
on h is/h er rest day. he/she shall be paid an additional 30 percent o f
his/her daily rate o f 200 percent. Computation: (Daily rate + COLA)
x 200%] + (30% P aily rate x 200%)].
• I f the em ployee w orked in excess o f eight hours (overtim e
work) during a regular holiday that also falls on h is/h er rest
day, he/she shall be paid an additional 30 percent o f his/her hourly
rate on said day. Computation: (Hourly rate o f the basic daily wage x
200% x 130% x 130% x number of hours worked);
Sim plified Com putation:
a. If w ork is rendered on an employee’s regular workday •
If unworked - 100%
•
If worked - 1st 8 hours - 200%
•
Work in excess o f 8 hours - plus 30% o f hourly rate on said day
b. If it is an em ployee’s rest day •
Ifu nw ork ed -1 0 0 %
•
If worked - first 8 hours - plus 30% of 200%
•
Work in excess of 8 hours - plus 30% o f hourly rate on said day
2. SPECIAL fN O N -W O R K IN Q DAYS OR SPECIAL
HOLIDAYS
• I f die em ployee did not work, the ' ‘no work, no pay” principle
shall apply, unless there is a favorable company policy, practice, or
CBA granting payment on a special day.
• I f the em ployee worked, he/she shall be paid an additional 30
percent o f his/her daily rate on the first eight hours o f work.
Computation: [p aily rate x 130%) + COLA).
• I f the em ployee w orked in excess o f eight hours (overtim e
work), he/she shall be paid an additional 30 percent of his/her
hourly rate on said day. Computation: (Hourly rate o f the basic daily
wage x 130% x 130% x number of hours worked).
• I f the em ployee w orked during a sp ecial day that also falls on
h is/h er rest day, he/she shall be paid an additional fifty percent o f
his/her daily rate on the first eight hours of work. Computation:
[Paily rate x 150%) + COLA].
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I f the employee worked in excess o f eight hours (overtime work)
during a special day that also falls on his/h er rest day. he/she
shall be paid an additional 30 percent of his/her hourly rate on said
day. Computation: (Hourly rate o f the basic daily wage x 150% x
130% x number of hours worked).
Simplified Computation:
a. If unworked • No pay, except if there is a company policy, practice, or collective
bargaining agreement (CBA) which grants, payment of wages on
special days even if unworked.
b. If worked • First 8 hours - plus 30% of the daily rate of 100%
• Work in excess of 8 hours - plus 30% of hourly rate on said day
c. If falling on the em ployee’s rest day and i f worked • First 8 hours - plus 50% o f the daily rate of 100%
• Work in excess of 3 hours - plus 30% of hourly rate on said day
6*1.
FACILITIES VS. SUPPLEMENTS
(NOTE: This is included under this topic of Hours of Work.
For better presentation, it s discussed under the topic "B. Wages", infra)
3.
W E E K L Y R E S T P E R IO D S
1. DURATION.
It shall be the duty o f every employer, whether operating for profit or not,
to provide each of his employees a weekly rest period o f not less than twentyfour (24) consecutive hours after every six (6) consecutive norm al work
days.'
2. PREROGATIVE O F E M PL O Y E R T O S C H E D U L E WEEKLY REST
DAY; EX C EPTIO N - R EL IG IO U S G RO U N D .
The employer has the prerogative to determine and schedule the weekly
rest day of his employees subject to the CBA and such rules and regulations as the
DOLE Secretary may provide. However, the employer shall respect the preference
of emplovees as to their weekly rest day when such preference is based on
religious grounds.12
1 Article 91(a) tabor Code.
2 Article 91(b; Id.
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In other words, the employer’s right and prerogative is subject to the
preference in the choice by the employee o f his rest day based on religious grounds.
Article 91, in fact, makes the employer duty-bound to respect such preference of
the employee if based on religious grounds. Where, however, the choice o f the
employees as to their rest day based on religious grounds will inevitably result in
serious prejudice or obstruction to the operations o f the undertaking and the
employer cannot normally be expected to resort to other remedial measures, the
employer may so schedule the weekly rest day o f their choice for at least two (2)
days in a month.1*
3. SUNDAY N O T T H E REST DAY D ESIG N A T E D BY LAW.
With the repeal of the Blue Sunday Laifi by the Labor Code,3 Sunday is no
longer the rest day designated by law. Consequent to such repeal, the rule now is
that all establishments and enterprises may operate or open for business on
Sundays and holidays provided that the employees are given the weekly rest day
and the resultant benefits as provided in the law and its implementing rules.4
4. W H E N EM PL O Y E R MAY R E Q U IR E W ORK O N REST DAY.
The employer may require any o f its employees to work on their
scheduled rest day for the duration of the following emergency and exceptional
conditions:
a) In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster
or calamity, to prevent loss o f life and property, or in case o f Jorce
majeure or imminent danger to public safety;
b) In case o f urgent work to be performed on machineries, equipment, or
installations, to avoid serious loss which the employer would otherwise
suffer,
c) In the event of abnormal pressure o f work due to special
circumstances, where the employer cannot ordinarily be expected to
resort to other measures;
d) To prevent serious loss of perishable goods;
e) Where the nature o f the work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of the
crew members of a vessel to complete a voyage and in other similar
cases; and
1 Section 4, Rule ill, Book III, RuJes to Implemert the Labor Code.
RA. No. 946 (June 20,1953], otherwise known as fie 'Blue Sunday Law,’ provides that no commercial, industrial or
agricultural enterprise or establishment, including stores and shops of any kind, shall be open on any Sunday. Christmas
Day, New Year's Day, Holy Thursday, and Good Friday, from 1200 midnight to 12.00 midnight
3 Article 317 (302], Labor Code; Section 1 |q]. Rule III, Book VII. Rules to Implement fie Labor Code.
4 Section 2. Rule III, Book III, Ibid.
7
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f) When the work is necessary to avail o f favorable weather or
environmental conditions where performance or quality o f work is
dependent thereon.1
5. EXCLUSIVE NATURE OF THE ENUMERATION.
No employee shall be required against his will to work on his scheduled
rest day except under the circumstances provided therein where work on such day
may be compelled.2*However, in case work on rest day is required and not one of
the said circumstances is present, the employee may work during such rest day b u t
only on voluntary basis. And once an employee volunteers to work on his rest
day, he should express such willingness and desire to work in writing. Accordingly,
he should be paid the additional compensation for working on his rest day under
the law.1
6 . SOME PRINCIPLES ON WEEKLY REST DAY.
• Where the weekly rest is given to all employees simultaneously, the employer
should make known such rest period by means o f a written notice posted
conspicuously in the workplace at least one (1) week before it becomes
effective.4
• Where the rest period is not granted, to all employees simultaneously and
collectively, the employer shall make known to the employees their respective
schedules of weekly test day through written notices posted conspicuously in
die workplace at least one (1) week before they become effective.5
• An express waiver o f compensation for work on test days and holidays
provided in an employment contract which fixes annual compensation o f the
employees is not valid and does not operate to bar claims for extra
compensation therefor.6
• Rest day cannot be offset by regular workdays.7
4.
HOLIDAYS
1. LIST OF HOLIDAYS.
The current regular holidays and nationwide special holidays are as
follows:
’ Secfion 6, Rule 111.Book 111, Rules to Implement the Labor Code; AiScle 92, Labor Code.
2 Id.
* U
4 Section 5 & Rule HI, Book III, Ibid.
5 Section 5 [b], Rule fll8ock IB, Ibid.
* Ashe)dinMeraflyDfugCo,lnc. v. Dayao,GJtNo.l-3W52,Sept30.1982.
' Lagafc v. NLRC. G H No. 121004, Jan 28.1998.
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fa) Regular H olidays
New Year’s Day
Maundy Thursday
Good Friday
Eidul Fitr
EidulAdka
-
January 1
Movable Date
Movable Date
Movable Date
Movable Date
Araw ng Kagitingan
(Bataan and Corregidor
Day)
Labor Day
Independence Day
Day
Bonifacio Day
Christmas Day
RizalDay
-
Monday nearest April 9
Monday nearest May 1
Monday nearest June 12Nationai Heroes
Last Monday o f August
Monday nearest November 30
December 25
Monday nearest December 30
(b) N ationw ide Special H olidays
Ninoy Aquino Day All Saints’ Day
Last Day o f the Year -
Monday nearest August 21
November 1
December 31
2. TWELVE (12) GUARANTEED PAID REGULAR HOLIDAYS.
Article 94 o f the Labor Code and the subsequent amendments1 thereto
guarantee a worker the enjoyment o f twelve (12) paid regular holidays in a year.
This is important for purposes o f reckoning certain divisors and computation o f
employee benefits.
The provision on holiday pay is m andatory, regardless o f whether an
employee is paid on a monthly or daily baas.2
3. HOLIDAY PAY RULE
"Holiday pay” refers to the payment of the tegular daily wage for any
unworked regular holiday.3 The H oliday Pay Rule, therefore, applies to
entidement to holiday pay during tegular holidays and not during special non­
working days. Thus, every employee covered by the H oliday Pay Rule is entitled
to the minimum wage rate (D aily Basic Wage and COLA). This means that the
employee is entitled to at least 100% o f his minimum wage rate even if he did not
report for work, provided he is present or is on leave of absence with pay on the
workday immediately preceding the holiday. Should the worker work on that day.
1 SuchasExecutiveOnlerNo.203l R A .No.9177,R A N o.9492andR A N o.9849.
2 Insular Bank of Asia and America Employees' Union (IBAAEU) v. W ong, G.R. No. L-52415, O ct 23,1984,132 SCRA663;
Chartered Bark Employees Association v. Opte, G it No. L-44717, Aug. 28.1985,138 SCRA 273; Manfrade/FMMC
Division Employees and Workers Union v. Bacungan, G.R. No. 1-48437, Sept 30,1986,144 SCRA 510.
3 No. 2 (AJ, Id.: Section 3, Rule tV, Book III, Rides to Implement (he Labor Code; OOLE Memorandum Ocular No. 01, March
8,2004.
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such work performed on that day would merit at least twice or two hundred
percent (200%) of the wage rate o f the employee.1
4. COVERAGE OF THE HOLIDAY PAY RULE; EXEMPTED
EMPLOYEES.
As a general rule, the holiday pay benefit is applicable to all employees.
The following, however, are not covered by this benefit as they are considered
exempted employees:
1. Government employees, whether employed by the National
Government or any o f its political subdivisions, including those
employed in government-owned and/or controlled corporations with
original charters or created under special laws;
2. Those of retail and service establishments regularly employing less than
ten (10) workers;
3. Kasambakay and persons in the personal service o f another;
4. Managerial employees, if they meet all o f the following conditions:
4.1. Their primary duty is to manage die establishment in which they
are employed or o f a department or subdivision thereof,
4.2. They customarily and regularly direct the work o f two or mote
employees therein; and
4.3. They have the authority to hire or fire other employees o f lower
rank; or their suggestions and recommendations as to hiring, firing,
and promotion, or any other change o f status o f other employees
are given particular weight
5. Officers or members o f a managerial staff, if they perform the
following duties and responsibilities:
5.1. Primarily perform work directly related to management policies of
their employer,
5.2. Customarily and regularly exercise discretion and independent
judgment;
5.3. (a) Regularly and directly assist a proprietor or managerial
employee in the management o f the establishment or subdivision
thereof in which he or she is employed; or (b) execute, under
general supervision, work along specialized or technical lines
requiring special training, experience, or knowledge; or (c) execute,
under general supervision, special assignments and tasks; and
5.4. Do not devote more than twenty percent (20%) o f their hours
worked in a workweek to activities which are not directly arid
closely related to the performance o f the work described in
paragraphs 5.1,5.2, and 5.3 above.
1 No. 2(C), id: Sedioo4, RUe N , Book III, Rules to Implement the laborCode.
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IA B O R STA N D A R D S
6. Field personnel and other employees whose time and performance are
unsupervised by the employer, including those who are engaged on task
o r contract basis, purely commission basis o r those who are paid a fixed
amount for performing work irrespective o f die time consumed in the
performance thereof.1
5. RIGHT TO HOLIDAY PAY IN CASE OF ABSENCES.
1) Employees on leave o f absence with p a y - entitled to holiday pay
when they are on leave o f absence with pay.2
2) Em ployees on leave o f absence without pay on the day
im m ediately preceding the regular holiday - may not be paid the
required holiday pay if they have not worked on such regular holiday.3
3) Employees on leave while on SSS or employee's compensation
benefits - Employers should grant the same percentage of the holiday
pay as the benefit granted by competent authority in the form of
employee's compensation or social security payment, whichever is
higher, if they are not reporting for work while on such benefits.4
4) When day preceding regular holiday is a non-working day or
scheduled rest day - should not be deemed to be on leave o f absence
on that day, in which case, employees are endded to the regular
holiday pay if they worked on the day immediately preceding the non­
working day or rest day.5
6 . RULE WHEN REGULAR HOLIDAY FALLS ON A SUNDAY.
The latest DOLE Handbook states that when a regular holiday falls on a
Sunday, the following Monday shall not be a holiday, unless a proclamation is
issued declaring it a special day. The President issues a proclamation in advance for
the following year which specifies the dates when all the holidays should be
celebrated or observed. In the absence o f a presidential proclamation, what should
be observed is the provision o f R A No. 9849 which states that if the holiday falls
on a Sunday, the holiday will be observed on the Monday that follows.
7. SUCCESSIVE REGULAR HOLIDAYS.
Where there are two (2) successive regular holidays, like Maundy Thursday
and Good Friday, an employee may not be paid for both holidays if he absents
himself from work on the day immediately preceding the first holiday, unless he
1
2019 Karx9xiokm W o(1(ers'SatidDiyM on^Bene% issued by tie Bureau of WoiVingCont2ions, DOLE.
1 Section 6 (a], Rufe IV, Book til, RuSes to Implement tie Labor Code; No. B[E), DOLE Handbook on Woricas Sfalutay
5 &S^SlV,BooklIl,lbii:No.lip,lbli
< Sec6on6§t>l,Rute(V,BockUl,lbi(L;No.a[g.tbil
5 Sec&n6fcj,RuleIV.Bock III Itu t-N a B I^ b k L
e N a2 ^ 201 9K an ± o o k on WExtos^SatAxyMonetiiyBeneSs, issued by Ihe Bureau ofWatingConclSons. DOLE
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works on the first holiday, in which case, he is entitled to his holiday pay on the
stcottd holiday. *
8. TWO REGULAR HOLIDAYS FALLING O N T H E SAME DAY.
There are cases in the past2 when two (2) regular holidays fell on one and
the same day, such as when Aranr ng Kagtingan falls on the same day as Maundy
Thursday or Good Friday. The rule5 is that a covered employee is entided to the
following;
o If unworked - 200% for the two regular holidays;
o If worked - 200% foe the two regular holidays plus premium of 100% for
work on that day for a total o f 300% o f the daily wage.4
The 200% represents the two (2) guaranteed paid regular holidays o f Aralv
ng Kagtingan and either Maundy Thursday or Good Friday. If w orked another 100% is
added to his 200% basic pay for working not mote than eight hours in consonance
with the requirement of wage legislations. However, if the same day happens to be
the employee’s scheduled test day, and he is permitted or suffered to work, he is
entided to an additional 30% of his wage for that day, that is, 300% o f his daily rate,
or a total of 390%.* It bears noting that the DOLE Explanatory Budetirfi enunciating
the above manner o f reckoning die holiday pay has been declared valid in Asian
Transmission Corporation v. CA?
9. RIGHT TO HOLIDAY PAY OF TEACHERS.
a. Private school teachers, in general.
Private school teachers, including faculty members o f colleges and
universities, may not be paid for die regular holidays during semestral vacations.
They shall, however, be paid for the regular holidays during Christmas vacation.8
b. Holiday pay o f hourly-paid teachers.
A school is exempted from paying hourly-paid faculty members their pay
for regular holidays, whether the same be during die regular semesters o f die
1 Section 10, R i^ IV, Book 111,l^ to lrn p lm ia d the LabvCod^ See also N a 2 p , 2019 Hancfixx)); on Wotecs’ StaU xy
MonebyBen^its,issuedbylbe6urBauofWal(irigCondiBonswDOl£.
2 S urtas»tethappenedm A p rf9.1993*toA raw ng K ag2^arrtG oalFtid ayfeS O Tt!»sarradayandw A pti9,
April9,2004 wtaiboftAiavngKagSngan and Good Fridayfelon Sesame day.
1 Per 'Explana&xy Biiefin on W afas' EnHemert to HoKday Pay on 9 Aprt 1993. Arsw ng Kagfiigan and Good Friday*
issuedm k^11,1993t^O O lE U nde^ecretafyC resend3roB .T[r^TlrisB iM iv/asreprci(ixedonjanuaiy23,
1998,vuhenborii Maundy ThrsdaymdAiawngKagSngan also teSon fiie sameday-Apr19,1993.
4 U^SecQon10,RuteiV, BookUl,Riiieslolmplement1heL^orCo(Je.
» No. 2, H i
4 Bq^an^BuDelin on Wotos'BiStlementtoKoGday Pay on9A(vi 1993, ArawngKagifingan and Good Friday issued on
March11.1993byOOI£UndeisecretaiyC(esendamB.Tr^ano.
’ GR No. 144664, March IS. 2004.
9 Section 8 [a), Rule IV, Book fll,b il.; No. IIQ , H i
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LABORSTANDARDS
147
school year or during semestral, Christmas, or Holy Week vacations. However, it is
liable to pay the faculty members their regular hourly rate on days declared as
special holidays or if, for some reason, classes are called off or shortened for the
hours they are supposed to have taught, whether extensions o f class days be
’ ordered or not; and in case of extensions, said faculty members shall likewise be
paid their hourly rates should they teach during said extensions.1
10. RIGHT TO HOLIDAY PAY O F PIE C E WORKERS, TAKAY AND
OTHERS PAID BY RESULTS.
a. Holiday p a y o f piece workers, takay or employees paid by results.
Where a covered employee is paid by results or output such as payment
on piece-work, his holiday pay should not be less than his average daily earnings
for the last seven (7) actual w orking days preceding the regular holiday. In no
case, however, should the holiday pay be less than the applicable statutory
minimum wage rate.2
b. Workers p a id by results classiSed into supervised and
unsupervised.
S'
2?
The principal test to determine entitlement to holiday pay is whether the
employees’ time and performance o f the work ate “supervised" or “unsupemsed" by
their employer. If supervised, the employee is entided to holiday pay. I f
unsupervised, he is not.3
The distinctions between supervisedand unsupemsedworkers paid by results
are as follows:
(1) Those whose Ja n e and, performance are supervised by the
employer. Hem, diem is an dem ent o f control and supervision over
die manner as to how the work is to be performed. A piece-rate
worker belongs to this category especially if he performs his work in
the company premises; and
(2) Those whose time and performance am unsupemsed Here, die
employer’s control is over the result o f the work. Workers on pakyao
and takay basis belong to this group. Both classes o f workers are
paid per unit accomplished. Piece-rate payment is generally practiced
in garment factories where work is done in the company premises,
while payment on pakyao and takay basis is commonly observed in the
i
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’ Jose Rzal CoOegev.NLRC.GR No.65482, December 1,1987.
? Section 8 jb), fate IV, Book (11, Rules to Implement Ihe Labor Code; No. 0 G j, DOLE Handbook on Workers Statutory
Monetary Benefits.
3 Labor Congress of the Phippinesv. NLRC, G J l N a 12838, May 21.1998,290 SCRA 509; Tan v lagrama. G R No.
151228. August 15,2002.
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agricultural industry, such as in sugar plantations where the work is
performed in bulk or in volumes, hence, difficult to quantify.1
11. RIGHT T O HOLIDAY PAY O F SEASONAL WORKERS.
Seasonal workers are entitled to holiday pay while working during the
season. They may not be paid the required regular holiday pay during off-season
where they are not at work.2
12. RIGHT TO HOLIDAY PAY O F SEAFARERS.
Anv hours of work or duty including hours o f watchkeeping performed
by the seafarer on designated rest days and holidays shall be paid rest day or holiday
pay.345
13. MONTHLY-PAID EM PLOY EES, N O T EXCLUDED.
In the cases of IBAAEU v. Indong,* and The Chartered Bank v. Qple} the
provision of Section 2, Rule IV, Book III o f the Labor Code’s Implementing Rules,
which provides that:
"SEC. 2. Statu: of employeespad by the month. - Employees
who arc uniformly paid by the month, irrespective of the number of
working days therein, with a salary of not less than the statutory or
established minimum wage, shall be presumed to be paid for all
days in the month whether worked or not
“For this purpose, the monthly minimum wage shall not
be less than the statutory minimum wage multiplied by 365 days
divided by twelve.”
was declared null and void by the Supreme Court, alongside with Polity Instructions
No. 9 [Paid Legal Holidays] issued by the D O LE Secretary because in the guise of
clantying the provision on holiday pay o f the Labor Code, the same, in effect,
■amended it by amplifying the scope o f its exclusion.6 The Labor Code does not
exclude monthly-paid employees from the benefit o f holiday pay. However, the
implementing rules on holiday pay excluded monthly-paid employees from the said
benefit by inserting Section 2 under Rule IV, Book III thereof which provides that
monthly-paid employees are presumed to be paid for all days in the month,
whether worked or not. Further, in Polity Instructions No. 9, the D O LE Secretary
categorically declared that the benefit of holiday pay is intended primarily for dailypaid employees when the law clearly states that every worker should be paid his
’ lambov NLRC.G.R.No. 111042,October26,1999,317SCRA420.
? Section 3 (c). Rule IV. Book III, Rules to Inplement the Labor Code; No. IIGJ, DOLE Handbook on Workers Statutory
Monetary Benefits.
3 Section 11 (Overtime and Hobdays), Memorandum Circular No. 10, Series of 2010, October 26.2010 [Amended Standard
Terms and Conditions Governing the Overseas Employment of FJipino Seafarers On-Board Oceangoing Ships].
4 Insular Bank of Asia and America Employees Union [IBAAEU] v. kxaong, G.R No. L-52415. Oct 23.1984,132 SCRA 663.
5 The Chartered Bank Employees Association v. Ople. G .R No. 1-44717, Aug. 28,1985.
4 See also Viluga v. NLRC, G.R No. 75038, Aug. 23,1993,225 SCRA 537.
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regular holiday pay. This is a flagrant violation of the mandatory directive o f Article
4 of the Labor Code which states that doubts in the implementation and
interpretation of the Labor Code, including its implementing rules, should be
resolved in favor o f labor. Moreover, it should always be presumed that the
legislature intended t'o enact a valid and permanent statute which would have the
most beneficial effect that its language permits.1
14. SOM E IM PO R T A N T P R IN C IP L E S O N HOLIDAYS.
• N on-M uslim s are entitled to M uslim holiday pay during M uslim
holidays2 considering that all private corporations, offices, agencies, and
entities or establishments operating within the designated Muslim provinces
and cities are required to observe Muslim holidays, hence, both Muslims and
Christians working within the Muslim areas may not report for work on the
days designated by law as Muslim holidays.3
• The day designated by law for holding a general election is deemed a regular
holiday.45But recent issuances by the President declared general elections as
special (non-working) holidays. For instance, the May 9, 2016 national and
local elections and the May 13, 2019 midterm elections were declared by
President Benigno Aquinos and President Rodrigo Duterte,6 respectively, as
special (non-working) holidays.
• Offsetting of holiday work with work on regular days is not allowed.7
5.
SERVICE INCENTIVE LEAVE
1. R IG H T T O SERV IC E IN C E N T IV E LEAVE.
Under Article 958 of the Labor Code, every covered employee who has
rendered at least one (1) year of service is entitled to a yearly service incentive leave
’ Insular Batk of Asia and America Employees Union pBAAEU)v.lndong, supra.
3 San Miguel Corporation v. The Hon. CA, G.R. No. 146775, Jan. 30,2002.
3 1999 Handbook on Wooers’ Statutory Benefits, approved by then DOLE Secretary Benvenido E. Laguesma on December
14,1999.
* Artide 94(c), Labor Code; See Associated Labor Unions [ALU)-TUCP v. Letrondo-Montejo, G.R. No. 111938. Oct 14.
1994,237 SCRA 621 wrtch irjvotves the election of Sangguniang Kabataan (Si^. The term 'general ejections' means, in the
context of the Sangguniang Kabataan (SK) elections, the regular etections for members of the SK, as (isfinguished from the
special elections for such officers.Moreover, the fact that only those between 15 and 21 took part in the election for members
of the SK does not make such election any less a regular local election. Consequent, it was held that whether in the contexl
of the CBA or the Labor Code, Dec. 4,1992 was a holiday for vJVtch holiday pay should be paid by respondent employer.
5 Per Presidential Proclamation No. 1254 (April 25,2016).
6 Per Presidential Proclamation No. 719 (May 9,2019).
3 Lagatic v. NLRC, G R No. 121004, Jan. 28,1998.
8 ART. 95. R ig ht to service incertw leave. - (a) Every employee who has rendered at least one year of service shal be
entitled to a yearty service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation
leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in
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(SIL) o f five (5) days with pay.*1The phtase “leave withpay”means that the employee
is endded to his full compensation during his leave o f absence from work.2
The term “at least oneyear ofsenate”should mean service within twelve (12)
months, whether continuous or broken, reckoned from the date the employee
started working, including authorized absences and paid regular holidays, unless the
number of working days in the establishment as a matter o f practice or policy, or
that provided in the employment contract, is less than twelve (12) months, in which
case, said period should be considered as one (1) year for the purpose o f
determining enddement to the service incentive leave benefit3
In JPL p. CA,4 where an employee was never paid his service incentive
leave during all the time he was employed, it was held that the same should be
computed not from the start o f employment but a year after commencement of
service, for it is only then that die employee is endded to said benefit This is
because the entitlement to said benefit accrues only from the time he has rendered
at least one year of service to his employer. The computation thereof should only
be up to the date o f termination o f employment There is no cause for granting
said incentive to one who has already terminated his relationship with the
employer.
2. COVERAGE.
This benefit applies to all employees except
1. Government employees, whether employed by the National
Government or any o f its political subdivisions, including those
employed in government-owned and/or controlled corporations with
original charters or created under special laws;
2. Persons in the personal service of another;
3. Managerial employees, if they meet all of die following conditions:
3.1. Their primary duty is to manage the establishment in which they
are employed or o f a department or subdivision thereof,
3.1 They customarily and regularly direct the work o f two or more
employees therein; and
3.3. They have the authority to hire or fire other employees o f lower
rank; or their suggestions and recommendations as to hiring
orGnandalccmdfiohtfsuchesteijGshmertL
(c) T te grant of benefl in excess of that provided heresi shall not be made a subject of arbitration or any court or
adrrinistraSveacGon.
1 No. 7 |AJ, 2019 Handbook on Workers' Sfe&Jtory Monetay Benefits, issued by the Bureau of Wotting Corxffions, DOLE;
See a^o Article 95 ^4. l-obor Code: Secfior 2. Rule V. Book □. F%uSesto tmplemer^the L^xx Code.
2 Esoosurav.San^«2lBreway,ln(x16RNo.L-16096;Jan.31,1962.
3 Secfan 3, R ile V, Book 10, Rules to Implement the labor Code: No. VI [Bl, DOLE Han&ook on Workers Statutory
Monetay Benefc; Integrated Contractorand P artin g Worts, he. v. M R C , G R No. 152427, Aug. 9,2005.
< JPL Martefog Prcmofcns v. CA, G R No. 151966. July 8.2005.
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fixing, and promotion, or any other change o f status o f other
employees are given particular weight.
4. Officers or members o f a managerial staff, if they perform the
5.
6.
7.
8.
4.1. Primarily perform work directly related to management policies o f
their employer;
4.2. Customarily and regularly exercise discretion and independent
judgment;
4.3. (a) Regularly and directly assist a proprietor or managerial
employee in the management o f the establishment or subdivision
thereof in which he or she is employed; or (b) execute, under
general supervision, work along specialized o r technical lines
requiring special training experience, or knowledge; or (c)
execute, under general supervirion, special assignments and tasks;
and
4.4. Do not devote more than twenty percent (20%) o f their hours
worked in a workweek to activities which are not directly and
closely related to the performance o f the work described in
paragraphs 4.1,4.2, and 4.3 above;
Held personnel and those whose time and performance are unsupervised
by the employer,1including those who are engaged on task or contract
basis, purely commission basis, or those who are paid a fixed amount
for performing work irrespective o f the time consumed in the
performance thereof,2
Those already enjoying this benefit;
Those enjoying vacation leave with pay of at least five (5) days; and
Those employed in establishments regularly employing less than ten
(10) employees.3
3. KASAM BAHAYSASE NOW E N T IT L E D T O SIL.
The grant o f 5-day SIL to domestic workers or kasambahtgs is not based
on Article 95 o f the Labor Code but on the following provision of R.A. 10361:4
“SEC. 29. Lease Benefit. - A domestic worker who has
rendered at least one (1) year of service shall be entitled to an annual
service incentive leave of five (5) days with pay: Provided, That any
unused portion of said annual leave shall not be cumulative or carried
SeealsoAiftle82, labor Code; Section 1,R ubV, Book Bl, Rules b Implementthe labor Code
2 SecSont (d).RidoV^efvtcelncen&ve(jBave>.6ookUI.RuIestDirnplementtheLatx}rCo(ie.
2 No. 7 (A), 2019 Handbook on W a te tf Staritay Monetary Benefis, issued by the Bureau ot Wotking CondSoos, DOLE;
See also Article82, Labor Code; Section 1, Rule V, Book Rules to Implementthe labor Code
« O te ft^ J ro u n a s T J o m e s fc V M e B A tf(x ’B atasK asaitaha/’ a rta p p rw e d b y P ^ ^
Januay 18,2)13.
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over to the succeeding years. Unused leaves shall not be convertible to
cash.”1
Clearly, as distinguished £rom the SIL under Article 95, this kind o f SIL
benefit is not convertible to cash, if unused.
4. USAGE/CONVERSION T O CASH; BASIS O F C O M PU TA TIO N .
a. Use o f SIL for sick and vacation leave.
The service incentive leave may be used for sick and vacation leave
purposes.2
b. Commutability to cash i f unused.
The unused service incentive leave is commutable to its money equivalent
at the end of the year.3
c. Basis o f computation.
In computing the SIL benefit, the basis is the salary rate at the date of
conversion.4 The use and conversion of the SIL benefit may be on a pro-rata basis.5
d. Illustration.
To illustrate the computation o f the SIL cash commutation, an employee
who is hired on January 1,2018 and resigned on March 1,2019, assuming he has
not used or commuted any of his accrued SIL, is entitled upon his resignation to
the commutation of his accrued SIL as follows:6
SIL earned as of D ecem ber 31,2018
-
Five (5) days
Proportionate SIL for Jan. and Feb.
2019 (2 /1 2 x 5 days)
Total accrued SIL as of M arch 1, 2019
- 0.833 day
- 5.833 days
5. RIGHT O F PART-TIME W ORKERS T O SIL.
In an Advisory Opinion issued by DOLE’s Bureau o f Working Conditions,
it was declared that part-time workers are entided to the full benefit o f the yearly
five (5) days SIL with pay. The reason is that the provision o f Article 95 of the
’ See Section 7, Rule IV, Implementing Fules and Regulations of R A No. 10361 which provides: “SECTION 7. Service
Incen&ve Leave. - A Kasambahay Abo has rendered at least one (1) year of service shal be entitled to an annual service
incentive leave of at least five (5) days with pay.
‘Any unused portion of said annual leave shal not be cumulative or carried over to the succeeding years. Unused leaves
shal not be convertible to cash.'
1 No. 7 |C], 2019 Handbook on Workers' Stotutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
3 Section 5, Rule V, Book III, Rules to Implement the Labor Code: No. 7 [C], 2019 Handbook on Workers'Statutory Monetary
Benefits, issued by the Bureau of Workhc Conditions, DOLE.
4 No. 7 p |. bid.
5 Id This is based on the opinion of DOLE Legal Service
6 Id., based on the opinion of DOLE Legal Service.
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Labor Code and its implementing rules, speak o f the number o f months in a year
for entitlement to said benefit Resultantly, part-time employees are also entitled to
the full SIL benefit and not on a piv-rata basis.1
6. CU RIO U S A NIM AL D O C T R IN E .
Auto Bus Transport System, Inc. v. Bautista,2 clarified the correct reckoning o f
the prescriptive period for SIL pay in that it is a curious anim al in relation to
other benefits granted by the law to every employee. This is so because in the case
of SEL, the employee may choose to either use his leave credits or commute it to its
monetary equivalent if not exhausted at the end of the year. Furthermore, if the
employee entided to SIL does not use or commute the same, he is entided upon his
resignation or separation from work to the commutation of his accrued service
incentive leave. In other words, an employee who has served for one year is entided
to it. He may use it as leave days or he may collect its monetary value. To limit the
award to three years is to unduly restrict such right.3
Correspondingly, it can be conscientiously deduced that the cause o f
action o f an entided employee to claim his SIL pay accrues from the moment the
employer refuses to remunerate its monetary equivalent if the employee did not
make use o f said leave credits but instead chose to avail o f its commutation.
Accordingly, if the employee wishes to accumulate his leave credits and opts for its
commutation upon his resignation or separation from employment, his cause o f
action to claim the whole amount of his accumulated SIL shall arise when the
employer fails to pay such amount at the time of his resignation or separation from
employment.
Applying Article 306 [291] of die Labor Code in light o f this peculiarity o f
the SIL, it can be concluded that the three (3)-year prescriptive period commences,
not at the end of the year when the employee becomes entided to the commutation
of his SIL, but from the time when the employer refuses to pay its monetary
equivalent after demand o f commutation or upon termination o f the employee's
services, as the case may be.
Thus, in the 2017 case o f Lourdes C. Rodrigue^ v. Park N Ride, Inc,*
involving an employee who has not availed o f SIL for the entire 25 years o f her
employment, it was held that the prescriptive period with respect to petitioner's
claim for her entire SIL pay commenced only from the time o f her resignation or
separation from employment. Since petitioner had filed her complaint for illegal
dismissal on October 7, 2009, or a few days after her resignation in September
2009, her claim for SIL pay has not prescribed. Accordingly, petitioner was
1 Advisory Opinion of the Bureau of WorVng Condftons, Department of Labor and Employment, on Conditions of
Employment of Part-time Workers, Cebu Institute of Technology v. Ope, G.R. No. L- 55870, Dec. 18,1987,156 SCRA 629.
* G il No. 156367. May 16.2005.
3 Fernandezv. NLRC, G.R. No. 105892, Jan. 28,1998,285 SCRA 149.176; 349 PM 65.
* LourdesC.Rodriguezv.ParkNRide,Inc.,G.R.No 222980.March20,2017
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awarded SIL pay for her entire 25 years o f service— from 1984 to 2009— and not
only three (3) years' worth (2006 to 2009) as determined by the Court o f Appeals.1
6.
SERVICE CHARGES
1. ESTABLISHMENTS COVERED.
Article 962 of the Labor Code enunciates the rules on service charges
which apply only to establishments collecting service charges, such as hotels,
restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars,
casinos and gambling houses, and similar enterprises, including those entities
operating primarily as private subsidiaries of the government.3
2. EMPLOYEES COVERED; EXCLUSION.
The same rules on service charges apply to all employees of covered
employers, regardless of their positions, designations or employment status, and
irrespective of the method by which their wages are paid except those receiving
more than P2,000.00 a month.4
Specifically excluded from coverage arc employees who are receiving
wages of more than P2,000.00 a month.5 However, it must be pointed out that the
P2.000.00 ceiling is no longer realistic considering the applicable minimum wages
prevailing in the country. Hence, it must be disregarded.6
3. D ISTRIBU TION .
All service charges collected by covered employers are required to be
distributed at the following rates:
1) 85% to be distributed equally among the covered employees; and
2) 15% to management to answer for losses and breakages.7
The share of the employees referred to above should be distributed and
paid to them not less often than once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days.1
1 See also Baroga v. Quezon Colleges of the North, G il No. 235572, Dec. 05,2018 where (he award of SIL from 1985 to
retirement granted by the CA was affirmed by tfie Supreme Court
7 ART. 96. S ervice charges. • All service charges collected by hotels, restaurants and similar establishments shall be
distributed at the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for
management The share of the employees shall be equally distributed among them, tn case the service charge is
abolished, the share of the covered employees shall be considered integrated in their wages.
5 Id.; Section 1, Rule VI [Service Charges], Book III of the Rules to Implement the Labor Code.
4 Section 2, Rule VI, Book III, Rules to Implement the Labor Code.
5 id
6 No. VII [A), DOLE Handbook on Workers Statutory Monetary Benefits.
’ Section 3, Rule VI, Book III. Ibid.; No. VII [A], Ibid.
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LABOR. STANDARDS
4. IN T E G R A T IO N .
In case the service charge is abolished, the share of covered employees
should be considered integrated in their wages, in accordance with Article 96 of the
Labor Code. The basis of the amount to be integrated is the average monthly share
of each employee for the past twelve (12) months immediately preceding the
abolition or withdrawal of such charges.*2
5. SO M E PR IN C IPLE S O N SERV IC E CHARGE.
• T ips and services charges are two different things. Tips are given by
customers voluntarily to waiters and other people who serve them out o f
recognition of satisfactory or excellent service. There is no compulsion to give
rips under the law. The same may not be said o f service charges which are
considered integral part o f the cost o f the food, goods or services ordered by
the customers. As a general rule, tips do not form part o f the service charges
which should be distributed in accordance with the sharing ratio prescribed
under Article 96 o f the Labor Code. However, where a restaurant or similar
establishment does not collect service charges but has a practice or policy o f
monitoring and pooling tips given voluntarily by its customers to its
employees, the pooled tips should be monitored, accounted for and distributed
in the same manner as the service charges.3 Hence, the 85% : 15% sharing
ratio should be observed.
• Service charge is not in the nature o f profit share and, therefore, cannot be
deducted from wage. It is not part of wages.4
7.
13th MONTH PAY
1. COVERAGE.
Under the law,5 all employers are required to pay all their rank-and-file
employees, a 13th month pay not later than December 24 of every year.
Only rank-and-file employees, regardless of their designation or
employment status and irrespective o f the method by which their wages are paid,
are entitled to the 13th month pay benefit.6 Managerial employees are not
'
i
3
4
5
Section 4, Rule VI, Book III, Ibid.; No. VII [B], Ibid,
Section 5, Rule VI, Book III, Ibid.; No. VII [B], Ibid.
No. VII [C], DOLE Handbook on Workers Statutory Monetaiy Benefits.
Mayon Hotel & Restaurant v. Adana, G.R. No. 157534, May 16.2005.
P D No 851 (December 16, 1975; Memorandum Order No 28 (August 13. 1986; Revised Guidelines on the
Implemenlation of the 13th Month Pay Law [November 16,1987.
6 Ibid.; Section 1. Memorandum Order No. 28.
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entitled to 13th month pay1 unless they are so granted under an em ploym ent
contract or a company policy or practice.
2. EX CLU SIO N S/EX EM PTIO N S FROM COVERAGE.
The following employers are not covered by the 13th month pay law;2
1)
The government and any o f its political subdivisions, including
government-owned and controlled corporations, except those
corporations operating essentially as private subsidiaries of tire
government.3
2)
Employers already paying their employees 13th mondi pay or more in
a calendar year or its equivalent at the time o f the issuance o f the
Revised Guidelines.4
3)
Employers of those who are paid on purely commission, boundary,
or task basis, and those who are paid a fixed amount for performing a
specific work, irrespective of the time consumed in the performance
thereof, except where the workers are paid on piece-rate basis, in
which case, the employer shall be covered by tire Revised Guidelines
insofar as such workers are concerned. W orkers paid on piece-rate
basis shall refer to those who are paid a standard amount for every
piece or unit of work produced that is more or less regularly
replicated without regard to the time spent in producing the same.5
2.1. DOM ESTIC WORKERS O R KASAMBAHA YS, N O W COV ERED .
Previously, not covered by the 13th month pay law are employers of
household helpers and persons in the personal service o f another in relation to
such workers.6 However, R.A. No. 103617 is now explicit in its commandment that
a domestic worker or kasambahay is entided to 13th month pay as provided by law.
3. N ATURE OF 13™ M O N T H PAY.
13* month pay is in the nature of additional incom e granted to
employees who are not receiving the same.8 P.D. No. 851 is undoubtedly a labor
1 House of Sara Lee v.R ey.G R No. 149013, Aug. 31,2006.
2 P.D. No. 851, as amended.
3 No. 2 [a]. Revised GuideSnes on the implementation of the 13” Month Pay Law, fomierty Section 3 [b], Rules and
Regulations Inplementing P.0. No. 851; AJSance of Government Workers v. Mnister of Labor and Employment G.R. No. L60403, Aug. 3,1983.
4 Section 2, P.D. No. 851; No. 2 [b], Revised GuideSnes on the Implementation of the 13” Month Pay Law, formerly Section 3
[c], Rules and Regulations Implementing P.D. No. 851.
5 No. 2 (dj. Ibid., formerly Section 3 (e],Rufes and Regulations Implementing P.D. No. 851.
« No. 2 H . Reused Guidefnes on the Implementation of the 13” Month Pay Law, formerly Section 3 [d]. Rules and
Regulations Implementing P.D. No. 851.
1 Section 25, Article IV, R A No. 10361, otherwise known as the “ Domestic Workers AcT (January 18,2013).
a Agabon v. NLRC, G.R. No. 158693, Nov. 17,2004.
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standards law whose purpose is to increase the real wages of the workers.1 It is
based on wage but not part o f wage.2
4. M IN IM U M A M O U N T O F 13™ M O N T H PAY.
The minimum 13th month pay required by law should not be less than
one-twelfth (1/12) of the total basic salaty earned by an employee within a calendar
year.3
5. M IN IM U M P E R IO D O F SERVICE R E Q U IR E D .
To be endded to the 13th month pay benefit, it is imposed as a m inim um
service requirem ent that the employee should have worked for at least one (1)
m onth during a calendar year.4
6. COM M ISSION VIS-A-VIS \3m M O N T H PAY.
In order to be considered part o f 13th month pay, the commission should
be part of the basic salary of the employee. However, whether or not a commission
forms part of the basic salary depends upon the circumstances or conditions for its
payment which indubitably are factual in nature for they will require a re­
examination and calibration of the evidence on record.5
If the commission paid in addition to the basic salary is in the nature of a
productivity bonus or profit-sharing benefit which is dependent on and generally tied
to the productivity or capacity for revenue production of a company, it should not
be considered as part of basic salary.6 But if the commission paid in addition to the
basic salary has a clear direct or necessary relation to the amount of work actually
done by the employee, it should be considered as part of basic salary.7
If the employee is paid on commission basis only, he is excluded from
receiving the 13th month pay benefit.8
7. CBA VIS-A-VIS tt™ M O N T H PAY.
For purposes of computing the 13th month pay, “basic salary” includes
all remunerations or earnings paid by the employer for services rendered but does
not include allowances and monetary benefits which are not considered or
integrated as part of the regular or basic salary, such as the cash equivalent of
1 Alliance of Government Workers v. Mn'ster of Labor, G Jl No. L-60403, Aug. 3,1983.
2 Central Azucarera de Tariac v. Central Azucarera de Tariac Labor Union-NLU, G.R. No. 188949, July 26,2010.
3 Section 2 [a], Rules aid Regulations Implementing P.D. No. 851.
* No. 1, Revised Guidelines on the Implementation of the 13* Month Pay Law, No. X [A], DOLE Handbook on Workers
Statutory Monetary Benefits.
5 Reyes v. NLRC, G R No. 160233, Aug. 8,2007.
6 Philippine Duplicators, Inc. v. NLRC, G R No. 110068, Feb. 15,1995; Boie-Takeda Chemicals, Inc. v. Dela Sema, G.R. No.
92174J and FMippine Fuji Xerox Corporation v. Trajano, G R No. 102552, March 24.1994.
7 Id.
King of Kings Transport, Inc v. Mamac, G R No. 166208, June 29,2007.
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unused vacation and sick leave credits, maternity leave, overtime, premium, night
differential and holiday pay, premiums for work done on rest days and special
holidays and cost-of-living allowances. However, these salary-related benefits
should be included as part of the basic salary in the computation o f the 13th month
pay if by individual or collective bargaining agreem ent, company practice or
policy, the same are treated as pan of the basic salary of the employees.1
8. SOME PRINCIPLES O N 13th M O N T H PAY.
1. "Basic salary" or "basic wage” contemplates work within the normal eight (8)
working hours in a day. This means that the basic salary of an employee for
purposes of computing the 13th month pay should include all remunerations
or earnings paid by the employer for services rendered during normal
working hours.2
2. For purposes of computing the 13th month pay, "basic salary” should be
interpreted to mean not the amount actually received by an employee, but 1/12
of their standard monthly wage multiplied by their length o f service within a
given calendar year.3
3. Extras, casuals and seasonal employees are entided to 13th month pay.4
B.
WAGES
1.
PAYMENT OF WAGES
1. BASIC WAGE.
The term “basic wage" means all the remuneration or earnings paid by an
employer to a worker for services rendered on normal working days and hours b u t
does not include cost-of-living allowances, profit-sharing payments, premium
payments. 13th month pay or other monetary benefits which are not considered as
part of or integrated into the regular salary o f the workers.5
Further, as held in Honda,6 the following should be excluded from the
computation of "basic salary, ” to wit. paym ents for sick, vacation and m aternity
' No. 4 [a], Revised Guidelines on the Implementation of the 13*’ Monti Pay Is a . formed/ Section 2 [b] of the Rules and
Regulations Implementing P.0. No. 851: No. X [C|. DOLE Handbook on Workers Statutory Monetary Benefits.
2 See No. 1, DOLE Explanatory Bulletin on the Inclusion of Teachers' Overload Pay n the 13* Month Pay Determination [Dec.
03.1993.
3 Honda Phis., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G R. No. 145561. June 15, 2005; San Mguel
Corporation (Cagayan CocaOHa Plant) v. Inaong, G R. No 149774. Feb. 24,1981,103 SCRA139.
4 BWC Opinion dated Dec. 19,1987, Bagong Piipino World's Fashion Workers Union, World’s Fashion, Inc.
5 Item (n). Definition of Terms, Rules Implementing Republic Act No. 6727.
6 Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, G.R. No. 145561, June 15,2005,460 SCRA
187.
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15 9
leaves, night differentials, regular holiday pay and prem ium s for work done
on rest days and special holidays.1
2. A TTRIBUTES O F WAGE.
“IP'i7g<?” paid to any employee has the following attributes:
1) It is the remuneration or earnings, however designated, for work done
or to be done or for services rendered or to be rendered;
2) It is capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece or commission basis, or other
method o f calculating the same;
3) It is payable by an employer to an employee under a written or
unwritten contract o f employment for work done or to be done or for
services rendered or to be rendered; and
4) It includes the fair and reasonable value, as determined by the DOLE
Secretary, o f board, lodging, or other facilities customarily furnished
by the employer to the employee. “Fair and reasonable value" shall not
include any profit to the employer or to any person affiliated with the
employer.2
3. M IN IM U M WAGE.
The m inim um w age rates prescribed by law shall be the basic cash
wages without deduction therefrom o f whatever benefits, supplements or
allowances which the employees enjoy free of charge aside from the basic pay.3
4. STATUTORY M IN IM U M WAGE.
“Statutory minimum wage ” refers simply to the lowest basic wage rate fixed by
law that an employer can pay his workers.4
5. REG IO N A L M IN IM U M WAGE RATES.
'‘Regional minimum wage rates" refer to die low est basic wage rates that an
employer can pay his workers, as fixed by the Regional Tripartite Wages and
Productivity Boards (RTWPBs), and which shall not be lower than the applicable
statutory minimum wage rates.5
The minimum wage rates for agricultural and non-agricultural employees
and workers in each and every region of the country shall be those prescribed by
1 See also San Mguel Coiporafon Cagayan CocaCda Plant v. Indong, G.R. No. L-49774, Feb. 24,1981,103 SCRA 139.
2 Based on the defireSon of'wage'in Artde 97(f), Labor Code.
3 Section 1. Rule Vll-A, Book III, Rules to Implement the Labor Code, as amended by Memorandum Circular No. 3, Ncv. 4,
1992.
4 Item jo], Definition cf Terms, Rules Implementing RA. No. 6727; Section 4 [I]. Rule I, NWPC Guidelines No. 01, Series of
2007, June 19,2007 [Amended Rules of Procedure on Minimum Wage Fixing.
s Section 4 [kj. Rule I, NWPC Guidelines No. 01, Senes of 2007, June 19,2007 (Amended Rules of Procedure on Mnimum
Wage Fixing.
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the “RTWPBs.>K These wage rates may include wages by industry, province or
locality as may be deemed necessary by the RTWPBs.*2
6. WAGE RATES.
"Wage rates" include cost-of-living allowances as fixed by the
RTWPB, but excludes other wage-related benefits such as overtime pay, bonuses,
night shift differential pay holiday pay, premium pay. 13th month pay, premium
pav. leave benefits, among others,3*
7. RATIONALE.
The principal reason why a legislated wage increase is considered valid is
that it prevents the exploitation of defenseless workers who are situated in an
unequal position vis-a-vis their employers in terms o f bargaining power. By setting
the minimum below which the law considers illegal, the workers are assured of
decent living subsistence without need for them to bargain for the same.
The employer cannot hope to validate his non-compliance with the
legislated minimum wage by contending that he has liquidity problem or is
suffering from financial reverses or business losses. Whatever problem he may have
in the operation of his business cannot certainly affect his obligation to pay die
minimum wage rate fixed by law.
Thus, in Mayon Hotel & Restaurant v. Adana,* the Supreme Court ruled that
petitioner’s repeated invocation o f serious business losses is not a defense to
payment of labor standard benefits. The employer cannot exempt himself from
liability to pay minimum wages because o f poor financial condition o f die
company. The payment of minimum wages is not dependent on the employer’s
ability to pay.5
It must be noted that acceptance by the employee of w age below the
minim um set by law does not preclude him from suing for the deficiency.
The principle o f estoppel or laches does not apply in this situation.
8. IN T EG R A T IO N OF COLA A ND O T H E R M ONETARY B E N E F IT S
IN T O T H E BASIC PAY.
a. M eaning o f cost-of-living allow ance (COLA).
Clearly, COLA is not in the nature o f an allowance intended to reimburse
expenses incurred by employees in the performance of their official functions. It is
not payment in consideration o f the fulfillment of official duty.6 As defined, “cost
’
}
3
‘
5
«
See Article 99 (Regional Minimum Wages),.as amended by Section 3, R A No. 6727, June 9,1989.
Article 99, Labor Code; Section 1. Chapter lit Rules Implementing R A No. 6727.
Section 2 G], Department Order No. 10, Seres of 1998 [May 04,1998.
G.R. No. 157634, May 16,2005.
See also Vda. de Radio v. Municipality of Hagan, G.R. No. L-23542, Jan. 2,1968,22 SCRA1.
Gutierrez v. DBM, G.R. No. 153266, March 18,2010,616 SCRA 1.18.
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of living” refers to “the level of prices relating to a range of everyday items”1 or
“the cost of purchasing the goods and services which are included in an accepted
standard level of consumption.”2 Based on this premise, COLA is a benefit
intended to cover increases in the cost of living.3
b. Validity ofintegration.
The integration o f monetary benefits into the basic pay o f workers is not a
new method o f increasing the minimum wage.
By way o f latest illustration, under Section 1 o f Wage Order No. NCR-20
which was issued on May 17, 2016, the COLA o f P i5.00 per day under the
previous Wage Order No. NCR-19 was ordered integrated into the basic pay of
P466.00 upon its effectivity thereby making P481.00 as the new basic wage.
Further, a new COLA o f P10.00 per day was added resulting in the new minimum
wage rate of P491.00.
9. “N O WORK, N O PAT” PRINCIPLE.
It must be emphasized that the age-old rule governing the relation
between labor and capital, or management and employee of “no work, no pay" or
‘fair day’s wageforfair day’s labor" remains to be adhered to in our jurisdiction as the
basic factor in determining the wages o f employees. I f the worker does not work,
he is generally not entided to any wage or pay. The exception is when it was the
employer who unduly prevented him horn working despite his ablcness, willingness
and readiness to work; or in cases where he is illegally locked out or illegally
suspended or illegally dismissed, or otherwise illegally prevented from working, in
which event, he should be entided to his wage.4
10. WAGE VS. SALARY
The term ,<wage”is used to characterize the compensation paid for manual
skilled or unskilled labor. "Salary, ” on the other hand, is used to describe the
compensation for higher or superior level o f employment.5
In cases o f execution, attach m en t or garn ish m en t o f the compensation
of an employee received from work issued by the court to satisfy a judiciallydetermined obligation, a distinction should be made whether such compensation is
considered “wage”ot "salary."U nder Article 1708 o f the Civil Code, if considered a
"wagi, ” the employee’s compensation shall not be subject to execution or
attachment or garnishment, ex cep t for debts incurred for food, shelter, clothing
1
2
3
4
5
Id. at 19, citing The New Oxford American Dctionary, Oxford University Press, 2005 Edition.
Id., citing Webster's Third New International Dietjonary, Meniam-Webster Inc., 1993 Edition.
Maynilad Water Supervisors Association v. MaynHad Water Services, Inc., G.R. No. 198935, Nov. 27,2013.
Aklan Electric Cooperative v. NLRC, G Jl No. 121439, Jan. 25,2000.
The terms "Wage’ (etymologically from the Middle English word \vagen’), 'salary (from the Roman word ‘saT and Latin
word ‘sderium "} are synonymous ii meaning and usage. They ai refer to the same thing, i.e., a compensation paid on
account of work or services rendered.
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and medical attendance. If deemed a "salary," such compensation is not exem pt
from execution or attachment or garnishment. Thus, the salary, commission and
other remuneration received by a managerial employee (as distinguished from an
ordinary worker or laborer) cannot be considered wages. Salary is understood to
relate to a position or office, or the compensation given for official or other
service; while wage is the compensation for labor.1
11. FACILITIES VS. SUPPLEM ENTS.
a. Facilities, defined.
The term "facilities" includes articles or services for the benefit o f the
employee or his family but does not include tools o f the trade or articles or services
primarily for the benefit o f the employer or necessary to the conduct o f the
employer’s business.2 They are hems o f expense necessary for the laborer’s and his
family’s existence and subsistence which form part o f the wage and when furnished
by the employer, are deductible therefrom, since if they are not so furnished, the
laborer would spend and pay for them just the same.3
b. Supplements, defined.
The term !supplements" means extra remuneration or special privileges or
benefits given to or received by the laborers over and above their ordinary earnings
or wages.4
c. Facilities distinguished from supplements.
The benefit or privilege given to the employee which constitutes an extra
remuneration over and above his basic or ordinary earning or wage is supplement,
and when said benefit or privilege is made part of the laborer’s basic wage, it is a
facility. The criterion is not so much with the kind of the benefit or item (food,
lodging, bonus or sick leave) given but its purpose. Thus, free meals supplied by
the ship operator to crew members, out o f necessity, cannot be considered as
facilities but supplements which could not be reduced having been given not as
part of wages but as a necessary matter in the maintenance o f the health and
efficiency of the crew during the voyage.5
12. SOME PRIN CIPLES O N FA C ILITIES AND SU PPLE M E N TS.
• Facilities are deductible from wage but not supplements.6
’ Gaa v. CA, hfra; See also Equitable Banking Corp v. Sadac, G.R. No. 164772, June 8,2006.
2 Section 2, Rule VILA, Book III, Rules to Implement the Labor Code, as amended by Memorandum Circular No. 3, Nov. 4,
1992.
3 State Marine Cooperation and Royal Line, !r>;. v. Cebu Seamen’s Association, Inc., G.R. No. L-12444, Feb. 28,1963.
* Atok Big Wedge fAning Co., Inc. v. Atok Big Wedge Mutual Benefit Association, G.R. No. L-5276, Mardi 3.1953.
s Mayon Hotel & Restaurant v. Adana, G.R. No. 157634, May 16,2005; Mabeza v. NLRC, G.R. No. 118506, Apri 18,1997.
6 State Maine Corporation and Royal Line, Inc. v. Cebu Seamen’s Association, Inc., supra.
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16 3
• Legal requirements must be complied with before facilities may be deducted
from wages. The employer simply cannot deduct the value from the
employee’s wages without satisfying the following;
(1) Proof that such facilities are customarily furnished by the trade;
(2) The provision o f deductible facilities is voluntarily accepted in writing by
the employee; and
(3) The facilities are charged at fair and reasonable value.1
• An employer may provide subsidized meals an d snacks to his employees
provided that the subsidy shall not be less than thirty percent (30%) of the
fair and reasonable value of such facilities. In such a case, the employer may
deduct from the wages o f the employees not more than seventy percent
(70%) o f the value of the meals and snacks enjoyed by the employees,
provided that such deduction is with the written authorization of the
employees concerned.2
• The free board and lodging petitioner SIP furnished its employees cannot
operate as a set-off for the underpayment of their wages.3
2.
PROHIBITIONS REGARDING WAGES
1. P E R T IN E N T LABOR C O D E PROVISIONS.
The Labor Code devotes an entire Chapter45on the prohibitions regarding
wages, spanning Articles 112 to 119 thereof. Below is a discussion of all these
prohibitions.
2. N O N -IN T E R F E R E N C E BY EM PLO Y ER IN T H E DISPOSAL BY
EM PLO Y EES O F T H E IR WAGES.
Article 112s o f the Labor Code is clear-cut in it's interdiction that no
employer is allowed to limit or otherwise interfere with the freedom o f any
employee to dispose of his wages and no employer shall in any manner oblige any
of his employees to patronize any store or avail o f the services offered by any
person.6
1 Mabezav.NLRC, supra.
3 Section 1, Rule VILA, Book III, Rules to Implement the Labor Code, as amended by Memorandum Circular No. 3, Nov. 4,
1992.
3 See Article 124, Labor Code.
4 See Chapter IV (Prohibitions Regarding Wages). Title II (Wages), Book III (Conditions of Employment), Labor
Code.
5 ART. 112. Noninterference 'n disposal of wages. - No employer shaS limit or otherwise interfere with the freedom of any
employee to dispose of his wages. He sha* not in any manner force, compel, a oblige his employees to purchase
merchandise, commodities or other property from any other person, or otherwise make use of any store or services of such
employer or any other person.
6 See also Section 12, Rule VIII, Book III, Rules to Implement the Labor Code.
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3. WAGES NOT SUBJECT TO E X E C U T IO N O R A TT A C H M E N T ;
EXCEPTION.
The general rule is that laborer’s wages are not subject to execution or
attachment. The exception is when such execution or attachment is made for debts
incurred for food, shelter, clothing and medical attendance.1
4. D ED UCTIO NS FROM WAGES.
The general rule is that an employer, by himself or through his
representative, is prohibited from m aking any deductions from the wages of
his employees. The employer is not allowed to make unnecessary deductions
without the knowledge or authorization of the employees.2
4.1. PERMISSIBLE D ED U C T IO N S FROM WAGES.
a. Deductions allowed under Ardclc 113.
Article 1133 of the Labor Code allows only three (3) kinds of deductions,
namely:
(a) In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for the
amount paid by him as prem ium on the insurance;
(b) For union dues, in cases where the right of the worker or his union
to check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations
issued by the DOLE Secretary.
b. Other deduedons.
Under other provisions o f the Labor Code and other laws, deductions
from the wages o f employees may be made by the employer in any of the following
cases:
1) Deductions for loss or dam age under Article 1144 of the Labor
Code;
1 Article 1708, Cwi Code.
2 Gafradoresv. Trajano, G.R. No. L-70O67, Sept 15,1986,144 SCRA138.
3 ART. 113. Wage deduction. - No employer, in his own behalf a in behalf of any person, shall make any deduction from the
wages of his employees, except
(a) In cases where the worker is insured wfrh his consent by the employer, and the deduction is to recompense the employer
hr the amount paid by him as premium on he insurance;
(b) For union dues, incases where the right of the worker or his union to check-off has been recognized by the employer or
authorized in writing by the individual worker concerned, and
(c) In cases where the employer is autoorized by law or regulations issued by the Secretary of Labor and Employment
4 ART. 114. Deposits for loss or damage. -N o employer shall require his worker to make deposits from which deductions shall
be made for the reimbursement of loss of a damage to tools, materials, or equipment suppled by the employer, except
when the employer 's engaged n such trades, occupations or business where the practice of making deductions or requiring
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2) Deductions made for agency fees from non-union members who
accept the benefits under the CBA negotiated by the bargaining union.
This form o f deduction does not require the written authorization o f
the non-bargaining union member concerned;*1
3) Union service fees;2
4) When the deductions are with the written authorization of the
employee for paym ent to a third person and the employer agrees to
do so, provided that the latter does not receive any pecuniary benefit,
directly or indirectly, from the transaction;3
5) Deductions for value of m eal and other facilities;4
6) Deductions for prem ium s for SSS, PhilH ealth, em ployees’
com pensation and Pag-IBIG;
7) W ithholding tax mandated under the National Internal Revenue
Code (NIRC);
8) Withholding of wages because of the employee’s d ebt to the employer
which is already due;5
9) Deductions made pursuant to a court judgm ent against the worker
under circumstances where the wages may be the subject o f
attachment or execution but only for debts incurred for food, clothing,
shelter and medical attendance;6
10) W ien deductions from wages are ordered by the court;
11) Salary' deductions o f a member of a cooperative.7
5. P R O H IB IT IO N AGAINST D E P O S IT R E Q U IR E M E N T .
a. General rule; exceptions.
Article 1148 of the Labor Code enunciates the general rule that while
deductions from the employees’ wages may be made for cash bonds or deposits,
the employer, however, is not allowed to unilaterally impose upon its employee's
the giving of cash bonds or deposits. To justify such imposition, the employer
should first prove and establish that it falls under any of the following exceptions:
(a) That it is engaged in such trades, occupations or business where
the practice o f making deductions or requiring deposits is a
recognized one; or
1
J
3
4
5
6
7
8
deposits is a recognized one. a is necessary or desirable as determined by the Secretary of Labor anc Employment in
appropriate roles and regulations.
Article 259(e) [248(e)]. Labor Code
Radio Communications of the Phils.. Inc. v. Secretary of Labor and Employment G.R. No. 77959. Jan 9,1989
Section 13, Rule VIII. Book III. Rules to Implement the Labor Code.
Section 7, Rule VI, Book III, Ibid.
Article 1705. Cwl Code.
Article 1703. Ibid.
Article 59, RA. No. 6938, The Cooperative Code of the Philippines.
Supra.
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(b) That the cash bond or deposit is necessary or desirable as determined
by the DOLE Secretary in appropriate rules and regulations.
In 2014, the DOLE Secretary12made known her determination of such
exception in her Labor Advisory No. 11, Series of 20141 where she clarified that it is
only in private security agency where the practice is recognized or allowed.3
With this clarification, the rules and legal principles proclaimed in Articles 114 and
11545arc, at the moment, applicable only to private security agencies, absent any
other appropriate rules and regulations declaring other sectors as falling under the
exception. Thus, the Labor Advisory states that “ [deductions or requiring cash
deposits from employees to answer for reimbursement of loss or damage on tools,
materials, or equipment supplied by the employer is allowed in private security
agencies as a recognized and reasonable industry practice given the nature
of the service/business.”s
b. Due process required before deduction from deposits.
Due process should first be afforded the employee before any deduction
from his deposits for the actual amount of the loss or damage alleged to have been
committed by him, may be made therefrom. This presupposes, o f course, that the
deposits from which such deductions may be taken are legally allowed or permitted.
Consequently, for deductions of such nature to be valid, the following
conditions must be observed:
a) The employee concerned is clearly shown to be responsible for the
loss or damage;
b) The employee is given reasonable opportunity to show cause why
deductions should not be made;
c) The amount o f such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
d) The deduction from the wages of the employee does not exceed 20%
of the employee's wages in a week.6
c. Amount o f cash deposit.
In the event that a private security agency requires a cash deposit from
its employees, the maximum amount shall not exceed the employee's one month
basic salary. The said a s h deposit may be deducted from the employee's wages in
’ Refermg to D 0l£ Secretary Rosalinda Cfmapfis43aldoz.
2 Issued on September 03.2014 and is entfled 'Non-Interference in the Disposal of Wages and Allowable Deductions ’
3 See Opening Paragraph thereof.
4 ART. 115. LMtaSons.-No deduction frori the deposits ofan employee for the actual amount of foe loss or damage shall be
made unless the employee has been hear) thereon, and his responsfcifity has been dearly shown.
5 No. 3. le tx f Advisory No. 11. Series of 2014 (September 03, 2014], Non-Interference in the Disposal of Wages and
AJkwable Deductions.
6 id.; See also Section 14. Rule VIII, Book la, Rules to Implement the Labor Code.
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an amount which shah not exceed twenty percent (20%) of the employee's wages in
a week.1
d. R efund o f cash deposit.
The full amount of cash deposit deducted shall be returned to the
employee within ten (10) days from his/her separation from the service.2
e. Lim itation.
No other deductions from the wages o f the employees or cash
deposit/bond shall be required by the employer without express authonzadon
from the DOLE Secretary through an advisory or guidelines.3
f U nauthorized deductions.
Deductions made from the employees' wages for company uniforms, cash
deposits for loss or damage, personal protective equipment (PPE), capital share or
capital build-up in service cooperatives, training fees, and other deductions not
included in the enumeration above, are unauthorized.4
g. R elevant cases.
In Five J Taxi? the Supreme Court, considered violative of Aruclc 114 o f
the Labor Code the P i 5.00 daily deposit required by the employer from taxi drivers
for the purpose o f defraying shortage in “boundary,” since there is no showing that
the DOLE Secretary has recognized the same as a “practice” in the taxi industry.
While Article 114 provides the rule on deposits for loss or damage to tools,
materials or equipment supplied by the employer, it does not, however, permit
deposits to defray any deficiency which the taxi driver may incur in the remittance
of his “boundary” Such illegally collected deposits should be refunded to the
drivers.*67
In Fluor Than Blue,1 the petitioner deducted the amount of P8,304.93 from
respondent Esteban’s last salary. According to the petitioner, this represents the
store’s negative variance for the year 2005 to 2006. The petitioner justifies the
deduction on the basis o f alleged trade practice and that it is allowed by the Labor
Code. The Supreme Court, however, disagreed because the petitioner failed to
sufficiently establish that Esteban was responsible for the negative variance it had
in its sales for the year 2005 to 2006 and that Esteban was given the opportunity to
show cause why the deduction from her last salary should not be made. The Court
'
7
3
4
s
6
7
No. 4, Id.
No. 5. Id.
No. 6, Id.
No. 7, Id.
FweJTaxiv. NLRC, G.R. No. 111474, Aug. 22.1994,235 SCRA 556.
See also Dentech Manufacturing Corporation v. NLRC, GR. No. 81477, April 19,1989,172 SCRA 588.
Buer Than Blue Joint Ventures Company v. Glyza Esteban, G R. No. 192582, April 07,2014.
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cannot accept die petitioner’s statement that it is the practice in the retail industry
to deduct variances from an employee’s salary, without more.
In NinaJewelry,1the Court ruled that:
“[T]he petitioners should first establish that the making of deductions
from the salaries is authorized by law, or regulations issued by the
Secretary of Labor. Ruther, the posting o f cash bonds should be
proven as a recognized practice in the jewelry manufacturing business,
or alternatively, the petitioners should seek for the determination by the
Secretary o f Labor through die issuance o f appropriate rules and
regulations that the policy the former seeks to implement is necessary
or desirable in the conduct of business. The petitioners failed in this
respect It bears stressing that without proofs that requiring deposits
and effecting deductions are recognized practices, or without securing
the Secretary of Labor's determination of the necessity or desirability of
the same, the imposition of new policies relative to deductions and
deposits can be made subject to abuse by the employers. This is not
what the law intends.”
6. P R O H IB IT IO N O N W IT H H O L D IN G O F WAGES.
Article 1162 of the Labor Code categorically prohibits and considers it
unlawful for any petson, whether employer or not, direedy or indireedy, to
withhold any amount from die wages o f a worker.
Under Article 1706 o f the Civil Code, withholding o f the wages, except
for a debt due, is not allowed to be made by the employer. Moreover, under Article
1709 o f the same Code, the employer is not allowed to seize or retain any tool or
other articles belonging to the laborer.
The above-cited provisions are dear and need no further ducidation.
Indeed, as hdd in Special Steel Products, Inc. v. Villareal,3 an employer has no legal
authority to withhold the employee’s 13th month pay and other benefits. What an
employee has worked for, his employer must pay. Thus, an employer cannot
simply refuse to pay the w^jes o r benefits o f its employee because he has either
1 ^
Marx&dumgofM^al Arts. h av .M o rtec ao .G A N a 188169, Nov. 28,2011,661SCRA 416. On August
13,2004,
a poky fcrgoldsnithsrapiingtiem to post cash bonds or deposits ri varying amcuits
but h no case exceeding 15% of to late 's salaries per week. The deposits were Mended to answer for any loss or
dam ageudMNSaJesji^ReysusIdhlvfeasonoflhBgbkfcnihsrfiatAarne^enoeiritiantangVieRflldenbusbadtD
theniTtedeposfeshdtetdim edupm cornptefaicifftegoBsn^vw riandaftafffliaccounfingofBiegcldreoeived.
N ^ J e ^ a fle g to tto ^ g o id s n x h s v ^ given tte q jfim not to post depose but to sign a u h o fe fo is a & M ^ fiie
tamer to deduct ta n the late's sabres amounts not exceetihg 18% ct M r take home pay shoukt l be found fta t hey
lost fie gold entrusted to hem The respondents darned otoeivifee nsisEng that Kite Jewety leS tie gddsm&s wSi no
cpSon but to post file deposfis. The respondents aSeged 6iat 8iey were construcfi^ly (fisrrussed by bfifla Jewfiky as their
conjnusdempioynMnts were mads deoendenton Ihoirraacfinoss to post Ihe required deposits. *
1 ART. 116. W tthGkfiq of wages and kickbacks proWbtai. - It s td be unlawful far a y person, (fireefly or indirectly, to
MtftWd any sn o u t tom fce wages of a w ater or induce h rn to g te u p a n y p a rto fh is wages by force, steaSi,
intinndatioa&ireatorbyanyoAiermeanswAatsoeverwaxut8ieworioa<'$(xnseni
2 G H No. 143304, July8,2004.
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defaulted in paying a loan guaranteed by his employer, or violated their
memorandum o f agreement; o r failed to render an accounting o f his employer’s
property.
In SHS Perforated Materials, Inc. p. Dia%1 petitioners contended that
withholding respondent employee’s last salary coveting the period from November
16 to November 30,2005, was justified because respondent was absent and did not
show up for work during that period. He also failed to account for his whereabouts
and work accomplishments during said period. Petitioners further argued that when
there is an issue as to whether an employee has, in fact, worked and is entided to
his salary, it is within management prerogative to temporarily withhold an
employee’s salary/wages pending determination o f whether o r not such employee
did indeed work. In disagreeing to this postulation o f petitioners, the High Court
stated that although management prerogative refers to “the right to regulate all
aspects o f employment,” it cannot be understood to include the right to
temporarily withhold salary/wages without the consent o f the employee. To
sanction such an interpretation would be contrary to Article 116 o f the Labor
Code. Any withholding o f an employee’s wages by an employer may only be
allowed in the form o f wage deductions under the circumstances provided in
Article 113 of the same Code. As conecdy pointed out by the Labor Atbiter,
“absent a showing that the withholding o f complainant’s wages falls under the
exceptions provided in Article 113, die withholding thereof is thus unlawful.”
Although it cannot be determined with certainty whether respondent worked for
the entire period from November 16 to November 30,2005, the consistent rule is
that if doubt exists between the evidence presented by the employer and that by the
employee, the scales o f justice must be tilted in favor o f the latter in line with the
policy mandated by Articles 2 and 3 o f the Labor Code to afford protection to
labor and construe doubts in favor o f labor. For petitioners’ failure to satisfy their
burden o f proof, respondent is presumed to have worked during the period in
question and is, accordingly, entitled to his salary. Therefore, the withholding o f
respondent’s salary by petitioners is contrary to Article 116 o f the Labor Code and,
thus, unlawful
6.1. WHEN WITHHOLDING OF WAGES AMOUNTS TO
CONSTRUCTIVE DISMISSAL.
In the same case o f SHS Perforated Materials, the unlawful withholding o f
the last salary o f respondent was declared to constitute constructive dismissal since
for this reason, he was forced to resign as it has made it impossible, unreasonable
o r unlikely for him to continue working for petitioners. It is o f no moment that he
served his resignation letter o n November 30, 2005, the last day o f the payroll
period and a non-working holiday, since his salary was already due him on
November 29,2005, being the last working day o f said period. In fact, he was then
1 G R . No. 185814, Oct 13,2010.
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in fo rm e d th a t th e w ages o f all th e o th e r S H S e m p lo y e e s w ere a lre a d y re le a se d , a n d
o n ly his w as b ein g w ith h eld . W h a t is sig n ific a n t is th a t th e r e s p o n d e n t p r e p a r e d a n d
se rv ed his re sig n atio n le tte r rig h t a f te r h e w a s in fo rm e d th a t h is salary w a s b e in g
w ith h eld .
It w o u ld be a b s u rd
to re q u ire re s p o n d e n t to to le ra te th e u n la w fu l
w ith h o ld in g o f his salary fo r a lo n g e r p e r io d b e fo re his e m p lo y m e n t c a n b e
c o n sid e re d as so im p o ssib le, u n re a s o n a b le o r u n lik ely as to c o n s titu te c o n s tru c tiv e
dism issal. E v e n g ra n tin g th a t th e w ith h o ld in g o f r e s p o n d e n t’s sa lary o n N o v e m b e r
30, 2005, w o u ld n o t c o n s titu te a n u n la w fu l a c t, th e c o n tin u e d re fu sa l to re le a se his
salary a fte r th e p ayroll p e rio d w a s clearly u n la w fu l. T h e p e titio n e rs ’ claim th a t th ey
p re p a re d th e ch e c k ready fo r p ic k -u p c a n n o t u n d o th e ’u n law fu l w ith h o ld in g . I t is
w o rth y to n o te th at in his re sig n a tio n le tte r, re s p o n d e n t cited p e titio n e rs ’
unfair iabor praclict" as
"'illegal and
h is c a u s e fo r re sig n a tio n . A s c o rre c d y n o te d by th e C A ,
re s p o n d e n t lo st n o tim e in s u b m ittin g h is re s ig n a tio n le tte r a n d e v e n tu a lly filing a
co m p la in t fo r illegal d ism issal ju st a few d a y s a fte r his salary w as w ith h e ld . T h e s e
c irc u m sta n c e s are in c o n s is te n t w ith v o lu n ta ry re sig n a tio n an d b o ls te r th e fin d in g o f
c o n s tru c tiv e dism issal.
6 .2 .
V A L ID I T Y O F W I T H H O L D I N G O F R E L E A S E O F L A S T
P A Y M E N T S T O E M P L O Y E E S F O R F A IL U R E T O C O M P L Y W IT H
C L E A R A N C E R E Q U IR E M E N T S .
A lth o u g h as a g e n e ra l ru le , e m p lo y e rs are p ro h ib ite d fro m w ith h o ld in g
w a g e s1 fro m em p lo y ees, th e y u su a lly w ith h o ld d ie release o f th e la st sa la ry a n d
b e n e fits o f te rm in a te d o r re s ig n in g e m p lo y e e s p r io r to o r p e n d in g th e ir c o m p lia n c e
w ith c e rtain cle a ra n c e p ro c e d u re s . T h is a p p e a rs to b e a s ta n d a rd p r o c e d u r e a m o n g
em p lo y ers, w h e th e r p u b lic o r p riv a te .23 C le a ra n c e p ro c e d u re s a re in s titu te d to
e n s u re th a t th e p ro p e rtie s , re a l o r p e rs o n a l, b e lo n g in g to th e e m p lo y e r b u t a re in
th e p o ss e s sio n o f th e s e p a ra te d e m p lo y e e , a r e r e tu rn e d to th e e m p lo y e r b e f o r e th e
e m p lo y e e ’s d e p a rtu re .56
T h e law s u p p o rts d ie e m p lo y e r s ’ in s titu tio n o f c le a ra n c e p r o c e d u r e s
b e fo re th e release o f w a g e s .4 A s a n e x c e p tio n to th e g e n e ra l ru le th a t w a g e s m ay
n o t b e w ith h e ld 5 a n d b e n e fits m a y n o t b e d im in is h e d ,5 th e L a b o r C o d e p r o v id e s in
its A rticle 113 [W age D e d u c tio n ] th a t “ [n]o e m p lo y e r, in h is o w n b e h a lf o r in
b e h a lf o f an y p e rs o n , shall m a k e a n y d e d u c tio n f ro m th e w ag es o f h is e m p lo y e e s ,
exceptxxx (3)
I n c a s e s w h e r e t h e e m p l o y e r is a u t h o r i z e d b y la w o r r e g u l a t i o n s
i s s u e d b y t h e S e c r e ta r y o f L a b o r a n d E m p l o y m e n t ”
1
2
3
4
5
6
Referring to Article 116 of toe Labor Code, entitled ‘ Withholding of wages and kckbacks prohibited.'
Man v. NLRC and Solid Mils, Inc.. G.R. No. 202961. Feb. 04.2015.
Id.
Id.
See Abide 116 ol toe Labor Code, entitled 'Witohoklng of wages and kickbacks prohtoted.'
Referring to Articie 100 of the Labor Code wtiich provides: ’Art. 100. Prohbiijon against eSmination or diminutjon of benefits.
Nothing h tors Book shall be construed to eliminate a in arty way diminish supplements, or other employee benefits being
enjoyed at toe time of promulgation of this Code.'
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17 1
LABORSTANDARDS
T h e C iv il C o d e 1 p ro v id e s th a t th e e m p lo y e r is a u th o riz e d to w ith h o ld
w ag es fo r d e b ts d u e .
“ D e b t ” in th is c a se re fe rs to a n y o b lig a tio n d u e fro m t h e
e m p lo y e e to th e e m p lo y e r.
It in c lu d e s a n y
accountability
th a t th e e m p lo y e e m a y
h a v e to th e e m p lo y e r. T h u s , th e r e is n o r e a s o n to lim it its s c o p e to u n ifo rm s a n d
e q u ip m e n t.
“ A c c o u n t a b i l i t y , ” in its o rd in a ry s e n s e , m e a n s o b lig a tio n o r d e b t.2 T h e
o rd in a ry m e a n in g o f th e te rm
‘‘accountability’’ d o e s
n o t lim it th e d e f in itio n o f
a c c o u n ta b ility to th o s e in c u rre d in th e w o rk s ite .3 A s lo n g as th e d e b t o r o b lig a tio n
w as in c u rre d b y v ir tu e o f th e e m p lo y e r-e m p lo y e e re la tio n s h ip , g en erally , it shall b e
in c lu d e d
in
th e
e m p lo y e e ’s
a c c o u n ta b ilitie s
th a t
a re
su b je c t
to
c le a r a n c e
p ro c e d u re s .45 T h e r e is n o re a s o n to lim it its s c o p e to u n if o rm s and e q u ip m e n t.
“accountability" was c o n s tru e d in th e 2 0 1 5 c ase o f Milan v. NLRC and
Solid Mills, Inc.} as in c lu d in g p e titio n e rs ’ p o s s e s s i o n o f th e ir c o n s tru c te d h o u s e s
T h u s , th e te rm
w ith in
th e S M I V illag e, a p r o p e rty
o f p riv a te
r e s p o n d e n t S olid M ills w h e r e
p e titio n e rs a n d th e ir fam ilies w e r e a llo w ed to o c c u p y d u rin g th e ir e m p lo y m e n t.
W h e n S o lid M ills c lo s e d its o p e r a tio n s r e s u ltin g in th e te rm in a tio n o f p e titio n e r s ,
th e y w e re b o u n d to v a c a te a n d tu r n -o v e r th e ir p o s s e s s io n o v e r th e ir h o u s e s to S o lid
M ills. C o n s e q u e n tly , th e ir re fu s a l to d o so ju stifie d th e w ith h o ld in g b y S o lid M ills o f
th e ir s e p a ra tio n p a y a n d te r m in a tio n b e n e fits .6
6 .3 .
KICKBACKS.
T h e s e c o n d in s ta n c e p r o h ib ite d b y A rtic le 1 1 6 o f th e L a b o r C o d e is d i e
so -c a lle d
“kickback ” w h ic h
c o n s is ts in d ie a c t o f a n y p e r s o n , w h e th e r e m p lo y e r o r
n o t, d ire e d y o r in d ire e d y , to in d u c e a w o r k e r to g iv e u p any p a r t o f iiis w a g e s b y
fo rc e , ste a lth , in tim id a tio n , th r e a t o r b y an y o t h e r m e a n s w h a ts o e v e r, w ith o u t t h e
w o rk e r’s c o n s e n t
7.
PROHIBITION AGAINST DEDUCTION TO ENSURE
EMPLOYMENT.
A rtic le 1 1 7 7 o f th e L a b o r C o d e p r o h ib its a n d c o n s id e rs it u n la w fu l fo r a n y
p e rs o n , w h e th e r th e e m p lo y e r h im s e lf o r h is re p re s e n ta tiv e o r a n in te rm e d ia ry , t o
r e q u ire th a t a d e d u c tio n b e m a d e o r to a c tu a lly m a k e a n y d e d u c tio n fro m th e w a g e s
o f an y e m p lo y e e o r w o r k e r, f o r th e b e n e f it o f s u c h e m p lo y e r o r his r e p re s e n ta tiv e
o r a n in te rm e d ia ry , a s c o n s id e ra tio n o f a p r o m is e o f e m p lo y m e n t o r, w h e n a lre a d y
e m p lo y e d , fo r th e c o n tin u a tio n o f su c h e m p lo y m e n t o r re te n tio n th e re in .
’
2
3
4
5
6
Article 1705. Withholding of the wages, except for a debt due, shall not be made by the employer.
Man v. NLRC and Solid Ml's, Inc., G R No. 202951, Feb 04,2015.
Id.
Id.
G R No. 202961, Feb. 04,2015.
Consisting of vacation and sick leave benefits and 13* month pay.
7 ART. 117. Deduction to ensure employment - It shall be unlawful to make any deduction from the wages of any employee
for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention
h employment
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8. RETALIATORY ACTIONS BY EMPLOYER.
A rticle 118* o f th e L a b o r C o d e p r o h ib its a n d d ec la re s it u n la w fu l fo r th e
em p lo y er:
a) to re fu se to p a y th e w a g e s a n d b e n e fits o f a n e m p lo y e e ; o r
b) to re d u c e h is w a g e s a n d b e n e fits ; o r
c) to disc h arg e h im fro m e m p lo y m e n t; o r
d) to d isc rim in a te a g a in s t h im in an y m a n n e r;
o n a c c o u n t a n d b y reaso n o f sa id e m p lo y e e ’s:
1) a c t o f filing an y c o m p la in t o r in s titu tio n o f an y p r o c e e d in g u n d e r T itle
I I [W ages], B o o k I I I o f th e L a b o r C o d e ; o r
2) a c t o f testify in g in sa id p ro c e e d in g s o r w h e n h e is a b o u t to testify
th erein .
8 .1.
WHEN RETALIATORY ACT CONSIDERED ULP.
T h e c o m m issio n o f th e re ta lia to ry a c t o f d is c h a rg in g o r in a n y m a n n e r
d isc rim in a tin g ag ain st any e m p lo y e e w h o h a s filed a n y c o m p la in t o r in s titu te d any
p ro c e e d in g o r h a s testified o r is a b o u t to te stify in s u c h p r o c e e d in g d e s c rib e d in
A rtic le 118 m a y b e c o n s id e re d a n u n f a ir la b o r p ra c tic e u n d e r A rtic le 2 5 9 (f) [248(f)]
o f th e L a b o r C o d e . A s p ro v id e d th e re in , it is a n a c t o f u n fa ir la b o r p r a c tic e f o r an
e m p lo y e r to d ism iss, d isc h a rg e o r o th e rw is e p re ju d ic e o r d is c rim in a te a g a in s t an
e m p lo y e e fo r h a v in g given o r b e in g a b o u t to g iv e te s tim o n y u n d e r th e L a b o r C o d e .
I t m u s t b e n o te d
th a t i t is o n ly th is ty p e o f u n f a ir la b o r p ra c tic e
m e n tio n e d in A rticle 259 [248] (U n fa ir L a b o r P ra c tic e s o f E m p lo y e rs ) w h ic h m ay
o r m ay n o t b e related to o r c o n n e c te d w ith th e e x e rc ise b y th e e m p lo y e e o f his
rig h t to se lf-o rg a n iz a tio n o r c o lle c tiv e b a rg a in in g . T h e e m p lo y e e g iv in g te s tim o n y
o r a b o u t to give o n e , m ay o r m a y n o t b e a m e m b e r o f a u n io n .2
T o cite an e x a m p le , in th e c ase o f
Philippine American Cigar? t h e
e m p lo y e r
d ism issed th e b r o th e r o f a n e m p lo y e e w h o filed a c a se a g a in st th e c o m p a n y . T h e
S u p re m e C o u r t ruled th a t s u c h a c t o f th e e m p lo y e r c o n s titu te s a n u n f a ir la b o r
p ractice. A th o u g h S ectio n 4 (a) 5 o f R .A . N o . 8 7 5 (n o w A rtic le 2 5 9 (f) [248(f)] o f
th e L a b o r C o d e ) w o u ld se e m to r e fe r o n ly to th e o n e w h o file d c h a rg e s a g a in s t the
c o m p a n y as c o n s titu tin g u n f a ir la b o r p ra c tic e , th e legislativ e in te n t is to a ssu re
a b s o lu te fre e d o m o f th e e m p lo y e e s to e s ta b lis h la b o r o rg a n iz a tio n s a n d u n io n s , as
well as to p r o ff e r c h arg es fo r v io la tio n o f la b o r law s.
I f th e d is m is s a l o f an
em p lo y e e d u e to th e filing b y h im o f c h a rg e s w o u ld b e a n d is a n u n d u e r e s tra in t 123
1 ART. 118. RetaTiafexy measures. - It shaS be unlawful for an employer to refuse to pay or reduce the wages and benefits,
discharge or in any manner discriminate against any employee vho has filed any complaint or hstiMed any proceeding
under this Tide or has testified or is about to testify in such proceedings.
2 P tiilcnm Fm ployees Union v. P hilippine G lobal C om m unications, G .R. No. 144315, July 17,2005.
3 Philippine American Cigar and Cigarette Factory Workers Independent Union v. Phfipphe American Cigar and Cigarette
Manufacturing Co., G.R. No. L-18364, Feb. 28,1963.
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LABOR. STANDARDS
17 3
u p o n said f re e d o m , d ie d ism issa l o f h is b r o t h e r o w in g to th e n o n -w ith d ra w a l o f t h e
c h a rg e s o f t h e f o rm e r , w o u ld b e a n d c o n s titu te as m u c h , in fa c t a g re a te r a n d m o r e
e ffe c tiv e , r e s tra in t u p o n th e sa m e f re e d o m . W h a t is p ro h ib ite d to b e d o n e d ire c tly
shall n o t b e a llo w e d to b e a c c o m p lis h e d in d ire c tly .
I n a n o th e r c a se ,
Itogon-Suyoc,*
l th e
H ig h C o u r t d e c la re d th a t an u n f a ir la b o r
p ra c tic e w a s c o m m itte d b y th e e m p lo y e r w h e n it d ism is se d th e w o r k e r w h o h a d
te s tifie d in th e h e a r in g o f a c e r tific a tio n e le c tio n c a s e d e s p ite its p r io r re q u e s t f o r
th e e m p lo y e e n o t to te stify in th e sa id p r o c e e d in g a c c o m p a n ie d w ith a p r o m is e o f
b e in g r e in s ta te d i f h e fo llo w e d s a id re q u e s t.2
9. FALSE STATEMENT, REPORT OR RECORD.
A rtic le 1 1 9 3 o f th e L a b o r C o d e p r o h ib its a n d c o n s id e rs i t u n la w fu l fo r a n y
p e r s o n , w h e th e r e m p lo y e r o r n o t , to m a k e an y false s ta te m e n t, r e p o r t o r r e c o r d
r e q u ire d to b e file d o r k e p t in a c c o r d a n c e w ith a n d p u r s u a n t to th e p r o v is io n s o f
th e L a b o r C o d e , k n o w in g s u c h s ta te m e n t, r e p o r t o r r e c o r d to b e false in a n y
m a te ria l re s p e c t.4
E x a m p le s o f s u c h s ta te m e n t, r e p o r t o r r e c o r d r e q u ire d to b e file d o r k e p t
u n d e r th e
L a b o r C o d e a re p a y ro lls , tim e r e c o r d s , e m p lo y m e n t r e c o r d s
and
p r o d u c tio n r e c o r d s , a m o n g o th e r s .
3.
WAGE DISTORTION
CONCEPT
a.
WAGE ORDER
1. WAGE ORDER, D EFIN ED .
T h e te r m
'Wage Order" r e fe rs
to th e o r d e r p r o m u lg a te d by th e R T W P B 5
p u r s u a n t to its w a g e fix in g a u th o r ity .6
2. PRESCRIBED INCREASES OR ADJUSTMENTS, D EFIN ED .
"Prescribed increases or adjustments"
r e fe r
to
th e
am ount
o r a d ju s tm e n ts in th e w a g e ra te o f w o r k e rs fix e d b y th e R T W P B
of
in c re a s e s
(hereafter may be
' ttogon-Suyoc Mnes, Inc. v. Baldo, G H No. L-17739, Dec. 24,1964.
See aiso National Fastener Corporation v. CIR. 1 SCRA17; Henares & Sons v. National Labor Union, 3 SCRA765.
3 ART. 119. False reporting. - It shall be unlawful for any person to make any statement report or record fifed or kept pursuant
to the provisions of Hits Code knowing sudi statement, report or record to be false in any material respect
4 Section 13, Rule X, Book III, Riies to Implement the Labor Code.
1
5
R egional T rip a rtte W ages and P roductivity Board (RTW PB).
6 Section 4 [nj, Rule I. NWPC Guidelines No. 01, Series of 2007, June 19,2007 [Amended Rules of Procedure on Mnimum
Wage Fodng]; Section 2 [h]. Department Order No. 10, Series of 1998 [May 04,1998],
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u b o r law
referred to as “Regotudboard') which the employer is mandated to pay upon effectivity
o f a Wage Older.1
3. W H EN PR O PER T O ISSUE WAGE O R D E R .
Whenever conditions in the region so warrant, the Regional Board shall
investigate and study all pertinent facts and based o n the prescribed standards and
criteria, shall proceed to determine whether a Wage O rder should be issued. Any
such Wage Order shall take effect after fifteen (15) days from its complete
publication in at least one (1) newspaper o f general circulation in die region.2
4. PUBLIC H EA R IN G S/C O N SU LT A TIO N S.
In die performance o f its wage-determining functions, the Regional Board
shall conduct public hearings/consultations, giving notices to employees’ and
employers’ groups, provincial, city and municipial officials and other interested
parties.3
5. STAN DA RDS/CRITERIA FO R M IN IM U M WAGE FIX IN G .
a.
Relevant factors to consider in fixin g m inim um wage.
The minimum wage rates to be established by die Regional Board shall be
as neatly adequate as is economically feasible to maintain the minimum standards
o f living necessary for the health, efficiency and general well-being o f the workers
within the framework o f national economic and social development goals. In the
determination o f regional minimum wages, the Regional Board shall, among other
relevant factors, consider the following:
(1) N eeds o f w orkers an d th eir families
a)
b)
c)
d)
e)
Demand for living wages;
Wage adjustment vis-a-vis die consumer price index;
Cost o f living and changes therein;
Needs o f workers and their families;
Improvements in standards o f living.
(2) CapacityLtojiay
a) Fair return on capital invested and capacity to pay o f employers;
b) Productivity.
(3) Comparable w ages an d incom es
a)
Prevailing wage levels.
(4) R equirem ents o f econom ic an d social developm ent
a) Need to induce industries to invest in die countryside;
b) Effects on employment generation and family income;
1 Sec6on2g, DepartmentOrderNo. 10, Seriesof1998[May04,1998.
2 Article 123.laborCode.
Ch apter th ree
LABORSTANDARDS
175
c) Equitable distribution o f income and wealth along die imperatives
o f economic and social developm ent1
b. Standardprevailing m inim um wages in every region.
The wages shall be die standard prevailing minimum wages in every
region. These wages shall include wages varying with industries, provinces o r
localities if in die judgment o f the Regional Board, conditions make such lo cal
differentiation proper and necessary to effectuate the purpose o f the law.2
6. M E T H O D S O F FIX IN G T H E M IN IM U M W AGE RATES.
The Supreme Court has identified two (2) methods o f fixing the minimum
wage, namely.
1. "Floor-Wag” method which involves the fixing o f a determinate
amount to be added to the prevailing statutory minimum wage rates.
This was applied in earlier wage orders; and
2. “Salary-Cap" or “Salary-Ceiling”method where the wage adjustment is
to be applied to employees receiving a certain denominated salary
ceiling. In other words, workers already being paid more than the
existing minimum wage (up to a certain amount stated in the Wage
Order) are also to be given a wage increase.34
The “SalayCap"or "SahyCethg”method is the preferred mode.*
The distinction between the two (2) methods is best shown by way o f an
illustration. Under the 'Floor Wag Method, ” it would be sufficient if the Wage O rder
simply set P15.00 as die amount to be added to the prevailing statutory minimum
wage rates; while in the "SalaryCdbig Method,” \t would be sufficient if the Wage
Order states a specific salary, such as P250.00, and only those earning below it shall
be entided to the wage increase.
When neither o f the two (2) methods is used and instead what was
granted was an across-the-board (ATB) wage increase, die Regional Board is
deemed to have exceeded its authority {ultra pins) by extending the coverage o f die
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Wage O rder to wage earners receiving more than the prevailing minimum wage
rate without a denominated salary ceiling.3
1 Seclm 2. R ^ lN W P C G u d e ^ F h 01. Series of2007, June 19,2007 {Amended Rules of PraceduBtnMnimwn
WageFargfcAride 124, LaborCode.
* kt
1 Employes Confederation ofthePhfyphes v. NWPC, G fi. No. 96169, Sept 24,1991,201SVRMSt See also Norids
Freeand todependsflVtalasUnion v. NoddsTracfingCompany. hc,G Jl No. 157098.June 30,2005.
4 The secondmeftod above was usediiRepubfc Acts Nos. 6640 and 6727 and hPresdertial Decrees Nos.525,1123,
1614,1634,16IB, 1713 andWbge Ortas Nos. 1,2,3,5 and 6.Thismethodis petered as 1 mnmizes dispute invoking
w agetfstafaifli).
s MebopoOan Bank and Trust Co, Inc. v. NWPC, GJl No. 144322, Feb. 6,2007; Nasjpi Integrated Anastre and
Stevedoring Services, Inc. (MASS)] v. Nasjft Employees Labor Union (NELO}ALU-TUCP. G il No. 162411. June 27,
2008.
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o n labor law
W h ile A T B w ag e in c re a se s h a v e b e e n g ra n te d in d ie p a s t, c u r r e n t p o lic y
d isco u rag es th e R eg io n al B o a rd s fro m g ra n tin g A T B a d ju s tm e n ts as th e y c r e a te
m o re d is to rtio n s in th e la b o r m a r k e t w h ic h in tu rn a f fe c t a d v e rse ly d ie in c o m e a n d
sta n d ard o f liv in g o f w o rk e rs a n d th e ir fam ilies. S p ecifically A T B w a g e in c re a s e s (1)
h av e g re a te r im p a c t o n in fla tio n ; (2) a re d is in c e n tiv e s to tra d e u n io n is m ; a n d (3) a re
n o t c o n s iste n t w ith th e m in im u m w ag e fix in g m a n d a te o f th e R e g io n a l B o a rd s .1
7.
S O M E P R IN C IP L E S O N W A G E F IX IN G .
a. O n i s s u a n c e o f w a g e o r d e r,
•
Contents o f Wage Order.
p ro v in c e , o r in d u stry
th e re u n d e r
shall a p p ly
- A W a g e O r d e r shall sp e c ify th e re g io n ,
to w h ic h
an d
th e m in im u m
p r o v id e
w ag e ra te s p r e s c r ib e d
e x e m p tio n s ,
i f an y ,
s u b je c t
to
g u id elin es issu ed b y th e C o m m is s io n .2
•
Frequency o f Wage Order. - A n y
W ag e O r d e r iss u e d b y th e R e g io n a l
B o a rd m ay n o t b e d is tu rb e d fo r a p e rio d o f tw elv e (12) m o n th s f ro m its
cffc ctiv ity , and n o p e titio n fo r w ag e in c re a s e shall b e e n te r ta in e d w ith in
th e said p e rio d e x c e p t w h e n th e re a re s u p e rv e n in g c o n d itio n s , s u c h as
e x tra o rd in a ry
in c re a se
in
p ric e s
of
p e tr o le u m
p r o d u c ts
and
b a sic
g o o d s /s e r v ic e s , w h ic h d e m a n d a re v ie w o f th e m in im u m w ag e r a te s as
d e te rm in e d by th e R e g io n a l B o a rd a n d c o n f irm e d b y th e C o m m is s io n
(N W P C ),3 in w h ic h c a se , th e R e g io n a l B o a rd shall p r o c e e d to e x e rc is e its
w ag e fix in g fu n c tio n e v e n b e f o re th e e x p ira tio n o f th e sa id p e r io d .4
•
Effectivity o f Wage Order; requirement o f publication.
-
A W age
O r d e r shall b e p u b lis h e d o n ly a f te r its re v ie w by th e C o m m is s io n a n d
sh a ll ta k e e ffe c t fifte e n (15) d ay s a f te r its p u b lic a tio n in a t le a s t o n e (1)
n e w s p a p e r o f g e n e ra l c irc u la tio n in th e re g io n .5
b . O n p u b lic h e a rin g s /c o n s u lta tio n s .
• H e a rin g s m ay b e c o n d u c te d by th e R e g io n a l B o a rd
en banc o r
b y a d u ly
a u th o riz e d c o m m itte e th e r e o f w h e re in e a c h s e c to r sh a ll b e r e p re s e n te d .6
• N o p re lim in a ry o r p e r m a n e n t in ju n c tio n o r te m p o ra ry r e s tra in in g o r d e r
m ay b e issu ed b y an y c o u rt, trib u n a l o r an y o th e r e n tity a g a in s t a n y
p ro c e e d in g b e f o re th e C o m m is s io n o r R e g io n a l B o a rd .7
1 SeehttpiAwvw.mvpc.dole.gw.pMaq.htiil.
1 Section 2, Rule IV, NWPC Guidelines No. 01, Series o f 2007, June 19.2007 [Amended Rules of Procedure on Mn'mum
Wage Fixing).
3 Referring to the National Wages and Producfrrity Commission (NWPC)
* Section 3, Rule IV, NWPC Guidelines No. 01, Series of 2007, June 19,2007 [Amended Rules of Procedure on Mnunum
Wage Feting).
5 Artide 123, Labor Code; Section 4, Chapter III, Rules implementing RA. No. 6727. Section 5, Rule (V, NWPC Guidelines
No. 01, Series of 2007, June 19,2007 [Amended Rules of Procedure on Minimum Wage Fixing).
6 Section 2. Rule III. NWPC Guidelines No. 01. Series of 2007. June 19.2007 [Amended Rules of Procedure on M nim um
Wage Roong).
7 Section 7, Rule III, bid.
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• F a ilu re to c o n d u c t p u b lic h e a r in g s /c o n s u lta tio n s a n d to p u b lis h a w ag e
o r d e r r e n d e r s it in v a lid .1
c. On applicability of wage order,
• W age
in c re a s e s
m a n d a te d
by
w ag e
o r d e rs
a p p ly
o n ly
to
co v ered
e m p lo y e e s s p e c ifie d th e r e in .2
• I f n o n e o f th e e m p lo y e e s a re re c eiv in g salaries b e lo w th e p re s c rib e d
m in im u m w a g e , a n e m p lo y e r is n o t o b lig e d to g ra n t th e w ag e in c re a se to
a n y o f th e m .34
b.
WAGE DISTORTION
1.
W A G E D IS T O R T IO N , AS D E F IN E D IN T H E LAW A N D
IM P L E M E N T IN G R U L E S .
‘Wage distortion’A c o n te m p la te s
a s itu a tio n w h e r e a n in c re a s e in p re s c rib e d
w a g e ra te s re su lts in e ith e r o f th e fo llo w in g :
1.
Elimination
o f th e q u a n tita tiv e d iffe re n c e s in th e ra te s o f w ag es o r
sa laries; o r
2.
Seven contraction o f
in te n tio n a l q u a n tita tiv e d if fe r e n c e s in w a g e o r salary
ra te s b e tw e e n a n d a m o n g e m p lo y e e g r o u p s in a n e s ta b lis h m e n t as to
e ffe c tiv e ly o b lite ra te th e d is tin c tio n s e m b o d ie d in s u c h w ag e s tr u c tu r e
b a s e d o n th e fo llo w in g c rite ria :
a) Skills;
b) L e n g th o f se rv ic e ; o r
c) O t h e r lo g ical b a s e s o f d if fe r e n tia tio n .5
Wage distortion presupposes a classification of positions a n d ranking o f
th e s e p o s itio n s a t v a rio u s le v e ls .
O n e v isu a liz e s a h ie ra rc h y o f p o s itio n s w ith
c o rre s p o n d in g ra n k s b asically in te r m s o f w a g e s a n d o th e r e m o lu m e n ts . W h e r e a
sig n ific a n t c h a n g e o c c u r s a t th e lo w e s t lev el o f p o s itio n s in te r m s o f b a s ic w a g e
w ith o u t a c o rre s p o n d in g c h a n g e in th e o t h e r lev el in th e h ie ra rc h y o f p o s itio n s ,
n e g a tin g a s a r e s u lt t h e r e o f th e d is tin c tio n b e tw e e n o n e level o f p o s itio n fro m th e
n e x t h ig h e r level, a n d re s u ltin g in a p a rity b e tw e e n th e lo w e s t level a n d th e n e x t
h ig h e r le v e l o r ra n k , b e tw e e n n e w e n tr a n ts a n d o ld h ire s, th e r e e x is ts
'
3
3
4
5
a w age
Cagayan Sugar Milting Company v. Secretary of Labor and Employment, G.R. No. 128399 Jan. 15.1998.
Capitol Wireless, Inc. v. Bate, G R No. 104682, July 14.1995.
Pag-Asa Sled Worts, Inc. v. CA, G.R. No. 166647, Mach 31,2006.
Mabeza v. NLRC, G.R. No. 118506, April 18,1997,271SCRA 670.
Article 124, Labor Code; Item [p], Definition of Terns, Rules Implementing Repubfc Act No. 6727; Section 4 [mj, Rule I,
NWPC Guideines No. 01, Series of 2007, June 19,2007 (Amended Rules of Procedure on Mnimum Wage FbcjngJ; See
also Section 1(1], Rule II, NCMB Revised Procedural Guidelines in the Conduct of Volintary Arbitration Proceedings (Od 15.
2004],
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on
Labor Law
d isto rtio n , xxx. T h e c o n c e p t o f w a g e d is to r tio n a s s u m e s a n e x is tin g g r o u p in g o r
classificatio n o f em p lo y ees w h ic h e s ta b lis h e s d is tin c tio n s a m o n g su c h e m p lo y e e s
o n so m e rele v a n t o r leg itim a te b a sis. T h is cla ssific a tio n is re fle c te d in a d iffe rin g
w age ra te fo r each o f th e e x is tin g cla sse s o f e m p lo y e e s .1
2. F O U R (4 ) E L E M E N T S O F W A G E D I S T O R T I O N .
'ITie fo u r (4) e le m e n ts o f w a g e d is to r tio n a re as follow s:
(1) A n ex istin g h ie ra rc h y o f p o s itio n s w ith c o rre s p o n d in g salary ra te s;
(2) A sig n ifican t c h a n g e in th e sa lary ra te o f a lo w e r p a y c lass w ith o u t a
c o n c o m ita n t in c re a s e in th e sa lary ra te o f a h ig h e r o n e ;
(3) T h e e lim in a tio n o f t h e d is tin c tio n b e tw e e n th e tw o levels; a n d
(4) T h e ex iste n ce o f th e d is to r tio n in th e s a m e re g io n o f th e c o u n try .2
N o rm a lly , a c o m p a n y h a s a w a g e s tru c tu re o r m e th o d o f d e te r m in in g th e
w ages o f its em p lo y ees. In a p r o b le m
d e a lin g w ith
"wage distortion,"
tire b a s ic
a s su m p tio n is th a t th e re e x is ts a g r o u p in g o r c la ssific a tio n o f e m p lo y e e s th a t
esta b lish e s d istin c tio n s a m o n g th e m o n s o m e re le v a n t o r le g itim a te b a s e s.3
In v o lv e d in th e c la s sific a tio n o f e m p lo y e e s a re v a rio u s f a c to rs s u c h as th e
d e g re e s o f r e s p o n s ib ility , th e s k i l l s a n d k n o w l e d g e re q u ire d , th e c o m p l e x i t y o f
th e jo b , o r o t h e r lo g ic a l b a s i s o f d iffe re n tia tio n . T h e d iffe rin g w a g e ra te fo r e a c h
o f th e ex istin g classes o f e m p lo y e e s re fle c ts th is cla ssific a tio n .
3.
“E LIM IN A T IO N ”VS. “SE V E R E C O N T R A C T IO N .”
In o rd e r to ju stify a d ju s tm e n t in w ag e ra te s , it is n o t re q u ire d th a t th e re
sh o u ld b e a c o m p le te e lim in a tio n o f q u a n tita tiv e w a g e d iffe re n c e s .
of
"severe contraction”o f su c h
T h e law m e n tio n s
T h e e x is te n c e
q u a n tita tiv e w a g e d iffe re n c e s is s u ffic ie n t.
"intentional quantitative differences” in
w a g e o r salary ra te s
b e tw e e n a n d am o n g e m p lo y e e -g ro u p s in a n e sta b lis h m e n t. B y th e te r m
"intentional”
m e a n s th a t th e q u a n tita tiv e d if fe r e n c e s h a d b e e n a rriv e d a t th r o u g h th e c o lle c tiv e
b a rg a in in g p ro c e ss a n d c o n c lu d e d by th e p a rtie s.
T h e in te n tio n o f th e p a rtie s o n
th e issu e o f w h e th e r o r n o t th e b e n e f its u n d e r th e C B A s h o u ld b e e q u a te d w ith
th o se g ra n te d by law m u s t p re v a il a n d s h o u ld b e g iv e n full e ffe c t.
4. S E V E R E C O N T R A C T I O N ; M E A S U R E T H E R E O F .
In
Metro Bank*
th e S u p re m e C o u r t said th a t th e c o n tr a c tio n b e tw e e n
p e rs o n n e l g ro u p in g a t a b o u t e ig h ty -th re e p e r c e n t (83% )
c e rta in ly c a n n o t b e
1 National Federafion of labor v. NLRC, G.R. No. 103586, July 21,1994,234 SCRA 311; See also Metropolitan Bank md
Trust Company Employees Union-ALU-TUCP v. NLRC, G .R No. 102636, Sept 10,1993,226 SCRA 268; Cadona v.
NLRC, G.R No. 89007, M arti 11.1991.195 SCRA 92; Associated labor Unions-TUCP v. NIRC, G.R No. 109328, Aug.
16,1994,235 SCRA 395.
J Poibankers Association v. Prudential Bank and Trust Company. G il No, 131247, Jan. 25,1999,302 SCRA 74.
3 National Federate of laborv. NLRC, G.R No. 103586, July 21,1994,234 SCRA 311.
* Metropolitan Bank and Trust Company Employees Union-ALU-TUCP v. NLRC, G R No. 102636, SepL 10,1993.
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c o n s id e re d less th a n se v ere .
C o n s e q u e n d y , th e r e is n o d o u b t th a t th e re is a n
e v id e n t se v e re c o n tr a c tio n w h ic h re su lte d in w ag e d is to rtio n .
5. C A S E S W H E R E N O W A G E D I S T O R T I O N O C C U R S .
In
Prubankers}
it w as d ec la re d
th a t w a g e
d is to rtio n p r e s u p p o s e s a n
in c re a se in th e c o m p e n s a tio n o f th e lo w e r ra n k s in a n o ffic e h ie ra rc h y w ith o u t a
c o r re s p o n d in g ra ise fo r h ig h e r-tie re d e m p lo y e e s in th e sa m e re g io n o f d ie c o u n tr y ,
re su ltin g in d ie e lim in a tio n o r th e se v ere d im in u tio n o f th e d is tin c tio n b e tw e e n th e
tw o g ro u p s . S u c h d is to r tio n d o e s n o t arise w h e n a w a g e o r d e r gives e m p lo y e e s in
o n e b r a n c h o f a b a n k h ig h e r c o m p e n s a tio n th a n th a t g iv e n to th e ir c o u n te r p a r ts in
o t h e r re g io n s o c c u p y in g th e
same
p ay scale, w h o a r e n o t c o v e re d b y said w a g e
o r d e r. I n s h o r t, th e im p le m e n ta tio n o f w a g e o r d e r s in o n e re g io n b u t n o t m o t h e r s
d o e s n o t in its e lf n e c e ssa rily re s u lt in w ag e d is to r tio n .
A d i s p a r i t y in w a g e s b e t w e e n e m p l o y e e s h o l d i n g s i m i l a r p o s i t i o n s
b u t in d iffe re n t re g io n s d o e s n o t c o n s titu te w a g e d is to r tio n as c o n te m p la te d
b y la w . I t is th e h ie ra rc h y o f p o s itio n s a n d t h e d is p a rity o f th e ir c o r r e s p o n d in g
w a g e s a n d o th e r e m o lu m e n ts th a t a rc s o u g h t to b e p re s e rv e d by th e c o n c e p t o f
w a g e d is to rtio n .
P u t d iffe re n d y , a w ag e d is to r tio n a rises w h e n a w a g e o r d e r
e n g e n d e rs w a g e p a rity b e tw e e n e m p lo y e e s in
different
ru n g s o f th e o rg a n iz a tio n a l
la d d e r o f th e sa m e e s ta b lis h m e n t. I t b e a rs e m p h a s is th a t w a g e d isto rtio n in v o lv e s a
p a rity in th e sa la ry ra te s o f
different pay
c la s se s w h ic h , as a resu lt, e lim in a te s t h e
d istin c tio n b e tw e e n th e d if fe r e n t ra n k s in th e s a m e re g io n .
T h e d if fe r e n c e in w a g e s b e tw e e n e m p lo y e e s in th e sa m e p a y sc a le in
different re g io n s
is n o t th e m is c h ie f s o u g h t to b e b a n is h e d b y th e law . I n fact, R .A .
N o . 6 7 2 7 *2 r e c o g n iz e s “ e x i s t i n g r e g io n a l d i s p a r i t i e s in t h e c o s t o f liv in g ” in
its S e c tio n 2.3
6. F O R M U L A F O R R E S O L V I N G W A G E D I S T O R T I O N .
In th e sa m e c a s e o f
Metro Bank,
th e C o u r t h a s g iv e n its
imprimatur to
th e
fo llo w in g fo rm u la fo r th e c o r re c tio n o f w a g e d is to r tio n in th e pay scale s tr u c tu r e s
fo r b e in g ju st a n d e q u ita b le :
Minimum Wage = % x Prescribed Increase = Distortion Adjustment
Actual Salary
7. W A G E D I S T O R T I O N ; H O W R E C T I F I E D .
1. I n
orwnned establishments.
- W h e r e t h e a p p lic a tio n o f a n y p r e s c r ib e d
w a g e in c re a se b y v irtu e o f a W age O r d e r is s u e d b y th e R T W P B re s u lts in
' Prubankers Association v. Prudential Bank and Trust Company. G.R. No. 131247. Jan. 25.1999,302 SCRA 74.
2 R A No. 6727, ottierwise known as the *Wage Rationalization Act"
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•
d is to rtio n s o f th e w age s tr u c tu r e w ith in a n e s ta b lis h m e n t, th e e m p lo y e r a n d th e
u n io n sh o u ld n eg o tiate to c o r r e c t th e d is to rtio n s . A n y d is p u te a risin g f ro m w ag e
d isto rtio n s sh o u ld b e re so lv e d th r o u g h th e g rie v a n c e p r o c e d u r e u n d e r th e ir C B A
an d , if it re m a in s u n re so lv e d , th r o u g h v o lu n ta ry a rb itra tio n .
U n le s s o th e rw is e
ag reed by th e p a rtie s in w ritin g , s u c h d isp u te s h o u ld b e d e c id e d b y th e V o lu n ta ry
A rb itra to r o r p a n e l o f V o lu n ta ry A r b itra to r s w ith in te n (10) day s fro m th e tim e sa id
d isp u te w as re fe rre d to v o lu n ta ry a r b itra tio n .1
2. I n
unomnbed establishments.
a g re e m e n ts o r re c o g n iz e d
- I n cases w h e r e th e re a re n o c o lle c tiv e
la b o r u n io n s ,
th e e m p lo y e rs
and
w o rk e rs
s h o u ld
e n d e a v o r to c o rre c t su c h d is to r tio n s . A n y d is p u te arisin g th e r e fr o m s h o u ld b e
se ttled th ro u g h th e N a tio n a l C o n c ilia tio n a n d M e d ia tio n B o a rd (N C M B ) a n d , i f it
rem ain s u n re so lv e d a fte r te n (10) d ay s o f c o n c ilia tio n , s h o u ld b e re fe rre d to a n y o f
d ie L a b o r A rb ite rs o f th e a p p r o p r ia te b ra n c h o f th e N L R C . I t sh a ll b e m a n d a to ry
fo r th e N L R C to c o n d u c t c o n tin u o u s h e a rin g s a n d d e c id e th e d isp u te w ith in
tw en ty (20) days
fro m
th e
tim e
said d isp u te
is
s u b m itte d
fo r c o m p u ls o ry
a rb itra tio n .23
3.
Effect ofpendency of a wave distortion dispute.
- T h e p e n d e n c y o f a d is p u te
arisin g fro m w ag e d is to rtio n sh a ll n o t, in an y w ay, d e la y th e ap p lic a b ility o f an y
in crease in p re sc rib e d w ag e r a te s p u r s u a n t to th e p r o v is io n s o f th e W ag e O r d e r .5
8.
P R O H I B I T IO N O N S T A G IN G O F S T R IK E O R L O C K O U T .
A n y issue in v o lv in g w a g e d is to r tio n is n o t a valid g r o u n d fo r a strik e o r
lo c k o u t.4 W ag e d is to rtio n s s h o u ld b e c o rre c te d th ro u g h v o lu n ta ry n e g o tia tio n o r
a rb itra tio n in ste a d o f strik e s, lo c k o u ts o r o th e r c o n c e r te d activities.
U n ila te ra l o r
n e g o tia te d w ag e in crease s g r a n te d b y e m p lo y e rs fo r th e p u r p o s e o f c o rre c tin g s u c h
w ag e d is to rtio n s a re in k e e p in g w ith th e p u b lic p o licy o f e n c o u ra g in g e m p lo y e rs to
g ra n t w ages h ig h e r th a n le g isla te d w a g e ra te s.5
T o c o m p e l e m p lo y e rs sim p ly to a d d u p o n leg islated in c re a se s in sa laries o r
allo w an ces w ith o u t re g a rd to w h a t is a lread y b e in g p a id w o u ld b e to p e n a liz e
e m p lo y ers w h o g ra n t th e ir w o r k e rs m o r e th a n th e sta tu to rily -p re s c rib e d m in im u m
ra te s o f in crease s. C learly, th is w o u ld b e c o u n te r -p r o d u c tiv e so f a r as se c u rin g th e
in te re sts o f la b o r is c o n c e r n e d .6
1 Paragraph 1, Secfion 1, Rule VII, NWPC Guidelnes No. 01, Series of 2007, June 19,2007 [Amended Rules of Procedure
on Mnimum Wage Rang]; Article 124, Labor Code; Secfion 7, Chapter II, Rules Implementing R A No. 6727.
2 Paragraph 2, Secfion 1, Rule VII, Ibid.; Article 124, bid.; Section 7, Chapter Ilf Ibid.
3 Paragraph 2, Secfion 1, Rule VII, bid.; Article 124, Ibid.; Section 7, Chapter III, bid.
4 Secfion 16, Chapter I, Rules Implementing R A No. 6727; Haw at BukJod ng Manggagawa v. NLRC, 6.R. No. 91980, June
27,1991.
5 Associated Labor Unions-TUCP v. N .R C , G.R. No. 109328, Aug. 16,1994,235 SCRA 395.
6 Apex Wring Co.. Inc. v. NLRC. G R No. 86200, Feb. 25,1992,206 SCRA 497,501; Metropolian Bank and Trust Company
Employees Urioo-ALU-TVCPv. NLRC G it No. 102636, Sept 10.1993.
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LABORSTANDARDS
9. W A G E D I S T O R T I O N N O T V A L ID S U B J E C T O F S T R IK E O R
LOCKOUT.
W a g e d is to r tio n is n o t a p r o p e r g r o u n d to b e in v o k e d in s u p p o r t o f a
strik e o r lo c k o u t. D is p u te s a risin g f ro m w a g e d is to r tio n re su ltin g fro m w a g e o r d e rs
iss u e d b y th e R T W P B s w h ic h a r e alleg ed in th e n o tic e o f strik e o r n o tic e o f lo c k o u t
s h o u ld b e r e f e r r e d to t h e L a b o r A r b i t e r i f n o t se ttle d w ith in te n (10) c a le n d a r
d a y s o f c o n c ilia tio n b y th e N C M B .1
10. W A G E D I S T O R T I O N , W H E N C O R R E C T I B L E .
T h e e m p lo y e r c a n n o t legally b e o b lig a te d to c o r re c t
“wage distortion ” if
th e
in c re a se in th e w a g e s a n d sa laries o f th e n e w ly -h ire d e m p lo y e e s w as n o t d u e to a
p r e s c r ib e d la w o r w a g e o r d e r b u t d u e to in c re a s e s it v o lu n ta rily g r a n te d to th e m .
T h e w o r d in g s o f A rtic le 124 a re clear. I f it w as th e in te n tio n o f th e le g isla to rs to
c o v e r all k in d s o f w a g e a d ju s tm e n ts , th e n th e la n g u a g e o f th e la w s h o u ld h a v e b e e n
b ro a d , n o t re stric tiv e , a s it is c u r re n d y p h ra s e d .
I f th e c o m p u ls o ry m a n d a te u n d e r A rtic le 124 to c o r re c t
a p p lie d to
voluntary and unilateral in c re a se s
“wage distortion ” is
e ffe c te d b y th e e m p lo y e r in fix in g lu n n g
ra te s w h ic h a re in h e r e n d y a b u s in e s s ju d g m e n t o r p re ro g a tiv e , th e n th e h a n d s o f
th e e m p lo y e r w o u ld b e c o m p le te ly tie d e v e n in c a s e s w h e re a n in c re a s e in w a g e s o f
a p a rtic u la r g ro u p is ju stifie d d u e to a re -e v a lu a tio n o f d ie h ig h p ro d u c tiv ity o f a
p a rtic u la r g r o u p , o r th e n e e d to in c re a s e th e c o m p e titiv e n e s s o f th e e m p lo y e r ’s
h irin g ra te . A n e m p lo y e r w o u ld b e d is c o u ra g e d f r o m a d ju s tin g th e salary ra te s o f a
p a rtic u la r g r o u p o f e m p lo y e e s fo r fe a r th a t it w o u ld re su lt to a d e m a n d b y all
e m p lo y e e s fo r a sim ila r in c re a s e , e s p e c ia lly i f t h e fin a n c ia l c o n d itio n s o f th e
b u s in e s s c a n n o t a d d r e s s a n
I n th e c a se o f
across-the-board in c re a se .
Bankard,23th e
c la im th a t th e o b lig a tio n to
p e titio n e r c ite d
Metro TransitJ
to s u p p o r t its
re c tify w a g e d is to r tio n is n o t c o n f in e d
to w a g e
d is to r tio n r e s u ltin g f ro m g o v e r n m e n t d e c r e e d la w o r w ag e o r d e r. R e lia n c e o n
Metro
Transit
w age
is, h o w e v e r , m is p la c e d a s th e
o b lig a tio n
th e re in
to
re c tify
th e
d is to r tio n w a s n o t b y v ir tu e o f A rtic le 1 2 4 o f th e L a b o r C o d e b u t o n a c c o u n t o f a
th e n e x is tin g
“company practice" th a t
w h e n e v e r ra n k -a n d -file e m p lo y e e s w e r e p a id a
s ta tu to rily m a n d a te d salary in c re a s e , s u p e rv is o ry e m p lo y e e s w e re , as a m a tte r o f
p ra c tic e , a lso p a id t h e s a m e a m o u n t p lu s a n a d d e d p re m iu m .
T h e m e r e fa c tu a l e x is te n c e o f w a g e d is to r tio n d o e s n o t, h o w e v e r ,
ipsofacto
re s u lt to a n o b lig a tio n to r e c tify it, a b s e n t a la w o r o t h e r s o u r c e o f o b lig a tio n w h ic h
r e q u ire s its re c tific a tio n .
1 Section 6 [c], Rule V, NCMB Manual of Procedures for Coodlaton and Prevents Mediation Cases.
Bankard Employees Union-Workers Alliance Trade Unions, v. NLRC, G.R. No. 140689, Feb. 17,2004.
3 Metro Transit Organization, Inc. v. NLRC, GR. No. 116008, July 11,1995,245 SCRA767.
2
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Ba r Reviewer o n Labor La w .
11. R ESTO RA TIO N O F SU BSTA NTIA L D IF F E R E N T IA T IO N .
It must be noted that in correcting wage distortion, the law does not
require that the difference which had previously existed between and among the
employees o f different classes be restored in exacdy the same am ount What is
required is substantial difference in such wage rates.1
4.
NON-DIMINUTION OF BENEFITS
1. TWO (2) PRIN CIPLES E N U N C IA T E D IN A RTIC LE 100.
Article 1002 ordains two (2) principles, namely: [1] the non-eSmination and
(2) the non-diminution, in any way, o f the “supplem ents or other employee
benefits.” This means that the reduction or diminution o r withdrawal by
employers o f any such benefits, supplements or payments as may be provided in
existing laws, individual or collective agreements or voluntary employer practice or
policy, is not allowed.3
2. M EANING O F “SUPPLEMENTS OR OTHER EMPLOYEE
BENEFITS”IN A RTIC LE 100.
Generally, employees have a vested right over existing benefits voluntarily
granted to them by their employer.4 Thus, any benefit and supplement being
enjoyed by the employees cannot be reduced, diminished, discontinued or
eliminated by die employer.3 Elimination, discontinuance o r diminution o f benefits
refers to the act o f the employer in unilaterally withdrawing the benefits already
The principle o f non-elimination or non-diminution enshrined in Article
100 covers only "supplements or other employee benefits. 'n Verily, the phrase “supplements
or otheremployee benfits”isi Article 100 is construed to mean the compensation and
privileges received by an employee aside from regular salaries o r wages.8
The issue o f what is meant by the term "benefits”under die contemplation
o f Article 100 was ridsed in Rvyal Plant v. Coca-Cola? Respondent company
removed die chairs o f its bottling operators who, as early as 1974, were provided
NaSondFuteraKonofLaborv. M JtC ,G R No. 103586,JuV21,1994,234 SCRA 311.
M.IOO.notMnag^eCmHia&nwi&m^ofba^.-Nciihi^inlhisBookshaSbecons&uedtoetniuteor'n
a n y ^ c f r i^ supplements, a tfte re m p to y m b e r^ b ^ e n o y e d a t (he firo of promigafion of his Code.
Repubic Ranters Bank, now Iro m as PNB-RepublcBarkv.NlRC,6R No. 117460, Jan 6,1997.
Vergarat Jr. v.OxaColaBotJem Pt^ppiies,he, G R No. 176985, A p ril,2013.
Eastern TeleootntmaticaSons Pl^ppines. Inc. v. Eastern Telecoms Employees Union, G R No. 185665, Feb. 8,2012.
Vergara, Jr. v. CocaGola 8o8ers Rttppnes, Inc., supra: See also Supreme Steel CorpqpSon v. Nagkakaisang
Manggagawang Supreme IndependentUnion (NMS^Nt>APL).GR No. 185556, March 28,2011.
NeEnk Computer Inc v.0elnx),G R No. 160827. June 18.2014.
Id.
Royal PlantWorkers Union v. CocaCoia Boaters Philippines, inc.-Cebu Plant, G R No. 188783, April 15,2013.
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C H U TER TH R EE
L A B O R ST A N D A R D S
183
with chairs upon their request. Sometime in September 2008, o r after more than
30 years, the chairs provided for the operators were removed pursuant to a
national directive o f respondent company which is in line with its "I Operate, l
Maintain, 1 Clean” program for bottling operators, wherein every bottling operator
is given the responsibility to keep the machinery and equipment assigned to him
dean and safe. The program reinforces the task o f bottling operators to constantly
move about in the performance o f their duties and responsibilities. The union
claimed that the CCBPI’s decision to unilaterally remove the operators’ chairs
constitutes diminution o f benefits provided in Article 100 o f the Labor Code. The
Supreme Court, however, ruled dial there can be no violation o f Article 100
because the operators’ chairs cannot be considered as one o f the "employee benefits”
covered thereunder. In the Court’s view, die term "benefits”mentioned in die non­
diminution rule refers to monetary benefits or privileges given to the employee
with monetary equivalents. Such benefits o r privileges form part o f die employees’
wage, salary or compensadon making them enforceable obligations.
It must be noted that several cases have been dedded regarding the nondiminution rule where die benefits or privileges involved therein mainly concern
monetary considerations or privileges with monetary equivalents. Thus, die “other
employee benefits" spoken jof by A rtide 100 should pertain only to those which are
susceptible o f monetary considerations. Indeed, this could only be the m ost
plausible condusion because the cases tackling Artide 100 involve mainly -with
monetary considerations or privileges converted to their monetary equivalents.
Some o f these cases are:
(1) Eastern Telecommunication Phils. Inc. v. Eastern Telecoms Employees Union,1
where the case involves the payment o f 14th, 15th and 16th month
bonuses;
(2) CentralAqucarem De Tarlac v. CentralAqucarera De Tarlac Labor UnionNLU,23regarding the 13th month pay, legal/special holiday pay, night
premium jpay and vacation and sick leaves;
(3) TSPIC Carp. 0. TSPIC ' Employees Union,1 regarding salary wage
increases;
(4) American Wire and Cable Daijy Employees Union 0. American Wire and
Cable Compary, Inc,4 involving service awards with cash incentives,
premium pay, Christmas party with inadental benefits and
promotional increase.
But there ate some monetary claims that cannot be considered as falling
within the definition o f “benefits”under the non-diminudon prinriple in A rtide 100.
1 G A No. 185665, Feb. 8,2012.
* G A No. 188949.July26.2010.
3 G.R. 163419. Feb. 13.2008.
4 G A No. 155059, Aprt 29.2005.
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Bar Reviewer o n Labor Law
184
F o r in stan c e, in
“benefit”
San Miguel Corp. v. Layoc, Jr.}
it w a s h e ld th a t o v e rtim e pay is n o t a
as th is te rm is u n d e r s to o d w ith in th e c o n te m p la tio n o f A rtic le 100 sin c e
tire em p lo y e e s c o u ld n o t d e m a n d o v e rtim e p a y f ro m th e ir e m p lo y e r if they d id n o t
re n d e r
o v e rtim e
w ork.
The
r e q u ire m e n t
of
re n d e rin g
a d d itio n a l
se rv ic e
d iffe re n tia te s o v e rtim e pay fro m b e n e fits s u c h as 1 3 th m o n th p a y o r yearly m e rit
increase. T h e s e
b e n e fits
do
not
re q u ire
an y
a d d itio n a l
se rv ic e
fro m
th e ir
b en efician es. T h u s , o v e r tim e p a y d o e s n o t f a ll w i t h i n t h e d e f i n i ti o n o f b e n e f i t s
u n d e r A r tic le 100 o f t h e
L a b o r C o d e . C o n tr a r y to th e n a tu re o f b e n e fits ,
p e titio n e rs d id n o t freely g iv e th e p a y m e n t f o r o v e r tim e w o r k to re s p o n d e n ts .
P etitio n e rs p a id re sp o n d e n ts o v e r tim e p ay as c o m p e n s a t i o n fo r se rv ic e s r e n d e r e d
in a d d itio n to th e reg u lar w o r k h o u rs . R e s p o n d e n ts r e n d e r e d o v e rtim e w o rk o n ly
w h e n th e ir se rv ices w ere n e e d e d a f te r th e ir re g u la r w o rk in g h o u r s a n d o n ly u p o n
th e in stru c tio n s o f th e ir s u p e rio rs . R e s p o n d e n ts e v e n d if fe r as to th e a m o u n t o f
o v e rtim e p a y receiv ed o n a c c o u n t o f th e d if fe r e n c e in th e a d d itio n a l h o u r s o f
services re n d e re d .
T h e e a rlier case o f
Manila Jockey Club, Inc.} h a s
Manila Jockey Club Employees Labor Union PTGIVO v.
b e e n m o r e c a te g o ric a l in its ru lin g th a t o v e rtim e p a y is
n o t c o v e re d by th e n o n -d im in u tio n d o c tr in e u n d e r A rtic le 100. R e s p o n d e n t
co m p an y w as n o t o b lig ed to a llo w all its e m p lo y e e s to r e n d e r o v e rtim e w o r k e v e ry
day fo r th e w h o le year, b u t o n ly th o s e e m p lo y e e s w h o s e se rv ices w e re n e e d e d a f te r
th eir reg u lar w o rk in g h o u rs a n d o n ly u p o n th e in s tr u c tio n s o f m a n a g e m e n t. T h e
o v e rtim e p ay w as n o t g iv e n
to e a c h
e m p lo y e e c o n s is te n tly , d e lib e ra te ly a n d
u n c o n d itio n a lly , b u t as a c o m p e n s a t i o n f o r a d d itio n a l se rv ic e s re n d e re d . T h u s ,
o v e r tim e p a y d o c s n o t fa ll w i t h i n t h e d e f i n i t i o n o f b e n e f i t s u n d e r A r tic le 100
o f th e L a b o r C o d e o n p r o h i b i t i o n
a g a in s t e lim in a tio n o r d im in u tio n
of
b e n e f its .
I n th e 2018 case o f
Coca-Cola v. ICCPELU}
th e C B A p ro v id e s fo r w o rk
to b e re n d e re d o n S atu rd ay s. In th e d e c is io n o f th e C A , it w a s h e ld th a t th e fa c t
th at p e titio n e r C C B P1 h a d b e e n p r o v id in g w o r k to its e m p lo y e e s e v ery S a tu rd a y fo r
several y ears, a c irc u m sta n c e th a t p r o v e d S a tu rd a y w a s p a r t o f th e re g u la r w o rk
w eek, m a d e th e g ra n t o f S a tu rd a y w o rk r ip e n in to c o m p a n y p ra c tic e c o v e r e d by
A rticle 100 o f th e L a b o r C o d e . T h e S u p re m e C o u r t, h o w e v e r, d isa g re e d w ith th is
CA ruling. I t p r o n o u n c e d th a t it is n o t S a tu rd a y w o r k
per se w h ic h
c o n s titu te s a
b e n e f it to th e c o m p a n y 's e m p lo y e e s . R a th e r, th e b e n e f it in v o lv e d in th is c a s e is th e
p r e m iu m w h ic h th e c o m p a n y p ay s its e m p lo y e e s a b o v e a n d b e y o n d th e m in im u m
re q u ire m e n ts se t by law. T h e C B A b e tw e e n C C B P I a n d th e r e s p o n d e n t u n io n
g u a ra n te e s th e em p lo y e e s th a t th e y w ill b e p a id th e ir re g u la r w a g e plu s a n a d d itio n a l
5 0 % th e r e o f fo r th e first e ig h t (8) h o u r s o f w o r k p e r fo r m e d o n S a tu rd a y s.
T h e re fo re , th e b e n e f it, i f e v e r th e re is o n e , is th e p re m iu m p a y g iv en by re a s o n o f *23
> G R . No 149640, O c t 19,2007.
2 G.R. No. 167760, March 7,2007.
3 Coca-Cola BoCers Phis., Inc v. Go3c Coca-Cola Plant Employees Labor Union, G R No. 195297, Dec. 05,2018.
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LARORSTANDARDS
S a tu rd a y w o rk , a n d n o t th e g r a n t o f S a tu rd a y w o rk itse lf. A s h e ld in
te r m
"benefits" m e n tio n e d
Royal Plant} th e
in th e n o n - d im in u tio n ru le re fe rs to m o n e ta ry b e n e fits o r
p riv ile g e s giv en to th e e m p lo y e e w ith m o n e ta ry e q u iv a le n ts . S ta te d o th e rw ise , th e
e m p lo y e e b e n e fits c o n te m p la te d b y A rtic le 100 a re th o s e w h ic h are c a p a b le o f
b e in g m e a s u re d in te rm s o f m o n e y . T h u s , it c a n b e read ily c o n c lu d e d fro m p a s t
ju ris p ru d e n tia l
p r o n o u n c e m e n ts
th a t
th e s e
p riv ile g e s
c o n s titu te d
m oney
in
th e m s e lv e s o r w e re c o n v e r tib le in to m o n e ta r y e q u iv a le n ts .
In o r d e r f o r th e r e to b e p r o s c r ib e d d im in u tio n o f b e n e fits th a t p re ju d ic e d
th e a ffe c te d e m p lo y e e s , C C B P I s h o u ld
h a v e u n ila te ra lly w ith d ra w n
th e 5 0 %
p r e m iu m p ay w ith o u t a b o lis h in g S a tu rd a y w o rk . T h e s e a re n o t th e facts o f th e c a s e
a t b a r. C C B P I w ith d r e w th e S a tu rd a y w o r k itself, p u r s u a n t, a s a lread y h e ld , to its
m a n a g e m e n t p re ro g a tiv e . I n fa c t, th is m a n a g e m e n t p r e ro g a tiv e h ig h lig h ts th e f a c t
th a t th e s c h e d u lin g o f th e S a tu rd a y w o r k w a s a c tu a lly m a d e s u b je c t to a c o n d itio n ,
i.e., th e
p re ro g a tiv e to p r o v id e th e c o m p a n y 's e m p lo y e e s w ith S a tu rd a y w o rk b a s e d
o n th e e x is te n c e o f o p e r a tio n a l n e c e s sity
3. C L A R IF IC A T IO N O F T H E N O N - D I M I N U T I O N R U L E .
Wesleyan University-Philippines,1
2su e d n ed y
c la rifie d th a t th e N o n -
D i m i n u t i o n R u le f o u n d in A rtic le 100 e x p lic id y p r o h ib its e m p lo y e rs fro m
e lim in a tin g o r r e d u c in g th e b e n e f its re c e iv e d b y th e ir e m p lo y e e s p ro v id e d su c h
b e n e f its a re b a s e d o n an y o f th e fo llo w in g :
(1) E x p re s s p o lic y ,
(2) W ritte n contract*, o r
(3) C o m p a n y p ra c tic e .3
T h e re is n o t m u c h c o n tr o v e rs y i f th e b e n e f it in v o lv e d is p r o v id e d f o r
u n d e r N o s . 1 a n d 2 a b o v e . T h u s , if it is e x p re ss ly laid d o w n in a w ritte n p o lic y
u n ila te ra lly p r o m u lg a te d b y th e e m p lo y e r, th e e m p lo y e r is d u ty - b o u n d to a d h e r e
a n d c o m p ly by its o w n p o licy . I t c a n n o t b e a llo w e d to re n e g e fro m its c o m m itm e n t
as e x p re s s e d in th e p o licy . I f t h e b e n e f it is g r a n te d u n d e r a w ritte n c o n tr a c t s u c h a s
a n e m p lo y m e n t c o n tr a c t o r a C B A , th e e m p lo y e r is lik e w ise u n d e r legal c o m p u ls io n
to so c o m p ly th e re w ith .
N o . 3 a b o v e p r e s e n ts a d if fe r e n t co m p le x ity ' sin c e th e b e n e fits are n o t c a s t
in s to n e , so to sp e a k , as th e r e is n o w r itte n in s tr u m e n t th a t r e fle c ts th e m w h ic h c a n
readily e sta b lish th e ir b in d in g e f fe c t a n d e n fo rc e a b ility . T h e d is c u s s io n o n c o m p a n y
p ra c tic e b e lo w is e n lig h te n in g a n d illu m in a tin g .
4. C O M P A N Y P R A C T I C E A N D P R I N C I P L E O F N O N - D I M I N U T I O N
O F B E N E F IT S .
1 Royal Plant Workers Union v. Coca-Cola BotOers PMippnes, lnc.-Cebu Riant, G.R. No. 198783, April 15,2013.
2 Wesleyan Urwefsity-PtiJippines v. Wesleyan Unwersity-PhSpp'ries Faculty and Staff Association, G R. No. 181806, March
12,2014.
3 Cling Central Azucarera De Tariac v. Central Azucarera De Tariac labor Union-NlU, G.R. No. 188949, July 26,2010.
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La b o r La w
a. N o bard and fast rule to establish companypractice.
Jurisprudence has not laid down any hard-and-fast rule as to the length o f
time that company practice should have been exercised o r observed in order to
constitute voluntary employer practice.1 There is no such rule which may be used
and applied in determining whether a certain act o f the employer may be
considered as having ripened into a practice which, having been elevated to such
status, may thus be accorded die same enforceability and binding effect equivalent
to a demandable polity or agreement
b. The grant o fbenefit should not be by reason o flegal or
contractual obligation but by reason oflibetality.
To ripen into a company practice that is demandable as a matter o f right,
the giving o f the benefit should n o t b e b y reason o f a strict legal or co n tractual
obligation b u t by reason o f an a c t o f liberality on th e p art o f the
employer.2 Hence, even if a company continuously grants a wage increase as
mandated by a Wage O rder or pursuant to a CBA, the same would not
automatically ripen into a demandable company practice if it has so acted on its
belief that it was obliged to do so under the CBA.3
c. Diminution o fbenefits, requisites.
According to Vtrfpra, Jr.,* there is diminution o f benefits when the
following requisites are present:
(1) The grant or benefit is founded on a polity or has ripened into a
practice over a long period o f time;
(2) T he practice is consistent and deliberate;
(3) The practice is not due to error in the construction o r application o f a
doubtful or difficult question o f law, and
(4) The diminution or discontinuance is done unilaterally by the employer.5
These requisites ate discussed in seriatim below.
4 . t FIRST REQUISITE: T H E G R A N T O R B E N E F IT IS F O U N D E D O N
A PQ L IQ CQ.RBAS. RXg fiNJBP IN TO_A
P E R IO D O E T IM E .
• M^cpo&an Bank and TnstC om paiyv.N LR C .G R N a 152928, June IS, 2009,589 SCRA 376,38W 86; Arm Metal
Products, Co, Inc. v. Samahan ng mga Manggagawa sa Aico MebW AFlU (SAMARMNAFLU), G R . No. 170734. May
14,2008,554 SCRA 110,119; Honda P H *, he. v. Samahan 19 Malayan M xggagauasa Honda, O R . No. 145561,
June15,2005,460SCRA 186,195.
3 Pag^sa Steel Wdtks, Inc. V .C A .G JI No. 166647, March31,2006.
3 Id.
« V e^ ra, Jr. v.CocaCotaBoaersPN^phes, Inc, G R No. 176985, Aprt 1,2013.
See also SupreroS^CorporatiOTv.NagkakaisangManggaga^ng Supreme Independent
Not 185556, March 28,2011,646 SCRA 501, S27; TSPiC Corporation v. TSPIC Employees Union (FFW), G.R. No.
163419. Feb. 13.2008.545 SCRA215.225.
3
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LABOR STA N D A R D S
The application o f the prohibition against die diminution o f benefits
presupposes that a company practice, policy or tradition favorable to die employees
has been clearly established and that die payments made by the employer pursuant
to the practice, policy, or tradition have ripened into benefits enjoyed by them.1 T o
be considered as a practice, policy or tradition, however, the giving o f the benefits
should have been done over a considerable or long period o f time.2 It is relevant to
mention that no specific minimum number o f years3 has been setded as the length
o f time sufficient to ripen the practice, policy or tradition into a benefit that the
employer cannot unilaterally withdraw.4*
If done only once as in the case o f Pkilacor? where die CBA signing bonus
was granted only once during the 1997 CBA negotiation, o r in Supreme Steel Corp.6
where the COLA under Wage O rder No. RBHI-10 was erroneously implemented
across the board for less th a n a year, die same cannot be considered as having
been practiced “over a long period o f time.”
While it is true that jurisprudence has n o t laid down any rule requiring a
specific minimum number o f years in order for a practice to be considered as a
voluntary act o f die employer, under existing jurisprudence on this matter, an act
carried out within a year o r less than a year would certainly not qualify as such.7
In die same vein, if an act is done merely as an isolated instance, it cannot
be considered as constitutive o f company practice. In the 2018 case o f Del Rio v.
DPO Philippines, Inc,8 petitioner9 voluntarily resigned from respondent company. It
was accepted by the latter. Later, he filed a monetary claims case asserting that it
has been a company practice o f respondent company to grant separation pay to
resigning employees. In his attempt to prove this fact, he presented the payslips of
Martinez and Legaspi showing that they received separation pay after they resigned.
The Supreme Court, however, was unconvinced. The rule remains that an
employee who voluntarily resigns from employment is not eotided to separation
pay, except when it is stipulated in the employment contract or the CBA, o r it is
sanctioned by established employer practice or policy.10 T he d ted exceptions do
not obtain in this case. As correctly found by the CA, there was no employment
contract, much less a CBA, which contained the stipulation that would grant
' P lip phe JoumaSstR he. v. Journal Employees Union (JEU), G J l No. 192601. June 03, 2013; See also B orodin v.
National P tm r CotpcraSon Employees ConsoHaSed Union (NECU), G R No. 162716, Sept 27,2006,503 SCRA 611,
628
2 MetrcpoStmBankandTfUstCanpanyv.NlRC.GJlNa 152928,June 18,2009,589SCRA376.384.
3 NeSnk Computer Inc. v. Debro, d R . No. 180327, June 18,2014.
*
Sevfe Trading Companyv. Semara, G.R. No. 152456, Apri 28,2004,428 SCRA 239.249.
3 Fli^ppineAppGanoeC^iriiocdSonfPtiilaoor) v. CA.Gi%. No. 149434, June 3,2004.
* Supreme Steel CotpotaSon v. NagkaWsang Manggagawa ng Supreme Independent Union (NMS4ND-API), G J l No.
185556, March28,2011.
1 See also Nafionai Sugar Refineries CoiporaSanv.NlRC.GR No. 1 0 1 7 6 1 ^ 2 4 .1 9 9 3 .2 2 0 SCRA452.
* Del Ifav.DPO Ptiippines, Inc, G R No. 211525, Dec. 10,2018.
* At Biefime of fereagntfion, he was hokfingflie position of Assistant CourUy Manager.
« Del f^ v . DPO PhifppineR h e , supra, d6ng'J*MaricetingCoip.v.Ta(an,GR NO. 163924, June 18,2009.
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Ba r R eviewer o n Labor Law
separation pay to resigning employees. Neither was there a company practice or
policy that was proven to exist in the instant case.
To be considered a company practice, the giving o f the benefits should
have been done over a long period o f time, and must be shown to have been
consistent and deliberate.*1 As records would show, the giving o f the monetary
benefit by respondents in favor o f Legaspi and Martinez is merely an isolated
instance. From the beginning o f respondents' business and up until petitioner's
resignation took effect on O ctober 7,2009, there was no showing that payments o f
such benefit had been made by respondents to their employees who voluntarily
resigned. The first and only instance when such a benefit was given to resigned
employees was on or after November 15, 2009 - not because it was a company
practice but only to pave the way for Legaspi and Martinez's graceful exit, so to
speak. As explained by respondents, the said benefit was n o t intended as a
separation pay but more o f a promise or an assurance to Legaspi and Martinez that
they would be paid a benefit if they tender their resignation. Given respondents'
knowledge o f Legaspi and Martinez's acts o f disloyalty and betrayal o f trust,
respondents opted to give them an alternative way o f exit, in lieu o f termination.
Respondents' decision to give Legaspi and Martinez a graceful exit is perfectly
within their prerogative. It is settled that there is nothing reprehensible or illegal
when the employer grants the employee a chance to resign and save face rather
than smear die 1atier's employment record.2 Relying on respondents' assurance,
Legaspi and Martinez tendered their resignation and it is incumbent upon
respondents to make good o f their promise.
h i the case o f CostUng v. Peretf a similar claim for separation pay was
asserted by a teacher who resigned from employment in petitioner Diliman
Preparatory School. In an effort to show that the school has a policy o f granting
separation pay to its employees who resigned, Perez submitted an Affidavit
executed by one Teresita Limochin (Limochin), a co-teacher who attested that she
received separation pay from die school following her voluntary resignation. A
scrutiny o f Limochin's affidavit, however, reveals that the school's grant o f
separation benefits or financial assistance to her was an isolated act, not borne out
by any established employer practice or policy. In fact, Limochin stated that she
was made to choose either to voluntarily resign from work with’ payment of
separation benefits or to face administrative proceedings, which may lead to
termination, in view of her habitual absenteeism. Rather than face an investigation,
limochin chose the first option. Still, there is nothing in her affidavit that would
disclose that die School granted her monetary benefits by virtue o f an established
practice or policy. Besides, Limochin's situation was different from Perez's; aside
from resigning three years after Perez did, the school gave Limochin a choice only
* U^oSng Sodefie MecnaSonaleOe Teleoomnwnic^onsAeranaufque~<v. HuGganga. GJ%. No. 215504.August20.20t6.
td^dting Cosue v. Femtz htegnated OeMetopmentCo(p..GK. No. 230664. Jtdy 24.2017.
» G R No. 185938. Sept 06.2017.
1
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189
because she faced the possibility o f an eventual termination o f employment,
whereas Perez did not. In Cb'tang Ktri Sbek College v. Toms} the Court acknowledged
that, a compromise agreement, which allows an employee facing an imminent
dismissal to opt for honorable severance from employment, may be validly entered
into between an employer and employee.
In another 2018 case, Societe Internationale de TelecommunicationsAmnautiques
(SITA) v. Hubganga} the claim o f respondent Huliganga for retirement benefits
provided in the CBA for rank-and-file employees was denied because he was a
managerial employee and thus not eligible to join, assist or form any labor
organization under Article 255 [245] o f the Labor Code. Most significantly, he was
not able to show by evidence that there exists a company policy o r practice
granting the same retirement benefits to managerial employees. To be considered a
company practice, the giving o f the benefits should have been done over a long
period o f time, and must be shown to have been consistent and deliberate.3 The
test or rationale o f this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefits knowing fully well that said
employees are not covered by the law requiring payment thereof.4 In other words,
the act o f extending benefits o f the CBA to managerial employees must have been
practiced for a long period o f time and must be shown to be consistent and
deliberate.5
In the following cases, the act o f the employer has been declared as
having ripened to a company practice drat can no longer be withdrawn:
(1) In Davao Fruits Corp. v. ALU,6involving the employer's act for six (6)
years o f freely and continuously including in the computation o f the 13th m onth
pay, certain items that were expressly excluded by law.
(2) In Sevilla Trading Co. v. Semana,7 where petitioner kept the practice o f
including non-basic benefits such as paid leaves for unused sick leave and vacation
leave in the computation o f the employees' 13th month pay for at least two (2)
years.
(3) In CentralAspcartra v. Central Aqucamu,6 where petitioner, for thirty
(30) years, granted its workers the mandatory 13th month pay computed in
accordance with the following formula: T o tal B asic A nnual Salary divided by
twelve (12). Included in petitioner’s computation o f the Total Basic Annual Salary
were the following, basic monthly salary; first eight (8) hours overtime pay on
1 G R No. 189456, Apri 2.2014.
1 Sodets Internationale de Telecornrranications AercnauSques (SITA) v. Hutganga, G R No. 215504, Aug. 20,2018.
3 Id., effing National Sugar Refineries Corporation v. NLRC, GR. No. 101761. March 24,1993.
4 1d.,dQngPhSppcne ApplanoeCotporaSonv.CA. G R N a149434, June3,2004.
* «.
Davao Fiufe&xporationv.Assoce^Lalxx Unions, G.R. No. 85073, Aug. 24,1993,225 SCRA 562.
7 SevaaTrac&igCompanyv. A. V .A Semana, G R No. 152456, Apri 28,2004,438 SCRA239.
3 Central Azucareta de Tarfac v. Central Azucarera de Tartac Labor UniorvNLU, G.R. No. 188949. Juty 26.2010.
6
J9JC9B0M
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Bar Reviewer o n
labor
Law
S u n d ay and le g a l/sp e c ia l h o lid a y ; n ig h t p re m iu m p ay ; a n d v a c a tio n a n d sick le av es
fo r each year.
(4) In
Meralco v. Secretary oj Labor}
w h e r e M e ra lc o f u rth e r g ra n te d its
em p lo y ees an ad d itio n a l C h r is tm a s b o n u s a t th e ta il-e n d o f th e y e a r sin c e 1988,
asid e from co m p ly in g w ith th e re g u la r 13th m o n th b o n u s . W h ile th e sp e c ia l b o n u s e s
d iffe re d in a m o u n t an d b o r e d if fe r e n t titles, it c a n n o t b e d e n ie d th a t th e s e w e re
g iv en v o lu n tarily a n d c o n tin u o u s ly o n o r a b o u t C h r is tm a s tim e . T h e c o n s id e ra b le
le n g th o f tim e M e ralco h a s b e e n g iv in g th e s e sp e c ia l g ra n ts to its e m p lo y e e s
in d icates a u n ilateral an d v o lu n ta r y a c t o n its p a r t to c o n tin u e g iv in g said b e n e f its
k n o w in g th a t su c h a c t w a s n o t re q u ire d b y law.
(5) In
Davao Integrated v. Abarquetf w h e re
th e e m p lo y e r, fo r th r e e (3) y e ars
a n d n in e (9) m o n th s , a p p r o v e d th e c o m m u ta tio n to c a s h o f th e u n e n jo y e d p o r tio n
o f th e sick leav e w ith p ay b e n e f its o f its in te r m itte n t w o rk e rs .
(6) In
Tiartgco v. l^eogardo, Jr.}
w h e re th e e m p lo y e r c a rrie d o n th e p r a c tic e
o f giving a fixed m o n th ly e m e rg e n c y a llo w a n c e f ro m N o v e m b e r 1976 to F e b r u a ry
1980, o r fo r a p e rio d o f th r e e (3) y e a rs a n d f o u r (4) m o n th s .
(7) In
Metrobank v. NLRCJ
in v o lv in g M e tr o b a n k ’s a c t, f o r o v e r a d e c a d e ,
o f co n sisten tly , d e lib e ra te ly a n d v o lu n ta rily g r a n tin g im p ro v e d b e n e fits to its
o fficers, a fte r th e sig n in g o f e a c h C B A w ith its ra n k -a n d -file e m p lo y e e s , re tro a c tiv e
to Ja n u a ry 1st o f th e sa m e y e a r as th e g ra n t o f im p r o v e d b e n e fits a n d w ith o u t th e
co n d itio n th a t th e o ffic e rs s h o u ld re m a in e m p lo y e e s as o f a c e rta in d a te .
T h is
u n d en iab ly in d icates a u n ila te ra l a n d v o lu n ta ry a c t o n M e tro b a n k ’s p a rt, to g iv e sa id
b en efits to its o ffic e rs, k n o w in g th a t s u c h a c t w a s n o t r e q u ire d by law o r th e
c o m p an y re tire m e n t p lan . I n th is c ase, it w as h e ld th a t b e c a u s e o f th is c o m p a n y
practice, p riv ate re s p o n d e n ts P a ta g a n d F lo ra , f o r m e r A s s is ta n t M a n a g e r a n d S e n io r
M anager, resp ec tiv ely , o f p e titio n e r M e tro b a n k , a re e n tid e d
to th e im p ro v e d
retire m e n t b e n e fits a lth o u g h th e y re tire d a fte r th e c o n c lu s io n o f th e re n e w e d C B A .5
(8) In
Nellink v. Delmo}
w h e re th e p a y m e n t o f sales c o m m is s io n s in U S
dollars in stea d o f P h ilip p in e c u rre n c y w a s d e c la re d as h a v in g rip e n e d in to a
co m p an y p ra c tic e .7*356
' Mania Electric Company v. Secretary of Labor, G.R. No. 127598, Jan. 27,1999.
7 G. Da/ao Integrated Port Stevedoring Services v. Abarqoez, R. No. 102132, March 19,1993,220 SCRA197.
3 G R No. 1-57636, May 15,1983,122 SCRA 267; 207 Phi 2285.
1 Metropolitan Bank and Trust Company v. NLRC, Felipe A Patag and Bienvenido C. Flora, G R no. 152928, June 18,2009.
5 But see Padtb v Rural Bank of Nabjnturan, Inc., G.R No. 199338, Jan. 21,2013, where it was pronounced by the High
Court, citing this case of Metropolitan Bank, that there is no company practice or policy upon which petitioner can assert his
claim for retirement benefits.
6 Neiink Computer Inc. v. Delmo. G.R No. 160827, June 18,2014. Respondent Eric S. Delmo was an account manager
tasked to canvass and source clients for petitioner and convince them to purchase the products and services of Nellink.
Delmo worked in the field most of the time.
1 See RA. No 8183, ‘An Act Repealng Republic Act Numbered Five Hundred Twenty-Nine, As Amended, Entiled ‘An Act
To Assure the Uniform Value of Philippine Coin and Currency." This law provides as follows: ‘Section 1. A1 monetary
obigatons s h il be sealed h the PhiSppine currency which is legal tender in the Phlipphes. Howwer, the partes may agree
that toe obkgaton or transaction shal be settled in any other currency at the time of payment* See also CF. Sharp & Co. v.
Northwest Aifnes. Inc., G R No. 133498, Aprt 18.2002,381 SCRA 314,319-320.
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LABOR STANDARDS
4 .2 .
SECO ND R E Q U ISITE : T H
E P R A C T I C E IS C O N S I S T E N T A N D
D E L IB E R A T E .
T o b e c o n s id e re d a s a p ra c tic e , p o lic y o r tra d itio n , th e g iv in g o f - t h e
b e n e fits s h o u ld b e s h o w n to h a v e b e e n c o n s is te n tly a n d d e lib e ra te ly d o n e .1 T h e
in te n tio n to m ak e a c e rta in a c t a c o m p a n y p ra c tic e m a y b e lo g ically in fe rre d fro m
th e p e c u lia r c irc u m s ta n c e s o b ta in in g in e a c h c ase. A n e x a m p le is
Jr.,2 w h e r e
Tiangco v. Leogardo,
th e d is c o n tin u a n c e b y th e e m p lo y e r e ffe c tiv e F e b ru a ry , 1 980 o f th e fix e d
m o n th ly e m e rg e n c y a llo w a n c e w h ic h it h a s c o n s is te n d y g r a n te d to th e e m p lo y e e s
s in c e N o v e m b e r , 1 9 7 6 , in s o f a r as n o n - w o rk in g d a y s a rc c o n c e r n e d b a s e d o n th e
p rin c ip le o f
"no work, nopay," w a s
d e c la re d v io la tiv e o f th e n o n - d im in u tio n p rin c ip le
in A rtic le 100 o f th e L a b o r C o d e .
In
Standard Chartered Bank v. SCBEU,3
e m p lo y e e s are e n tid e d
to
it w a s
h e ld
th a t p e titio n e rs
“ o u tp a tie n t m e d ic in e r e im b u rs e m e n ts ” d is tin c t a n d
s e p a ra te fro m th e “ m e d ic in e a llo w a n c e s ” g r a n te d in th e C B A b e c a u s e d te re is a n
e s ta b lis h e d c o m p a n y p ra c tic e o f r e im b u rs e m e n t o f o u tp a tie n t s e n d e e s , in c lu d in g
m e d ic in e
re im b u rs e m e n t,
d e s p ite
th e
absence
o f a p r o v is io n
in
th e
g ro u p
h o sp ita liz a tio n in s u r a n c e p la n r e g a rd in g o u tp a tie n t b e n e fits.
A n o th e r e x a m p le is
Republic Planters Bank v. NLRC,4 w h e r e
it w as ru le d
d ia t s in c e p e titio n e r P N B - R B h a s c o n s is te n d y a n d d e lib e ra te ly a d o p te d th e p ra c tic e
o f g r a n tin g g ra tu ity b e n e f its to its re tirin g o ffic e rs b a s e d o n th e sa lary ra te o f th e
n e x t h ig h e r ran k e v e n a fte r th e e x p ira tio n o f th e 1 9 7 1 -1 9 7 3 C B A , a lth o u g h it k n e w
fully w e ll th a t it w a s n o t r e q u ire d to g iv e th e b e n e f its a f te r th e e x p ira tio n o f th e
1 9 7 1 -1 9 7 3 C B A , s u c h g r a n t o f g ra tu ity p ay h a s alre a d y r ip e n e d in to a c o m p a n y
p ra c tic e o r policy' w h ic h c a n n o lo n g e r b e p e r e m p to rily w ith d ra w n .
4 .3 .
TH IR D REQ U ISITE: T H
E P R A C T IC E IS N O T D U E T O E R R O R
IN T H E C O N S T R U C T IO N O R A P P L IC A T IO N O F A D O U B T F U L
O R D IF F IC U L T Q U E S T IO N O F LAW .
a.
General rule.
T h e g e n e ra l ru le is th a t i f it is a p a s t e r r o r th a t is b e in g c o r re c te d , n o
v e s te d rig h t m ay b e said to h a v e a rise n th e r e fr o m n o r a n y d im in u tio n o f b e n e f it
u n d e r A rtic le 100 o f th e L a b o r C o d e m a y h a v e r e s u lte d b y v ir tu e o f th e c o r re c tio n 1*3
1 Vergara, Jr. v. Coc^Cola Bottlers Philippines, Inc., G R No. 176985, Aprfl 1, 2013; Eastern Telecommunications
Philippines, Inc. v. Eastern Telecoms Employees Union, G.R. No. 185665, Feb, 8,2012,665 SCRA 516,532; Supreme
Steel Corporation v. Nagkakatsang Manggagawa ng Supreme Independent Union (NMS-IND-APL), G R No. 185556,
March 28,2011,646 SCRA 501,527, 528; and Metropolitan Bank and Trust Company v. NLRC, G.R. No. 152928, June
18,2009,589 SCRA 376,384.
* G R No. L-57636, May 16,1983,122 SCRA 267; 207 Phil. 2235.
3 Standard Chartered Bank v. Standard Chartered Bank Employees Union (SCBEU), G R No. 165550, Oct. 8,2008.
1 Republic Planters Bank, [new know as PNB-RepubSc Bank] v. NLRC, G R No. 117460, Jan. 6,1997.
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Ba r R e v i e w e r
on
La b o r
law
thereof.1 The error, however, must be corrected immediately after its discovery;2*
otherwise, the rule on non-diminution o f benefits would still apply.5
In the following cases, the erroneous application o f a law has been
declared as not having ripened into a binding company practice:
(1) In Globe Mackay Cable and Radio Corporation v. N L R C 4 petitioner
corporation, pursuant to Wage O rder No. 6 (effective O ctober 30,1984), increased
die COLA, o f its monthly-paid employees by multiplying the P3.00 daily COLA by
22 days which is the number o f working days in die company. The union disagreed
with die computation, Haiming that the daily COLA rate o f P3.00 should be
multiplied by 30 days which has been the practice o f the company for several years.
The Supreme Court, however, upheld die contention o f petitioner corporation and
thus pronounced that the grant by the employet o f benefits through an erroneous
application o f the law due to absence o f d ear administrative guidelines is not
considered a voluntary act which cannot be unilaterally discontinued.
(2) In TSPIC Cotp. ». TSPIC Employees Union [FFW]p the Supreme Court
reiterated the rule enunciated in Globe-Mackay, that an erroneously granted benefit
may be withdrawn without violating the prohibition against non-diminution o f
benefits.
(3)
In PrubankenAssociation ». PrudentialBank and Trust Compart/ petitioner
asserts that respondent Bank has already adopted a uniform wage policy which has
attained the status o f an established management practice; thus, it is estopped from
implementing a wage order for a specific region only. In this case, respondent Bank
has previously implemented Wage Orders Nos. NCR-01 and NCR-02 nationwide
although they are supposedly applicable to the National Capital Region only. With
the issuance o f Wage O rder No. RB 05-03 (applicable for Region V) and Wage
Order No. RB VII-03 (applicable for Region VII), respondent Bank started to
regionalize die implementation o f die wage increases. In holding that this argument
o f petitioner is not persuasive, the Supreme Court ruled that although the Bank
implemented Wage Orders Nos. NCR-01 and NCR-02 nationwide instead o f
regionally even after the effectivity o f R A . No. 6727, the Bank at the time was still
uncertain about how to follow the new law. In any event, that single instance
cannot constitute "managementpractice."
t Goto MadayCabfev. NLRC, W a.
2 CentralA zucaeraD eTariacv.to^A zut^araD eTartac LaborUnior>t«fLU,GJl No. 186949, July26,2010.
1 W esieyanUiher^Phpppliesv. WesfeyanUniw8(sit^Ri^pf)inesFacu^randSt^FAssoci^on.GJ%.Nat. 181606. March
12,2014.
< G Jl No. 74156, June 29,1988,163 SCRA 71.
5 G J lN a 163419. Feb. 13.2003.
« GR. to . 131247, Jan 25.1999,302SCRA 74.
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b. E xception.
But if the error does n o t proceed from the interpretation or construction
o f a law or a provision in the CBA, die same may ripen into a company practice.
Thus, in Hinatuan Mining Corporation,* the act o f the employer in granting separation
pay to resigning employees, despite the fact that the Labor Code does not grant it,
was considered an established employer practice.
In A m MetalProducts, Inc.,2 petitioner, despite the provision o f the law and
the CBA that 13th month pay, vacation leave and sick leave conversion to cash
should be computed in amounts proportional to the service the employees have
actually rendered within a year, had no t pro-rated the payment o f the same
benefits to seven (7) employees w ho had not served for the full 12 months in 1992,
1993, 1994, 1996,1999,2003, and 2004. Petitioner claims that its full payment o f
benefits regardless o f the length o f service to the company docs not constitute
voluntary employer practice. It points out that the payments had been erroneously
made and they occurred in isolated cases in the years 1992,1993, 1994,1999,2002
and 2003. According to petitioner, it was only in 2003 that the accounting
department discovered the error “when there were already three (3) employees
involved with prolonged absences and the error was corrected by implementing the
pro-rata payment o f benefits pursuant to law and their existing CBA.” It adds that
the seven earlier cases o f full payment o f benefits went unnoticed considering the
proportion o f one employee concerned (per year) vis-a-vis the 170 employees o f the
company. Petitioner describes the situation as a “clear oversight” which should
not be taken against it. To further bolster its case, petitioner argues that for a grant
of a benefit to be considered a practice, it should have been practiced over a long
period o f time and must be shown to be consistent, deliberate and intentional,
which is not what happened in this case. Petitioner tries to make a case out o f the
fact that the CBA has not been modified to incorporate die giving o f full benefits
regardless o f the length o f service, proof that the grant has not ripened into a
company practice.
The Supreme Court, however, disagreed:
“In the years 1992, 1993, 1994, 1999, 2002 and 2003,
petitioner had adopted a policy o f freely, voluntarily and consistendy
granting full benefits to its employees regardless of the length of sendee
rendered. True, there were only a total of seven employees who
benefited from such a practice, but it was ah established practice
nonetheless, jurisprudence has not laid down any rule specifying a
minimum number of years within which a company practice must be
exercised in order to constitute voluntary company practice. Thus, it can
be six (6) years, three (3) years, or even as short as two (2) years.1
' Kna&fln Wring CoiporaSon andforihe Managerv. KLRC, G R No. 117394, Feb. 21.1997.
1 Atm Metal Products, Inc. v. Samahang ng mga Manggagawa sa Arco MetaWAFLU (SAMARMNAFLU), G R No.
170734, May 14,2008.
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Petitioner cannot shirk away from its responsibility by merely claiming
that it was a mistake or an error, supported only by an affidavit of its
manufacturing group head.
XXX
“Indeed, if petitioner wants to prove that it merely erred in
giving full benefits, it could have easily presented other proofs, such
as the names of other employees who did not fully serve for one year
and thus were given prorated benefits. Exponentially, a perfect
attendance in die workplace is always the goal but it is seldom achieved.
There must have been other employees who had repotted for work less
than a full year and who, as a consequence received only prorated
benefits. This could have easily bolstered petitioner’s theory o f
mistake/error, but sadly, no evidence to that effect was presented ”
The same issue o f the validity o f the pro-rating of the 13th month pay as
well as the 14* month pay and financial assistance was raised in Honda Phils., Inc} It
has not been refuted that Honda has not implemented any pro-rating o f the 13*
month pay before the instant case. Honda did not adduce evidence to show that
die 13* month, 14* month and financial assistance benefits were previously subject
to deductions or pro-rating or that these were dependent upon the company's
financial standing. As held by the Voluntary Arbitrator, Honda expliddy accepted
that it was the strike held that prompted them to adopt a pro-rata computation,
aside from being in a state o f rehabilitation due to Php227M substantial losses in
1997, P hpll4M in 1998 and Php215M loss o f sales in 1999 due to strike. This is
an implicit acceptance that prior to die strike, a full month basic pay computation
was die “present practice” intended to be maintained in the CBA. The
memorandum dated November 22,1999 which Honda issued shows that it was the
first time a pro-rating scheme was to be implemented in the company. I t was a
convenient coincidence for the company that the work stoppage held by the
employees lasted for thiriy-one p i ) days or exactly one month. This enabled them
to devise a formula using 11/12 o f the total annual salary as base am ount for
computation instead o f the entire amount for a 12-month period. That a full month
payment o f the 13* month pay is the established practice at Honda is further
bolstered by die affidavits executed by Feliteo Bautista and Gdgardo
Cruzada. Both attested that when they were absent from work due to motorcycle
accidents, and after they have exhausted all their leave credits and were no longer
receiving their monthly salary from Honda, they still received die full amount of
their 13* month, 14* month and financial assistance pay.
H ie argument o f petitioner, in PhilippineJournalists, Inc.,2 that the grant o f
the funeral and bereavement benefit was not voluntary but resulted from its
mistaken interpretation as to who was considered a ‘legal dependent” o f a regular
employee deserves scant consideration. T o be sure, no doubtful or difficult*1
1 HondaPhJs..lnc. v. Samahanng Mabyang Manggagawa sa Honda, G.R. No. 145561, June 15,2005.
1 PMippineJoumafsfe,lnev.Jounal Employees Union (JEU),G.R No. 192601, June03,2013.
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question o f law was involved inasmuch as the several cogent statutes existing at the
time the CBA was entered into already defined who were qualified as the legal
dependents o f another. Moreover, the voluntariness o f the grant of the benefit
became even manifest from petitioner’s admission that, despite the memorandum it
issued in 2000, in order to “correct” the interpretation o f the term legal dependent,
it still approved in 2003 the claims for funeral and bereavement aid o f two
employees, namely: (a) Cecille Bulacan, for the death o f her father, and (b) Chadto
Cartel, for the death o f her mother, based on its supposedly mistaken
interpretation.
It is further worthy to note that petitioner granted claims for funeral and
bereavement aid as early as 1999, then issued a memorandum in 2000 to correct its
erroneous interpretation o f legal dependent under Section 4, Article X III o f the
CBA. This notwithstanding, the 2001-2004 CBA still contained the same provision
granting funeral or bereavement aid in case o f the death of a legal dependent o f a
tegular employee without differentiating the legal dependents according to the
employee’s civil status as married or single. The continuity in the grant o f the
funeral and bereavement aid to tegular employees for the death o f their legal
dependents has undoubtedly ripened into a company policy. W ith that, the denial
o f respondent Alfante’s qualified claim for such benefit pursuant to Section 4,
Article XQI o f the CBA violated the law prohibiting the diminution o f benefits.
c. N o m ore error can be asserted at th is late hour.
In connection with the grant o f the mandatory 13* m onth pay, error in
the interpretation o r construction o f what should be included in the term ‘'basic
salary” as basis for its computation, as mandated under the law, P.D. N o. 851, as
well as its implementing rules and regulations can no longer be asserted at this late
hour. This is so because from the inception o f P.D. No. 851 on December 16,
1975, clear-cut administrative guidelines have been issued to insure uniformity in
the interpretation, application, and enforcement o f the provisions o f P.D. No. 851
and its implementing rules and regulations. Thus, an employer cannot successfully
assert that it has committed an honest error in including such salary-related benefits
as the cash equivalent o f unused vacation and sick leave credits, overtime,
premium, night differential and holiday pay, and cost-of-living allowances in the
computation o f die 13* month pay.
Petitioner, in GntralAqtcanra de Tarlac} argued that there was an error in
the computation o f the 13* month pay o f its employees as a result o f its mistake in
implementing P.D. No. 851, an error that was discovered by the management only
when respondent union raised a question concerning the computation o f the
employees’ 13* m onth pay for 2006. Petitioner included in the computation o f the
13* month pay the cash equivalent o f unused vacation and sick leave credits,
overtime, premium, night differential and holiday pay, and cost-of-living
allowances. Admittedly, it was an error that was repeatedly committed by petitioner
’ Central Azucarea de Tariac v. Central Azucarera de Tailac labor Un'on-NlU, G.R No 188949. July 26,2010.
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for almost thirty (30) years. Petitioner insisted that the length o f time during which
an employer has performed a certain act beneficial to the employees, does not
prove that such an act was not done in error. It maintained that for the claim o f
mistake to be negated, there must be a clear showing that the employer had freely,
voluntarily, and continuously performed the act, knowing that he is under no
obligation to do so. Petitioner asserted that such voluntariness was absent in this
case. The Supreme Court, however, found this argument deserving o f scant
consideration. No doubtful or difficult question o f law is involved in this case. The
guidelines set by the law are not difficult to decipher. The voluntariness o f the
grant o f the benefit was manifested by die number o f years die employer had paid
the benefit to its employees. Petitioner only changed the formula in the
computation o f the 13d1 m onth pay after almost thirty (30) years and only after the
dispute between the management and employees erupted. This act o f petitioner in
changing the formula at this time cannot be sanctioned, as it indicates a badge o f
bad faith.
4.4. f o u r t h m u i s i r n w m m m m m
D ISCON TINU AN CE IS D O N E UNILA TERALLY BY T H E
employer,
Diminution of benefits refers to the act o f the employer in unilaterally
withdrawing the benefits already enjoyed by the employees.1 Consequently, if die
diminution or discontinuance o f a certain benefit is by mutual consent o f the
employer and the employee, there can be no violation o f the non-diminution
principle.
For instance, parties to a CBA may validly agree in die CBA to reduce
wages and benefits of employees provided such reduction does not go below the
minimum standards. While it is a fundamental rule that the parties to the CBA are
not allowed to stipulate below the minimum labor standards set by law, they are
not, however, prohibited by law or jurisprudence from negotiating and agreeing to
the reduction o f wages and benefits provided such reduction does not go below
the minimum standards.
The case o f InsularHotelEmployees Union-NFL,2is instructive on this p o int
It was held here that the Memorandum o f Agreement (MOA) executed by the
exclusive bargaining union and respondent hotel providing for the diminution
and/or elimination of some o f the benefits provided in the CBA in order to avert
further financial losses on the part o f respondent hotel and to enable it to re-open
and resume its operation, did not violate Article 100. And even assuming arguendo
that Article 100 applies to the case at bar, it was further held that the same does not
prohibit a union from offering and agreeing to reduce wages and benefits o f the*
1 Vogara, Jr. v. CaaCoia Bodes PiSpphes, he., supra; See also Supreme Steel Corporator v. Magkakaisang
M aw gaw a ng Supreme IndependentUnion (NM S^NMPL), O R. No. 185556, March 28.2011.
* Insular Ho&ei Emptoyees Unioo-t^L v. Waterfront Instdar Hotel Davao. 6.R. Nos. 17404041, Sept22.2010.
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employees, as held in Rivera v. Espiritu.* It was ruled in this case that the tight to free
collective bargaining includes the right to suspend i t 12
The same principle in InsularHoteland Rivera was cited in Octavio,3where it
was held that even assuming that there has been a diminution of benefits on
petitioner's part, Article 100 does no t prohibit a union from offering and agreeing
to reduce wages and benefits o f the employees as the right to free collective
bargaining includes the right to suspend i t
5. N O COM PANY P R A C T IC E W H E N B E N E F IT S A R E G RA N TED
D U E T O C E R T A IN S P E C IF IE D CIRCU M STA N CES.
N o company practice could ripen in situations where certain benefits are
granted only under certain specified circumstances. Consequently, even if the
employee has been enjoying certain benefits for quite a long period o f time, if the
circumstances have changed which no longer justify the continuation o f the grant
o f said benefits, the removal thereof does not certainly constitute a violation o f the
non-diminution o f benefits principle. Thus, die grant o f relocation allowance,
dislocation pay, gasoline allowance o r per diem intended for board and lodging once
an employee is assigned away from his home base, may be discontinued if die
employee is no longer assigned to posts requiring the grant thereof.4
6. E L IM IN A T IO N O R D IM IN U T IO N O F B E N E F IT S MAY
C O N S T IT U T E D E M O T IO N O R C O N S T R U C T IV E D ISM ISSA L
Elimination or diminution o f certain benefits may amount to constructive
dismissal. This (rind o f dismissal is technically considered an act o f involuntary
resignation resorted to when continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank a n d /o r a diminution in
pay, or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee that it could foreclose any choice by him
except to forego his continued employment56
C.
LEAVES
1.
SERVICE INCENTIVE LEAVE*
(NOTE: This topic is extensively discussed above)
GANO 1135547. Jan. 23.2002.
Octavio v. PhiEppine Long OistanceTelephone Company. GJA Nol175492, Feb. 27,2013.
O daviov.Phippre Long Distance Telephone C«rpanyl GANo.175492, Feb. 27,2013.
1 ^ Laboratories, Inc. v. Courtof W ustialRelali(ins,G Jl No. L-24632, O ct 26,1968; Aasv.Mnister of Labor, G A Nos.
58094-95, March 15,1989.
5 Unicorn Safely Glass. Inc. v.Basarte,G A No. 154689, Nov 25,2004.
6 Article 95 (a). Labor Code.
1
2
3
4
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2
MATERNITY LEAVE
1 .105-DAY EXPANDED M A T E R N IT Y LEAVE LAW (R A . N O . 11210).
O n February 20, 2019, President Rodrigo Duterte approved R.A. No.
11210, otherwise known as die ‘7 05-DayExpandedMaternity Leave Law. ’* This is the
prevailing law on maternity leave benefit It repealed or modified “[a]U laws,
decrees, orders, rules and regulations or parts thereof inconsistent [therewith]” and
this necessarily includes Article 131 [133] o f die Labor Code, as amended.12
O n May 1, 2019, die Implementing Rules and Regulations (IRR) o f this
law was signed by die D O L E Secretary, Chairperson o f the Civil Service
Commission (CSC) and President and CEO o f the Social Security System (SSS).
Inconsistency in recent enacted laws.
It bears noting that about 13 days before the signing into law o f R A . No.
11210, President Duterte approved on February 07, 2019, R.A. No. 11199,
otherwise known as the “Social Security Act of 2018” which re-enacted the exact
provision o f Section 14-A o f the previous R A . No. 8282, the “SocialSecurityAct of
1997“ which grants maternity leave o f sixty (60) days for normal delivery or
seventy-eight (78) days in case o f caesarian delivery. Obviously, the provisions o f
RA. No. 11210 should prevail over those o f Section 14-A o f 11199.
2. COVERAGE:
The Expanded Maternity Leave Law (EMLL) shall cover the following:
1. Female wo deers in die Public Sector,
2 Female workers in the Private Sector,
3. Female workers in the Informal Economy;
4. Female members who are voluntary contributors to the Social Security
System (SSS); and
5. Female national athletes.3
3. WHAT B EN E FIT S A R E G R A N T E D .
The following benefits ate granted under the 105-Day Expanded
Maternity Leave Law (EMLL) to die corresponding sectors:
1 Tfciw isen!^'An Ad trweasing to MatemfyUave Periodb OneHundrrt Five (105) Daysfor FemateWrites wft
an 0p6onto Bdend for an AddBonal TTwty (30) Days wdhout Pay. and Granting an AdcSonal Fifteen (15) Days for Soto
Motorsart ForOtorftiposes.*
2 The provisions of paragraphs (a) ffld (c) of Article 131 [133] of the Labor Code on matemty leave benefits ceased to be
appfable in to Eight of to integration of these benefits into RA No. 1161, to Soria! Security lav, by PD. No. 1202
(September27,19771art to amendments(heretointroducedby RA No. 7322(Apr! 23,1992Jart subsequeriy, by RA
No.8282,otherwiseknownasto'Social SecurtyAd of 1997.’ (May01.1997). However,theprwaSnglawnowis RA No.
11210(Febiuary20,201SLotorafeeknownasto*105DayBranded Materity Leavelaw.’
2 Section1.Ridetn, IRRofRA No. 11210.
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1. Paid leave benefit granted to a qualified female worker in die
PU B L IC SE C T O R , for the duration o£
a. O n e H u n d re d Five (105) days for live childbirth, regardless o f
the mode o f delivery, and an additional fifteen (15) days p a id
leave if die female worker qualifies as a solo parent under R A
No. 8972, o r die "Sob Parents' WelfareA rt of2000"’, or
b. Sixty (60) days paid leave for miscarriage and emergency
termination o f pregnancy,
2. Paid leave benefit granted to a qualified female worker in the
PR IV A T E SE C T O R coveted by the SSS, including those in the
informal economy, for the duration of:
a. O ne H u n d red Five (105) days for live childbirth, regardless o f
die mode o f delivery, and an additional fifteen (15) days p a id
leave if the female worker qualifies as a solo parent under R A .
No. 8972, or the "Sob Parents' WelfareA rt of2000"; or
b. Sixty (60) days paid leave for miscarriage and emergency
termination o f pregnancy,
Employed female workers shall receive full pay which consists o f
(i) SSS maternity benefit computed based on their average daily
salary credit and (ii) salary differential to be paid by the employer, if
any;
3. An option to extend for an additional thirty (30) days without pay in
case o f live childbirth;
4. Paid maternity leave, allowances and benefits granted to female
national athletes; and
5. Health care services for pre-natal, delivery, postpartum and pregnancyrelated conditions granted to female workers, particulady those w ho
are neither voluntary nor regular members o f the SSS, as governed by
die easting rules and regulations o f the Philippine Health Insurance
Corporation (PhilHealth).1
4. G R A N T O F M A T E R N IT Y LEAVE.
All coveted females regardless o f civil status, employment status, and die
legitimacy o f her child, shall be granted o n e h u n d red five (105) days m atern ity
leave w ith full pay, and an additio n al fifteen (15) days w ith full pay in case the
female worker qualifies as a solo p a re n t under R A . No. 8972, o r the "Solo Parents'
WelfareA rt of2000."
1 Section 2. Rule 111. W.
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In cases of miscarriage or emergency termination o f pregnancy sixty
(60) days maternity leave w ith full pay shall be granted.1
5. M A NN ER O F E N JO Y M E N T O F T H E B E N E F IT .
Enjoyment o f maternity leave c an n o t be deferred but should be availed
o f either before or after the actual period o f delivery in a continuous and
uninterrupted manner, and such that:
a. In cases o f live childbirth, one hu n d red five f!05^ days maternity
leave with full pay shall be granted; or
*
b. In cases o f miscarriage or emergency termination o f pregnancy,;
sixty (601 days maternity leave shall be granted.
In all o f the above instances, the maternity leave can be credited as
combinations o f prenatal and postnatal leave as long as it does not exceed one
hundred five (105) days or sixty (60) days, as the case may be. In no case shall
postnatal care be less than sixty (60) days.2
6. EX T E N D E D M A T ER N IT Y LEAVE.
In cases o f live childbirth, an additional maternity leave o f thirty (30)
days w ithout pay can be availed of, at die option o f the female worker, provided
that the employer shall be given due notice. D ue notice to the employer must be in
writing and must be given at least forty-five (45) days before the end o f die female
worker's maternity leave. However, no prior notice shall be necessary in the event
o f a medical emergency but subsequent notice shall be given to the employer.
The above period o f extended maternity leave without pay shall n o t be
considered as gap in die service.3
7. FREQ U EN CY O F T H E GRANT.
Maternity leave shall be granted to a qualified female worker in every
instance o f pregnancy, m iscarriage or em ergency term ination o f pregnancy
regardless o f frequency.4
8. GRANT O F M A T ER N IT Y LEAVE B E N E F IT S A FTE R
T ER M IN A T IO N O F E M PL O Y M E N T .
Maternity leave with full pay shall be granted even if the childbirth,
miscarriage, or emergency termination o f pregnancy occurs n o t m ore th an
fifteen (15) calendar days after the term ination o f a n em ployee's service, as
her right thereto has already accrued. Such period is not applicable when the
employment o f the pregnant woman worker has been term inated w ith o u t ju st
'
*
1
4
Secfonl.RuleW , W .;Secfon3,RANo.11210.
Secfion2,Ru5eiV, Id.
Section 3, Rub W. I I
Section4, Rub IV, Id.; Section 3, R A No. 11210.
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cause, in which case the employer will pay her the full am ount equivalent to her
salary for one hu n d red five (105) days for childbirth and sixty (60) days for
m iscarriage or em ergency term in atio n o f pregnancy b a se d on h er full pay, in
addition to the other applicable daily cash m aternity ben efits that she should
have received had her employment not been illegally terminated.1
9. M A T E R N IT Y LEAVE O F A FE M A LE W O RK ER W IT H P E N D IN G
A D M IN IST R A T IV E CASE.
The maternity leave benefits granted under R.A. N o. 11210 and the Rules
shall be enjoyed by a female worker in the public sector and in the private sector
even if she has a pending administrative case.2
10. M A T E R N IT Y LEAVE F O R FE M A LE W ORKERS IN T H E PU B L IC
SEC TO R .
a. Eligibility.
Any pregnant female worker in the government service, regardless o f
employment status and length o f service, in National Government Agencies
(NGAs), Local Government Units (LGUs), Government-Owned or Controlled
Corporations (GOCCs), State Universities and Colleges (SUCs), or Local
Universities and Colleges (LUCs) shall be granted maternity leave o f o n e h u n d red
five (105) days w ith full pay regardless o f the m an n e to f delivery o f die chad, and
an additional fifteen (15) days p a id leave if the female worker qualifies as a solo
parent under R.A. No. 8972, o r die "Solo Vomits' Wefan Act of2000." She shall be
entitled to maternity leave o f sixty (60) days w ith full p ay for m iscarriage o r
em ergency term ination o f p re gnancy,3
b. Notice o f pregnancy and application for maternity leave.
The female worker shall give prior notice to the head o f agency o f her
pregnancy and her availment o f maternity leave at least thirty (30) days in advance,
whenever possible, specifying the effective date o f the leave. The female wotker
shall use die prescribed civil service form in the filing o f the maternity leave
application, supported by a medical certificate.4
c. Maternity leave in the teaching profession.
Female teachers in the teaching profession may also avail o f maternity
leave even during long vacations,
* Section5. Rule (V, Id.
Sec6on6,RutelV, W.; Sec&on12. RA No. 11210.
3 Section1,RideV, H;Secton4,RA No. 11210.
4 Secfion2,RuieV, kl.
1
summer and Christmas vacations, in which
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case, both the maternity leave benefits and the proportional vacation pay (PVP)
shall be granted.1
d. Extended maternity leave.
In cases o f live childbirth, the female worker has the option to extend
her maternity leave for a n additional thirty (30) days w ithout pay, or use h er
earned sick leave credits for extended leave w ith pay. In case the sick leave
credits are exhausted, the vacation leave credits may be used.2
e. Manner o f payment o f maternity leave benefits.
The female worker shall be entided to full pay during maternity leave
which shall be paid by the agency. The female worker shall have the option to
receive full pay either through lump sum payment o r tegular payment o f salary
through agency payroll. A clearance from money, property and work-related
accountabilities shall be secured by the female worker. Money, property and. workrelated accountabilities as well as pending administrative case shall not deprive the
female worker o f the availment o f her maternity leave benefits.3
f. Consecutivepregnancies and multiple childbirths.
In case o f overlapping maternity benefit claims, eg., one m iscarriage or
emergency term ination o f pregnancy after the other or foQowed by live
childbirth, the female member shall be granted maternity benefits for die two
contingencies in a consecutive manner. The female worker shall be paid only one
maternity benefit, regardless o f the number o f offspring, per chfldbirth/deBvety.4
g. Dispute resolution.
Any dispute, controversy or claim arising out o f or relating to the payment
of full pay shall be filed by the concerned female worker initially to the head o f
agency and may be appealed to the Civil Service Commission (CSC) Regional
Office having jurisdiction over the agency, and to the Commission Proper,
respectively. The agency shall not hold o r delay the payment o f full pay to the
female worker pending the resolution o f the dispute, controversy o r claim.3
11. M ATERNITY LEAVE F O R FEM A LE W O RK ERS IN T H E PRIV ATE
SECTOR.
a. Eligibility.
To qualify for the grant o f maternity leave benefit, the female worker
must meet the following requirements:
‘
2
1
4
*
Section 3, Rute V, U.
Sec6on4,RuteV, Id.
Section 5, Ads V, Id.
Section 6, Rule V, Id.
Section 7. Rule V, M.
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a. She must have at least three (3) monthly contributions in the twelvemonth period immediately preceding the semester o f childbirth,
miscarriage, or emergency termination o f pregnancy.
In determining the female member's enddement to the benefit, the SSS
shall consider only those contdbudons paid prior to the semester o f
contingency; and
b. She shall have notified her employer o f her pregnancy and the probable
date o f her childbirth, which nodce shall be transmitted to the SSS in
accordance with the rules and regulations it may provide.1
b. N otice requirement.
The notification process for SSS-covered female workers a n d /o r
members and employers shall be governed by the following rules:
a. The female member, upon confirmation o f pregnancy, shall
immediately inform her employer o f such fact and the expected date
o f childbirth;
b. The employer shall, in turn, notify the SSS through the prescribed
manner,
c. The above rules notwithstanding, failure o f the pregnant female
worker to notify the employer shall not bar her from receiving the
maternity benefits, subject to guidelines to be prescribed by the SSS;
and
d. Self-employed female members, including those in the inform al
econom y, O FW s and voluntary SSS m em bers may give notice
directly to the SSS.2
c. Amount o f benefit.
Covered female workers availing of the maternity leave benefits must
receive their full pay. Full payment o f the maternity leave benefit shall be advanced
by the employer within thirty (30) days from die filing o f the maternity leave
application.
In the case o f self-em ployed female members, including those in the
inform al econom y, O FW s an d voluntary SSS m em bers, the SSS shall direedy
pay die maternity benefit.3
d. Reimbursement.
The SSS shall immediately reimburse to the employer die maternity
benefits advanced to the employed female member, only to the extent o f one
1 Section1, RuleVI, H.;Secfai5,RANo. 11210.
2 Section2, RuleVI, U
2 Section3. RuleVI, Id.
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hundred percent (100%) o f her average daily salary credit for one h u n d red five
(105) days, one hundred twenty (120) days or sixty (60) days, as the case m ay
be, upon receipt o f satisfactory and legal p ro o f o f such payment1
e. Salary differential, exceptions.
Employers from the private sector shall pay for the difference between
the full salary and the actual cash benefits received from the SSS. Female workers
employed by exempt establishments and enterprises, which satisfy the requirements
and criteria listed below, shall not be entided to the salary differential. The said
female workers shall be entided to receive only their SSS maternity benefits.
Upon submission o f proofs and other necessary documents, the following
establishments in the private sector may be exempted from paying the salary
differential herein prescribed, provided the criteria ate satisfied:
1. Those operating distressed establishments.
2. Those retail/service establishments and other enterprises employing
not more than ten (10) workers:
3. Those considered as micro-business enterprises and engaged in the
production, processing, or manufacturing o f products o r commodities,
including agro-processing, trading, and services, whose total assets are
not more than P3 Million in accordance with the Barangay Micro
Business Enterprises (BMBE's) Act o f 2002; and
4. Those who are already providing similar or more than the benefits
herein provided under an existing Collective Bargaining Agreement
(CBA), company practice or policy.2
f. Bar to recovery o f sickness beneffts.
The payment o f daily SSS maternity benefits shall be a bar to recovery o f
sickness benefits provided under R A No. I l l 99,3 for the same period for which
daily maternity benefits have been received.4
g. Consecutive pregnancies and m ultiple cbildbirtbs.
The payment of the SSS maternity benefits in cases o f consecutive
pregnancies resulting in overlapping maternity leaves and in cases o f multiple
childbirths shall be governed by die following rules:
a. In case o f the overlapping o f two (2) maternity benefit claims, the
female member shall be. granted maternity benefits for the two
contingencies in a consecutive manner. However, the amount o f
1 SacSoHRuteVI, id.
1 Section5, RuleVI, Id.
3 09ierwiselmownasfheaSod^Seax^Actof20l8*(Februaiy€7.2019).
1 Section6,RileVI, IRRofRANa 11210.
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LABO R STANDARDS
benefit corresponding to the period where there is an overlap shall be
deducted from the current maternity benefit claim; and
b. The female member shall be paid only one maternity benefit,
regardless o f the number o f offspring, per childbirth/delivery.1
h. Liability o f the employer.
The employer shall pay to the SSS damages equivalent to the benefits
which said female member would otherwise have been entitled to in any o f the
following instances:
a. Failure o f employer to remit to the SSS the required contributions for
the female worker; or
b. Failure o f the employer to transmit to SSS the female worker's
notification on the fact o f pregnancy and probable date o f childbirth.2
i. Dispute resolution.
Any dispute, controversy, or claim as regards the grant o f SSS maternity
leave benefit under the Rules shall be filed before the Social Security Commission
(SSQ. The filing, determination, and settlement o f disputes shall be governed by
the Rules and Regulations o f the SSC, which provide that all petitions shall be filed
with the Office o f the Executive Clerk o f the Commission or his/her Deputy, o r a t
any Regional Commission Legal Department. Any dispute, controversy, or claim
arising out of or relating to the payment o f salary differential shall be filed before
the D O LE Field/Provindal/Regional Office having jurisdiction over the
workplace and shall be subject to existing enforcement mechanisms o f the D O LE.3
12. M A T ER N IT Y LEA V E B E N E F IT S F O R W O M E N I N T H E
IN FO R M A L E C O N O M Y .
Maternity benefits shall cover all married and unmarried women,
including female workers in the informal economy. Female workers in die informal
economy are entided to maternity leave benefits if they have remitted to the SSS at
least dime (3) monthly contributions in the twelve (12)-month period immediately
preceding the semester o f her childbirth, miscarriage, o r emergency termination o f
pregnancy.4
13. A LL O C A T IO N O F M A T E R N IT Y LEAVE C R E D IT S.
a. Allocation to the child's father or alternate caregiver.
A female worker endded to maternity leave benefits may, at her option,
allocate up to seven (7) days o f said benefits to the child's father, whether o r n o t
•
*
3
4
Section7, RuleVt Id.
Section 8.RuleVI, Id.
Sec6on9,RuieVt Id.
Section1. RuleVII, Id.
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labor
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the same is mariied to the female worker. The allocated benefit granted to the
child's father under this law is over and above that which is provided under R.A.
No. 8187, or the "PaternityLeaveAct of 1996."
In case o f death, absence, or incapacity o f the child's father, the female
worker may allocate to an alternate caregiver who may be any o f the following,
upon the election of the mother taking into account the best interests o f the child:
a. A relative within the fourth degree o f consanguinity, or
b. The current partner, regardless o f sexual orientation or gender identity,
of the female worker sharing the same household.
The option to allocate maternity leave credits shall not be applicable in
case the female worker suffers miscarriage or emergency termination o f pregnancy.1
b. Allocation for the SSS-covered female workers.
In case the female worker avails o f the option to allocate, the SSS shall
pay her the amount of the maternity benefit corresponding to die period not
allocated.
As applicable, die father or, in his death, absence, ox incapacity, the
alternate caregiver shall be granted by his employer a leave with pay equivalent to a
period from one (1) to seven (7) days, which may be enjoyed either in a continuous
or in an intermittent manner not later than the period o f the maternity leave availed
of.
The female worker shall notify her employer o f her option to allocate with
her application for maternity leave. The father or alternate caregiver, as the case
may be, shall notify the employer concerned o f his o r her availment o f die allocated
leave and the inclusive dates therefor.
This written notice to the employers shall be required even if the child's
father or the alternate caregiver is employed in the public sector.2
c. Allocation ofmaternity leave credits for female workers in the
public sector.
In case the female worker avails o f the option to allocate, she shall submit
a written notice to the head o f agency or the head o f agency's authorized
representative, with her application for maternity leave.
The allocated maternity leave may be enjoyed by the child's father or the
alternate caregiver either in a continuous or in an intermittent manner not later
than the period of the maternity leave availed of.*
• Section1,RuleVID, Id.
* Section2, RuleVIO, Id.
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207
In case full pay has been given to the female worker, the child's father o r
the alternate caregiver, as die case may be, shall only be excused from work (leave
without pay). The leave without pay shall not be considered as a gap in the service.1
d. Death or permanent incapacity o f the female worker.
In the event the beneficiary female worker dies o r becomes permanendy
incapacitated, the balance o f her maternity leave benefits, if any, shall accrue to the
child's father or to a qualified alternate caregiver as provided in the preceding
sections subject to the following conditions:
a. That the maternity leave benefits have not yet been commuted to
cash, if applicable; and
b. That a certified true copy o f the death certificate or medical certificate
or abstract is provided to the employers o f both the female w orker
and the child's father or alternate caregiver.
In case the maternity leave benefits o f die deceased o r permanendy
incapacitated female worker have already been paid to the latter in full, the child's
father or alternate caregiver shall be entided to enjoy the remaining unexpired leave
credits o f the female worker, if there be any, without pay: Provided, That such leave
without pay shall no t be considered as a gap in die service o f die child's father or
alternate caregiver, in both the public and private sector.23
14. M A T E R N IT Y LEAVE F O R FE M A L E N A T IO N A L A T H L E T E S .
In the event that a national athlete who is in the roster o f national athletes
o f the National Sports Association (NSA) to which she is affiliated becomes
pregnant, she will be referred to a physician o f die Philippine Sports Commission
(PSQ or an obstetrician-gynecologist to determine her fitness to continue training.
She will be allowed to participate in all team-related activities, unless the physician
advises that participation is n o t medically safe o r should be limited. Upon medical
advice, she shall go on maternity leave until cleared to return to training. She shall
continue receiving her allowance and be endded to the same benefits while on
maternity leave prior to childbirth and up to six (6) months after, unless she can
resume sooner as advised by her physician, in which case, she will continue to
receive die same allowances and benefits she received prior to and during the
pregnancy: Provided, That a female national athlete employed in the public sector
shall not receive double compensation o r benefits.1
' Sedan3, RuleVIS, Id.
2 Section4, RuleVIA, Id.
3 Section1,RuleIX, Id; Section 113, RA No. 11210.
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3.
PATERNITY LEAVE
1. C O N C EPT AND PU RPO SE.
Under R A No. 8187,* otherwise known as the ‘Paternity Leave Act of
1996," every married male employee in die public*2 and private sectors, regardless
of his employment status (eg, probationary, regular contractual, project basis),3 is
entided to a paternity leave o f seven (7) calendar days with full pay for die first
four (4) deliveries456of the legitim ate spouse3 with whom he is cohabiting.3 If
die spouses are not physically living together because o f the workstation or
occupation, the male employee is still entided to the paternity leave benefit.2
The purpose o f the leave is to enable die male employee to effectively
lend support to his wife in her period o f recovery a n d /o r in the nursing o f the
newly-born child.8 Therefore, the usage o f the paternity leave shall be after the
delivery9 which means that this benefit is granted to the qualified male employee
after the delivery by his wife. This is without prejudice to an employer allowing an
employee to avail of the benefit before o r during die delivery, provided that the
total number o f days should not exceed seven (7) calendar days for each delivery.
In the event that the paternity leave benefit is not availed of, said leave shall n o t he
convertible to cash10and shall n o t be cumulative.11
The married male employee should apply for paternity leave with his
employer within a reasonable period o f time from the expected date o f delivery by
his pregnant spouse, or within such period as may be provided by company rules
and regulations, or by CBA. In case o f a m iscarriage, prior application for paternity
leave shall not be required.12
' RANo. 8187, The ftatemfyleave Act of 1996* (tone 11,1996, mffied'An Act Granting PaJemSyLeave of Seven (7)
Dayswffli Ful PaytoAl MarriedMaleEmployees h tie fttoate and PUMcSectorstor Ste First Far (4) Dehwies ofthe
Legimte SpouseWBiWhomHeIsGohtixSngandforOher Fuposes.*TWswasapprovedonJune 11,1996. OnMatch
13,1997, (he Department of labor and Employment and Department of Healthjointly Issued the Revised Implementing
RulesandReguldSonsofRANo.8187.
2 Government employeesarealsoen&fedtohts benefit but hey aregovernedbytie Civ) Servicerules. (Na 9 (A], 2019
HandboakonMbr1cem*St3]utb(yM(vietBuy6ene&l5i,issuedt^teBuiaauorWo(t&igCon(S6on^OOL^(.
1 No 9|A].1M.
4 Theterni'de§^indj(]esch2ldbirhtfanyniiscamag&(Sect)m2,S^Sec&)n1^Bal.).
5 "Spouse* rates to he laafiJwfe. For his purpose, lawful wife* rates to a woman Mho is legally married to he male
emptoyeeconcemed. (Sechon 1 {dh B>id.).
6 ‘CohaUSng'retestoheobfi^on of h e husband and w ieto ive togeher. (SectSonl hid.).
1 N a 9 {8 l 2019Harxhook onW txt^'Staluto^hteietaryBeneSs, issued ty h e Bure^ofVlteldngCfn&ions, DOLE.
8 Sedxn3. RAIto.8187;SecGon1 (a].Reusedtn^tenenfingRulesandRegulaSonsofRANo.8187 (March13,1997).
8 No 9 [B], 2019HanflxiokmVMers’S tati^R tav^B aTe^ issued ho BureauolWotteijContaions, DOLL
w No 9(Q ib ilS edoR s 5 and 8. Revised Implernenfng Rules and Regula5onsofRANa 8187 [M sdi 13,1997];
" No. 9 [E], bid.
'? No. 9 [DJ, B»d.; Section 2, R A No. 8187.
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LABOR STANDARDS
209
2. C O N D IT IO N S F O R A V A IL M E N T .
A married male employee is entided to this benefit provided that he has
m et the following conditions:
1. H e is an employee at die time o f die delivery o f his child;
2. H e is cohabiting with his spouse at the time that she gives birth o r
suffers a miscarriage;
3. H e has applied for paternity leave with his employer within a reasonable
period o f time from die expected date o f delivery by his pregnant
spouse, o r within such period as may be provided by company rules
and regulations, o r by CBA; and
4. His wife has given birth o r suffered a miscarriage.1
T he following are the rules for crediting o f existing benefits to paternity
leave:
1. I f the existing paternity leave benefit under die CBA, contract, or
company policy is greater than seven (7) calendar days as provided for
in RA 8187, the greater benefit shall prevail
2. I f the existing paternity leave benefit is less than that provided in RA
8187, the employer shall adjust the existing benefit to cover the
difference.2
Where a company policy, contract, or CBA provides for an em erg en cy
or contingency leave without specific provisions on paternity leave, the employer
should still grant to the employee seven (7) calendar days o f paternity leave.3
4.
SOLO PARENT LEAVE
1. C O N C E P T A ND PU RPO SE.
R A . N o. 8972,* otherwise known as 'The Sob Parents' WelfareAct of2000,"
grants a parental leave o f no t more than seven (7) w orking days every year to a
solo parent who has rendered service o f at least one (1) year, to enable h im /h e r to
perform parental duties and responsibilities where his/her physical presence is
required.5
I h is leave privilege, is an additional leave benefit which is separate and
distinct from any other leave benefits provided under existing laws o r agreements.6
1 No.9tq.aiki
a>kl
1 No. 9 [FI,
’ Id.
4 R A . No. 8972, T h e Sob Parent? Wettare Act of 200QT (Nouennlier 7,200(9, enffed'An Act Profiting for Benefits and
ffivieges to Solo Patents and Their Children, Appropriating Funds Therefor and Ibr Otter Rnposes.' It was approved on
November7,2000.
5 Section 8. RA. No. 8972; N a 10 [BJ. 2019 Handbook on Workers’ Statutory Monetary Benelits. issued by the Bureau of
Vtaking Condons, DOLE
« H ; No. 10 [Cl, bid.
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T h e sev en -d a y p a re n ta l leav e is n o n - c u m u la d v e .1 I f th e r e is a n e x is tin g o r sim ila r
b en efit u n d e r a co m p a n y p o lic y o r a C B A , d ie s a m e sh a ll b e c r e d ite d as su c h . I f th e
sam e is g re a te r th a n th e se v e n (7) d ay s p ro v id e d f o r in R A 8 9 7 2 , th e g re a te r b e n e f it
shall p rev ail.23E m e rg e n c y o r c o n tin g e n c y leav e p r o v id e d u n d e r a c o m p a n y p o lic y o r
a C B A shall n o t b e c re d ite d as c o m p lia n c e w ith th e p a r e n ta l le a v e p r o v id e d fo r
u n d e r R A 8972.3
T h e p a re n ta l le a v e is w ith
full p ay , c o n s is tin g o f b a sic
sa lary a n d
m a n d a to r)' a llo w an ces fix ed b y th e R e g io n a l W a g e B o a rd , i f an y , p ro v id e d th a t
h is /h e r pay shall n o t b e less d ia n th e m a n d a te d m in im u m
wage.4 I n th e e v e n t th a t
this leave is n o t availed o f , it shall n o t b e co n v ertib le? to ca sh , u n le s s sp e cifically
agreed o n p re v io u sly .5
2.
C O N D IT IO N S F O R A V A IL M E N T .
M o re specifically, th is leav e b e n e fit is g r a n te d to a n y so lo p a r e n t o r
individual w h o is left alo n e w ith th e re sp o n s ib ility o f p a r e n th o o d d u e to:
1. G iv in g b irth as a resu lt o f rap e o r , as u s e d by th e law , o th e r c rim e s
ag ain st ch astity ;
2. D e a th o f sp o u s e ;
3. S p o u se is d e ta in e d o r is se rv in g s e n te n c e f o r a c rim in a l c o n v ic tio n fo r
a t least o n e (1) year,
4. P h y sica l a n d / o r m e n ta l in c a p a c ity o f s p o u s e as c e rtifie d by a p u b lic
m ed ical p ra c titio n e r,
5. L eg al se p a ra tio n o r d e fa c to s e p a ra tio n f r o m s p o u s e fo r a t le a s t o n e (1)
y e a r P ro v id e d th a t h e / s h e is e n tr u s te d w ith th e c u s to d y o f th e
ch ild ren ;
6. D e c la ra tio n o f n u llity o r a n n u lm e n t o f m a rria g e as d e c re e d b y a c o u r t
o r by a c h u rc h : P ro v id e d , th a t h e / s h e is e n tr u s te d w ith th e c u s to d y o f
th e ch ild ren ;
7. A b a n d o n m e n t o f s p o u s e fo r a t le a s t o n e (1) year;
8. U n m a rrie d f a t h e r /m o th e r w h o h a s p r e f e r r e d to k e e p a n d re a r h i s / h e r
c h ild /c h ild re n , in s te a d o f h a v in g o th e r s c a r e fo r th e m o r g ive th e m u p
to a w elfare in s titu tio n ;
9. A n y o th e r p e r s o n w h o so lely p r o v id e s p a r e n ta l c a r e a n d s u p p o r t to a
ch ild o r c h ild re n :
p a r e n t by
th e
Provided,
th a t h e / s h e is du ly lic e n s e d as a fo s te r
D e p a r tm e n t
o f S o cial W e lfa re
and
D e v e lo p m e n t
(D S W D ) o r d u ly a p p o in te d leg al g u a r d ia n b y th e c o u r t; a n d
10. A n y fam ily m e m b e r w h o a s su m e s th e r e s p o n s ib ility o f h e a d o f fam ily
as a re su lt o f th e d e a th , a b a n d o n m e n t, d is a p p e a ra n c e , o r p ro lo n g e d
absence
1
5
3
4
5
of
th e
p a r e n ts
or
so lo
p a re n t:
Provided,
th a t
su c h
Section 8, R A No. 8972; Section 18. Article V, Rules and Regulations Implementing R A No. 8972.
No. 10 [F], 2019 Handbook on Workers' Statutory Monetary Benefits, issued by the Bureau of Workirtg Conditions, DOLE
Id; Section 21, Article V, Ibid.
No. 10 [C], 2019 Handbook on Workers’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions. DOLE.
No. 10 [E], Ibid.; Section 20, Article V, Rules and Regulations Implementing R A. No. 8972.
C h a pter T hree
LABOR. STANDARDS
211
a b a n d o n m e n t, d is a p p e a ra n c e , o r p r o lo n g e d a b s e n c e la s ts fo r a t le a s t
o n e (1) y e a r.1
F o r p u r p o s e s o f th is le a v e ,
"child’-'' r e fe rs
to a p e r s o n liv in g w ith a n d
d e p e n d e n t o n th e s o lo p a r e n t f o r s u p p o r t. H e / s h e is u n m a r r ie d , u n e m p lo y e d , a n d
b e lo w e ig h te e n (18) y e a rs o f a g e , o r e v e n e ig h te e n (18) y e a rs o ld a n d a b o v e b u t is
in c a p a b le
of
s e lf- s u p p o r t
because
h e /s h e
is
m e n ta lly -
a n d /o r
p h y sic a lly -
c h a lle n g e d .2
A s o lo p a r e n t e m p lo y e e is e n tid e d to th e p a r e n ta l le a v e , p r o v id e d th a t:
1. H e / s h e
has
re n d e re d
a t le a st o n e
(1)
y ear o f se n d ee, w h e th e r
c o n tin u o u s o r b r o k e n ;
2.
H e /s h e
has
n o tifie d
h is /h e r
e m p lo y e r
th a t
h e /s h e
w ill
a v a il
h i m s e lf /h e r s e lf o f it, w ith in a re a s o n a b le p e r io d o f tim e; a n d
3.
H e / s h e h a s p r e s e n te d to h i s / h e r e m p lo y e r a S o lo P a r e n t I d e n tif ic a tio n
C a rd , w h ic h m a y b e o b ta in e d fro m th e D S W D o ffic e o f 't h e c ity o r
m u n ic ip a lity w h e r e h e / s h e re sid e s .3
A c h a n g e in th e s ta tu s o r c ir c u m s ta n c e o f th e p a r e n t c la im in g th e b e n e f it
u n d e r th e law , s u c h th a t h e / s h e is n o lo n g e r le ft a lo n e w ith th e re s p o n s ib ility o f
p a r e n th o o d , sh a ll te r m in a te h i s / h e r elig ib ility f o r th is b e n e f it.45
N o e m p lo y e r sh a ll d is c rim in a te a g a in s t any s o lo p a r e n t e m p lo y e e w ith
re s p e c t to te r m s a n d c o n d itio n s o f e m p lo y m e n t o n a c c o u n t o f h i s / h e r b e in g a s o lo
p a r e n t.3
5.
LEAVE BENEFITS FOR WOMEN WORKERS
UNDER R.A. 9710 and R.A. 9262
a.
SPECIAL LEAVES FOR WOMEN WORKERS
(R.A. No. 9710)
1.
CO N CEPT AND PU RPO SE.
U n d e r R .A . N o . 9 7 1 0 ,67o th e r w is e k n o w n as
'The Magna C.arta of Women
7 a w o m a n e m p lo y e e , re g a rd le s s o f a g e a n d civil sta tu s , h a v in g r e n d e r e d c o n tin u o u s
a g g re g a te e m p lo y m e n t s e rv ic e o f a t le a st six (6) m o n d is f o r th e last tw e lv e (12)
'
2
3
1
5
6
7
w
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No. 10 (A), bid.; Section 6 [b], Article III, Rules and Regulations implementing RA. No. 8972.
No. 10 [B], bid.
No. 10 [D], Ibid.; Section 19, Article V, Rules and Regulations Implementing RA. No. 8972.
No. 10IG), bid.
No. 10 [H], Ibid.
Entitled "An Act Providing lor the Magna Carta ofWomen enacted on August 14.2009
This is the proper desenption of this law, R A. No. 9710, otherw.se knovm as 'The Magna Carta of Women' [August
14,2009], not ‘Magna Carta for Women’ since this is whaf is embodied in the law.
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Bar Reviewer on La b o r Law
m o n th s shall b e en titled to a sp e cial leav e b e n e fit o f tw o (2) m o n t h s w ith full payb ased
on
her g ro ss
m o n th ly
c o m p e n s a t i o n 1 fo llo w in g
surgery' c a u s e d
by
g y n e c o lo g ic a l d is o r d e r s .2
“Gynecological disorders”
re fe r to d is o rd e rs th a t w o u ld r e q u ire surgical
p ro c e d u re s su c h as, b u t n o t lim ite d to , d ila ta tio n a n d c u re tta g e a n d th o s e in v o lv in g
fem ale re p ro d u c tiv e o rg a n s s u c h as th e v ag in a , ce rv ix , u te ru s , fa llo p ia n tu b e s ,
ovaries, b re a st, ad n ex a an d p elv ic flo o r, as c e rtifie d b y a c o m p e te n t p h y sic ia n . I t
shaE also in c lu d e h y ste re c to m y , o v a rie c to m y a n d m a s te c to m y .34
2.
C O N D IT IO N S F O R A V A IL M E N T .
T h e follow ing a re th e c o n d itio n s fo r e n title m e n t o f th is le a v e b e n e fit:
1. S h e has r e n d e re d
a t le a st six (6) m o n th s
c o n tin u o u s
a g g re g a te
em p lo y m e n t se rv ic e fo r th e la s t tw elv e (12) m o n th s p r io r to su rg e ry ,
2.
She has filed a n a p p lic a tio n fo r sp e cial le a v e w ith h e r e m p lo y e r w ith in
a reaso n ab le p e rio d o f tim e f ro m th e e x p e c te d d a te o f su rg e ry o r
w ithin such p e rio d as m a y b e p ro v id e d by c o m p a n y ru le s a n d
regulations o r C B A ; a n d
3. S h e has u n d e rg o n e su rg e ry d u e to g y n e c o lo g ic a l d is o r d e r s as c e rtifie d
by a c o m p e te n t p h y s ic ia n /
T h e special leave sh a ll b e g r a n te d to th e q u a lifie d e m p lo y e e a f t e r s h e h a s
u n d e rg o n e su rg ery , w ith o u t p re ju d ic e to a n e m p lo y e r aU ow ing a n e m p lo y e e to
receive h e r p ay
before
or
during
th e su rg e ry .5 I t is n o n - c u m u la tiv e a n d n o n -
c o n v e rtib le to cash unless o d ie r w is e p r o v id e d b y a C B A .6
b.
LEAVE FOR VICTIMS OF VIOLENCE
AGAINST WOMEN AND CHILDREN
(RA. No. 9262)
1.
CO N CEPT AND PURPOSE.
R A . N o . 9262,7 o th e rw is e k n o w n a s th e
Their Children Act of 2004," g ra n ts
"Anti-Violence Against Women and
to v ic tim s a le av e o f u p to t e n (10) d a y s w ith full
pay, c o n s istin g o f basic sa lary a n d m a n d a to r y a llo w a n c e s fix ed b y th e R e g io n a l
’ Gross monthly compensation refers © the monthly basic pay plus mandatory atowances fixed by the Regional Wage
Boards.
7 Section 18. RA No. 9710, Mo. 12 [A] and P ), 2019 Handbook on Wooers' Statutory Monetary Benefits, issued by the
Bureau of Working Conditions, DOLE
3 No. 12 [B], 2019 Handbook on Wofkets’ Statutory Monetary Benefits, issued by the Bureau of Working Conditions. DOLE
4 No. 12 (C). Ibid.
5 No. 12 [El, M .
5 No. 12 [F], ibid.
7 Entitled *An Ad Defining Violence Against Women and Ther Chidren. Providing for Protects Measures for Victims.
Prescribing Penalties Therefor, and F a Other Purposes.’ This taw was enacted on March 08,2004.
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W a g e B o a rd , i f a n y .1 T h is is in
addition
2 13
to o t h e r p a id le a v e s u n d e r th e L a b o r C o d e
a n d C iv il S e rv ic e R u le s a n d R e g u la tio n s . I t is e x te n d ib le w h e n th e n e c e ssity a r is e s as
s p e c ifie d in th e p r o te c tio n o r d e r is s u e d b y th e b a ra n g a y o r th e c o u r t.2
P riv a te s e c to r w o m e n e m p lo y e e s w h o a r e v ic tim s a s d e fin e d in R A 9 2 6 2
sh a ll b e e n title d to th e p a id te n -d a y le a v e b e n e f it u n d e r s u c h te rm s a n d c o n d itio n s
p r o v id e d h e re in . T h e le a v e b e n e f it sh a ll c o v e r th e d a y s th a t th e w o m a n e m p lo y e e
h a s to a tte n d to m e d ic a l a n d legal c o n c e r n s .3 T h e u sa g e th e r e o f sh a ll b e a t th e
o p tio n o f th e w o m a n e m p lo y e e . I n th e e v e n t th a t th e le a v e b e n e f it is n o t a v a ile d o f ,
it sh a ll n o t b e c o n v e r tib le in to c a s h a n d sh all n o t b e c u m u la tiv e .4
‘Violence against women and their children," a s
u s e d in R ,A , 9 2 6 2 , re fe rs to a n y
a c t o r a sc rie s o f a c ts c o m m itte d by a n y p e r s o n a g a in s t a w o m a n w h o is h is w ife ,
f o r m e r w ife , o r a g a in s t a w o m a n w ith w h o m th e p e r s o n h a s o r h a d a s e x u a l o r
d a tin g re la tio n s h ip , o r w ith w h o m h e h a s a c o m m o n c h ild , o r a g a in st h e r c h ild ,
w h e th e r le g itim a te o r ille g itim a te , w ith in o r w ith o u t th e fam ily a b o d e , w h ic h w ill
re s u lt in o r is likely to re s u lt in p h y sic a l, se x u al, p s y c h o lo g ic a l h a rm o r s u ffe rin g , o r
e c o n o m ic
abuse,
in c lu d in g
th re a ts
of
such
a c ts ,
b a tte ry ,
a ssa u lt,
c o e r c io n ,
h a r a s s m e n t o r a rb itra ry d e p r iv a tio n o f lib e rty .5
2.
C O N D IT IO N F O R A V A IL M E N T .
T o b e c n tid e d to th e le a v e b e n e f it, th e o n ly r e q u ire m e n t is f o r th e v ic tim -
e m p lo y e e to p r e s e n t to h e r e m p lo y e r a c e rtific a tio n f r o m th e b a ra n g a y c h a ir m a n
(Pnnong Barangay)
o r b a ra n g a y c o u n c ilo r ( barangay
kagawad)
o r p r o s e c u to r o r th e
C le rk o f C o u rt, a s th e c a s e m a y b e , th a t a n a c tio n re la tiv e to th e m a tte r is p e n d i n g .6
D.
SPECIAL GROUPS OF EMPLOYEES
1.
WOMEN
a.
DISCRIMINATION
1.
A C T S O F D IS C R IM IN A T IO N U N D E R T H E L A B O R C O D E .
A rticle 133 [135] o f th e L a b o r C o d e c o n s id e rs a s u n la w fu l th e act o f an
e m p lo y e r to d is e n m m a te a g a in s t any w o m a n e m p lo y e e w ith re sp e c t to te rm s a n d
’ No. 11 p ], 2019 Handbook on Wooers' Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
3 Id.
3 Section 43, RA. No. 9262; No 11 [BJ. 2019 Handbook on Workers' Statutory Monetary Benefits, issued by the Bureau of
Working Ccndtions. DOLE
4 Id.; No. 11 [Ej. Ibid.
5 Section3 .ibid:No. 11 (A).ibid.
6 No. 11 [CJ, 2019 Handbook on Workers' Statutory Monetary Benefits, issued by the Bureau of Working Conditions, DOLE.
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review er o n
La bo r
law
c o n d itio n s o f em p lo y m e n t solely o n a c c o u n t o f h e r ' sex. M o r e sp e c ific a lly , it
e n u m e ra te s th e fo llow ing a c ts o f d isc rim in a tio n :
(a)
P a y m e n t o f a lesser c o m p e n s a tio n , in c lu d in g w a g e , salary o r o th e r
fo rm o f re m u n e ra tio n a n d frin g e b e n e fits , to a fe m a le e m p lo y e e as
ag ain st a m ale e m p lo y e e , fo r w o r k o f e q u a l valu e; a n d
(b)
F a v o rin g a m ale e m p lo y e e o v e r a fe m a le e m p lo y e e w ith r e s p e c t to
p ro m o tio n , tra in in g o p p o r tu n itie s , s tu d y a n d s c h o la rs h ip g r a n ts solely
o n a c c o u n t o f th e ir sex es.
2.
•w
A C T S O F D IS C R IM IN A T IO N U N D E R T H E M A G N A C A R T A O F
W OM EN.
R .A . N o . 9 7 1 0 ,1 o th e rw ise k n o w n a s
'The Magna Carta of Women," is
a
c o m p re h e n siv e w o m e n ’s h u m a n rig h ts la w th a t se e k s to e lim in a te d is c rim in a tio n
against w o m e n by reco g n izin g , p ro te c tin g , fu lfillin g a n d p r o m o tin g th e rig h ts o f
F ilipino w o m e n , especially th o s e in th e m a rg in a liz e d s e c to rs .
B ased o n th e d e fin itio n o f th e te r m
“Discrimination Against Women”in
R .A .
N o . 9710,2 th e follow ing are c o n s id e re d d is c rim in a to ry acts:
1. A n y g e n d e r-b a se d d is tin c tio n , e x c lu s io n , o r re s tric tio n w liic h h a s th e
e ffe c t
or
p u rp o s e
of
im p a irin g
or
n u llify in g
th e
re c o g n itio n ,
en jo y m e n t, o r ex e rc ise b y w o m e n , irre s p e c tiv e o f th e ir m a rita l sta tu s ,
o n a basis o f e q u ality o f m e n a n d w o m e n , o f h u m a n rig h ts a n d
fu n d a m e n ta l fre e d o m s in th e p o litic a l, e c o n o m ic , so c ia l, c u ltu ra l, civil
o r any o th e r field;
2.
A n y act o r o m iss io n , in c lu d in g b y law , p o lic y , a d m in is tra tiv e m e a s u re ,
o r practice, th a t d ire c tly o r in d ire e d y e x c lu d e s o r re s tric ts w o m e n in
th e reco g n itio n a n d p r o m o tio n o f th e ir rig h ts a n d th e ir a c c e ss to a n d
e n jo y m e n t o f o p p o r tu n itie s , b e n e f its o r p rivileg e s;
3. A m e a su re o r p ra c tic e o f g e n e ra l a p p lic a tio n th a t fails to p r o v id e fo r
m e c h a n ism s to o ffs e t o r a d d r e s s sex o r g e n d e r-b a s e d d is a d v a n ta g e s o r
lim ita tio n s o f w o m e n , as a r e s u lt o f w h ic h w o m e n a re d e n ie d o r
re stric te d in th e re c o g n itio n a n d p r o te c tio n o f th e ir r ig h ts a n d in th e ir
acce ss to an d e n jo y m e n t o f o p p o r tu n itie s , b e n e fits , o r p riv ile g e s; o r
w o m e n , m o re th a n m e n , a re s h o w n to h a v e s u f f e re d th e g re a te r
a d v e rse effe cts o f th o s e m e a s u re s o r p ra c tic e s; a n d
4.
D isc rim in a tio n c o m p o u n d e d b y o r in te rs e c tin g w ith o th e r g ro u n d s ,
sta tu s, o r c o n d itio n , s u c h a s e th n ic ity , a g e , p o v e rty o r re lig io n .1
1 R A No. 9710, approved on August 14,2009.
2 Section 4(b), Chapter II, R A No. 9710, approved on August 14,2009; See also Section 7(c), Rule II, Implementing Rules
and Regulations ot RA. No. 9710.
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A d d itio n a lly , w o m e n a re g u a r a n te e d th e ir rig h t to d e c e n t w o rk . T h e S ta te
sh a ll p ro g re s siv e ly realize a n d e n s u re d e c e n t w o r k s ta n d a rd s fo r w o m e n
th a t
in v o lv e th e c re a tio n o f jo b s o f a c c e p ta b le q u a lity in c o n d itio n s o f f re e d o m , e q u ity ,
s e c u rity a n d h u m a n d ig n ity .*2
b.
STIPULATION AGAINST MARRIAGE
1. I N V A L I D I T Y O F S T I P U L A T I O N A G A I N S T M A R R I A G E .
A rtic le 1 3 4 [136] o f th e L a b o r C o d e c o n s id e rs a s a n u n la w fu l a c t o f t h e
e m p lo y e r to re q u ire as a c o n d itio n f o r o r c o n tin u a tio n o f e m p lo y m e n t th a t a
w o m a n e m p lo y e e sh a ll n o t g e t m a r rie d o r to s tip u la te e x p re s s ly o r tac itly th a t u p o n
g e ttin g m a rrie d , a w o m a n e m p lo y e e sh a ll b e d e e m e d re s ig n e d o r s e p a ra te d .
I t is lik e w ise a n u n la w fu l a c t o f th e e m p lo y e r, to a c tu a lly d is m is s ,
d isc h a rg e , d is c rim in a te o r o th e r w is e p re ju d ic e a w o m a n e m p lo y e e m e re ly b y r e a s o n
o f h e r m a rria g e .3
2. R E L E V A N T J U R I S P R U D E N C E .
T h e fo llo w in g c a se s a re re le v a n t:
1)
Zialcita v. PAL,4 a
c a se d e c id e d b y th e O ffic e o f th e P re s id e n t, w h e r e
th e p ro v is io n in a c o n tr a c t b e tw e e n a n a irlin e c o m p a n y a n d a flight a tte n d a n t w h ic h
sta te s th a t “ flig h t a tte n d a n t- a p p lic a n ts m u s t b e sin g le a n d th a t th e y sh a ll b e
a u to m a tic a lly s e p a ra te d f ro m
e m p lo y m e n t in
th e e v e n t th e y s u b s e q u e n d y g e t
m a rrie d ,” w as d e c la re d n u ll a n d v o id a n d th u s c a n n o t b e e n f o rc e d
fo r b e in g
c o n tr a ry to A rtic le 1 3 4 [136] o f th e L a b o r C o d e a n d th e p r o te c tio n - to - la b o r c la u s e
in th e C o n s titu tio n .
2)
FT&T v.
N L R C .,5 w h e re it w a s d e c la re d th a t th e c o m p a n y p o lic y o f
n o t a c c e p tin g o r c o n s id e rin g a s d isq u a lifie d f ro m w o rk a n y w o m a n w o r k e r w h o
c o n tr a c ts m a rria g e r u n s a fo u l o f th e te s t o f, a n d th e rig h t a g a in st, d is c rim in a tio n
a f fo r d e d
all w o m e n
w o rk e rs
by
our
la b o r
law s a n d
by
no
le ss
th a n
th e
C o n s titu tio n .6
' Id.
2 Section 25, Rule V, Implementing Rules and Regulations of R A No. 9710.
3 See also Section 13 fej, Rule XII, Book III, Rules to Implement the Labor Code; Gualberto v. Mahnduque Mning Industrial
Corporation, CA-G.R. No. 52753-R, June 28,1978.
4 Ziatata v. Philippine Airlines, Inc., Case No. R04-3-398-76, Feb. 20,1977.
5 Philippine Telegraph end Telephone Company v. NLRC. G.R. No. 118978, May 23,1997,272 SCRA 596,605.
6 See also Gualberto v. Marinduque Mning & Industrial Corporation, supra; Saida, v. Phapphe Airfnes, supra; 45A Am. Jur.
2d, Job Discrirnnation, Sec. 506, p. 486.
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Ba r R e v i e w e r
on
La b o r
u w
3) Star Paper Gap. v. Simbol} where die following policy was struck down
as invalid fot violating the standard o f reasonableness, otherwise called the
“Reasonable BusinessNecessity Rule, ’’which is being followed in our jurisdiction:
"1. New applicants will not be allowed to be hired if in case he/she has
[a] relative, up to [the] 3rd degree of relationship, already employed
by the company.
“2 In case of two of our employees (both singles [sic], one male and
another female) developed a friendly relationship during the course
of their employment and then decided to get married, one of them
should resign to preserve the policy stated above.”
4) Duncan v. Glaxo Welcome} where the prohibition against marriage
embodied in the following stipulation in the employment contract was declared
valid:
“10. You agree to disclose to management any existing or future
relationship you may have, either by consanguinity or affinity with coemployees or employees of competing drug companies. Should ir pose a
possible conflict of interest in management discretion, you agree to resign
voluntarily from the Company as a matter of Company policy.”
The Supreme Court ruled that die dismissal based on above stipulation in
the employment contract is a valid exercise o f management prerogative. The
prohibition against personal or marital relationships with employees o f competitor
companies upon its employees was held reasonable under the circumstances
because relationships o f this nature might compromise the interests o f die
company. In laying down the assailed company policy, the employer only aims to
protect its interests against the possibility that a competitor company will gain
access to its secrets and procedures.
c,
PROHIBITED ACTS
1. PR O H IB IT E D ACTS U N D E R A R T IC L E 135 [137] A N D ITS
IM PLE M E N TIN G RU LES.
Artide 135 [137] o f the Labor Code and its implementing rule consider
1) To discharge any woman employed by him for the purpose of
preventing such woman from enjoying maternity leave, facilities and
other benefits provided under the Labor Code;*1
1 StarPaper Cap. v. Smbd, Coma and Esfrefla. G.R. No. 164774,Apri 12.2006.
1 DuncmAssoc^dO^aititan^GWOv.QaxoWdcnnePhippnes, Inc., G.R. No. 162994. SeplU. 2004.
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LA BO R STA N DA RDS
217
2) T o discharge such woman on account o f her pregnancy, or while on
leave o r in confinement due to her pregnancy,
3) To discharge or refuse the admission o f such woman upon returning
to her work for fear that she may again be pregnant;
4) To discharge any woman o r any other employee for having filed a
complaint or having testified or being about to testify under the Labor
Code; or
5) To require as a condition for or continuation o f employment that a
woman employee shall n o t get married or to stipulate expressly or
taddy that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason o f marriage.1
2. D E N IA L O F B E N E F IT S .
The following are the prohibited acts under Artide 135 [137] o f die Labor
Code:*2
1) To deny any woman employee the following benefits,3 namely:
a) Facilities for women;4
b) Maternity leave benefits;5 and
c) Family planning services and incentives for family planning.6
2) T o discharge any woman employee for die purpose o f preventing her
from enjoying any o f the benefits provided under the Labor Code.7
Under N o . 1 above, mere denial o f the afore-described benefits would
already constitute a violation o f A rtide 135 [137]. Under N o . 2 above, it is required
that there must not only be denial but actual discharge or dismissal o f the w om an
employee meant to prevent her from enjoying n o t only the benefits under Chapter
I, Tide m o f Book m o f the Labor Code but any o f the benefits granted under die
other provisions thereof
3. D ISC H A R G IN G A W OM AN D U E T O PREG N AN CY .
A rtide 135 [137]1 contemplates the following prohibited acts in
connection with the pregnancy o f a woman employee:
' Seclion 13, Rule X I. Book HI (hereof.
2 See paragraph [a] (1) thereof.
1 As provided in Chapter I (Employment of Women), Title 111 (Woridng Conditions for Special Groups of Employees)
of Bode III of the Labor Code.
4 Under Article 1301132], Ibid.
5 The proving law now is R A No. 11210 (February 20,2019), obewiseknowi as be *10SOay Expanded Maternity Leave
^2W*
« Under Article 132 (134), Labor Code.
1 Seeafso Section 13. Rule XH. Book IB, ftdes to Implement he LabcrCode.
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218
bar
R eviewer
on La b o r Law
1) T o d isc h arg e h e r o n a c c o u n t o f h e r p re g n a n c y ;
2) T o d isc h a rg e h e r w h ile sh e is o n le av e d u e to h e r p re g n a n c y ;
3) T o d isc h a rg e h e r w h ile sh e is in c o n f in e m e n t d u e to h e r p re g n a n c y ;
4) T o d isc h arg e h e r u p o n r e tu rn in g to h e r w o r k fo r fe a r th a t sh e m ay
again b e p re g n a n t; o r
5) T o re fu se h e r a d m iss io n u p o n r e tu rn in g to h e r w o rk fo r fe a r th a t sh e
m ay again b e p re g n a n t.*2
In
Del Monie Philippines, Inc. v. Velasco,3
th e se rie s o f a b s e n c e s o f th e
re sp o n d e n t d u e to h e r p re g n a n c y a n d its re la te d a ilm e n ts , su c h a s u rin a ry tra c t
in fectio n , w e re fo u n d n o t to b e a valid g r o u n d to d ism is s h e r f ro m e m p lo y m e n t.
T h e S u p re m e C o u rt a g re e d
w ith
th e
C o u r t o f A p p e a ls in
c o n c lu d in g
th a t
re sp o n d e n t’s sic k n ess w as p re g n a n c y -re la te d a n d th e r e fo r e th e p e titio n e r c a n n o t
te n n in a te r e s p o n d e n t’s se rv ic e s b e c a u s e in d o in g so , p e titio n e r w ill, in e ffe c t, b e
violating th e L a b o r C o d e w h ic h , u n d e r A rtic le 135 [137] th e r e o f, p ro h ib its a n
e m p lo y er to d isc h a rg e a n e m p lo y e e o n a c c o u n t o f th e la tte r ’s p re g n a n c y .
The
C o u rt w as c o n v in c e d th a t th e p e titio n e r te r m in a te d th e se rv ic e s o f r e s p o n d e n t o n
a c c o u n t o f h e r p re g n a n c y w h ic h ju stifie d h e r a b s e n c e s a n d it th u s c o m m itte d a
p ro h ib ite d a c t re n d e rin g th e d ism issa l illegal.
In
Lakpue Drug, Inc. v. Belga,4 r e s p o n d e n t
B elg a w a s d is m is s e d fo r alleg ed ly
deliberately c o n c e a lin g h e r p re g n a n c y a n d fo r in c u r rin g a b s e n c e s w ith o u t o ffic ia l
leave fo r 16 d ay s a t w h ic h tim e s h e d e liv e re d h e r b ab y . P e titio n e r a rg u e d th a t su c h
n o n -d isc lo s u re is ta n ta m o u n t to d is h o n e s ty . I n fin d in g t h e p e n a lty o f d ism issa l to o
h a rsh a n d illegal, th e S u p re m e
C o u rt ru le d
re sp o n d e n t B elga barely falls w ith in
th a t th e
alleg ed m is c o n d u c t o f
th e s itu a tio n c o n te m p la te d b y law .
H er
a b sen ce fo r 16 d ay s w as ju s tifie d c o n s id e rin g th a t s h e h a d ju s t d e liv e re d a ch ild ,
w h ich can h a rd ly b e c o n s id e re d a fo rb id d e n a c t, a d e re lic tio n o f d u ty , m u c h less
d o e s it im p ly w ro n g fu l
in te n t
on
h e r p a rt. P e titio n e r h a rp s
on
th e
alleg ed
c o n c e a lm e n t by B elga o f h e r p re g n a n c y . T h is a r g u m e n t, h o w e v e r, b e g s th e q u e s tio n
as to
how
one
can
conceal
a
fu ll-te rm
p re g n a n c y . T h e
C o u r t a g re e d
w ith
re s p o n d e n t’s p o s itio n th a t it c a n h a rd ly e s c a p e n o tic e h o w sh e g ro w s b ig g e r e a c h
day. W hile th e re m ay b e in s ta n c e s w h e re th e p re g n a n c y m a y b e in c o n s p ic u o u s , it
has n o t b e e n su fficien tly p r o v e n b y p e titio n e r th a t B e lg a’s c ase is su c h .
4.
D IS C H A R G IN G A W O M A N E M P L O Y E E F O R H A V IN G F IL E D A
CA SE O R F O R T E S T IF Y IN G IN A C A SE
A n a d d itio n a l p ro h ib ite d a c t5 is th e a c t o f d is c h a rg in g an y w o m a n o r any
o th e r e m p lo y e e fo r h a v in g filed a c o m p la in t o r h a v in g te s tifie d o r b e in g a b o u t to
'
See paragraph [a ] (2 ) and (3 ) th e reo f.
2 See aiso Section 13, Rule X II, Book III, R ules to Im plem ent the Labor C ode.
> G R No. 153477, M arch 6,2007.
4 G R No. 166379, O ct 20,2005.
5 See Section 13, Rule X II, Book III o f the R ules to Im plem ent the Labor Code.
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te stify u n d e r th e L a b o r C o d e . O f re le v a n c e to th is p r o h ib ite d a c t a re th e p a ra lle l
p ro v is io n s in A rticles 118 a n d 2 5 9 (f) [248(f)] o f th e L a b o r C o d e .
U n d e r A rtic le 118, it is c o n s id e re d u n la w fu l fo r a n e m p lo y e r to d is c h a rg e
o r in a n y m a n n e r d is c rim in a te a g a in st a n y e m p lo y e e w h o h a s file d any c o m p la in t o r
in s titu te d a n y p ro c e e d in g u n d e r T id e II (W ages) o f B o o k I I I (C o n d itio n s o f
E m p lo y m e n t) o r h a s te s tifie d o r is a b o u t to testify in su c h p ro c e e d in g s .
U n d e r A rtic le 2 5 9 (f) [248(f)], it is c o n s id e re d a n u n fa ir la b o r p r a c tic e
(U L P ) to d ism is s, d is c h a rg e o r o th e rw is e p re ju d ic e o r d is c rim in a te a g a in s t a n
e m p lo y e e fo r h a v in g g iv e n o r b e in g a b o u t to g ive te s tim o n y u n d e r th e L a b o r C o d e .
T h is is th e o n ly U L P a c t o f th e e m p lo y e r w h ic h n e e d n o t b e re la te d to th e e x e rc is e
by th e e m p lo y e e o f h is rig h t to s e lf-o rg a n iz a tio n a n d c o lle c tiv e b a rg a in in g .1
d.
SEXUAL HARASSMENT
1. T H R E E (3 ) S I T U A T I O N S O N L Y .
R .A . N o . 7 8 7 7 ,2 o th e rw is e k n o w n as t h e
1995," d e c la re s
(1)
(2)
(3)
"Anti-Sexual Harassment A ct of
se x u a l h a r a s s m e n t u n la w fu l o n ly in th r e e (3) s itu a tio n s , n am ely :
employment e n v ir o n m e n t;
education e n v ir o n m e n t; a n d
training e n v ir o n m e n t.
N o ta b ly , se x u a l h a r a s s m e n t is n o t th e so le d o m a in o f w o m e n as m e n m a y
a lso b e s u b je c te d to th e s a m e d e s p ic a b le a c t. S a id la w d o e s n o t lim it th e v ic tim o f
se x u al h a r a s s m e n t to w o m e n .
2. S P E C IF I C A C T S P E N A L I Z E D .
T h e law p u n is h e s se x u a l h a r a s s m e n t i f th e sa m e is:
1. « w .£ -rela te d ; o r
2.
3.
educalion-Tchtcfr, o r
training-re la te d .3
3. P E R S O N S W H O M A Y B E L IA B L E F O R S E X U A L H A R A S S M E N T .
W o rk , e d u c a tio n o r tra in in g -re la te d se x u al h a r a s s m e n t is c o m m itte d b y
an y e m p lo y e r, e m p lo y e e , m a n a g e r, s u p e rv is o r, a g e n t o f th e e m p lo y e r, te a c h e r ,
in s tr u c to r , p r o fe s s o r , c o a c h , tra in o r, o r an y o th e r p e r s o n w h o , h a v in g a u th o r ity ,
in flu e n c e o r m o ra l a s c e n d a n c y o v e r a n o th e r in a w o rk o r tra in in g o r e d u c a tio n
e n v ir o n m e n t, d e m a n d s , r e q u e s ts o r o th e rw is e r e q u ire s a n y s e x u a l f a v o r f ro m
’
Ph3com Em ployees U nion v. P hilippine G lobal C om m unications, G R N o. 144315, Ju ly 17, 2006; See a lso B e q
M anggagaiva sa T ryco v. N LR C . G .R. N o. 151309, O c t 15,2008.
2
R A . N o. 7877, Feb. 14,1995.
3
Section 3, R A No. 7877.
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Bar Reviewer on Labo r Law
a n o th e r, reg ard le ss o f w h e th e r th e d e m a n d , r e q u e s t o r r e q u ire m e n t fo r s u b m is s io n
is a c c e p te d by th e o b je c t o f said a c t.1
F u rth e r, any p e rso n w h o d ire c ts o r in d u c e s a n o th e r to c o m m it a n y a c t o f
sexual h a ra s s m e n t as d e fin e d in th e law , o r w h o c o o p e r a te s in th e c o m m is s io n
th e re o f b y a n o th e r w ith o u t w h ic h it w o u ld n o t h a v e b e e n c o m m itte d , shall a ls o b e
h eld liable u n d e r th e law.2
4.
SEX U A L H A R A S S M E N T IN A W O R K -R E L A T E D O R
E M P L O Y M E N T E N V IR O N M E N T .
In a w o rk -re la te d o r e m p lo y m e n t e n v ir o n m e n t, se x u a l h a r a s s m e n t is
c o m m itte d w h e n :
1. T h e
sexual fa v o r is m a d e a c o n d itio n
e m p lo y m e n t,
rc -c m p lo y m e n t
or
in
c o n tin u e d
th e
h irin g o r in
e m p lo y m e n t
of
th e
said
in d iv id u al o r in g r a n tin g said in d iv id u a l fa v o ra b le c o m p e n s a tio n ,
te rm s, c o n d itio n s, p r o m o tio n s , o r p riv ile g e s; o r th e re fu s a l to g r a n t th e
sexual fav o r resu lts in lim itin g , se g re g a tin g o r cla ssify in g th e e m p lo y e e
w h ic h in any w ay w o u ld d isc rim in a te , d e p riv e o r d im in is h e m p lo y m e n t
o p p o rtu n itie s o r o th e rw is e a d v e rse ly a f fe c t sa id e m p lo y e e ;
2. T h e a b o v e acts w o u ld im p a ir th e e m p lo y e e ’s rig h ts o r p riv ile g e s u n d e r
ex istin g la b o r law s; o r
3. T h e a b o v e acts w o u ld re su lt in a n in tim id a tin g , h o s tile , o r o ffe n s iv e
e n v iro n m e n t fo r th e e m p lo y e e .34
4.1.
IL L U S T R A T IV E C A SE S.
T h e fo llo w in g cases b e s t e x e m p lify w o r k -r e la te d se x u a l h a ra s s m e n t:
(1)
Villarama v. NLRC,*
w h e re
p e titio n e r
w as
p riv a te
resp o n d en t
c o m p a n y ’s M a terials M an ag er. H e w a s c h a rg e d w ith se x u a l h a ra s s m e n t b y D iv in a
G o n z a g a , a c le rk -ty p ist a s sig n e d in his d e p a r tm e n t. T h e h u m ilia tin g e x p e rie n c e
co m p e lle d h e r to resign fro m w o rk . I n h e r le tte r-re s ig n a tio n , s h e a lleg ed th e
follow ing in c id e n t:
“ Last Friday, July 7, 1989, Mr. D elfin Villarama and Mr. Jess
de Jesus invited all the girls o f Materials D ep a rtm e n t for a d inner w hen
in (sic) the last minute th e o th er three (3) girls decided not to join the
group anymore. I do (sc ) n o t have second th o u g h ts ) in accepting their
invitation for they arc m y collc(a)gues and I had nothing in m ind that
would in any manner p ro m p t me to refuse to w h at appeared to m e as a
simple and cordial invitation. We w en t to a restaurant along M akati
'
Id.
3 Id.
3 Section 31a), R A . No. 7877.
4 DeTn G . V illaram a v. NLRC and Golden D onuts, In c , G .R. N o. 106341, S e p t 2 ,1 9 9 4 ,2 3 6 SCRA 280.
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A venue w h ere w e ate o u r dinner. Mr. V illaram a, Mr. O laybar and Mr.
Jess de Je su s w ere drinking while w e were eating and (they) even
offered m e a few drinks an d w hen w e were finished, they decided to
While on my way, I found out that Mr. Villarama was not
driving tlx way to my houst. 1 was wondering why we were taking the wrong way
until I found out that we were entering a motel I was really shocked). I did not
expect that a somewhat reputableperson Ike Mr. Villarama could do such a thing
to any of his subordinates. I should have left the company without any word but I
feel that I would be unfair to those who might be similarly situated. I ho p e that
b ring m e hom e.
you w ould find tim e to investigate th e veracity o f my allegations and
m ake each (sic) responsible fo r his ow n deed.” 1
T h e S u p r e m e C o u rt, in fin d in g th a t p e titio n e r ’s d ism is sa l w a s leg al,
ra tio c in a te d :
“ xxx (Ljoss o f tru st an d co nfidence is a good ground for
dism issing a m anagerial em ployee. It can be proved by substantia]
evidence w hich is p resen t in the case a t bench. A s further observed by
the Solicitor G eneral:
*... assuming arguendo that Dejesus and Gonzaga were
sweethearts and that petitioner merely acceded to the request of the
former to drop them in the motel, petitioner acted in collusion with
the immoral designs of De Jesus and did not give due regard to
Gonzaga's feeling on the matter and acted in chauvinistic disdain of
her honor, thereby justifying public respondent's finding of sexual
harassment Thus, petitioner not only failed to act accordingly as a
good father of the family because he was not able to maintain his
moral ascendancy and authority over the group in the matter of
morality and discipline of his subordinates, but he actively facilitated
the commission of immoral conduct of his subordinates by driving
his car into the motel. (Comment, April 29,1993, p. 9)’
“ As a managerial em ployee, petitioner is bound by a m ore
exacting w ork ethics. H e failed to live up to this higher standard o f
responsibility w hen he succum bed to his m oral perversity. A nd when
such m oral perversity is perpetrated
against his subordinate, he
provides justifiable g round for his dismissal for lack o f trust and
confidence. It is the right, nay, the duty o f every em ployer to protect its
em ployees from over sexed superiors.”
(2)
Libres v. NLRC,2 w h e r e
p e titio n e r, an e le c tric a l e n g in e e r w h o w as a n
A s s is ta n t M a n a g e r in p riv a te r e s p o n d e n t N a tio n a l S te e l C o r p o r a tio n (N S C ), w a s
s u s p e n d e d fo r 30 d a y s w ith o u t p a y o n th e b a s is o f th e c h a rg e o f se x u al h a r a s s m e n t
m a d e b y S u sa n D . C a p ira l, a se c re ta ry . S e x u al h a r a s s m e n t is c o n s id e re d a v io la tio n
o f th e P la n t’s R u le s a n d R e g u la tio n s .3 H is a c t c o n s is ts o f “ to u c h in g a fe m a le
s u b o r d in a te ’s h a n d a n d s h o u ld e r, c a re s sin g h e r n a p e a n d tellin g o t h e r p e o p le th a t
'
Em phasis found in Ihe original te xt o f the Suprem e C ourt decision m this case.
2 Carlos G. Utxes v. NLRC. G.R. No. 123737, May 28,1999
3
Ite m 2 ,T a b le V th e re o f.
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Bar. Reviewer on Labo r Iaw
C ap iral w as th e o n e w h o h u g g e d a n d k isse d h im a n d th a t s h e r e s p o n d e d to th e
sexual
a d v a n c e s.” T h e
S u p re m e
C o u rt
a f fir m e d
th e
v a lid ity
o f h is
3 0 -d a y
su sp e n sio n .
Philippine Aeolus v. NLRC,1 w h e r e
(3)
p r iv a te r e s p o n d e n t C o r te z w a s
c h a rg e d by p e titio n e r c o m p a n y , a m o n g o th e r s , th a t o n A u g u s t 2 , 1 9 9 4 , s h e
c o m m itte d a c ts c o n s titu tin g g ro s s d is r e s p e c t to h e r s u p e rio r , W illia m C h u a , th e
P la n t M a n ag er, c o n sistin g o f h e r a c t o f th r o w in g a s ta p le r a n d u tte r in g a b u s iv e
language u p o n th e p e rso n o f th e la tte r. I n h e r d e f e n s e , C o r te z cla im s th a t as e a rly as
h e r first y ear o f e m p lo y m e n t, W illia m C h u a a lre a d y m a n if e s te d a sp e c ia l lik in g fo r
h e r, so m u c h s o th a t sh e w as re c e iv in g sp e c ia l tr e a tm e n t fro m h im . H e w o u ld
o fte n tim e s in v ite h e r " fo r a d a te ," w h ic h sh e w o u ld as o f te n re fu s e . O n m a n y
o c c a sio n s, h e w o u ld m ak e sex u al a d v a n c e s - to u c h in g h e r h a n d s , p u ttin g h is a rm s
a ro u n d h e r sh o u ld e rs , ru n n in g h is fin g e rs o n h e r a rm s a n d te llin g h e r s h e lo o k e d
b eau tifu l. T h e
special tre a tm e n t
and
se x u al
advances
c o n tin u e d
d u r in g
her
e m p lo y m e n t fo r 4 years b u t sh e n e v e r re c ip ro c a te d h is flirta tio n s , u n til finally, s h e
n o tic e d th a t his a ttitu d e to w a rd s h e r c h a n g e d . H e m a d e h e r u n d e r s ta n d th a t i f sh e
w o u ld n o t g ive in to his sexual a d v a n c e s , h e w o u ld c a u s e h e r te r m in a tio n f r o m th e
service; a n d lie m a d e
g o o d his d ir e a t w h e n h e s ta r te d h a r a s s in g h e r. S h e ju s t fo u n d
o u t o n e day th a t h e r table w h ic h w a s e q u ip p e d w ith te le p h o n e a n d in te r c o m u n its
an d c o n ta in in g h e r p e rso n a l b e lo n g in g s w a s tr a n s f e r re d w ith o u t h e r k n o w le d g e to a
place w ith n e ith e r te le p h o n e n o r in te r c o m , f o r w h ic h r e a s o n , a n a r g u m e n t e n s u e d
w h e n sh e c o n f ro n te d W illiam C h u a r e s u ltin g in h e r b e in g c h a r g e d w ith g ro s s
d isre sp e c t.
On
th e
fo reg o in g
re s p o n d e n t’s a c t o f th ro w in g
c h a rg e ,
2
th e
S u p re m e
C o u rt
r u le d
th a t
p riv a te
s ta p le r a n d u tte r in g a b u s iv e la n g u a g e u p o n th e
p e rso n o f th e p la n t m a n a g e r m a y b e c o n s id e r e d , f ro m a la y m a n 's p e r s p e c tiv e , a s a
se rio u s m isc o n d u c t. H o w e v e r, in o r d e r to c o n s id e r it a s e rio u s m is c o n d u c t th a t
w o u ld ju stify d ism issal u n d e r th e law , it m u s t h a v e b e e n d o n e in re la tio n to th e
p e rfo rm a n c e o f h e r d u tie s as w o u ld s h o w h e r to b e u n f it to c o n tin u e w o r k in g fo r
h e r em p lo y e r. T h e acts c o m p la in e d o f, u n d e r th e c ir c u m s ta n c e s th e y w e r e d o n e ,
d id n o t in an y w ay p e rta in to h e r d u tie s a s a n u r s e . H e r e m p lo y m e n t id e n tific a tio n
c a rd d isc lo se s th e n a tu re o f h e r e m p lo y m e n t a s a n u r s e a n d n o o th e r . A ls o , th e
m e m o ra n d u m in fo rm in g h e r th a t s h e w a s b e in g p r e v e n tiv e ly s u s p e n d e d p e n d in g
in v e stig a tio n o f h e r case w as a d d r e s s e d to h e r a s a n u rs e .
O n th e delay in th e filin g o f th e c a s e , th e S u p re m e C o u r t o b s e rv e d , th u s:
“W e are not p ersuaded. T h e gravam en o f the offense in
sexual harassm ent is n ot the violation o f the em ployee's sexuality b u t
the abuse o f pow er by th e em ployer. A ny em ployee, male o r female,
may rightfully cry ‘foul’ provided th e claim Is well substantiated. Stricdy
speaking, there is no tim e period w ithin w hich h e o r she is expected to
1 Phifippine Aeolus A utom otive U nted C orporation v. NLRC and R osalinda C. C ortez, G .R . N o. 124617, A pril 2 8,2000.
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223
com plain th ro u g h the p ro p e r channels. T h e tim e to d o so m ay vary
d ep en d in g u p o n th e needs, d ic u m sta n c e s, and m o re im portandy, the
em otional th resh o ld o f the em ployee.
‘T riv a tc resp o n d en t adm ittedly allow ed fo u r (4) years to pass
befo re finally co m in g o u t w ith h e r em ployer's sexual im positions. N o t
m any w o m en , especially in this co u n try , are m ade o f th e stu ff that can
en d u re the agony and trau m a o f a public, even co rp o ra te , scandal. If
p etitio n er c o rp o ra tio n had n o t issued the third m em orandum that
term inated th e services o f private resp o n d en t, w e could only speculate
how m u ch lo n g er she w ould keep h er silence. M o reo ver, few persons
are pnvileged in d eed to tran sfer from o n e em p lo y er to another. T he
dearth o f quality em p lo y m en t has beco m e a daily ‘m o n ste r’ roam ing the
streets that o n e may n o t b e expected to give u p o ne's em ploym ent
easily b u t to han g on to it, so to speak, by all tolerable m eans. Perhaps,
to private re sp o n d en t's m in d , for as long as sh e could outw it her
em ployer's p loys, she w ould continue o n h er job and consider them as
m ere occu p atio n al hazards. T his uneasiness in h er place o f work
thrived in an atm o sp h e re o f tolerance fo r four (4) years, and o n e could
only im agine th e prevailing anxiety an d re sen tm en t, if n o t bitterness,
th at beset h e r all that tim e. But W illiam C h u a faced reality soon
enough. Since he had no place in private re sp o n d en t's heart, so m ust
she have n o place in his office. So, he p ro v o k ed h er, harassed her, and
finally dislodged her, and for finally v en tin g her p e n t-u p anger fo r years,
h e ‘fo u n d ’ the p erfe ct reason to term inate her."
5. S E X U A L H A R A S S M E N T I N A N E D U C A T IO N O R T R A IN IN G
E N V IR O N M E N T .
I n a n e d u c a tio n o r tra in in g e n v ir o n m e n t, s e x u a l h a r a s s m e n t is c o m m itte d :
1) a g a in s t o n e w h o is u n d e r th e c a re , c u s to d y o r su p e rv is io n o f th e
o f fe n d e r;
2) a g a in s t o n e w h o s e e d u c a tio n , tra in in g , a p p r e n tic e s h ip o r tu to r s h ip is
e n tr u s te d to th e o f fe n d e r,
3) w h e n t h e se x u a l f a v o r is m a d e a c o n d itio n to th e g iv in g o f a p a s s in g
g ra d e , o r t h e g ra n tin g o f h o n o r s a n d s c h o la rs h ip s , o r th e p a y m e n t o f
a s tip e n d , a llo w a n c e o r o t h e r b e n e f its , p riv ile g e s, o r c o n s id e ra tio n s ;
or
4) w h e n
th e
se x u al a d v a n c e s
r e s u lt in
an
in tim id a tin g , h o s tile
or
o ffe n s iv e e n v ir o n m e n t f o r th e s tu d e n t, tr a in e e o r a p p r e n tic e .1
6. D U T Y O F T H E E M P L O Y E R O R H E A D O F O F F I C E .
I t is th e d u ty o f th e e m p lo y e r o r th e h e a d o f th e w o rk -re la te d , e d u c a n o n a l
o r tra in in g e n v ir o n m e n t o r in s titu tio n , to p r e v e n t o r d e te r th e c o m m is s io n o f a c ts
Section 3[bJ, R A . No. 7877.
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224
r e v ie w e r o n
L a b o r La w
of sexual harassment and to provide the procedures for the resolution or
prosecution of acts of sexual harassment.
Towards this end, the employer or head o f office is required to:
1. promulgate appropriate rules and regulations, in consultation with and
jointly approved by die employees or students or trainees, through
their duly designated representatives, prescribing the procedure for the
investigation o f sexual harassment cases and the administrative
sanctions therefon The said rules and regulations issued shall include,
among others, guidelines on proper decorum in the workplace and
educational or teaming institutions.
2. create a committee on decorum and investigation o f cases on sexual
harassment The committee shall conduct meetings, as the case may
be, with officers and employees, teachers, instructors, professors,
coaches, trainors and students or trainees to increase understanding
and prevent incidents o f sexual harassment. It shall also conduct the
investigation o f alleged cases constituting sexual harassment.
In the case o f work-related environment, the committee is composed o f
at least one (1) representative each from die management, the union, if any, the
employees from the supervisory tank and from the rank-and-file employees. In the
case of educational or training institution, the committee is composed o f at least
one (1) representative from the administration, die trainors, teachers, instructors,
professors, or coaches and students o r trainees, as the case may be.1
7. SOME PRIN CIPLES O N SEXUAL HARASSM ENT.
1) The employer or head o f office or the educational or training institution are
solidadly liable for damages arising from the acts o f sexual harassment
committed in an employment, education or training environment, if such
employer or head o f office or educational or training institution is informed
of such acts by the offended party and no immediate action is taken
thereon.2
2) The victim o f sexual harassment is not precluded from instituting a separate
and independent action for damages and other affirmative reliefs.3
3) Any action arising from sexual harassment prescribes in three (3) years.4
4) Any person who violates the provisions of R A No. 7877 shall, upon
conviction, be penalized by imprisonment o f not less than one (1) month
nor more than six (6) m onths, or a fine of not less than P10,000.00 nor
more than P20,000.00, o r both such fine and imprisonment at the discretion
•
*
3
4
Section 4, IW .
Section 5, Wd.
Section 6, Ibid.
Section 7. Md.
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o f the couit.1* T he case o f Dr. Ruo S. Jacutin v. People1 best illustrates the
proper penalty imposable on die violator. Here, the Supreme Court affirmed
the Sandiganbayan’s decision finding Dr. Rico Jacutin y Salcedo guilty o f the
crime o f sexual harassment defined and punished under R.A. No. 7877,
particularly Sections 3 and 7 thereof, and penalizing him with imprisonment
o f six (6) m onths and to pay a fine o f P20,000.00, with subsidiary
imprisonment in case o f insolvency. Additionally, he was ordered to
indemnify the offended patty, Juliet Yee, in the amount o f P30,000.00 and
P20,000.00 by way o f moral damages and exemplary damages, respectively.
2.
MINORS
(R A No. 7610, as Amended by R A No. 9231)
t G O V E R N IN G LAW O N T H E E M P L O Y M E N T O F C H IL D R E N .
Section 12, Article V III o f R A . No. 7610,3 specifically treats die subject
o f employment o f children. It was first amended by R A . No. 7658,4 and later, by
R A N o. 9231.s As amended, Section 12 now reads as follows:
“Sec 12. Employment of Children. - Children below fifteen (15)
years of age shall not be employed e x c e p t
“(1) When a child works directly under the sole responsibility
of his/her parents or legal guardian and where only
members of his/her family are employed: Provided,
however, That his/her employment neither endangers
his/her life, safety, health, and morals, nor impairs
his/her normal development: Provided, further, That the
parent or legal guardian shall provide the said child with
the prescribed primary and/or secondary education;
“(2) Where a child’s employment or participation in public
entertainment or information through cinema, theater,
radio, television or other forms of media is essential:
Provided, That the employment contract is concluded by
die child's parents or legal guardian, with the express
agreement of the child concerned, if possible, and the
approval of the Department of Labor and Employment:
1
z
3
4
Section 7. kid.
G R No. 140604, March 6,2002.
0£henMseIaKwmastie“SpeaaIProtectjooof CKklren AgainstAbuse. Exploflafion ^Dtscrim m aijonAct*
Entitled *AN ACT PROHIBITING THE EMPLOYMENT OF CHILDREN BELOW 15 YEARS OF AGE IN PUBLIC
AND PRIVATE UNDERTAKINGS, AMENDING FOR ITS PURPOSE SECTION 12, ARTICLE VIII OF R A 7810."
* Entitled ‘AN ACT PROVIDING FOR THE ELIMINATION OF THE WORST FORMS OF CHILD LABOR AND
AFFORDING STRONGER PROTECTION FOR THE WORKING CHILD, AMENDING FOR THIS PURPOSE
REPUBLIC ACT NO. 7610, AS AMENDED. OTHERWISE KNOWN AS THE 'SPECIAL PROTECTION OF
CHILDREN AGAINST CHILD ABUSE, EXPLOITATION AND DISCRIMINATION ACT."
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Prodded, further, That the following requirements in all
instances arc strictly complied with:
(a) The employer shall ensure the protection, health,
safety, morals and normal development of the
child.
(b) The employer shall institute measures to prevent
die child's exploitation or discrimination taking
into account the system and level of remuneration,
and the duration and arrangement of working time;
and
v
(c) The employer shall formulate and implement,
subject to the approval and supervision of
competent authorities, a continuing program for
training and skills acquisition of the child.
“In the above exceptional cases where any such child may be
employed, the employer shall first secure, before engaging such child, a
work permit from the Department of Labor and Employment which
shall ensure observance of the above requirements.
“For purposes of this Article, the term 'child’shall apply to all
persons undec eighteen (18) years of age.”
To reflect the changes introduced by die said amendatory R.A. No. 9231,
a new set of Implementing Rulerand Regulations was issued in 2004.1
2. WORKING CHILD.
For legal purposes, the term "child”refers to any person less than eighteen
(18) years o f age. On the other hand, a "working child”refers to any child engaged as
follows:
i. When the child is below eighteen (18) years o f age, in work or
economic activity that is not "child labor”-} and
ii. When the child below fifteen (15) years o f age:
(a) in work where he/she is direedy under the responsibility o f
his/her parents3 or legal guardian1 and where only members o f
the family2 o f the child are employed;3 or
1 On July 26,20M ,(om «fDO l£Seaetay Patricia Santo Tomas issued he ImpteuenSng Rules and Regiiafions of R A No.
9231 «Ndh amended R A Na7610, as amended. The Rifes superceded Department Order No. 18, SeriesoM 994or8»
Rules and Regdafions bqtenerthg R A No. 7668. Ail other issuances which are tnconastent IherewSh are deemed
modified atxatfngly. (S aion 29, Chapter 9, Department Onler No. 6504). However, I bears stressing foat Ihe Rides
should not be interpreted to enpatr contests executed prior to its eSecfcty. A l other general tries m iu icn paim entof
contracts shd apply. (Section 30, Chapter 9. Ibid.), these Rides cover a! pawns and enftes engaging 8ie setvices ot or
ernployingdtl(ben.(SecSon1,Ctiapter1,bid.).
t Theterm*chUtabor”nwn6onedabowereferstoanyworkoreoonoRiicac6t%perfonnedbyacMdQiatstA3ectslilTWt)erto
aiyfonnofexploitefionorishamngrilotiisJherttealthandsaf^orphysic^mentalorpsycho^odaldeMelopmenL
» AsunifamtoodMdhIn&ieoontesdoftheabovedescrIptianofawofkingctdd.Sieterm'parertrnefisrstoeifierSieMologIcalor
adoptivemotheror falter
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(b) in ''public entertainment or information” which refeis to artistic,
literary, and cultural performances for television show, radio
program, cinema or film, theater, commercial advertisement,
public relations activities or campaigns, print materials, internet,
and other media.
3. P R O H IB IT IO N O N T H E E M P L O Y M E N T O F C H IL D R E N B E L O W
15 YEARS O F A G E ; E X C E P T IO N S A N D C O N D IT IO N S .
Based on the above discussion, the general rule is that no child below
fifteen (15) years o f age shall be employed, permitted or suffered to work in any
public o r private establishment4 The only exceptions to the prohibition on the
employment o f a child below fifteen (15) years o f age are as follows:
(a) When the child works under the sole responsibility o f his/her parents
or guardian, provided that only members o f foe child’s family are
employed.
(b) When foe child’s employment o r participation in public
entertainment or information is essential, regardless o f foe extent o f
foe child’s role.5
Such employment shall be strictly under foe following conditions:
L The total number o f hours worked shall be in accordance with foe
working hours prescribed in foe Ruler,6
il The employment does not endanger foe child’s life, safety, health and
morals, nor impair foe child’s normal development?
iii. The child is provided with at least foe mandatory elementary o r
secondary education; and
iv. The employer secures a work permit for the child.8
' The term iguanfianT refers to any person who so u ses subs&ute parental autwcty, reganfiess of whettier or not such
parerdatauSKX^werachUhbedD^byacout
2 TliepIvaselrnerrbem oflftefan^refevstofoecKIfspanBnts.guaitfan.brolhefsorsistetsvfoefoeroffijBorhalfblood.
and other ascendants and desoendanls or oolateial relaStfes w9iin foe fo trfi dui degree of oonsanguku^. (Secfion 3,
Chap&r1, Department (M e r No.
3 For purposes of this law, fteterniietnptoyer* o fa working cMd refers to anyperson, VktieQier na&jral or juridical who,
whether for valuable constieraSon or not, ifiecty or imfiecSy procures, uses, arafls feel d , contracts out or dherefee
derh«bene3fit)mbewo(1(ffser^rfad^ha(70cnjpa^mdert3iang.fxtjedorac^,whe9ieri(xprfoanot.
^niK ]esa(7 p e rs m a c ^ h ^ e i^ ^ e s t ofsuch employer. (SecOonS.Chapterl.DepatriatfOrder No. 6504)
4 SecSon4.Clmpter2.Bdd.
5 Section7, Chapter3, H i
s SeeSec£on15^1ousofVVcxkafaV\fo(1ckqChld]afDepartnentOnlerNa65-04.
1
'ttoneldevdopmentofCiscfBkrreGBistofoeplT^cal.emoBond.m ent^.andspnlLialgioweiofacttldwihiiasafoand
nurturing environment where tefcte is $ven adequate nourishment, care and protacfion and h a opportunSy to perform
tasteappn3prtaSsateach$tet9eof<letnebp(nertL(S9Cflbn3>ChaptBr1>lbkf^.
3 ld4hacm darK*w ithSec6crs8to12hereot
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4.
P R O H IB IT IO N O N T H E E M P L O Y M E N T O F C H IL D R E N IN
W O R ST F O R M S O F C H IL D L A B O R .
T h e rule is th a t n o c h ild sh a ll b e e n g a g e d in d ie w o r s t fo rm s o f c h ild
lab o r. T h e p h ra se
(a)
"worstform! ofchild labor" re fe rs
to an y o f th e follow ing:
All fo rm s o f s la v e r y 1 o r p ra c tic e s sim ila r to sla v ery , su c h as sale a n d
t r a f f ic k in g o f c h i l d r e n , 2 d e b t b o n d a g e 3 a n d s e rf d o m a n d fo rc e d o r
c o m p u lso ry la b o r, in c lu d in g r e c r u i t m e n t o f c h i l d r e n fo r u s e in
a r m e d c o n f lic t.4
(b)
T h e u se, p ro c u rin g , o ffe rin g o r e x p o s in g o f a c h ild fo r p r o s t i t u t i o n , 56
fo r
th e
p ro d u c tio n
of
p o rn o g ra p h y *
or
fo r
p o r n o g ra p h ic
p e rfo rm a n c e s .
(c)
T h e use, p r o c u rin g o r o ffe rin g o f a c h ild fo r illegal o r illicit a c tiv ities,
in clu d in g th e p r o d u c tio n o r tra ffic k in g o f d a n g e r o u s d ru g s o r v o latile
su b s ta n c e s p ro h ib ite d u n d e r e x istin g law s; o r
(d)
W o rk w h ich , by its n a tu r e o r th e c irc u m s ta n c e s in w h ic h it is c a rrie d
o u t, is h a z a r d o u s 1 o r likely to b e h a r m fu l to th e h e a lth , sa fe ty o r
m o ra ls o f c h ild re n , s u c h th a t it:
' Under RA. No. 9208 [May 26,2003], otherwise known as the 'Anti-Trafficking in Persons Act of 2003,' the term forced
labor and slavery" refers to the extraction of work or services from any person by means of enticement vioience, intimidaCon
or threat, use of force or coercion, including deprivation of freedom, abuse of authority or moral ascendancy, debt-bondage
or deception. (Section 3 thereof).
2 Under RA No. 7610 [June 17,1992], otherwise known as the "Special Protection of Children Against Abuse, Exploitation
and Discrimination Act," as well as the rales implementing it, the term "trafficking" refers to the act of trading or dealing with
chidren, including, but not limited to, the buying and seTng of chJdren for money, or for any other consideration or baiter.
(Section 1 [b] thereof, See also Section 7, Artide IV, R A No. 7610). However, under RA. No. 9208, "frafficking in persons’
is broadly defined as the recruitment, transportation, transfer or harboring, or receipt of persons with cr without the victim’s
consent or knowledge, within or across national borders by means of tveat or use of force, or other forms of coercion,
abduction, fraud, deception, abuse of power or of position, taking advantage of the vulnerability of the person, or, the giving
or receiving of payments or benefits to achieve the consent of a person having control ewer another person for the purpose (rf
exploitation which includes at a minimum, the exploitation or the prostitution of ohers a other forms of sexual exploitation,
forced labor or services, slavery, servitude or the removal or sale of organs. (See Section 3 thereof). The recruitment,
transportation, transfer, harboring or receipt of a chid for the purpose of exploitation shafl also be considered as "trafficking in
persons" even if it does not involve any of the means set forth in the definition of "trafficking in persons' in the preceding
paragraph. (Id.).
3 Under RA. No. 9208, "debt bondage'refers to the pledging by the debtor of hislher personal services a labor a those of a
person under his/her control as security or payment for a debt, when the lengfi and nature of services are not dearly defined
or when the value of the services as reasonably assessed is not appled twrard the liquidation of the debt (Section 3
thereof).
4 In regard to the recruitment of children for use in armed confict i is declared under Section 22, Article Xof R A No. 7610,
that children are zones of peace. Consequently, it shall be the responsbity of the State and all other sectors concerned to
resolve armed conflicts in order to promote the goal of children as zones of peace. To attain this objective, the law lays down
certain policies that need to be observed.
5 UnderRA No. 9208, 'prostitution" refers to any ad. transaction, scheme or design involving the use cf a person by another,
for sexual intercourse or lascvious condud n exchange for money, profit or any other consideration. (Section 5, Chapter 2,
Ibid.)
6 ■Pornography," according to RA. No 9208. refers to any representation, through publication, exhibition, cinematography,
^decent shews, information technology, or by whatever means, of a person engaged in real a simulated explicit sexual
activities or any representation of tne sexual parts of a person for primariy sexual purposes (Section 5. Chapter 2. Ibid).
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LABOR STANDARDS
i.
D e b a s e s , d e g r a d e s o r d e m e a n s th e in trin s ic w o r th a n d d ig n ity o f a
c h ild a s a h u m a n b e in g ; o r
ii.
E x p o s e s th e c h ild to p h y sic a l, e m o tio n a l o r s e x u a l a b u s e , 12 o r is
f o u n d to b e h ig h ly s tre s s fu l p sy c h o lo g ic a lly o r m a y p re ju d ic e
m o ra ls; o r
iii. Is p e r f o r m e d u n d e r g r o u n d , u n d e r w a te r o r a t d a n g e r o u s h e ig h ts ;
or
iv. In v o lv e s th e u s e o f d a n g e ro u s m a c h in e ry , e q u ip m e n t a n d to o ls
s u c h as p o w e r -d r iv e n o r e x p lo s iv e p o w e r -a c tu a te d to o ls; o r
v.
E x p o s e s th e c h ild to p h y sic a l d a n g e r, s u c h as, b u t n o t lim ite d to ,
th e d a n g e r o u s fe a ts o f b a la n c in g , p h y sic a l s tr e n g th o r c o n to r tio n ,
o r w h ic h r e q u ire s th e m a n u a l tr a n s p o r t o f h e a v y lo a d s ; o r
vi. Is p e r fo r m e d in a n u n h e a lth y e n v ir o n m e n t e x p o s in g th e c h ild to
h a z a r d o u s w o r k in g c o n d itio n s , e le m e n ts , s u b s ta n c e s , c o -a g e n ts o r
p ro c e s s e s
in v o lv in g
io n iz in g ,
ra d ia tio n ,
fire ,
fla m m a b le
s u b s ta n c e s , n o x io u s c o m p o n e n ts a n d th e lik e, o r to e x tr e m e
te m p e r a tu re s , n o is e le v e ls o r v ib ra tio n s ; o r
vii. Is p e r f o r m e d u n d e r p a rtic u la rly d iffic u lt c o n d itio n s ; o r
viii. E x p o s e s th e c h ild to b io lo g ic a l a g e n ts s u c h a s b a c te ria , fu n g i,
v iru se s , p r o to z o a , n e m a to d e s a n d o t h e r p a ra s ite s ; o r
ix.
I n v o lv e s th e m a n u f a c tu r e o r h a n d lin g o f e x p lo s iv e s a n d o t h e r
p y r o te c h n ic p r o d u c ts .34
5.
P R O H IB IT IO N O N E M P L O Y M E N T O F C H IL D R E N IN C E R T A IN
A D V E R T IS E M E N T S .
N o c h ild b e lo w e ig h te e n (18) y e a rs o f ag e is a llo w e d to b e e m p lo y e d as a
m o d e l in a n y a d v e r tis e m e n t d ir e c tly o r in d ire c tly p r o m o tin g a lc o h o lic b e v e ra g e s ,
in to x ic a tin g d rin k s , to b a c c o a n d its b y -p ro d u c ts , g a m b lin g o r a n y f o r m o f v io le n c e
o r p o rn o g ra p h y /
1 Whle ‘hazardous’ w rit is defined and futy described in details in Section 5, Chapter 2 of Department Oder No. 65-04,
there is no definition thereto of the term ’nonhazardous' work. The Rules' to implement the Labor Code, however, defines a
’norvhazardousT work or undertaking as any work or activity in which the employee is not exposed to any risk which
constitutes an imminent danger Idhis safety and health. The Secretary of Labor and Employment shal, from time to time,
pubish a list of hazardous work and activities in which persons 18 years of age and below cannot be employed. (See
Section 3, Rule XII, Book III, Rules to Implement the Labor Code). The Bureau of Working Conditions (BWC) shall, with the
approval of toe Secretary of Labor and Employment issue from time to lime, a detailed list of hazardous workplaces.
(Section 8, Rule I, Book IV, Rules to Implement toe Labor Code).
7 ’Sexual exploitation,’ under R A No. 9208, refers to participation by a person in prostitution or toe production of pornographic
materials as a result of being subjected to a threat deception, coercion, abduction, force, abuse of authority, debt bondage,
fraud or through abuse of a victim's vulnerability. (Section 5, Chapter 2, bid.).
3 Section 5, Ch^ter 2, bid.; Section 12-D, RA. No. 7610, as added by Section 3, R A No. 9231; See also Section 8, Rule I,
Book IV, Rules to Implement toe Labor Code.
4 Section 6, Chapter 2, Department Oder No. 65-04; Section 14, Article VIII, R A No. 7610, as amended by Section 5, RA.
No. 9231.
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6 . HOURS O F WORK OF A W O RK IN G C H IL D .
As applied to working children, “hours of work " include (1) all time during
which a child is required to be at a prescribed workplace, and (2) all time during
which a child is suffered or permitted to work. Rest periods o f short duration
during working hours shall also be counted as hours worked.1
More concretely, die following hours o f work shall be observed for any
child allowed to work under the law.2
(a) For a child below 15 years o f age, the houfe o f work shall not be
more than 20 hours per week, provided that the work shall not be
more than 4 hours at any given day;
(b) For a child 15 years o f age b u t below 18. the hours o f work shall
not be mote than 8 hours a day, and in no case beyond 40 hours a
week; and
(c) N o child below 15 years o f ago shall be allowed to work between 8
o’clock in the evening and 6 o’clock in die morning o f the following
day and no child 15 years o f age bu t below 18 shall be allowed to
work between 10 o ’clock in the evening and 6 o'clock in the morning
o f die following day.3
Sleeping time as well as travel time o f a child engaged in public
entertainment or information from his/her residence to his/her workplace shall
not be included as hours worked without prejudice to the application o f existing
rules on employees’ compensation.4
3.
KASAM BAHAY
(R.A. No. 10361)
1. EXPRESS REPEA L OF E N T IR E C H A P T E R III, T IT L E III, B O O K III
O F T H E LABOR CODE.
The Chapter on H ousehelpers originally covers Articles 139 [141] to 150
[152] o f the Labor Code. The entire Chapter III, however, has been expressly
repaded by R A No. 10361, otherwise known as ‘Domestic Workers Act”or <
cBatas
Kasambabay” approved by President Benigno S. Aquino III on January 18,2013.®
' SecSon3,Ct)apter1,DepertnientOnlerNo.6&04.
J R A Nol9231 and its touleflienSnQ Rules.
3 Secto IS , Chapter $,lb il;S e d o n 1 2 A R A No. 7610, as added by Sec6on3,RA No. 9231.
4 kL
5 it's pro^'nteSecfim 44, thus:*SEC. 44.Repea6igaaiisa-A !3rtdesapfOw^ofChapter!a(Ernpioyinertcf
Househelpeis) of P.D. No. 442. asamended and rerwrfcered by RA No; 10151 are herebyexpresslyrepealed. All laws.
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LA BO R STA N DA RDS
Further, note must be made that R.A. No. 10361, despite its expressed
intent o f repealing the said provisions, did not follow the numbering pattern o f the
Labor Code, as renumbered lately pursuant to Section 5 o f R.A. No. 10151 [|une
21,2011]. It, in fact, has its own designation o f its provisions which it denominated
as “sections.” This notwithstanding the fact that it merely rehashed or revived
some principles already embodied in the repealed provisions o f the Labor Code.
For purposes o f discussion, therefore, its substantive provisions are presented
herein following the presentation in the law itself.
2. COVERAGE.
R A . N o . 10361 applies to all dom estic w orkers employed and working
within the country.*1 It shall cover all parties to an employment contract for the
services o f the following Kasmbahays, whether on a live-in or live-out
arrangem ent, such as, bu t n o t limited to:
(a) General househelp;
(b) Yaya;
(c) Cook;
(d) Gardener,
(e) Laundry person; or
(f) Any person who regularly performs domestic work in one household
on an occupational basis.2
3. EXCLUSION S.
T he following are n o t coveted:
(a) Service providers;
(b) Family drivers;
(c) Children under foster family arrangement;3 and
(d) Any other person who performs work occasionally or sporadically
and not on an occupational basis.4
4. D E F IN IT IO N S .
Some important terms are defined below:
1
*
3
4
Consequently, the Mowing eleven (11) pcwisioRS entraced in said Chapter applicable to ai househelpers, whether
employed on M a p a r t * * basis, are already expressly repealed: Article 1391141) (Coverage); Article 140 [142| (Contract
of Domestic Service); Article 141 [143] (Mnanum Wage); Article 142 (144] (NWmum Cash Wage): Article 143 [145]
(Assignment Id Non-Household W ak); Article 144 [146] (Opportutity far Education]; Article 145 (147| (Treatment of
Househelpers}; Article 146 [146] (Board, Lodging, and Medical Attendance); Article 147 (149] (Indemnity far Unjust
TemsnaSon of Sendees); Article 1481156] (Sendee of TermfaaSon Notice); Article 149 (151] (Employment Certification) and
Article 150 (152] (Employment Record).
Sectfan 3, Article I, R A No. 10361.
Section 2, RuteL implementing Rules arfa Regulation of R A No. 10361.
Section 3(a), Ride 1, Implementing Rules and Regulations of RA. No. 10361.
Section 4(d), Article 1,R A No. 10361; Section 3(e), Ridel, implementing Rules and Regulations of R A No. 10361.
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Ba r R e v ie w e r o n La b o r La w
(a) “Domtstic worker” or “'kasambahay” refers to any person engaged in
domestic work within an employment relationship, whether on a live-in or live-out
arrangement, such as, but not limited to, general househelp, "yaya", cook, gardener,
or laundry person, but shall exclude service providers, family drivers, children who
are under foster family arrangement, or any person who performs domestic work
only occasionally or sporadically and not on an occupational basis.1
This term shall not include children who are under foster family
arrangement which refers to children who are living with a family or household of
relative/s and are provided access, to education and given an allowance incidental to
education, i.e., "baon", transportation, school projects, and school activities;
provided, that the foster family and foster care arrangements are in compliance
with the procedures and requirements as prescribed by R.A. No. 10165 or tire
“Foster Care Act of2012 .’z
Because of these new terminologies prescribed in the law, the use o f the
term “househelper" may no longer be legally correct.
(b) “Domestic work” refers to work performed in or for a household or
households.3
(c) "Household" refers to the immediate members of the family or the
occupants of the house who arc directly and regularly provided services by the
Kasambahay*
(d) "Employer1' refers to any person who engages and controls the services
of a Kasambahay and is party to the employment contract.5
(e) "Live-out arrangement" refers to an arrangement whereby the Kasambahay
works within the employer's household but does not reside therein.6
(f) "Service provided1 refers to any person or entity that carries an
independent business and undertakes to perform a job, work or service on his/her
own for a household, according to his/her own manner and method, and free from
the control and direction of the employer in all matters in connection with the
performance of the work except as to the results thereof.7
5. H IR IN G O F KASAMBAHAY.
a.
Mode of Hiring. - A Kasambahay can be hired by the employer directly
or indireedy through a licensed “Private Employment Ageny (PEA)”* which refers to
Section 2, Rule I, Ibid.
Section 4 [d], A rticle I, R A . No. 10361; Section 3 (a ), R ule I, Im plem enting R ules and R egirtatioos o f R A N o. 10361.
Section 4
(cj, A rticle I, Ibid.; Section 3(d), R ufe 1, Ibid.
Section 4 p], A rtd e I. Ibid.; Section 3(g), Rule 1, foid.
Section 4 (e), A rticle I, ib id .; Section 3(0, Rule 1. Ibid.
Section 3(h), Rule I, ibid
Section 3® , Rule I, Ibid.
Section 1, Rule II, Ibid.
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any individual, partnership, corporation or entity licensed by the DOLE to engage
in the recruitment and placement o f Kasambahay for local employment.1
b. C ost o f H irin g . - The employer shall shoulder the cost of hiring of a
Kasambahay, whether h e/she is hired through a licensed PEA.23In no case shall the
recruitm ent or finder's fees be charged against the Kasambahay?
“Recruitment andfinder'sfees" refer to charges or any amount collected by the
licensed PEA from the Kasambahay for his/her recruitment and placement.4
c. D eploym ent E xpenses. - The employer, whether the Kasambahay is
hired direedy or through a PEA, shall pay the expenses direedy used for his/her
transfer from place o f origin to the place o f work. The employer may recover
deployment costs from the Kasambahay whenever he/she leaves without justifiable
reason within six (6) months from employment.5
"Deployment expenses" refer to expenses that are direedy used for the
transfer o f the Kasambahay from place of origin to the place of work covering the
cost of transportation, meals, communication expense, and odier incidental
expenses. Advances or loans by the Kasambahay arc not included in die definition o f
deployment expenses.6
6. P R E -E M PL O Y M E N T R E Q U IR E M E N T .
Prior to the execution o f the employment contract, the employer may
require the following from the Kasambahay.
(a) Medical certificate or a health certificate issued by a local government
health officer,
(b) Barangay and police clearance;
(c) National Bureau o f Investigation (NBl) clearance; and
(d) Duly authenticated birth certificate or, if not available, any other
document showing die age of the Kasambahay such as voter’s
identification card, baptismal record or passport
The foregoing shall be die standard requirements when the employment
o f the Kasambahay is facilitated through a PEA. The cost of the foregoing shall be
borne by the prospective employer or agency,7 as the case may be.8
’
S ection 3 (i), R ule I, Ibid.
2 Section 2, R ule II, b id .
3
Id.
4
Section 3 (j), R ule I. b id .
5
Section 3 , R ule II, Ibid.
6
Section 3(c), R ule I. b id .
7
R eferring
*
Section 12, A rticle III, R A . N o. 10361; S ection 4 , R ule II, Im plem enting R ules and R egulations o f R A . No. 10361.
b a private em ploym ent agency (PE A ).
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7. W R ITTEN EM PLOYM ENT C O N TRA C T.
a. The employment contract m ust b e in writing and should contain
the conditions set by law.
To make the relationship between the employer and the kasambahay more
formal, RA. No. 103611 requires that a written contract of employment be
executed between them. T his is a very significant improvement since not even the
Labor Code requires the execution o f a written instrument in order to create or
establish an employer-employee relationship. It is a well-established rule that such
relationship need not be documented by a written contract. Once the elements o f
die employer-employee relationship are determined and established, it is immaterial
whether such relationship was created verbally or in writing.
b. Contents o f the em ploym ent contract.
Before the commencement o f the service, a written employment contract
between the Kasambahay and the employer shall be accomplished in three (3) copies.
The contract shall be in a language or dialect understood by both the Kasambahay
and the employer, and shall include the following:
(a)
D u tie s
an d
r e s p o n s ib ilitie s
of
th e
Kasambahay,
in c lu d in g
th e
resp o n sib ility to r e n d e r s a tis fa c to ry s e rv ic e a t all tim e s;
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
Period of employment;
Compensation;
Authorized deductions;
Hours of work and proportionate additional payment;
Rest days and allowable leaves;
Board, lodging and medical attention;
Agreements on deployment expenses, if any;
Loan agreement, if any,
Termination of employment; and
Any other lawful condition agreed upon by both parties. If the
Kasambahay is below 18 years old, the employment contract shall be
signed by his/her parent or lawful guardian on his/her behalf.2
Upon the request o f either party, the Vunong Barangay or his/her
designated officer shall read and explain the contents o f the contract to both parties
and shall serve as its witness.3
c. Standard em ploym ent contract.
The employment contract shall conform to the DOLE Standard
Employment Contract {Kontrata sa Paglilingkod sa Tahanan) or Form BK-1.1
’
Section 11. Article III Ibid.
? S ecfim 11, A rtjde III to d : Section 5. R u'e II. bid.
3 Id.
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d. D istribution o f cop ies o f em ploym ent contract.
The employer shall have the obligation to furnish a copy o f the
employment contract to the Kasambahay and to the Office o f the Punong Barangay in
the barangay where the employer resides.*2
e. R enew al o f Contract.
Should the parties mutually agree to continue their employment
relationship upon expiration of the contract, they shall execute a new contract to be
registered with the concerned barangay. However, if the parties fail to execute a new
contract, the terms and conditions o f the original contract and other improvements
granted during the effectivity of said contract are deemed renewed.3
f. D om estic w orkers cannot acqu ire regularity o f em ployment.
Despite the repeal of the entire chapter of the Labor Code on
Househelpers by R.A. No. 10361, all the indicia of regularity of employment remain
absent in the employment of domestic helpers. The following factors clearly show
that domestic helpers can never become regular employees:
1) By express provision o f the law, the employment contracts o f
Kasambahays arc for fixed or definite term .4 They do not fix the
period o f employment nor put a cap on their duration, unlike in
Article 140 [142] o f the Labor Code.56
2) The law does not recognize any probationary employment of
Kasambahayrf
'
S ection 6, R ule II, Ibid.
2 S ection 7, R ule II. Ibid.
3
*
Section 8, R ule II, Ibid.
Section 11 [b ]. A rticle III, R A N o. 10361, in relation to Section 3 2, A rtid e V o f R A . N o. 10361. Section 11(b) o f A rticle III
thereof d e a rly states that th e em ploym ent co n tra ct by and betw een foe dom estic w orker and foe em ployer should include a
■period o f
employment’ C orrelating
th is provision w ith S ection 32 o f A rticle V thereof w ould result in the inescapable
conclusion th a t such em ploym ent contract is fo r a te rm ', thus: ‘ SEC. 3 2 Term ination o f S ervice. - N either the dom estic
w r ie r nor th e em ployer m ay term inate the contract before the expiration o f the term except fo r grounds provided fo r in
S ections 33 a rx l 34 o f this A c t x x ri This observation s further strengthened by the opening paragraphs o f said S ections 33
and 34, thus: 'S E C . 33. Term ination foB ated by foe D om estic W orker. - The dom estic w orker m ay term inate foe
em ploym ent relationship a t any tin e before foe e xp ia tio n o f the co n tra ct fo r any o f foe fbCcwing causes: xxx* and “SEC . 34.
Term ination Initiated by foe E m ployer. - An em ployer m ay term inate the services o f foe dom estic w orker at any tim e before
the expiration o f foe contract, fo r any o f foe fotow ing causes:"
5
N otably. R A N o. 10361 no lo ng e r m andates th a t a definite num ber o f years be stipulated h foe original contract o f
em ploym ent o f dom estic w orkers. Under foe o rig in al rendering o f A rticle 142 o f the Labor C ode, it is provided th a t '(t)h e
original contract o f dom estic service shall not la st fo r m ore than tw o (2) years but it m ay be renew ed for such periods as m ay
be agreed upon by the parties.’ T his perio d -im ita tio n has already been deleted in foe new law.
6
N either R A N o. 10361 n or the Labor C ode em bodies a ry probationary em ploym ent applicable to dom estic w orkers.
Although in cases o f overseas F ilipino w orkers w ho are deployed as dom estic w orkers abroad, the va lidity o f such
probationary period o f em ploym ent is recognized, but the sam e is o nly for the purpose o f determ ining w hether foe dom estic
w orker has q ua ffied fa foe fixed-term em ploym ent contem plated by foe parties as held m P nlem pby S ervices and
Resources, Inc v A nita R odriguez, G A N o 152616, M arch 3 1 ,2 0 0 6
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3) The Kasarnbahays are not included in the concept o f regular
employment under Article 295 [280] (Regular and Casual
Employment) of the Labor Code;1
4) The Kasarnbahays are not entitled to the reliefs provided under Article
294 [279] of the Labor Code such as “reinstatement without loss of
seniority rights and other privileges and to his/her full backwages,
inclusive of allowances, and to his/her other benefits or their
monetary equivalent computed from the time his/her compensation
was withheld from him /her up to the time of his/her actual
reinstatement”;23
5) The Kasatnbahay{ enjoyment o f security o f tenure holds true only
during the effective o f their fixed-term employment;5
6) The employment o f Kasarnbahays ceases upon the expiration of the
fixed term thereof;4
7) The contract of employment of Kasarnbahays is terminable by mere
notice, a clear indication that the employment is not regular in nature;5
8) The Kasambahay is given the right to pre-tenninate the employment
contract.6
1 This rs obvious from the fa ct that there is no provision o f la w w hich m akes reference to the appScabOity o f said provision to
the em ploym ent o f dom estic w oikers. On the contrary, the em ploym ent o f w o oe rs fo r an indefinite period is n ot allow ed and
they do not becom e regular em ployees by reason o f the nature d th e ir w ork. Series o f re -h iin g or renew al o f the contract o f
em ploym ent o f a dom estic w orker does not likew ise ripen in to regular em ploym ent
2 The
to an ile g a ly dism issed dom estic w o rker is found in S ection 32, A r6de V o f R A . No. 10361 w hich speaks o f the
penalty w hen the em ployer “unjustly dism isses' the dom estic w orker. Thus, "(i)f the dom estic w o ike r is unjustly dism issed,
the dom estic w orker shaS be paid the com pensation already earned plus the equivalent o f fifteen (15) days w ork by w ay o f
indem nity.’
3 This is dea r from the afore-quoted provision o f S ection 32 o f A rticle V o f R A . N o. 10361 during the effectrvity o f th e ir contract
and before the e xp iatio n o f its term , neither th e dom estic w orker n or the em ployer m ay term inate it except on the grounds
m entioned in the law itse lf.
4 This is dea r from Section 32, thus: ’SEC. 32. Term ination o f S ervice - N either the dom estic w orker nor the em ployer m ay
term inate Hie contract before the expiration of the term except fo r grounds provided fo r in Sections 33 and 34 o f th is A c t.'
Section 33 treats o f the ju st causes in cases o f term ination Initiated by the D om estic W orker and S ection 34 speaks o f the
ju st causes when term ination is initiated by the em ployer.
5
til case tie em ploym ent contract for dom estic services does not provide for a specific o r d efinfjve term , 2nd paragraph o f
Section 32, A rticle V o f R A No. 10361 states, thus: ’ SEC . 32. Term ination o f S ervice. - xxx ‘ If the duration c f the dom estic
service is not determ ined either in stipulation o r b y the nature o f the service, the em ployer or the dom estic w orker m ay give
notice to end tie w a kin g relationship five (5 i days before the intended term ination o f the service.’ It is thus crystal d e a r from
this prevision, w hich is a com plete rehash c r the repealed A rtide 150 o f the Labor C ode, that no presum ption o f reg u la rity o f
em ploym ent m ay arise from the failure -of the em ployer and the dom estic w orker to stipulate on a d efinite term .
C onsequently, fie em ploym ent relationship is term inable by the sim ple expedience o f the em ployer o r the dom estic w o ike r
W n g ) notice to end fie working relationship five (5 ) days before the intended term ination o f the service ’
6 This is another indication that fie em ploym ent relationship betw een a dom estic w orker and his/her em pkjyef is n ot reg u la r in
nature is fie grant o f fie right to either of h e m to pre-term inate th e ir contract o f em ptoym ent under the 3rd paragraph o f
Section 32, A rtid e V o f R A . No. 10361, h u s : *SEC. 32. Term ination o f S ervice - xxx T h e dom estic w orker and the
em ployer m ay rru tu a fy agree upon w ritten notice to pre-term inate the contract o f em ploym ent to end the em ploym ent
relationship.’ It bears noting that there is no s im la r provision in the entire Labor C ode w hich grants the sam e rig h t o f preterm ination to the em ployer and Ihe dom estic w orker (househelpef). U nder existing law and jurisprudence, never is it
provided o r allow ed n any way for the e m fio ye r and em ployee to p re -te n rin a te th e ir regular relationship by sim ply in king an
agreem ent o f pre-term inaSon. In fact, such agreem ent on pre-term ination has been struck dow n as a
mi stipulation
em ploym ent contract in the case o f P rice v . Innodata P h is ., IncA nnodata C o rp , G .R . N o. 178505, S e p t 30,2 00 8 .
in an
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8. R IG H T S A ND PR IV ILEG ES O F KASAM BAH A Y.
The nights and privileges1of the Kasambabay are as follows:
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods,
service incentive leave and 13th month pay,
(c) Freedom from employer’s interference in the disposal o f wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;
(h) Access to outside communication;
(l) Access to education and training;
0
Right to form, join or assist labor organization;
(k)
R ig h t to b e p r o v id e d a c o p y o f th e e m p lo y m e n t c o n tra c t;
0
Right to certificate o f employment;
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices.2
The foregoing rights and privileges are discussed below.
9.
MINIMUM WAGE.
a.
Amount o f minimum wages.
The new minimum wage rates prescribed in R.A. No. 103613 are as
follows:
“ SEC 24.
Minimum Wage.
- T h e m inim um wage o f dom estic w orkers
shall n o t be less than the following:
(a) T w o
thousand
five
hundred pesos
(P2, 500.00) a
month for
those
em ployed in the N ational C apital Region (NCR);
(b) T w o th o u s a n d p e s o s (P2,000.00) a
month for
those em ployed in
chartered cities and first class m unicipalities; and
(c)
One thousand five hundred
p e s o s ( P i, 500.00) a
month for
those
em ployed in o th er municipalities.
“ A fter o n e (1) year from the effectiviry o f this Act, and periodically
thereafter, th e Regional T ripartite and Productivity Wage B oards (RTPW Bs)
shall review , and if p ro p er, determ ine an d adjust the m inim um wage rates o f
dom estic w orkers.”4
1 P er S ection 1, R ule IV , Im plem enting R ules and R egulations o f R A . N o. 10361.
*
Id.
3
See S ection 24, A rtid e IV thereof.
* See also S ection 2, R ule IV , Im plem enting R ules and R egulations o f R A N o. 10361.
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b. Some important principles on wage.
• Frequency of paym ent o f w ages. - The wages o f the Kasambahay
shall be paid at least once a month.1This is so because the minimum
wage rates are on a monthly hasis.2
• The equivalent m inim um daily wage rate o f the Kasambahay shall
be determined by dividing the applicable minimum monthly rate by
thirty (30) days.3
• The amount o f the minimum wage depends on the geographical
area where the Kasambahay works.4
• Payment of wages:
1 To whom paid. - It should be made on time directly to the
Kasambahay to whom they are due in cash at least once a month.5
2. Deductions, prohibition; w hen allowed. - The employer,
unless allowed by the Kasambahay through a written consent,
shall make no deductions from the wages other than that which
is mandated by law6 such as for SSS, P h ilH ealth or Pag-IBIG
contributions.7
Deduction for loss or dam age shall only be made under the
following conditions:
(a) The Kasambahay is clearly shown to be responsible for the
loss or damage;
(b) The Kasambahay is given reasonable opportunity to show
cause why deduction should not be made;
(c) The total amount o f such deductions is fair and reasonable
and shall not exceed the actual loss or damage; and
(d) The deduction from the wages o f the Kasambahay does not
exceed 20% o f his/her wages in a month.
The DOLE shall extend free assistance in the determination
of fair and reasonable wage deductions.8
1 Section 4, RuSe IV, Im plem enting Rules and R egulations o f R A . N o. 10351.
7 As distinguished from the legally m andated increases in the m in im u n w ages (such as those m andated by R A N o. 5640,
R A . No. 6727 a x ) W age O rders passed by the RTW PBs) w hich are on a d a fy-ra te basis, the m n in u n w age rates
preserved in R A . N o. 10361 are on a m onthly basis.
5 Section 6, Rule X III, Book III. Rutes to Im ptenrent fr»e Labor Code.
*
S ectico 24. A rticte IV . R A N o. 10361.
5 Section 25, A rticle IV , Ibid
$
y
7 Section 30, A rticle IV , Ibid.
8 S ecticn 6, Rule V, In^tem enting Rules and R egulations o f R A No. 10361.
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3. M ode of paym ent. - It should be paid in cash and not by
means o f promissory notes, vouchers, coupons, tokens, tickets,
chits, or any object other than cash wage.1
4. Pay slip. - The employer shall at all times provide the
Kasambahay with a copy o f the pay slip containing the amount
paid in cash every pay day, and indicating all deductions made, if
any. The copies of the pay slip shall be kept by die employer for
a period of three (3) years.2
5. Prohibition on interference in the disposal of w ages. - It
shall be unlawful for the employer to interfere widi the freedom
o f the Kasambahay in the disposition o f his/her wages, such as:
(a) Forcing, compelling, or obliging the Kasambahay to purchase
merchandise, commodities or other properties from the
employer or from any other person; or
(b) Making use o f any store or services of such employer or any
other person.3
6. Prohibition against w ithholding of w ages. - It shall be
unlawful for an employer, direcdy or indirectly, to withhold the
wages of the Kasambahay. If the Kasambahay leaves without any
justifiable reason, any unpaid salary for a period not exceeding
fifteen (15) days shall be forfeited. Likewise, the employer shall
not induce the Kasambahay to give up any part o f the wages by
force, stealth, intimidation, threat or by any other means
whatsoever.4
10. T ER M S AND C O N D IT IO N S O F E M PL O Y M E N T .
The following is a rundown of the basic terms and conditions that should
be observed in the employment o f a Kasambahay.
a. Em ployable age. - Children whose age is below 15 years are
absolutely prohibited to work as Kasambahay.5
b. N orm al daily hours of w ork. - Because R.A. No. 10361 docs not
contain any provision on the number o f normal hours o f work that a Kasambahay
should render in a day but merely prescribes said daily rest period o f eight (8) hours
1 Section 30, A rtid e IV. b id .; S ection 3, R ule IV , Ib id .
2 Section 26, A rtid e IV , R A N o. 10361; S ection 2, R ule V , Ibid.
3
Section 27, A rtid e IV , b id ,- S ection 5, R ule V , Ibid.
*
Section 28, A rtid e IV , b id ; S ection 4, R ule V , Ibid.
5
Section 16, A rtid e III o f R A N o. 10361 states in ve ry d ea r te rm s, thus: 'S E C . 16. E m ploym ent A ge o f D om estic W orkers. It sha3 be u n la w fti to em ploy any person below fifte en (15) years o f age as a dom estic w orker. E m ploym ent o f w x k in g
chidren, a s defined under th is A ct. shad be su b ject to tee provisions o f S ection 10(A ), paragraph 2 o f S ection 12-A,
paragraph 4 o f Section 12-D, and Section 13 o f R A No. 7610, a s am ended, otherw ise know n a s tee ’ S pecial P rotection o f
C hildren A ga in st C hild A buse, E xploitation and D iscrim ination A ct.’
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pet day, it may be deduced that the Kasambabay should wotk fot at least a total of
sixteen (16) hours per day as normal hours o f work Congruendy, it must be
noted that the Labor Code does not contain any provision on the normal hours of
wotk of househelpers. However, Article 1695 of the Civil Code specifically
provides that househelpers shall not be required to work for more than ten (10)
hours a day. Since R.A. No. 10361, a special law, is the most recent piece of
legislation, it should prevail over the general provision of the Civil Code.
c. Normal daily hours of work for working cbi\d-kasam bahay is
eight (8) hours per day.1
>
d. 13th month pay. - The Kasambabay who has rendered at least one (1)
month of service is entitled to a 13* month pay which shall not be less than onetwelfth (1/12) of his/her total basic salary earned in a calendar year. The 13*
month pay shall be paid not later than December 24 of every year or upon
separation from employment.2
e. Daily rest period. - The Kasambabay shall be entitled to an aggregate
test period of eight (8) hours per day.3
f. Weekly rest period. - The Kasambabay shall be entitled to at least
twenty-four (24) consecutive hours of rest in a week. The employer and the
Kasambabay shall agree in writing on die schedule of die weekly test day but die
preference of the Kasambabay, when based on religious grounds, shall be
respected.4 Nothing in this provision shall deprive the Kasambabay and the employer
horn agreeing to die following:
(1) Offsetting a day of absence with a particular rest day;
(2) Waiving a particular rest day in return for an equivalent daily rate of
pay,
(3) Accumulating rest days not exceeding five (5) days; or
(4) Other similar arrangements.5
g. Service incentive leave. - A Kasambabay who has rendered at least one
(1) year of service shall be entitled to an annual service incentive leave o f at least
1 Shoe as earier discussed, R A No. 7610, as amended by R A No. 9231, apples t> a W
wMcb term, n legal
contenpb8m ieteutoanypeism «d»'surNterei^Ben(1Qyeam (da 9eldomes6ew oiteRvhom a 3eteuidweighteen
(18) years are subject to the hows of wort, of a "woddng chid.’ Section 16, Arficte HI of R A No. 10361 states tu t tee
enpbymertdvrortdrig children is subject to tee provision of paragraph 2 of Section 12-A of R A No. 7610, as amended.
1 Section 25, Article IV. R A No. 10361; Secfon 8. Rule IV, Implementing Rules and Regulations of R A No. 10561. Note
n e t be made ta t previously, employers <f household helpers and peisons h tee personal setice of another in reteSon to
such w oteis are not oblgated to pay 13* monte pay to these folds of employees. (No. 2 f t Revised Guidelines on tee
Implementation of tee 13te month Pay Law, formerly Section 3 [dj, Rules and Regulations ImplemenSng P.D. No. 851).
3 Section20, ArtcSe IV, R A No. 10361; Section 5, Rule IV, Implemenfing Rules and RegubSons of RA. No. 10561.
4 Section 21. Arhde IV. ttiid.; SecSon6. R ile <V. bid.
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five (5) days with pay. Any unused portion of said annual leave shall not be
cumulative or carried over to the succeeding years. Unused leaves shall nor he
convertible to cash.1
h. Social security benefits. - A Kasambabay who has rendered at least one
(1) month of service shall be covered by the Social Security System (SSS),
Employees Compensation Commission (ECC), Philippine Health Insurance
Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, and
shall be entitled to all the benefits in accordance with their respective policies, laws,
rules and regulations.2
Benefits under the SSS include sickness, maternity, disability, retirement,
death and funeral. A unified benefit package under PhilHealth includes Inpatient
Hospital Care and Outpatient Care.3
Mandatory premium payments or contributions shall be shouldered by the
employer. However, if the Kasambabay is receiving a monthly wage rate o f Five
Thousand Pesos (P5,000.00) and above, the Kasambabay shall pay the proportionate
share in the premium payments or contributions, as provided by law.4
In the event the Kasambabay avails of certain loan privileges from PagIBIG Fund which require the payment o f additional or upgraded contributions, the
said additional or upgraded contributions shall be shouldered solely by the
The SSS, Pag-IBIG and PhilHealth shall develop a unified system o f
registration and enrollment within six (6) months from the promulgation o f the
Implementing Rules and Regulations (IRR) ofILA. No. 10361.*
L Obligation o f employer to register and enroll with SSS,
PhilH ealth, and Pag-IBIG. - As employer of the Kasambabay, he/she shall
register himself/herself with, and enroll die latter as his/her employee to die SSS,
PhilHealth, and Pag-IBIG.7
j. Loan assistance. - An employer may agree to extend loan assistance to
die Kasambabay 'm. an amount not exceeding his/her six (6) months' salary. This
provision shall not apply to working children.8
k. Deduction for loans. - By written agreement, the employer may
deduct the loans from the wages o f the Kasambabay, which amount shall not exceed
20% of his/her wages every month.1
1 Section 29, Article IV, bid.; Section 7, Rule IV, bid.
2 Section30. Article IV. Ibid.; Section9. RuleIV. Ibid.
3 kL;U
4 ii;M.
5 Id.; ML
6 Id.; id.
1 Section3.RuleV.lbid.
8 Section 10. Rule IV, Ibid.
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I.
Deposits for loss or dam age. - It shall be unlawful for the employer
or any other person to require a Kasambahay to make deposits from which
deductions shall be made for the reimbursement o f loss or damage to tools,
materials, furniture and equipment in the household.*2
11.
OTHER TERMS AND CONDITIONS OF EMPLOYMENT.
In addition to the foregoing, the following terms and conditions are
mandated under R.A. No. 10361:
a. Standard of treatm ent. - The Kasambahay shall be treated with respect
by the employer or any member o f the household. H e/she shall not be subjected to
any kind of abuse, including repeated verbal or psychological, nor be inflicted with
any form of physical violence or harassment or any act tending to degrade his/her
dignity, as defined under the Revised Penal Code, Violence Against Women and
their Children Law (R.A. No. 9262), Special Protection o f Children Against Child
Abuse, Exploitation and Discrimination Act (R.A. No. 7610) as amended by R.A.
No. 9231, Anti-Trafficking in Persons Act o f 2003 (R.A. No. 9208), and other
applicable laws.3
b. Board, lodging and m edical attendance. - The employer shall
provide for the basic necessities of. the Kasatnbahay, to include the following:
(1) At least three (3) adequate meals a day, taking into consideration the
Kasambahay's religious beliefs and cultural practices;
(2) Humane sleeping condition that respects the person's privacy for
live-in arrangement; and
(3) Appropriate rest and medical assistance in the form of first-aid
medicines, in case o f illnesses and injuries sustained during service
without loss of benefits.
For the Kasambahay under live-out arrangement, h e/she shall be provided
space for rest and access to sanitary facility. At no instance shall the employer
withdraw or hold in abeyance the provision of these basic necessities as
punishment to, or disciplinary action against, the Kasambahay.4
c. Guarantee of privacy. - The employer shall, at all times, respect the
right of the Kasambahay to privacy, which shall extend to all forms of
communication and personal effects.5
d. Access to outside com m unication. - During free time, the
Kasambahay shall be granted access to outside communication. In case o f
'
Section 11, Rule IV , Ibid.
7 Section 14, A rticle III, R A . No. 10361; Section 7 , Rule V , Ibid.
3 Section 5, A rticle II, ib id ; Section 12, R ule IV , Ibid.
4 Section 6, A itid e II, Ibid.; Section 13, R ule IV , Ibid.
* Section 7, A rticle II, Ibid.; Section 14, R ule IV , Ibid.
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emergency, access to communication shall be granted even during working time.
Should die Kasambahay use the employer's telephone or other communication
facilities, the costs shall be borne by the Kasambahay, unless waived by die
employer.1
e. Prohibition ag ain st privileged inform ation. - All communication
and information pertaining to the employer or members of the household shall be
treated as privileged and confidential, and shall not be publicly disclosed by die
Kasambahay during and after employment. Such privileged information shall be
inadmissible in evidence, except when the suit involves the employer or any
member o f the household in a crime against persons, property, personal liberty and
security and chastity.2
f. O pportunities for education and training. - The Kasambahay shall be
afforded the opportunity to finish basic education, which shall consist o f
elementary and secondary education. H e/she may be allowed access to alternative
learning systems and, as far as practicable, higher education or technical vocational
education and training.
The employer shall adjust the work schedule o f the Kasambahay to allow
his/her access to education or training without hampering the services required by
the employer. Access to education may include financial assistance at the option o f
the employer.
The Department o f Education (DepEd) shall ensure continued access o f
the Kasambahay to alternative learning system education.3
g. M em bership in lab o r organization. - The Kasambahay shall have die
right to join a labor organization o f his/her own choosing for purposes o f mutual
aid and collective negotiation. The Kasambahay shall be afforded opportunity to
attend organization meetings during free time.4
h. H ealth an d safety. - The employer shall safeguard the safety and
health o f the Kasambahay in accordance with the standards which the DOLE shall
develop through the Bureau o f Working Conditions (BWC) and the Occupational
Safety and Health Center (OSHC) within six (6) months from the promulgation o f
the Implementing Rules and Regulations (IRR) o f R.A. No. 10361. The said
standards shall take into account die peculiar nature o f domestic work.5
i. Prohibition on d e b t bondage. - It shall be unlawful for the employer
or any person acting on h is/her behalf to place die Kasambahay under debt
'
S ection 8 , A rbde II. te d .; S ection 15. R ule IV . to id .
7 S ection 8 , R ule V , Ibid.
3
S ection 9 , A rticle II, Ib id.; Section 16. R ule IV , Ib id .
*
S ection 17, Rule IV, Ibid.
S ection 19, A rticle IV , R A N o. 10361; S ection 12. R ule V , Ibid.
5
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bondage.1 "Debt bondage" refers to the rendering of service by the Kasambahay as
security or payment for a debt where the length and nature of service is not clearly
defined or when the value of the service is not reasonably applied in the payment
of the debt.2
j. Assignment to non-household w ork. - The employer shall n o t assign
the Kasambahay to work, whether in full or part-time, in a commercial, industrial or
agricultural enterprise at a wage rate lower than that provided for agricultural or
non-agricultural workers.3
The following cases decided prior to R.A. No. 10361, are still relevant to
this proscription in the law:
[1] Apex Mining Company, Inc. v. NLRC .4 - In this case, the High Court
held that a househelper in the staffhouses o f an industrial company is considered a
regular employee thereof. The mere fact that the househelper is working within the
premises of the business of the employer and in relation to or in connection with
its business, as in its staffhouse; for its guest or even for its officers and employees,
warrants the conclusion that such househelper is and should be considered as a
regular employee of the employer and not as a mere family househelper or as
contemplated in the law.5
[2] Remington Industrial Sales Corp. v. Castaneda.6 - The same ruling as in
Apex was made in this case. Respondent worked at the company premises and her
duty was to cook and prepare its employees’ lunch and merienda. Clearly, the situs as
well as the nature of respondent’s work as a cook, who caters not only to the needs
of Mr. Tan (Managing Director of petitioner) and his family but also to that o f the
petitioner’s employees, made her fall squarely within the definition of a regular
employee under the doctrine enunciated in the Apex Mining case. That she works
within company premises and that she does not cater exclusively to the personal
comfort of Mr. Tan and Iris family, is reflective of the existence of the petitioner’s
right of control over her functions, which is the primary indicator o f the existence
of an employer-employee relationship.
[3] Barcenas v. N LR C 7 - In this case, private respondent contends that
petitioner was not an employee but a servant at the Manila Buddhist Temple. The
Supreme Court, however, disagreed. It held that petitioner was a regular employee
thereof considering that the work that she performed in the temple could not be
categorized as mere domestic work. Petitioner, being proficient in the Chinese
1 Section 15, A rticle III, Ibid.; Section 9, Rule 7 , Ibid.
2 Section 4{a). A rttfe I, Ibid.; Section 3(b), R ile I, Ib id .; See a lso S ection 3, R A N o. 9203.
3 Section 22, A rticle IV , Ibid.; Section 10, Rule V , Ibid.
« G .R. No. 34951. A pril 22.1991.196 SCRA 251.254-255.
5 Id.
« G R Nos. 169295-95, Nov. 20,2006.
7 G.R. No. 87210. July 16.1990.
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language, attended to the visitors, mosdy Chinese, who came to pray or seek advice
before Buddha for personal or business problems; arranged meetings between
these visitors and the Head Monk and supervised the preparation of the food for
the temple visitors; acted as tourist guide o f foreign visitors; acted as liaison with
some government offices; and made the payment for the temple's Meralco, MWSS
and PLDT bills. Indeed, these tasks may not be deemed activities of a household
helper. They were essential and important to the operation and religious functions
of the temple.
k. E x ten t o f duty outside the household. - The Kasambahay and the
employer may mutually agree for the Kasambahay to temporarily perform a task for
the benefit o f another household under the following conditions:
(a) There is an agreement between die Kasambahay and the employer for
the purpose, particularly on the tasks to be performed;
(b) 'Die Kasambahay is enutled to additional payment of not less than the
applicable minimum wage rate:
(c) The original employer shall be responsible for any liability incurred
by the Kasambahay on account o f such arrangement; and
(d) The original employer is not charging any amount from the other
household for the arrangement.
The temporary performance of work shall not exceed tliirty (30) days per
assignment. The other household where the Kasambahay is temporarily assigned is
solidarily liable with the original employer for any non-payment o f wages during
such temporary assignment.
It shall be unlawful for the original employer to charge any amount from
die said household where the service o f die Kasambahay was temporarily
performed.1
12. STANDARDS F O R E M PL O Y M E N T O F W O RK IN G C H IL D R E N .
a. W orking children. - This term refers to Kasambahays who are fifteen
(15) years old and above but below eighteen (18) years old.23
b. G eneral prohibition. - It shall be unlawful to employ any person
below fifteen (15) years o f age as Kasambahay}
c. Benefits o f w orking children. - Working children shall be entided to
m inim um w age, and all benefits provided under R.A. No. 10361, the Batas
Kasambahay, which include access to education and training.1
1 Section 23, A rticle IV , Ib id .; S ection 11. Rule V , Ibid.
2 Section 3{k), R ule I, Im plem enting R ules and R egulations o f R A No. 10351.
3 Section 1, R ule V I, Ibid.
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d.
Employment of working children. - Pursuant to ILA. No. 9231,12
working children shall ngj be subjected to the following;
(1) Work for more than eight (8) hours a day and beyond forty (40)
hours a week;
(2) Work between ten o'clock in the evening and six o'clock in the
morning of the following day; and
(3) Work which is hazardous or likely to be harmful to the health, safety
or morals of children, as defined under existing laws and regulations.3
13. TERMINATION OF KASAMBAHAY.
a. Pre-termination o f employment.
The following rules shall be observed;
(1) In case the duration of employment is specified in the contract, the
Kasambabay and the employer may mutually agree upon notice to
terminate tire contract of employment before the expiration o f its
term.4
(2) In case the duration is not determined by stipulation or by nature of
service, the employer or die Kasambabay may give notice to end die
employment relationship five (5) days before die intended
termination of employment5
b. Termination of employment initiated by the Kasambabay.
The Kasambabay may terminate the employment relationship at any time
before the expiration of the contract for any o f the following causes:
(1) Verbal or emotional abuse of the Kasambabay by the employer or any
member of the household;
(2) Inhuman treatment, including physical abuse of the Kasambabay by
the employer or any member o f die household;
(3) Commission of a crime or offense against the Kasambabay by the
employer or any member of the household;
1 Section 16, Article HI, R A No. 10361; Section 3, Rule VI. Ibid.
2 EntSed *An Act Provicfing for the SmEna^on of Sie Worst Forms of Chad Latxx and Aferding Stronger Protecfion for Sie
W o^C fiJ,Am eref'ngfertlisRjrp(«RepubicAdNoJ610.AsAn«nded,O ff!enM seknow 3sttw ‘SpedaiPrrtec6on
ofCWdten AgarnstChid Abuse. Exploitation and OiscrimhationAcl*
1 Section 2, Rule VI,Implementing RJes and Regulations of R A .N o. 10361. AddfionaD/.Sfe provided herein as Wows:
"SeCTtON 4. FVogranns for the Efiminatjon of Worst Forms of CMd Labcr in Domesdc Work. - The DOLE, through Sie
Nationd M O tid Labor Commtee (NClC) and h collaboration with the NCLC member-agencies, shaB continue to
implement programs to withdraw. rescue, and rehab&ate unking children below Steen (15) years of age. th e NCLC shal
ensue that working cHdren and Bier tansies arc provided wSh access to education, aocess to produce resources, and
that measures are r place to ensure compsance with the standards tor employment of dddren in domestic work as
prescribed in this Rule *
4 Section32,AiticfcV,R^ttoJ0361;Sectioni.RuieVltlm plem enfingRulesandRegulationsofllA.Na 10361.
* Id ; id
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(4) Violation by die employer o f die terms and conditions o f the
employment contract and other standards set forth in the lair,
(5) Any disease prejudicial to die health o f the Kasambabay, die employer,
or members of the household; and
(6) Other causes analogous to the foregoing.1
If the Kasambabay leaves without cause, any unpaid salary due, not
exceeding the equivalent of fifteen (15) days work, shall be forfeited. In addition,
the employer may recover from the Kasambahay deployment expenses, if any, if
the services have been terminated within six (6) months from employment2
c. Termination o f employment initiated by the employer.
An employer may terminate the employment of the Kasambabay at any
time before the expiration of the contract for any of the following causes:
(1) Misconduct or willful disobedience by the Kasambabay of the lawful
order o f the employer in connection with the former’s work;
(2) Gross or habitual neglect or inefficiency by the Kasambabay in the
performance of duties;
(3) Fraud or willful breach of the trust reposed by the employer on the
Kasambabay,
(4) Commission of a crime or offense by the Kasambabay against the
person o f the employer or any immediate member o f die employer's
family;
(5) Violation by the Kasambabay of the terms and conditions o f the
employment contract and other standards set forth under die law;
(6) Any disease prejudicial to the health o f die Kasambabay, die employer,
or members of the household; and
(7) Other causes analogous to the foregoing.3
If the employer dismissed the Kasambabay for reasons other than die
above, be/she shall pay the Kasambabay die earned compensation plus indemnity in
the amount equivalent to fifteen (15) days work.4
d. Invalidground for termination.
Pregnancy and marriage of the Kasambabay are not valid grounds for
termination o f employment.5
1 Section 33, Article V, IM ; Section 2, Rule VII, Ibid.
* SecSon32,AifcleV.bid.;Section2 ,RubVII,W d.
1
Section34,A iW eV.W d.;Secfon3 ,RuleVII,B k L
4 Section 32. Article V. Ebid^ Section 3. Rule VI). BAL
5 Section 4, Rub VII. bid.
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e. Employment CcrdGcation.
Upon the termination of employment, the employer shall issue the
Kosambabay, within five (5) days from request, a certificate o f employment
indicating the nature, duration o f the service and work description.1
f. Mechanism for settlement/disposition o f labor-related disputes.
All labor-related disputes shall be filed before the DOLE
Field/Provincial/Regional Office having jurisdiction over the workplace and shall
go through the thirty-day (30) mandatory conciliation under the DOLE Single
Entry Approach (SEnA) program to exhaust all efforts for the settlement of the
dispute.2 The DOLE Secretary issued Labor Advisory No. 17, Series o f2018 [October
30, 2018], for purposes of promulgating the Clarificatory Guidelines on the
handling of Kasambahay complaints or request for assistance.3*
The phrase “all labor-related disputes” necessarily includes and covers not
only monetary claims, regardless of amounts thereof, but termination or illegal
dismissal issues as well.
g. Compliance order.
In case the parties fail to reach a setdement, a mandatory conference not
exceeding thirty (30) days shall be conducted by
the DOLE
Field/Provincial/Regional Office from referral o f the unsetded dispute. The
DOLE-Regional Director shall issue a Compliance Order within ten (10) days from
the submission of the case for resolution/
h. Motion for reconsideration.
Any aggrieved party may file a motion for reconsideration from the
Compliance Order within ten (10) days from receipt thereof.5
i. Appeal.
The Resolution on the Motion for Reconsideration of the DOLERegional Director may be appealed to the DOLE Secretary' within ten (10) days
from receipt thereof. Thereafter, the Order of the DOLE Secretary shall be final
and executory.6
1 Section 35, A rticle V . Ibid.; Section 5. R ule \A I, Ibid.
7 Section 37, ArticJe V I. Id.; Section 1, Rule X !, Id.
3
The fu ll te xt o f this issuance is avaiSabte a t th e DO LE w ebsite a t
https7Avww.dole.gov ph/fdesAJabcx% 20Advtsor/% 20M o_% 2017% 20-
1
% 20Ctarifx2tory% 20gukleinesVc20<xi% 201wKjrng% 2C»<asarnbahayo/o2()corriplaints.pdf. Last A ccessed: M arch 19,2019.
Section 2. Rule X I, Id : See also Nos. V II and V III, Labor A dvisory No. 17, Series o f 2018 (O ctober 3 0,2 01 8 ].
5 Section 3, Rule XI, Id.
£ Section 4, Rule X I, Id ; See also No IX , Labor A dvisory No. 17, S eries o f 2018 (O ctober 3 0 ,2 0 1 8 ].
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Crimes and offenses.
Ordinary crimes or offenses committed by either party under the Revised
Penal Code and odier special penal laws shall be filed with the appropriate courts.'
4.
HOMEWORKERS*2
1.
DEFINITIONS.
For clarity in understanding, the following terms are defined as follows:
a) industrial homeworker” refers to a worker who is engaged in industrial
homework3
b) industrial homework ” refers to a system of production under which work
for an employer or contractor is carried out by a homeworker at his/her home.
Materials may or may not be furnished by the employer or contractor. It differs
from regular factory production principally in that, it is a decentralized form o f
production where there is ordinarily very little supervision or regulation o f methods
o f work.4
c) “Home” means any nook, house, apartment or other premises used
regularly, in whole or in part, as a dwelling place, except those situated within the
premises or compound of an employer, contractor/subcontractor and the work
performed therein is under the active or personal supervision by or for the latter.5
d) “Field personnel" refers to a non-agricultural employee who regularly
performs his 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.6
e) “Employer" refers to any natural or artificial person who, for ltis own
account or benefit, or on behalf o f any person residing outside the Philippines,
direedy or indirectly, or through any employee, agent, contractor, subcontractor or
any other person: (1) delivers or causes to be delivered any goods, articles or
materials to be processed or fabricated in or about a home and thereafter to be
returned or to be disposed o f or distributed in accordance with his direction; or (2)
sells any goods, articles or materials for the purpose of having such goods or
'
Section 5, R ule X I, Id.; See also Section 37, A rticle V II, R A N o. 10361; No X , Labor A dvisory N o. 17, S eries o i 2018
[O ctober 30,20181
2
R elevant P rovisions: A rticles 151 [153] to 153 [1 5 5 ], Labor C ode; D epartm ent O d e r No. 5, [February 4 ,1 9 9 2 ] enunciating
the regulations governing the em ploym ent o f hom ew orkers. T h is D epartm ent O rder is now know n as Rule X IV , B ook III o f
the R ules to Im plem ent the Labor C ode.
3
S ection 2 , D epartm ent O rder N o. 5 [R ule X IV , B ook III, R ules to Im plem ent
4 Id.
5 Id.
6 A rticle 82, Labor Code
Labor Code).
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articles processed in or about a home and then repurchases them himself or
through another after such processing.
f) “Contractor” or “subcontractor” refers to any person who, for the account
or benefit of an employer, delivers or causes to be delivered to a homeworker,
goods or articles to be processed in or about his home and thereafter to be
returned, disposed of or distributed in accordance with the direction o f the
employer.1
g) ‘"Processing” refers to manufacturing, fabricating, finishing, repairing,
altering, packing, wrapping or handling in any way connected with the production
or preparation of an article or material.23
2. DUTIES OF EMPLOYER, CO N TRA C TO R OR SUBCO NTRACTOR.
Whenever an employer contracts with another for the performance o f the
employer’s work, it shall be die duty of such employer to provide in such contract
that the employees or homeworkers of the contractor and the latter’s subcontractor
shall be paid in accordance with the provisions o f the Pules to Implement the Labor
Code? In the event that such contractor or subcontractor fails to pay the wages or
earnings of his employees or homeworkers as specified in said Rules, such employer
shall be jointly and severally liable with the contractor or subcontractor to the
workers of the latter, to the extent that such work is performed under such
contract, in the same manner as if the employees or homeworkers were direedy
engaged by the employer. The employer, contractor or subcontractor shall assist
the homeworkers in the maintenance o f basic safe and healthful working
conditions at the homeworkers’ place of work.4
3. PAYMENT FOR HOM EW ORK.
Immediately upon receipt o f the finished goods or articles, the employer
is required to pay the homeworker or the contractor or subcontractor, as the case
may be, for the work performed less the corresponding homeworker’s share of
SSS, PhilHealth and ECC premium contributions which should be remitted by the
contractor or subcontractor or employer to the SSS with the employer’s share.
However, where payment is made to a contractor or subcontractor, the
homeworker should likewise be paid immediately after the goods or articles have
been collected from the workers.5
4. PR O H IB IT IO N S ON C ER T A IN K INDS O F H O M E W O R K
No homework shall be performed on the following;
1) Explosives, fireworks and articles o f like character;
1 Section 2, D epartm ent O rder No. 5 [R ule X IV , Book 111, R ules to Im plem ent
Labor CodeV
2 Id.
3 See Rule XIV thereof.
* Section 11, Departm ent O rder No. 5 [R ule X IV , Book III, R ules to Im plem ent the Labor C ode.
5 Section 6, Ibid.
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2) Drugs and poisons; and
3) Other articles, the processing o f which requires exposure to toxic
substances.1
5. C O N D IT IO N S FO R D E D U C T IO N FROM H O M E W O R K E R ’S
EA R N IN G S.
N o employer, contractor or subcontractor shall make any deduction from
the homeworker’s earnings for the value of materials which have been lost,
destroyed, soiled or otherwise damaged unless the following conditions are met:
a) The homeworker concerned is clearly shown to be responsible for the
loss or damage;
b) The homeworker is given reasonable opportunity to show cause why
deduction should not be made;
c) The amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
d) The deduction is made at such rate that the amount deducted does not
exceed twenty percent (20%) o f the homeworker’s earnings in a week.2
5.
NIGHT WORKERS
1. SIG N IFIC A N C E O F T H E LAW.
R.A. No. 101513 has repealed Article 130 [Nightwork Prohibition] and
Article 131 [Exceptions] o f the Labor Code and accordingly renumbered the same
articles. Additionally, it has inserted a new Chapter V to Title III of Book III o f the
Labor Code entitled “Employment o f Night Workers” which addresses the issue
on nightwork of all employees, including women workers. Chapter V covers newly
renumbered Articles 152 [154] up to 167 [161] o f the Labor Code.
2. COVERAGE O F T H E LAW.
The law on nightwork applies not only to women but 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 n o t less th an seven (7) consecutive hours,
including the interval from m id n ig h t to five o 'clock in the m orning, to be
1 Section 13, Ibid.
2
R elevant P rovisions: (1 ) A pprentices - covered by A rbcies 57 to 72. Labor C ode; (2) Learners - covered by A rticles 7 3 to
77, Labor C ode; (3) R A N o. 7796 (Technical E ducation and SkJIs D evelopm ent A ct o M 994) and its Im plem enting R ules
and R egulations.
3
E ntitled 'A n A ct A llow ing the Em ploym ent o f N ig ht W orkers, Thereby Repeating A rticles 130 and 131 of P D. N o. 442, A s
Am ended. O therw ise Known a s the L a txx Code o f the P hilip pin e s' w as approved on June 21,2 01 1 .
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determined by the DOLE Secretary, after
representatives/labor organizations and employers.1
consulting
the
workers’
3. NIGHT WORKER, MEANING.
"Night worker" means any employed person whose work covers the
period from 10 o'clock in the evening to 6 o'clock the following morning
provided that the worker perfotm$ no less than seven (7) consecutive hours of
work.2
4. HEALTH ASSESSMENT.
At their request, workers shall have the right to undergo a health
assessment without charge and to receive advice on how to reduce or avoid health
problems associated with their work:
(a) Befote taking up an assignment as a night worker,
(b) At tegular intervals during such an assignment; or
(c) If they experience health problems during such an assignm ent
With the exception of a finding of unfitness for night work, die findings,
of such assessments shall be confidential and shall not be used to their detriment,
subject, however, to applicable company policies.3
5. MANDATORY FACILITIES.
Mandatory facilities shall be made available for workers performing night
work which include die following:
(a) Suitable first-aid and emergency facilities as provided for under
Rule 1960 (Occupational Health Services) o f the Occupational Safety
and Health Standards (OSHS);
(b) Lactation station in required companies pursuant to ILA. No.
10028 (The Expanded Breastfeeding Promotion Act o f 2009);
(c) Separate toilet facilities for men and women;
(d) Facility for eating w ith potable drinking water; and
(e) Facilities for transportation and/or properly ventilated temporary
sleeping or resting quarters, separate for male and female
workers, shall be provided except where any of the following
circumstances is present:
1 Aificfe 152 [154], LaborCode; as snended by SecSon 4, R A No. 10151.
2 See SecSon 2, Department Oder No. 119-12, Series of 2012 (Rules Implementing R A No. 10151). It bears noting that the
definSon o l‘night ro te * under the law b as fellow: *MgW wotteT means any employed person vhose wok requres
performance of a substantial nunter of hous of night wod< wWch exceeds a spectSed ^ T h sfm ish aS b eftced b ylh e
SecnataiyofLaborafteroonsuttngihewaVe»srreprBsentaSvesteboro(ganizafionsgideniployers.*(ftrticle 152I154|.Lgtxy
Code, as amended by Section 4, R A No. 10151).
3 Section 3, Department Order No. 119-12, Series of 2012 (Rules Implementing R A No. 10151); Article 153 (155], Labor
Code, as amended by Section 4, R A No. 10151.
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i. Where there is an existing company guideline, practice or policy,
C8A or any similar agreement between management and workers
providing for an equivalent or superior benefit; or
ii. Where the start or end o f the night work does not fall within 12
midnight to 5 o'clock in the morning; or
iii. Where the workplace is located in an area that is accessible
twenty-four (24) hours to public transportation;
iv. Where the number of employees does not exceed a specified
number as may be provided for by the DOLE Secretary in
subsequent issuances.*
1
6. TRANSFER D U E TO U N FITN ESS O F WORK FOR HEALTH
REASONS.
Night workers who are certified by competent physician, as unfit to
render night work due to health reasons, shall be transferred to a job for which
they are fit to work whenever practicable. T he transfer of the employee m ust be
to a similar or equivalent position and in good faith.
If such transfer is not practicable or die workers are unable to render
night work for a continuous period of riot less than six (6) months upon die
certification of a competent public health authority, these workers shall be
granted the same company benefits as other workers who are unable to work due
to illness.
A night worker certified as temporarily unfit for night work for a
period of less than six (6) months shall be given the same protection against
dismissal or notice of dismissal as other workers who are prevented from working
for health reasons.2
7. W OM EN N IG H T WORKERS, ALTERNATIVE MEASURES T O
N IG H T WORK FOR PREGNANT AND NURSING EMPLOYEES.
Employers shall ensure that measures shall be undertaken to provide an
alternative to night work for pregnant and nursing employees who would otherwise
be called upon to perform such work. Such measures may include the transfer to
day work, where it is possible, as well as the provision of social security benefits
or an extension of maternity leave.
(a)
Transfer to day work. - As far as practicable, pregnant or nursing
employees shall be assigned to day work, before and after childbirth for a period o f
at least sixteen (16) weeks which shall be divided between the time before and after
childbirth.
1 Section 4, Id. Arfde 156. W.
1 Sections ld.Ar8cte157.ld.
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Medical certificate issued by competent physician (it ., Obstetrician/
Gynecologist, Pediatrician, etc.) is necessary for the grant ofi
i. additional periods of assignment to day work during pregnancy or
after childbirth other than the period mentioned in die foregoing
paragraph, provided that the length of additional period should not be
more than four (4) weeks o r for a longer period as may be agreed
upon by the employer and the worker,
ii. extension of maternity leave; and
iil clearance to render night work.
'
(b) Provision of social security benefits. - Social security benefits, such
as paid maternity leave shall be provided to women workers in accordance with the
provisions of R A No. 8282 (Social Security Act of 1997) and other existing
company policy or CBA.
(c) Extension of maternity leave. - Where transfer to day work is not
possible, a woman employee may be allowed to extend, as recommended by a
competent physician, her maternity leave without pay or using earned leave credits
of die worker, if any.1
8. NON-DIM INUTION OF MATERNITY LEAVE BENEFITS U N D ER
EXISTING LAWS.
The law and its rules shall not be construed to authorize diminution or
reduction of the protection and benefits connected with maternity leave under
existing law.2
9. PROTECTION AGAINST DISMISSAL AND LOSS OF BENEFITS
ATTACHED TO EMPLOYMENT STATUS, SENIORITY AND
ACCESS T O PROMOTION.
Where no alternative work can be provided to a woman employee who is
not in a position to render night work, she shall be allowed to go on leave or on
extended maternity leave, using her earned leave credits.
A woman employee shall not be dismissed for reasons of pregnancy,
childbirth and childcare responsibilities. She shall not lose the benefits
regarding her employment status, seniority, and access to promotion which may
attach to her regular night work position.3
10. COMPENSATION.
The compensation for night workers in the form of working time, pay or
similar benefits shall recognize the exceptional nature of night work.4
'
>
5
4
Section 6. kLAride 158. U.
Secfion7.ld.Aitide158.ld.
Sections, UArtide 158, Id.
Article 159, Id.
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Consequently, such compensation shall include, but not be limited to,
working time, pay and benefits under the Labor Code, as amended and under
existing laws, such as service incentive leave, rest day, night differential pay,
13th m onth pay, and other benefits as provided for by law, company policy or
CBA.‘
1L SOCIAL SERVICES.
Appropriate social services shall be provided for night workers and, where
necessary, for workers performing night work.*2
12. N IG H T WORK SCHEDULES.
The employer shall at its own initiative, consult the recognized workers'
representatives or union in the establishment on the details o f the night work
schedules and the forms of organization of night work that are best adapted to the
establishment and its personnel, as well as on the occupational health measures and
social services which are required.
In establishments employing night workers, consultation shall take place
regularly and appropriate changes of work schedule shall be agreed upon before it
is implemented.3
SPECIAL WORKERS
In the Labor Code, there ate three (3) groups that ate considered “special
workers"under Title II, Book II thereof, namely:
a) Apprentices - coveted by Articles 57 to 72;
b) Learners - covered by Articles 73 to 77; and
c) H andicapped workers - covered by Articles 78 to 81.
Following is a discussion of these groups of workers as prescribed in the
Syllabur.
.
6
APPRENTICES AND LEARNERS
L DEFIN ITIO N S.
a. Apprenticeship-related term s.
“Apprenticeship” means practical training on. the job supplemented by
related theoretical instructions involving apprenticeable occupations and trades as
may be approved by the DOLE Secretary.4 It is a training within employment with
compulsory related theoretical instructions involving a contract between an
» Section 9. Id.
2 AiBdelfiO.id.
2 Section 10, H A ricle 161, Id.
< Artde 58 [a]. Labor Code; Section 2. Rule VI, Book II, Rules to Imptement the Labor Code.
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apprentice and an employer or an enterprise on an approved apprenticeable
occupation.1
An "apprentice” is a worker who is covered by a written apprenticeship
agreement with an individual employer or any o f the entities recognized under the
law.2 He is a person undergoing training for an approved apprenticeable occupation
during an established period and covered by an apprenticeship agreement3
An "apprenticeable occupation” means any trade, form o f employment or
occupation approved for apprenticeship by the DOLE Secretary, which requires
for proficiency, more than three (3) months of practical training on the job
supplemented by related theoretical instructions.'4 It is an occupation officially
endorsed by a tripartite body and approved for apprenticeship by 1ESDA.S6
An "apprenticeship asreement” is an employment contract wherein the
employer binds himself to train the apprentice and the apprentice in turn accepts
the terms of the training and agrees to work for the employed' for a recognized
apprenticeable occupation, emphasizing the rights, duties and responsibilities of
each part}'.7
b. Leamership-rekted terms.
“Leamership"refers to any practical training on leamable occupation which
may or may not be supplemented by related theoretical instructions.8
“Learner” refers to a person hired as a trainee in semi-skilled and other
industrial occupations which are non-apprenticeable and which may be learned
through practical training on the job for a period not exceeding three (3) months,
whether or not such practical training is supplemented by theoretical instructions.9
1 Section 4 [j], R A No 7796; Section 1, R ule X , R ules and R egulations Im plem enting the TESDA A ct o f 1994; Letter B (1),
D epartm ent O rder N o. 68-04, S eries o f 2004; N o. 2. TESO A C ircular N o. 16. S eries o f 2004.
2 A rticle 58 [b ], Labor Code, referring to C hapter I, TB e II o f Book II o f the Labor C ode; Section 2. Rule V I, Book II, Rules to
Im plem ent the Labor Code.
3 Section 4 [k], R A No. 7796; Section 1 , Rule X , R ules and R egulations Im plem enting the TESDA A ct o f 1994; L ette r B {2),
D epartm ent O rder No. 6 80 4 , S eries o f 2004; N o. 2. TESD A C ircular No. 16, S eries o f 2004, dated A ug. 12,2004.
4 A rticle 58 (c), Labor Code; Section 2, R u e V I, Book II. R ules to Im plem ent Ihe Labor Code.
5 Section 4 (m ], R A . No. 7796; Section 1. R ule X , R ules and R egulations Im plem enting Ihe TESDA A ct o f 1994; Letter B (4),
D epartm ent O rder No. 68-04, S eries o f 2004; N o. 2. TESD A C ircufer N o. 16, S eries o f 2004.
6 A rtide 58 (d], Labor Code; Section 2 , RiAe V I, B ook I! thereof.
1 Section 4 p], R A . No. 7796; Section 1, R ule X , R ules and R egulations Im plem enting Ihe TESDA A ct o f 1994; Letter B (3),
D epartm ent O lder No. 6 8 0 4 , S eries o f 2004; N o. 2. TESD A C ircular N o. 16, S eries o f 2004.
8 No. 2, TESDA C ircular No. 16, S eries o f 2004, dated Aug. 12, 2004 [R evised G uidelnes in the Im plem entation of
A pprenticeship and Leam ership P rogram s].
9 Section 4 [n], R A . No. 7796; Section 1, Rule X, R ules and R egulations Im plem enting the TESDA A ct o f 1994; (N o. 2,
TESDA C ircular No. 16, Series o f 20QA dated A ug. 12,2 00 4 [R evised G uidelines in the Im plem entation o f A pprenticeship
and Leam ership Program s); Section 1 (a], Rule VII, Book II, TESDA C ircular N o. 16, S eries o f 2004, dated Aug 12,2004
[Revised G uidelnes in the Im plem entation o f A pprenticeship a id Leam ership Program s]
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LABOR STANDARDS
“Leamership agreement” refers to the employment and training contract
entered into between the employer and the learner.1
2. D IS T IN C T IO N S B E T W E E N L E A R N E R S H IP A ND
A P P R E N T IC E S H IP .
The following are the distinctions:
C r ite r ia
P r a c t i c a l t r a in in g
L e a m e r s h ip
A p p r e n tic e s h ip
P ra c tic a l tra in in g o n -th e -jo b
P ra c tic a l tra in in g o n -th e -jo b
L e a m e rs h ip A g re e m e n t
A p p re n tic e s h ip A g re e m e n t
L e a m a b le o c c u p a tio n s c o n s is tin g o f
A p p r e n t ic e a b le o c c u p a tio n s o r a n y
s e m i- s k ille d a n d o th e r in d u s t r ia l
tra d e , fo rm o f e m p lo ym e n t o r
T r a in in g a g r e e m e n t
O c c u p a t io n .
o c c u p a t io n s w h ich a re n o n -
o c c u p a tio n a pp ro ve d fo r
a p p re n tic e a b le
a p p re n tic e s h ip b y th e D O LE S e c re ta ry
T h e o r e t ic a l
M a y o r m a y n o t be s u p p le m e n te d
S h o u ld a lw a y s b e s u p o le m e n te d b y
in s t r u c t i o n s
b y re la te d th e o re tic a l in s tru c tio n s
re la te d th e o re tic a l in s tru c tio n s
N o rm a l ra tio is 100 h o u rs o f
N o rm a l ra tio is 100 h o u rs o f th e o re tic a l
th e o re tic a l in s tru c tio n s fo r e ve ry
in s tru c tio n s fo r e v e ry 2 ,0 0 0 h o u rs o f
2 ,0 0 0 h o u rs o f p ra c tic a l o r o n -th e -
p ra c tic a l o r o n -th e -jo b tra in in g
R a t io o f t h e o r e t ic a l
in s tr u c tio n s a n d o n t h e - jo b t r a in in g 2
jo b tra in in g
D u r a t io n o f t r a in in g
P ra c tic a l tra in in g on th e jo b fo r a
P ra c tic a l tra in in g on th e jo b o f m o re
p e rio d n o t e x c e e d in g th re e (3 )
th a n th re e (3 ) m o n th s b u t n o t o v e r
m o n th s
s i x (6 ) m o n t h s 3
N o s im ila r p ro v is io n in th e L a b o r C o d e
C irc u m s ta n c e s
ju s t if y in g h ir in g o f
t r a in e e s
A rtic le
74
e x p re s s ly
o f th e
L ab o r C ode,
p re s c rib e s
th e
p re ­
re q u is ite s b e fo re le a rn e rs m a y be
v a lid ly e m p lo y e d , to w it.
(a ) W h en n o e x p e rie n c e d w o rk e rs
a re a v a ila b le ;
(b ) T h e e m p lo y m e n t o f le a rn e rs is
n e c e s s a ry
c u rta ilm e n t
to
of
p re v e n t
e m p lo ym e n t
o p p o rtu n itie s ; and
(c )
The
c re a te
e m p lo ym e n t
does
not
u n fa ir c o m p e titio n
in
te rm s o f la b o r c o s ts o r im p a ir
o r lo w e r w o rk in g s ta n d a rd s .4
L i m it a t i o n o n th e
A p a rtic ip a tin g e n te rp ris e is a llo w e d
N o s im ila r ca p
to ta k e in le a rn e rs o n ly u p to a
n u m b e r o f t r a in e e s
m a xim u m o f tw e n ty p e rc e n t (2 0 % )
o f its to ta l re g u la r w o rk fo rc e 5
1 Section 1 [b ]. Rule V II, Book II. R ules to Im plem ent the Labor C ode.
J Section 28, Rule VI, Book U. bid.
CXXE Ocular No. 2, Series ol 2006, (A n ^n g C e rtjn P rcvi^jo iD e p a ftrie n lO rd e f No. 6WM] issued on August 11 2006 by boner DOLE
Secretary (new Assocafe Justioe be Supreme Cool) A rtro 0. Brion
1 See a!so Section 2, Rule VII, Book!!, Rules blmpiement he Labor Code.
» No. 37.. bid.
3
o(
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O ption to e m p lo y
W age rate
Q ua lification s
Bar Reviewer on U bor uw
The e n te rp ris e is o b lig e d to h ire
T h e e n te rp ris e is g iv e n o n ly a n
th e le a rn e r a fte r th e la p s e o f th e
“ o p tio n " to h ire th e a p p re n tic e a s an
le a m e rs h ip p e rio d
e m p lo y e e .1
S e v e n ty -five p e rc e n t (7 5 % ) o f th e
S e v e n ty -fiv e p e rc e n t (7 5 % ) o f th e
s ta tu to ry m in im u m w a g e .2
s ta tu to ry m in im u m w a g e .3
N o q u a lific a tio n s e x p re s s ly
m e n tio n e d in th e la w
A rtic le 59 o f th e L a b o r C o d e re q u ire s
th e a p p re n tic e :
(a )
B e a t le a s t fo u rte e n (1 4 ) y e a rs
o f age;
(b )
P o sse ss v o c a tio n a l a p titu d e a nd
c a p a c ity
fo r a p p ro p ria te
te s ts ;
a nd
(c )
P o sse ss
th e
a b ility
to
co m p re h e n d a nd fo llo w o ra l a nd
w ritte n in s tru c tio n s .
3. CON FLICT IN T H E AGE R E Q U IR E M E N T FOR A P P R E N T IC E S ,
HOW RESOLVED.
While the age prescribed for apprentices under Article 59 is 14 years of
age, however, the Implementing Rules provided the following age requirement, to wit
Be at least fifteen (15) years of age, provided those who are at least fifteen (15)
years of age but less than eighteen (18) may be eligible for apprenticeship only in
non-hazardous occupations.4
Notably, there is a difference in the age requirement between the 14-year
old prescribed in the law and the 15-year old enunciated in the Implementing Rules.
Generally, the well-setded role o f legal hermeneutics dictates that if there is a
conflict between the law and its implementing rule or regulation, the provision of
the former should prevail over die latter. The implementing rule cannot certainly
operate to amend the law. Consequently, the minimum age requirement should
have been fourteen (14) years of age except for the fact that the age requirement in
the said Implementing Rules is based on and more congruent with latest legislation,
more particularly, the 2003 law, R.A. No. 9231,5 where it is provided that:
1 SeeNo.llO ofTESDAQ rcularNo. 16, Series of 2004 and DOLE Circular No 2. Series of 20G5.
Sector 29, Rub VI, Bock II, bid; Sector £, Republc Ad No. 6640, Sector 10, Rules implementing R A No. 6640, Sector 10, Rules
Implementing R A No. 6727; No. I (HI D C tf Hanctoook on W otes StaWay Monetary Bcnets; No. 1 8 , TESDA Q a ta r No. 16, Series ot
2004, dated August 12,2004 (Revised Guidelines in the Implementator of Apprenticeship and Leamership Programs
1 Secfcn 29, Rub VI, Book II, Ibid.; Secfon 5, Republc Act No. 6640, Sector 10, Rules implementing RA No. 6640, Secfon 10, Rubs
knpbmentog RA No. 6727; No. I (It). DOLE Handbook on Worters Statutory Monetary Benefits; No. 3.8, TESDA Ocular No. 16, Series of
2004, dated August 12,2004 Revised Gu'defces in the Impienentafcn of Apprenticeship and leamemhp Programs.
4 The otoer 3 requirem ents are: (1) Be phvsicaty f t for the occupation in w hich he desres to be trained; (2) P ossess vocational
2
aptitude and capacity fo r the particular occupation as estabfched through appropriate tests; and (3) P ossess the abSity to
com prehend and W tow oral and w ritten instructions.
5 Entitled "AN ACT PROVIDING FOR THE ELIMINATION OF THE WORST FORMS OF CHILD LABOR AND AFFORDING
STRONGER PROTECTION FOR THEW ORKING CHILD, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 7610,
AS AMENDED, OTHERWISE KNOWN AS THE 'SPECIAL PROTECTION OF CHILDREN AGAINST CHILD ABUSE,
EXPLOITATION AND DISCRIMINATION A C T approved on D e ce rrter 19,2003.
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(1) All persons under eighteen (18) years o f age shall be considered as a
“child”; and
(2) Children below fifteen (15) years of age shall not be employed except
if he/shc falls under any of the exceptions*1 mentioned and
enumerated in the law.2*
Apprenticeship is not one o f the exceptions, therefore, this prohibition on
employing an apprentice below the age o f fifteen (15) years applies to apprentices.
Consequently, the proper age qualification is fifteen (15) years but not because o f
the Implementing Rules’ provision as mentioned above but by reason of R.A. No.
9231.
7.
PERSONS WITH DISABILITIES
1. LEGAL BASIS.
Prior to the advent of R.A. No. 7277,J otherwise known as the “Magna
Cartafor Disabled Persons, ” the relevant provisions arc found in the Labor Code on
handicapped w orkers, namely: Articles 78 to 81 thereof. R.A. No. 7277 is now
the prevailing law. Subsequently, however, R.A. No. 94424 was enacted for
purposes, inter alia, o f changing the tide o f R.A. No. 7277 to read as the ‘Magna
Cartafor Persons with Disability, ” and all references in the said law to “disabledperson"
were likewise amended to read as “person with disability'' or 'P\VD. ” The term
“handicapped workers” therefore should no longer be used to describe persons with
disability as this is no longer legally correct
1 The exceptions, as enum erated in Section 12 o f R A N o. 7610, as am ended by S ection 2 o f R A No. 9231 are as fo llo w s:
(1) W hen a c h id v e rts d ire c t)/ m d e r the so le responsiW ity o f h is/h e r parents o r legal guardian and w here o niy m em bers o f
his/her fa m iy are em ployed: P rovided, how ever, T h a t h is/h e r em ploym ent n eithe r endangers his/her tfe , safety, h ea lth , and
m orals, n o r im pairs h is/h e r norm al d evelopm ent P rovided, fu rth e r, That the parent o r legal guardian shaJ provide th e said
child w ith tt^e prescribed prim ary a nd/or secondary education; o r
(2) W here a chiefs em ploym ent o r p articipation in public entertainm ent or inform ation through cinem a, theater, ra d io ,
television o r other form s o f mecSa is essential: P rovided, T hat th e em ploym ent contract is concluded by the child's parents o r
legal guardian, w ith the express agreem ent o f the c h id concerned, if possfcle. and the approval o f the D epartm ent o f L ab o r
and E m ploym ent P rovided, further, That the foScMing requirem ents in a l instances are strid tyco m p fe d w ith:
(a) The em ployer s h a l ensure the protection, h ea lth , safety, m orals and norm al developm ent o f the child.cralaw
(b) The e m p tie r sh a ll ris h tu te m easures Id prevent the ch ie fs e x p b ta to n o r discrim ination taking into account the system
and level o f rem uneration, and the duration and arrangem ent o f w orking tim e, and
(c) The em ployer s h a l form ulate and im p lem ent subject to the approval and supervision o f com petent a uthorities, a
continuing program fo r training and s kills acquisition o f the ch ild.
In the above exceptional cases w here any such child m ay be em ployed, the em ployer shall first secure, before engaging
such ch id , a w ork p erm it from the D epartm ent c f Labor and Em ptoym en; w hen shall ensure observance o f the above
requirem ents.
1 A rticle 59, Labor C ode; S ection 11, R ule V I. Book II, R ules to Im plem ent the Labor Code
J Approved on March 2 4 ,199Z
* See Section 4 thereof. This law became efioctve on April 30.2007. Secfon 4 states "S tC 4 The tide o( R A No 7277 3 hereby amended b
read as he “Magna Carta b r Persons with D sa b it/*, and aS references on the sa ri law to '(fcafcfcd persons- shal fc w s e be amended to read
as‘persons w H idsaM iy*
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2. D E FIN IT IO N OF IM PO R TA N T TERM S.
The following terms are specifically defined in the law;
1. “Persons with Disability” are those suffering from restriction or different
abilities, as a result of a mental, physical or sensory impairment, to
perform an activity in the manner or within the range considered
normal for a human being.
2. “Impairment” refers to any loss, diminution or aberration of
psychological, physiological, or anatomical structure or function.
3. ‘Disability" means (1) a physical or mental impairment that
substantially limits one or more psychological, physiological or
anatomical functions o f an individual or activities o f such individual;
(2) a record of such an impairment; or (3) being regarded as having
such an impairment.
4. “Handicap” refers to a disadvantage for a given individual, resulting
from an impairment or a disability that limits or prevents the function
or activity that is considered normal given the age and sex o f the
individual.
5. “Marginalised Persons with Disability” refer to persons with disability who
lack access to rehabilitative services and opportunities to be able to
participate fully in socio-economic activities and who have no means of
livelihood and whose incomes fall below the poverty threshold.
3. EQUAL O PPO R TU N ITY FO R EM PL O Y M E N T .
Under the law',1PWDs are entided to equal opportunity for employment.
Consequently, no PWD shall be denied access to opportunities for suitable
employment. A qualified employee with disability shall be subject to the same terms
and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able-bodied person.
Five percent (5%) o f all casual emergency and contractual positions in the
Departments of Social Welfare and Development, Health, Education and other
government agencies, offices or corporations engaged in social development shall
be reserved for PWDs.2
4. PWDs ARE ELIGIBLE F O R A P P R E N T IC E S H IP A ND
LEARNERSHIP.
Under R A No. 7277,3 it is provided that subject to the provisions o f the
Labor Code, as amended, PWDs shall be eligible as apprentices, or learners;*5
1
7
5
Under RA No. 7277, oterwse known as fie'M agna Carta farDsabled Persons" [now known as H agra Carta ter Persons Willi D isabiy.
Secfcn 5, Chapter 1, Tide II, R A No. 7277.
Secfon 7, Chapter I, Trtte Btiereof.
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provided that their handicap is not as much as to effectively impede the
performance of job operations in the particular occupation for which they are hired
and provided further that after the lapse o f the period of apprenticeship, if found
sadsfactory in the job performance, they shall be eligible for employment.
5. WAGE RATE.
Under Article 80 of the Labor Code, handicapped workers are endded to
not less than seventy-five percent (75%) o f the applicable adjusted minimum wage.1
In view, however, o f R.A. No. 7277,2 the wage rate o f PWDs is 100% o f the
applicable minimum wage.
Wage orders issued by the Regional Tripartite Wages and Productivity
Boards (RTWPBs) normally reflect this principle. To cite an example, Section 7 o f
Wage O rder N o. NCR-20, which was approved on May 17, 2016345 by the
RTWPB-National Capital Region, states:
“All qualified handicapped workers shall receive the full amount of the
minimum wage rate prescribed herein pursuant to Republic Act No. 7277,
otherwise known as the Magna Cartafor DisabledPersons.”*
Moreover, in case o f legally-mandated wage increases enunciated in wage
orders issued by the RTWPBs, the employment agreements with persons with
disability are deemed automatically modified insofar as their wage clauses arc
concerned to reflect the said increases.5
6. WAGE RATE AS A P P R E N T IC E O R LEA R N ER .
A PWD hired as an apprentice or learner shall be paid not less than
seventy-five percent (75%) of the applicable minimum wage.
If the PWD, however, is hired as a learner and employed in piece or
inccnuve-ratc jobs during the training period, he shall be paid one hundred percent
(100%) o f the applicable minimum wage.
a.
DISCRIMINATION
1. D ISC R IM IN A T IO N O N E M P L O Y M E N T P R O H IB IT E D .
N o entity, whether public or private, shall discriminate, against a qualified
PWD by reason o f disability in regard to job application procedures, the hiring,
'
Article 80 [b], Labor Code; Secfcn 5, Repubfc Act No. 6640; Section 10. Riies Imptemenfog Republic Act No. 6640; Secfcn 10, Rules
Smpiementing RcpubQc Act No. 6727; No. I f t l CXXE Handbook on Workers Stakrtry Monetary BeneSs.
J Secfcn 5, Chapter 1, Tile II o (R A No. 7 27.
3 The«vageordervespubEstejiiThePhippineStaronM 3/18.2016.lt6»vusefccfvecn2,2016.
4 See also Section 8. Rdafl, Rules Impfemenfcg Wage Order No. NCR-20 a p p n ^ by toe DOl£$ecretay on May 27,2016.
5 Arfde 124, Labor Code as amended by Section 3, Repubfc Act No. 6727; Secfcn 10, Rules ImpiemenSng Repubfc Ad No 6727; Section 5,
Repubfc Act No. 6640; Section 10. Rifes Implementing Repubfc Act No. 6640 [applying by analogy sin lar provisions appfcabte to
apprenfceship and bamership agreements mentioned therm
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promotion, or discharge of employees, employee compensation, job training, and
other terms, conditions and privileges of employment The following constitute
acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in
such a manner that adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other selection
criteria that screen out or tend to screen out a PWD unless such
standards, tests or other selection criteria are shown to be job-related
for the position in question and are consistent with business
necessity;
(c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect o f discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who ate subject to
common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of
remuneration and fringe benefits, to a qualified employee with
disability, by reason o f his disability, than the amount to which a non­
disabled person performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified employee with
disability with respect to promotion, training opportunities, and study
and scholarship grants solely on account o f the latter’s disability;
(f) Re-assigning or transferring an employee with a disability to a job or
position he cannot perform by reason of his disability;
(g) Dismissing or terminating the services o f an employee with disability
by reason of his disability unless the employer can prove that he
impairs die satisfactory performance o f the work involved to the
prejudice of the business entity, provided, however, that the
employer first sought to provide reasonable accommodations for
persons with disability;
(h) Failing to select or administer in the most effective manner
employment tests which accurately reflect the skills, aptitude or other
factor of the applicant or employee with disability that such tests
purports to measure, rather than die impaired sensory, manual or
speaking skills o f such applicant or employee, if any, and
(i) Excluding PWD from membership in labor unions or similar
organizations.1
S eria l 32. Chapter I, W a ll, kid
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b.
INCENTIVES FOR EMPLOYERS
1
INCENTIVES FO R EMPLOYERS W HO EMPLOY PWDs.
To encourage the active participation of the private sector in promoting
the welfare of PWDs and to ensure gainful employment for qualified persons with
disability, adequate incentives shall be provided to private entities which employ
PWDs.1
Private entities that employ PWDs who meet the required skills or
qualifications, either as a regular employee, apprentice or learner, shall be entitled to
an additional deduction from their gross income equivalent to twenty-five percent
(25%) o f the total amount paid as salaries and wages to persons with disability;
provided, however, that such entities could present proof as certified by the
Department of Labor and Employment P O L E ) that PWDs are under their
employ and provided further that the employee with disability is accredited with the
DOLE and the Department of Health as to his disability, skills and qualifications.2
Private entities that improve or modify their physical facilities in order to
provide reasonable accommodation for PWDs shall also be entitled to an
additional deduction .from their net taxable income equivalent to fifty percent
(50%) of the direct costs of the improvements or modifications.3
■oOo
^ Secfion 8(a), Chapter 1,TJje0,a)id.
2 Secfion8{bll Chaptar1,TBaB,bit
3 TliisSecto,howeveradoesratappVtt>inr|)(ove(nei4sorino(fiEcaSonsoffiacS6esreqiiredunder6alasParnbansaaang
344 febcuaiy 25 ,1S831 enSJed 'An Act to Enhance Die Mobfiy of Disabled Persons by Requfing Certan Buffings,
teffirfons, Estebishmente.and Pubic Utfties to instal FacBies and Olher Devioes.' (Section 8 ^ . Chapter 1, Tide 0, bid.).
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SOCIAL WELFARE LEGISLATION
TOPICS PER SYLLABUS
IV.
SOCIAL WELFARE LEGISLATION
A. SSS Law (R.A. 8282)
1. Coverage and exclusions
2. Dependents and beneficiaries
3. Benefits
B. GSIS Law (R.A. 8291)
1. Coverage and exclusions
2. Dependents and beneficiaries
3. Benefits
C. Disability and death benefits
1. Labor Code
2. POEA-Standard Employment Contract
A.
SSS LAW
1.
R.A. 8282, REPEALED BY R.A. 11199.
The 2019 Labor Lav Syllabus still prescribed R A No. 8282 as the
reference for the discussion of the SSS Law. However, on February 07, 2019,
President Duterte approved R.A. No. 11199,1 otherwise known as the "Social
Security Act of 2018, ’’which expressly repealed2 R.A. No. 8282.
' RA. No. 11199 is entitled 'AN ACT RATIONALIZING AND EXPANDING THE POWERS AND DUTIES OF THE SOCIAL
SECURITY COMMISSION TO ENSURE THE LONG-TERM VIABILITY OF THE SOCIAL SECURITY SYSTEM,
REPEALING FOR THE PURPOSE REPUBLfC ACT NO. 1161, AS AMENDED BY REPUBLIC ACT NO. 8282,
OTHERWISE KNOWN AS THE'SOCIAL SECURITY ACT OF 1997"
2 RA. No. 11199 embodies the foSowng prevision: ‘SEC. 33. R e pe a in g Clause. - Republic Act No. 1161 and RepubSc Act
No 8282 and all other laws, proclamations executive orders, rules and regulations or parts thereof inconsistent with this Act
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This topic therefore will be discussed in accordance with R.A. No. 11199.
1.
COVERAGE AND EXCLUSIONS
a.
COVERAGE
1. COMPULSORY COV ERA GE.
Coverage in the SSS shall be compulsory upon all employees, including
kasambahays or domestic workers not over sixty (60) years o f age and their
employers.1
“Employer” is any person, natural or juridical, domestic or foreign, who
carries on in the Philippines any trade, business, industry, undertaking, or activity o f
any kind and uses the services o f another person who is under his orders as regards
the employment, except the government and any o f its political subdivisions,
branches or instrumentalities, including corporations owned or controlled by the
Government*. Provided, That a self-employed person shall be both employee and
employer at the same time.2
‘Employee” is any person who performs services for an employer in which
either or both mental o r physical efforts are used and who receives compensation
for such services, where there is an employer-employee relationship: Provided, That
a self-employed person shall be both employee and employer at the same time.3
2. COMPULSORY C OV ERA GE O F SE L F-E M PL O Y E D PERSO N S.
Coverage in the SSS shall also be compulsory upon such self-employed
persons as may be determined by the Commission under such rules and regulations
as it may prescribe, including, but not limited to, the following:
(a) All self-employed professionals;
(b) Partners and single proprietors o f businesses;
(c) Actors and actresses, directors, scriptwriters and news correspondents
who do not fall within the definition o f the term "employee" (supra)]
(d) Professional athletes, coaches, trainers and jockeys; and
(e) Individual farmers and fishermen.4
Unless otherwise specified in the law, all provisions thereof applicable to
covered employees shall also be applicable to the covered self-employed persons.1
are hereby repealed, modified or amended accordingly: P rovided, That no person shal be deemed to be vested with any
property or other right by virtue of the enactment a operation of this Act’
Section 9(a), R A No. 11199.
Section 8(c), Id.
Section 8(c), Id.
Section 9-A, Id.
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“Stif-employid” is any person whose income is not derived from
employment as defined under this Act, as well as those workers enumerated
above.2
3. COMPULSORY COVERAGE O F OFW s.
a. Coverage o f all OFWs.
Coverage in the SSS shall be compulsory upon all sea-based and landbased OFWs,3 Provided, That they are not over sixty (60) years o f age.4
All benefit provisions under this Act shall apply to all covered OFWs. The
benefits include, among others, retirement, death, disability, funeral, sickness and
maternity.5
b. Sea-based OFWs.
Manning agencies are agents o f their principals and are considered as
employers o f sea-based OFWs.
For purposes of die implementation o f R A . No. 11199, any law to the
contrary notwithstanding manning agencies are jointly and severally or solidarily
liable with their principals with respect to die civil liabilities incurred for any
violation thereof.
The persons having direct control, management or direction o f the
manning agencies shall be held criminally liable for any act or omission penalized
under RA. No. 11199 notwithstanding Section 28(0 thereof.4
c. Land-based OFWs.
Land-based OFWs are compulsory members o f the SSS and considered in
the same manner as self-employed persons under such rules and regulations that
die Commission shall prescribe.7
The Department o f Foreign Affitirs (DFA), the Department o f Labor and
Employment (DOLE) and all its agencies involved in deploying OFW s for
employment abroad are mandated to negotiate bilateral labor agreements with the
OFWs' host countries to ensure that the employers o f land-based OFWs, similar to
the principals o f sea-based OFWs, pay die required SSS contributions, in which
• ML
7 Secfon8(s),ld.
1 AsW stem 'OFW 'Bde5iedurK!6fFlANo.8042,o()ie»v^luxwnas(heM 3rantVVbr1^3ndOveiseasFi]pnosActof
1995, as amended by R A No. 10022;
< Section9-8 (a), RA. No. 11199.
s U
Secfim 9 6 (b), R A hkx 11199; Sedrn 28© states: SEC.
C la u s a -m (OB he ad a omission penafeed by
this Ret be commlted by an association. patoashjp, ccxpcraSon OT anyoher institution. is managing h e a t ifrectoisor.
pam asshal be iableftr he penaSes presided in ihis Actfcrlheottense.*
' Section 9 6 (c),RANo.11199.
1
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S O C IA L W ELFA RE L E G IS L A T IO N
case, these land-based OFWs shall no longet be considered in the same manner as
self-employed persons. Instead, drey shall be considered as compulsorily covered
employees with employer and employee shares in contributions that shall be
provided for in die bilateral labor agreements and their implementing
administrative agreements: Prwidtd, I h a t in countries which already extend social
security coverage to OFWs, the DFA through die Philippine embassies and the
D O LE shall negotiate further agreements to serve the best interests o f the OFW s.1
The DFA, the D O LE and, the SSS shall ensure compulsory coverage o f
OFWs through bilateral social security and labor agreements and other measures
for enforcement2
4. V O LU N TA R Y COVERAGE.
In addition to the foregoing OFW s who are eligible for voluntary
coverage, the following may be dted:
1) N on-w orking spouses o f SSS m em bers
Spouses who devote full time to managing the household and family
affairs, unless they are also engaged in other vocation or employment
which is subject to mandatorv coverage, may be covered by the SSS
on a voluntary basis.3
2) ®
Upon die termination o f their employment overseas, OFW s may
continue to pay contributions on a voluntary basis to maintain their
rights to full benefits.4
3) Filipino p erm an en t m ig ran ts, in clu d in g Filipino im m igrants,
p erm an en t residents an d n atu ralized citizens o f their h o st
CM inffigs
Filipino permanent migrants, including Filipino immigrants,
permanent residents and naturalized citizens o f their host countries
may be covered by the SSS on a voluntary basis.5
5. E F F E C T IV E D A T E O F C O V ERA G E.
The effectivity date o f die compulsory coverage are as follow:
1) For em ployer - Compulsory coverage o f the employer shall take
effect on die first day o f his operation.1
1
1
J
4
5
Section 9 6 (<0,11
Secflon 9 6 (e ), H.
Section 9(b), U
Section 9 6 Q .I1
Section 9 6 (g),kL
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2) For employee - Compulsory coverage o f the employee shall take
effect on the first day o f his employment2
3) For self-employed - The compulsory coverage o f the self-employed
person shall take effect upon his registration with the SSS.3
6. E FFEC T O F SEPARATION F R O M E M PL O Y M E N T .
When an employee under compulsory coverage is separated from
employment, his employer's contribution on his account and his obligation to pay
contributions arising from that employment shall cease at the end o f die month o f
separation but said employee shall be credited with all contributions paid on his
behalf and endded to benefits according to the provisions o f R A No. 11199. He
may, however, continue to pay die total contributions to maintain his right to full
benefit4
7. E FFEC T O F IN T E R R U P T IO N O F BUSINESS O R PR O FESSIO N A L
IN C O M E.
If the self-employed member realizes no income in any given month, he
shall not be required to pay contributions for that month. He may, however, be
allowed to continue paying contributions under the same rules and regulations
applicable to a separated employee m em ber Provided, That no retroactive payment
o f contributions shall be allowed other than as prescribed under Section 22-A5 o f
R A N o .lll9 9 .«
b.
EXCLUSIONS
1. EXCLUDED EM PLOYER.
Government and any o f its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the Government7
with original charters.
2. EXCLUDED EM PLOYEES.
Workers whose employment or service falls under any o f the following
circumstances ate not covered:
1 SecfolO pfecfeD ateofO K efageLM .
* kL
1 Id.
4 SecSon 11 [E^ofSepar^»nfromErnplc>Tnenq, id.
5 SEC. 22-A. R e n til& K Q d C o n & M io n s o< S e f- & n p b y d d Member. ■ Se*amployed members shafl re n t their monthly
conitutons quatety on such dates and schedules as the Commisaon may sperfy through nfes and regulations:
AtMdMTtaroieiroac&epaymrttfanHwS^
« Secto11AP^dWHn^dBu9nessaPnfesiC)ndta»^,RA.No.11199.
r
Secfan 8(c). RA. No. 11199.
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SO C IA L W ELFA RE L E G ISLA TIO N
(1) Services where there is no employer-employee relationship in
accordance with existing labor laws, rides, regulations and
jurisprudence;
(2) Service performed in the employ o f the Philippine Government or
instrumentality or agency thereof,
(3) Service performed in the employ o f a foreign government or
international organization, o r their wholly-owned instrumentality:
Provided, however, That this exemption notwithstanding, any foreign
government, international organization or their wholly-owned
instrumentality employing workers in the Philippines or employing
Filipinos outside o f the Philippines, may enter into an agreement with
the Philippine Government for the inclusion of such employees in the
SSS except those already covered by then respective civil service
retirement systems: Provided, further, That the terms o f such agreement
shall conform with die provisions o f R.A. No. 11199 on coverage and
amount o f payment o f contributions and benehts: Provided,finally, T hat
the provisions o f this Act shall be supplementary to any such
agreem ent and
(4) Such other services performed by temporary and other employees
which may be excluded by regulation o f die Commission. Employees
o f bonafide independent contractors shall not be deemed employees o f
the employer engaging the service o f said contractors.1
2.
DEPENDENTS AND BENEFICIARIES
a.
DEPENDENTS
L W HO ARE D EPEN D EN TS.
T he dependents shall be the following:
(1) The legal spouse entided by law to receive support from the member,
(2) The legitimate, legitimated o r legally adopted, and illegitimate child
who is unmarried, not gainfully employed, and has not reached
twenty-one (21) years o f age, o r if over twenty-one (21) years o f age,
he is congenitally or while still a minor has been permanendy
incapacitated and incapable o f self-support, physically or mentally: and
(3) The parent who is receiving regular support from the member.2*
1 SecSon8Q.il
* Sec6on8(e).tl
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b.
BENEFICIARIES
1. PRIMARY B EN EFIC IA RIES.
The following ate primary beneficiaries:
1. The dependent spouse until he o t she remarries;
2. The dependent legitim ate, legitim ated o t legally adopted, and
illegitimate children;
The dependent illegitim ate children shall be entitled to 50% of the
share of the legitimate, legitimated o t legally adopted children.
However, in the absence o f the dependent legitimate, legitimated
children of the member, his/her d ep en d en t illegitim ate children
shall be entitled to 100% of the benefits1
2. SECONDARY B EN EFIC IA R IES.
The following are seconriatybeneficiaries:
1. The dependent parents, in the absence o f die primary beneficiaries.
2. Any other person designated by die member as h is/h er secondary
beneficiary, in the absence o f aO die foregoing primary beneficiaries
and dependent parents.2
3.
BENEFITS
1.
TW O (2) M AIN CLASSIFICATIONS.
The SSS benefits may be classified as follows:
(a) Social security benefits:
1)
2)
3)
4)
Sickness
Maternity Leave
Retirement
Unemployment Insurance or Involuntary Separation
5) Disability
6) Death
7) Funeral
(b) Employees’ com pensation benefits
1 Section 8{k),M.
} IfcW.
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a.
SOCIAL SECURITY BENEFITS
1.
SICKNESS BENEFIT
1. W H O M A Y A V A IL .
The sickness benefit is a daily cash allowance paid fot the number of days
a member is unable to work due to sickness or injury. This benefit may be availed
o f as follows:
A member who has paid at least three (3) monthly contributions in the
12-month period immediately preceding the semester o f sickness or injury and is
confined therefor for more than three (3) days in a hospital or elsewhere with the
approval o f the SSS, shall, for each day o f compensable confinement or a fraction
thereof be paid by his employer, or the SSS, if such person is unemployed ot selfemployed, a daily sickness ben efit equivalent to ninety p e rcen t (90%) of h is
average daily salary c re d it1 subject to the following conditions:
(1) In no case shall the daily sickness benefit be paid longer than one
hundred twenty (120) days in one (1) calendar year, nor shall any
unused portion o f the one hundred twenty (120) days o f sickness
benefit granted under this section be carried forward and added to the
total number o f compensable days allowable in the subsequent year;
(2) The daily sickness benefit shall not be paid for more than two hundred
forty (240) days on account o f the same confinement, and
(3) The employee member shall notify his employer o f the fact o f his
sickness or injury within five (5) calendar days after the start o f his
confinement unless such confinement is in a hospital or the employee
became sick or was injured while working or within the premises o f
the employer, in which case, notification to the employer is not
necessary. Provided,- That if the member is unemployed or selfemployed, be shall directly notify the SSS o f his confinement within
five (5) calendar days after the start thereof unless such confinement is
in a hospital, in which case, notification is also not necessary: Provided,
further, That in cases where notification is necessary, the confinement
shall be deemed to have started not earlier than the fifth day
immediately preceding the date o f notification.2
1 SecSon 8(n) of RA. No 111S9 states: a(n} Average dacV safary cnoc£F- The resuS obtatned by dividing the sum ot 0ie six (6)
highest monthly salary credits in tie tweh/e-monti period innmeefiaaety preceding foe semester of conSngency by one
hundred eighty (180).*
2 SecSon 14{a), R A No. 11199.
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2. COMPENSABLE C O N F IN E M E N T .
The compensable confinement shall begin on die first day of sickness,
and the payment of such allowances shall be prompdy made by the employer every
regular payday or on the fifteenth and last day o f each month, and similarly in the
case of direct payment by the SSS, for as long as such allowances are due and
payable: Provided, That such allowance shall begin only after all sick leaves of
absence with full pay to the credit of the employee member shall have been
exhausted.1
One hundred percent (100%) o f the daily Benefits provided in die
preceding paragraph shall be reimbursed by the SSS to said employer upon receipt
of satisfactory proof of such payment and legality thereof: Provided, That the
employer has notified the SSS of the confinement widiin five (5) calendar days after
receipt of the notification from the employee member: Provided, further, That if the
notification to die SSS is made by the employer beyond five (5) calendar days after
receipt of the notification from the employee member, said employer shall be
reimbursed only for each day of confinement starting from the tenth calendar day
immediately preceding the date o f notification to the SSS: Provided, finally, That the
SSS shall reimburse the employer or pay the unemployed member only for
confinement within the one-year period immediately preceding the date the claim
for benefit or reimbursement is received by the SSS, except confinement in a
hospital, in which case, the claim for benefit or reimbursement must be filed within
one (I) year from the last day of confinement.2
3. N O T IFIC A TIO N R E Q U IR E M E N T .
Where the employee member has given the required notification but the
employer fails to notify the SSS o f the confinement or to file the claim for
reimbursement within the period prescribed in this section resulting in the
reduction of the benefit or denial o f the claim, such employer shall have no fight to
recover the corresponding daily allowance he advanced to the employee member as
required in this section.** The provisions regarding the notification required o f the
member and the employer as well as the period within which the claim for benefit
or reimbursement may be filed shall apply to all claims filed with the SSS.4
4. ADJUDICATION OF CLAIM O F R EIM B U R SE M E N T .
The claim of reimbursement shall be adjudicated by the SSS within a
period of two (2) months from receipt thereof: Provided, That should no payment
be received by the employer within one (1) month after the period prescribed
'
*
Section 14(b). Id.
Secfion 14(C), k l
J
Section 14(d), Id.
1 Section 14(f), Id.
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herein for adjudication, the reimbursement shall thereafter earn simple interest of
one percent (1%) per month until paid.1
2.
MATERNITY LEAVE BENEFIT
1. R.A. N O . 11210, T H E PR EV A IL IN G LAW.
R.A. No. 11199, otherwise known as the "Social Security Act of 2018 ”,
which was approved on February 07, 2019. re-enacted the exact provision o f
Section 14-A23of the repealed R-A. No. 8282, the "Social Security Act of 1997."
However, 13 days later, or on February 20, 2019. President Rodrigo Duterte
approved R.A. No. 11210, otherwise known as the "105-Day Expanded Maternity
Leave Law’* which contains diametrically different provisions from R.A. No. 11199.
There is thus no doubt that die prevailing law on maternity leave benefit is R.A.
No. 111210 which repealed or modified “ [a]ll laws, decrees, orders, rules and
regulations or parts thereof inconsistent [therewith].”
The maternity leave benefit under R.A. No. 11210 is discussed extensively
under the topical heading of “ C. LEAVES” in C hapter T hree, supra.
3.
RETIREMENT BENEFITS
1. TW O TYPES O F R E T IR E M E N T B E N E F IT S .
Retirement benefit is a cash benefit either in m onthly pension or lum p
sum paid to a member who can no longer work due to old age.
The two (2) types of retirement benefits arc:
1) Monthly pension, and
2) Lump sum amount.
The m ondily pension is a lifetime cash benefit paid to a retiree who has
paid at least 120 monthly contributions to the SSS prior to the semester o f
retirement. The lum p sum am o u n t is granted to a retiree who has not paid the
required 120 monthly contributions. It is equal to the total contributions paid by
die member and by the employer including interest.
2. W H O A RE Q U A LIFIED .
A member who has paid at least one hundred twenty (120) monthly
contributions prior to the semester of retirement and who:
’ Section 14(e), Id.
SEC. 14-A-Matem iy Leave Beneft.
3 This law is entitled ‘An Act Increasing the Maternity Leave Period to One Hundred Five (105) Days for Female Workers with
an Opficn to Extend for an Additional Thirty (30) Days without Pay, and Granting an Additional Fifeen (15) Days for Solo
Mothers and F a Other Purposes.’
2
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(1) has reached the age o f sixty (60) years and is already separated from
employment or has ceased to be self-employed: or
(2) has reached the age o f sixty-five (65) years, shall be entided for as long
as he lives to the monthly pension,
Provided, That he shall have the option to receive his first eighteen (18)
monthly pensions in lum p sum discounted at a preferential rate o f interest to be
determined by die SSS.1
A covered member who is sixty (60) years old at retirement and who
does not qualify for pension benefits as above described, shall be endded to a
lump sum benefit equal to the total contributions paid by him and on his behalf:
Provided, That he is separated from employment and is not continuing payment of
contributions to the SSS on his own.2
3. REEM PLO YM EN T OR R ESU M PT IO N O F SELF-EM PLO Y M E N T .
The monthly pension shall be suspended upon the reem ploym ent or
resumption of self-employment of a retired member who is less than sixty-five
(65) years old. He shall again be subject to Section 18 (Employee’s Contributions)
and his employer to Section 19 (Employer’s Contributions) of RA. No. 11199.3
4. DEATH O F R ET IR E D M EM BER.
Upon the death of the retired m em ber, his prim ary beneficiaries as o f
the date of his retirement shall be entided to receive the monthly pension: Provided,
That if he has no primary beneficiaries and he dies widiin sixty (60) months from
the start of his monthly pension, his secondary beneficiaries shall be entided to a
lump sum benefit equivalent to the total monthly pensions corresponding to the
balance of the five-year guaranteed period, excluding the dependents' pension.4
5. R E T IR E M E N T O F M EM B ER A FTER R E A C H IN G 60.
The monthly pension o f a member who retires after reaching age sixty
(60) shall be the higher of either (1) the monthly pension computed at the earliest
time he could have retired had he been separated from employment or ceased to be
self-employed plus all adjustments thereto; or (2) the monthly pension computed at
the time when he actually retires.5
6. R E T IR E M E N T O F U N D E R G R O U N D M IN EW O R K ER S.
An underground mineworker shall be entided to retirement benefits if he:
'
?
J
4
s
Section 12-8 (a), R A No. 11199.
Section 12-8 (b), id.
Section 12-8(c). Id.
Section 12-B(d), Id.
Section 12-8 (e). Id.
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1. has reached the age o f 55 years old and is an underground mineworkcr
for at least 5 years (either continuous or accumulated) prior to the
semester o f retirement but whose actual date o f retirement is not
earlier than March 13,1998; separated from employment or in the case
of self-employed, has ceased self-employment, and has paid at least
120 monthly contributions prior to the semester of retirement.
2. has reached the age of 60 years old whether employed or not.
7. M O N T H LY P E N S IO N .
a. Amount o f monthly pension.
The monthly pension shall be the highest o f the following amounts:
(1) The sum o f P300 plus 20% o f the average monthly salary cred it1
plus 2% o f the average monthly salary credit for each credited year
of service (CYS) in excess of 10 years; or
(2) 40% of the average m onthly salary cred it; or
(3) P I,000 if the member had less than 10 credited years of service (CYS);
P I,200 if widi at least 10 CYS; or P2,400 if with at least 20 CYS. The
monthly pension is paid for not less than 60 months.2
b. Additional monthly benefit allowance.
Pursuant to Memorandum from die Executive Secretary dated 22
February 2017, by authority o f the President o f the Republic o f the Philippines, an
additional monthly benefit allowance amounting to P I,000 shall be given to all
retirement, death, and disability pensioners receiving monthly pensions in or after
January 2017.3
c. Dependents1pension.
Where monthly pension is payable on account o f death, p erm an en t
total disability or retirem ent, dependents' pension equivalent to 10% o f the
monthly pension or P250, whichever is higher, shall also be paid for each
dependent child conceived on or before the date o f the contingency but not
exceeding five (5), beginning with the youngest and without substitution: Provided,
That where there are legitimate and illegitimate children, the former shall be
preferred.4
1 Section 8(m) of RA. No. 11199 states: “(m) Average m onthly sa la ry credit - The result obtained by dwdhg the sum of the
last sixty (60) monthly salary credits immediately preceding the semester of contingency by sixty (60), or the result obtained
by dividing the sum of all the monINy salary credits paid prior to the semester of contingency by the number of monthly
contritxrions paid in the sarrx2period, whtiiever is greater ftovibfed, That the rjury a ackness
caused the drsatx%
shafl be deemed as the permanent disablity fa the purpose of computing the average monthly salary credit’
3 Section 12(a) and (b).RA. No. 11199
3 Section 12(c), Id.
4 Section 12-A, Id.
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8. R E T IR E E ’S A D D ITIO N A L B E N E F IT S .
The retiree is entitled to a 13th month pension payable every December.
All retiree pensioners prior to the effectivity o f R.A. No. 7875* on March 4,1995
are automatically considered members o f PhilHealth and he and his legal
dependents are cntided to its hospitalization benefits. On the other hand, retirees
effective March 4,1995 up to die present will be entitled to hospitalization benefits
under PhilHealth only if they have contributed 120 monthly Medicare
contributions. The counting o f 120 monthly contributions shall start in 1972, when
the Medical Care Act o f 1969 started implementation.
v
UNEMPLOYMENT INSURANCE
OR INVOLUNTARY SEPARATION BENEFITS
R.A. No. 11199 grants this benefit to a member who is not over sixty (60)
years of age who has paid at least thirty-six (36) months contributions twelve (12)
months o f which should be in die 18-month period immediately preceding die
involuntary unemployment o r separation. H e shall be paid benefits in the form o f
monthly cash payments equivalent to fifty percent (50%) o f the average monthly
salary credit for a maximum o f two (2) months: Provided, That an employee who is
involuntarily unemployed can only claim unemployment benefits once every three
(3) years: Provided,further, That in case o f concurrence o f two or more compensable
contingencies, only the highest benefit shall be paid, subject to the rules and
regulations that the Commission may prescribe.2
5.
DISABILITY BENEFITS
1. PER M A N EN T TO TA L D ISA BILITY B E N E F IT S .
Upon the perm anent total disability o f a member who has paid at least
thirty-six (36) monthly contributions prior to die semester o f disability, he shall be
entitled to the monthly pension: Provided, That if he has not paid die required thirtysix (36) monthly contributions, he shall be entitled to a lump sum benefit
equivalent to the monthly pension times the number o f monthly contributions paid
to the SSS or twelve (12) times the monthly pension, whichever is higher.3
2. REEM PLO YM EN T O R R E S U M P T IO N O F SE LF-EM PLO Y M E N T .
A member who (t) has received a lump sum benefit; and (2) is
teemployed or has resumed self-employment not earlier than one (l) year from the
' Tfelaw solhew iseluio^ as Ihe’Na&jria Health Insurance Act <rf1995*
a Section 14-6. RA. No 11199.
» Section IW (a). R A No 11199.
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date o f his disability shall again be subject to compulsory coverage and shall be
considered a new member.1
The monthly pension and dependents’ pension shall be suspended upon
the reemployment or resumption o f self-employment or the recovery o f the
disabled member from his permanent total disability or his failure to present
himself for examination at least once a year upon notice by the SSS.2
3. D E A T H O F P E R M A N E N T T O T A L D ISA BILITY P E N S IO N E R .
Upon the d e a th o f the perm an en t to tal disability pensioner, his
prim ary beneficiaries as o f the date o f disability shall be entitled to receive th e
monthly pension: Provided, That if he has no primary beneficiaries and he dies
within sixty (60) months from die start o f his monthly pension, his secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to the total
monthly pensions corresponding to the balance o f the five-year guaranteed period
excluding the dependents’ pension.3
4. P E R M A N E N T T O T A L D ISA B ILITIES.
The following disabilities shall be deemed permanent total;
(1) Complete loss o f sight o f both eyes;
(2) Loss o f two limbs at or.above the ankle o r wrists:
(3) Permanent complete paralysis o f two limbs;
(4) Brain injury resulting to incurable imbecility or insanity; and
(5) Such cases as determined and approved by die SSS.4
5. P E R M A N E N T PA RTIA L D ISA B ILITIES.
If the disability is p e rm an en t p a rtia l and such disability occurs before
thirty-six (36) monthly contributions have been paid prior to die semester o f
disability, die benefit shall be such percentage o f the lump sum benefit described in
the preceding paragraph with due regard to die degree o f disability as the
Commission may determine.5
I f the disability is p erm an en t partial and such disability occurs after
thirty-six (36) monthly contributions have been paid prior to the semester o f
disability, the benefit shall be the monthly pension for; p erm an en t total disability
payable not longer than the period designated in the following schedule:6
• It
*
3
4
3
3
Section 13A (b),Id.
Section 134(c), W.
Section 134(d), Id.
Section 134
Section 134(1),Id.
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Complete and perm anent
lo ss o ffuse o f
Num ber
of
M onths
10
8
6
S
3
6
One thum b
One index finger
One m iddle finger
One ring finger
One little finger
One big toe
One band
One arm
39
50
31
One foot
One leg
«
10
20
10
50
25
One ear
Both ears
H earing o f o n e ear
H earing o f b o th ears
Sight o f one eye
v
The percentage degree of disability which is equivalent to the ratio that
the designated number of months of compensability bears to seventy five (75),
rounded to the next higher integer, shall not be additive for distinct, separate and
unrelated permanent partial disabilities, but shall be additive for deteriorating and
related permanent partial disabilities, to a maximum o f one hundred percent
(100%), in which case, the member shall be deemed as permanently totally
disabled.1
In case of perm anent partial disability, the monthly pension benefit
shall be given in lump sum if it is payable for less than twelve (12) months.2
For the purpose of adiudicadng retirem ent, death and p erm an en t total
disability pension benefits, contributions shall be deemed paid for the months
during which the member received partial disability pension: Provided, That such
contributions shall be based on his last contribudon prior to his disability.3
Should a member who is on partial disability pension rerire or die, his
disability pension shall cease upon his retirement or death.4
6.
DEATH BENEFITS
5. W HO ARE E N T IT L E D .
Death benefit is a cash benefit either in monthly pension or lump sum
paid to the beneficiaries of a deceased member.
Upon the death o f a member who has paid at least thirty-six (36)
monthly contributions prior to the semester of death, his prim ary beneficiaries
'
2
3
4
Section 13-A(g), Id.
Section ttA (h ),ld .
Section 13-A (0. Id.
Section 13-A©,Id.
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shall be entitled to the m onthly pension: Provided, That if he has no primary
beneficiaries, his secondary beneficiaries shall be entitled to a lum p sum benefit
equivalent to thirty-six (36) times the monthly pension. If he has not paid the
required thirty-six (36) monthly contributions, his prim ary or secondary
beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly
pension times the number o f monthly contributions paid to the SSS or twelve (12)
times the monthly pension, whichever is higher.1
2. TYPES O F D E A T H B E N E F IT S .
Based on the foregoing, there are two (2) types o f death benefits, to wit.
1) Monthly pension; and
2) Lump sum amount.
The m onthly pension is granted only to the prim ary beneficiaries of a
deceased member who had paid 36 monthly contributions before the semester o f
death.
The lum p sum is the amount granted to the prim ary beneficiaries of a
deceased member who had paid less than 36 monthly contributions before the
semester o f death. The secondary beneficiaries shall be entitled to a lump sum
benefit
3. A M O U N T O F B E N E F IT S .
The m onthly pension depends on the member’s paid contributions,
including the credited years o f sendee (CYS) and the number of dependent minor
children but not to exceed five (5V
The amount o f monthly pension will be the highest of:
1. the sum of P300 plus 20 percent o f the average m onthly salary
credit2 plus two percent of the average monthly salary credit for each
credited year of service (CYS) in excess o f 10 years; or
2. 40 percent o f the average monthly salary credit; or
3. P I,000 if the member had less than 10 credited years of service (CYS);
P I,200 if with at least 10 CYS; or P2,400 if with at least 20 CYS. The
monthly pension is paid for not less than 60 months.
If a deceased member is survived by less than five (5) minor legitimate,
legitimated, or legally adopted children, the illegitim ate m inor children will be
' Section 13, Id.
Section 8(m) of R A No. 11199 states: \m ) A verage m o n th !/ sa la ry cre d it - The result obtained by dividing the sum of (tie
last sixty (60) monthly salaiy credits immediately preceding the semester of contingency by sixty (50), or the result obtained
by dividing the sum of all the monthly salaiy credits paid prior to the semester of contingency by the number of monthly
contributions paid in the same period, whichever is greater P rovided, That the injury a sickness which caused the Usability
shal be deemed as rie permanent dsabiity for the purpose of computing the average monthly salary credit'
2
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entitled to 50% of the share o f the legitimate, legitimated or legally adopted
children in die basic pension and 100% o f the dependents* pension.
In cases where there are no legitimate, legitimated, o r legally adopted
children, the illegitimate minor children shall be entitled to 100% o f the basic
pension.
The primary beneficiaries o f a deceased member who has paid less than
36 monthly contributions shall he endded to lump sum benefit which shall be the
higher of:
*
1) monthly pension times the number o f monthly contributions paid
prior to the semester o f death; or
2) twelve (12) times the monthly pension.
The secondary beneficiaries o f the deceased member shall be endded to
a lum p sum benefit equivalent to:
a. 36 times the monthly pension; if the member has paid at least 36
monthly contributions prior to the semester o f death; or
b. monthly pension times the number o f monthly contributions paid or
twelve (12) times the monthly pension, whichever is higher, if the
member has paid less than 36 monthly contributions prior to die
semester of death.
The primary o r secondary beneficiaries o f a deceased employeemember, who had no contribution payment at all and who was reported for
coverage shall be endded to funeral benefit only.
The dependent legitimate, legitimated, legally adopted o r illegitimate
children, conceived on or before the date o f death o f a deceased wdl each receive a
dependents* pension equivalent to 10% o f the members* monthly pension o r P250,
whichever is higher.
Only five (5) minor children, beginning from the youngest, are endded to
die dependents’ pension. N o su b stitu tio n is allowed.
Where there are m ore than five (5) legitimate and illegitimate minor
children, the legitimate shall be preferred.
The dependents* pension stops when die child reaches 21 years old, gets
married, gets employed or dies. However, the dependents* pension is granted for
life to children who are over 21 years old, provided they are incapacitated and
incapable of self-support due to physical or mental defect which is congenital and
acquired during minority.
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4.
2& 1
O T H E R B E N E F IT S T H E D E C E A SE D M E M B E R ’S B E N E F IC IA R IE S
CAN AVAIL O F.
H ie deceased member’s beneficiaries ate entitled to a 13d1 month pension
payable every December and die funeral benefit, which is paid to whoever,
shouldered the funeral expenses o f the deceased member.
Survivorship pensioners prior to the efFecdvity o f R.A. 7875* on March 4,
1995 are also endded to hospitalization benefits under PhilHealth. They need to
register under PhilHealth.
Survivorship pensioners under the effectivity o f RA 7875 on March 4,
1995 and thereafter, are no longer covered. However, those who wish to avail o f
PhilHealth benefits may enroll in the Individually-Paying Program (for
voluntary/self-employed) or the Indigent Program (IP) o f PhilHealth.
7.
FUNERAL BENEFIT
1.
A M O U N T O F FU N E R A L B E N E F IT .
A funeral grant equivalent to P 12,000 shall be paid, in cash or in kind, to
help defray the cost o f funeral expenses upon the death o f a member, including
permanendy totally disabled member o r retiree.2
b.
EMPLOYEES’ COMPENSATION BENEFITS
This is the second class o f benefits under die SSS Law, the first being die
Social Security Benefits discussed above. For purposes o f discussing this topic in
an orderly fashion, the same shall be presented under the topic “ C . D ISABILITY
A N D D E A T H B E N E F IT S ” , infm.
B.
GSIS LAW
1.
LEGAL BASIS.
R A . No. 8291, entided ‘The Government ServiceInsuranceSystemAct of1997 ”*
1
1 Thislawisotherwiseknownasthe"NafonalHealft InsuranceM of 1995*
1 See6onBB,RA No 11199.
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1.
COVERAGE AND EXCLUSIONS
a.
COVERAGE
1. COMPULSORY M EM B ER SH IP IN T H E GSIS.
(1) AH government personnel, whether elective or appointive, irrespective
of status of appointment, provided they are receiving fixed monthly compensation
and have not reached the mandatory retirement age o f d5 years, are compulsorily
covered as members of the GSIS and shall be required to pay contributions.1
(2) However, employees who have reached the retirement age of 65 or
more shall also be covered, subiect to die following rules:
An employee who is already beyond the mandatory retirement age o f 65
shall be compulsorily covered and be required to pay both the life and retirement
premiums under the following situations:
a) An elective official who at the time o f election to public office is
below 65 years o f age and will be 65 years or more at the end o f his
term of office, including the period/s of his re-election to public office
thereafter without interruption.
b) Appointive officials who, before reaching the mandatory age o f 65,
are appointed to government position by the President o f the Republic
of the Philippines and shall remain in government service at age
beyond 65.2
c) Contractual employees including casuals and other employees with
an employee-government agency relationship are also compulsorily
covered, provided they are recaving fixed monthly compensadon and
rendering the required number of working hours for the month.3
2. CLASSES O F M EM B ERSH IP.
Membership in the GSIS is classified either by type or status o f
membership.4
• As to type of members, there are regular and special members:
(a) Regular M em bers - are those employed by the government o f the
Republic of the Philippines, national or local, legislative bodies,
government-owned and controlled corporations (GOCCs) with
'
?
3
4
Section 2 .1 Rule II, Implementing Rules and Regulations of R A No. 8291.
Section 2 2 , Rule II, bid.
Section 2 1 , Rule II, ibid.
Section Z4„ Rule II, Ibid.
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original charters, government financial institutions (GFIs), except
uniformed personnel of the Armed Forces o f the Philippines, the
Philippine National Police, Bureau o f Jail Management and
Penology (BJMP) and Bureau of Fire Protection (BFP), who are
required by law to remit regular monthly contributions to the GSIS.
(b) Special M em bers - are constitutional commissioners, members o f
the judiciary, including those with equivalent ranks, who are
required by law to remit regular monthly contributions for life
insurance policies to the GSIS in order to answer for dicir life
insurance benefits defined under RA 8291.1
• As to status o f membership, there are active and inactive members.
(a) Active m em ber - refers to a member of the GSIS, whether
regular or special, who is still in the government service and
together with the government agency to which he belongs, is
required to pay the monthly contribution.
(b) Inactive m em b er - a member who is separated from the service
either by resignation, retirement, disability, dismissal from the
service, retrenchment or, who is deemed retired from the service
under the GSIS Law.2
3. EFFEC T IV IT Y O F M E M B E R S H IP .
The effective date o f membership shall be the date o f the member’s
assumption to duty on his original appointment or election to public office.3
4. E F F E C T O F SE PA R A T IO N FROM T H E SERV IC E.
A member separated from the service shall continue to be a member, and
Tiall he entitled to whatever benefits he has qualified to in the event o f any
contingency compensable under the GSIS Law.4
b.
EXCLUSIONS
1. EXCLUSION FR O M COM PULSORY COVERAGE O F GSIS LAW.5
The following employees arc excluded from compulsory coverage:
(a) U niform ed personnel o f the Armed Forces of the Philippines
(AFP), Philippine National Police (PNP), Bureau o f Fire Protection
(BFP) and Bureau o f Jail Management and Penology (BJMP);1
’
2
3
‘
s
Section 2.4.1.. Rule II, bid.
Section 2.42 , Rule II, bid.
Section 5, Rule II, bid.
Section 4, R A No. 8291.
Section 3., Riie II, ttxJ.
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(b) Barangay and Sanggunian Officials who arc not receiving fixed
monthly compensation;12
(c) Contractual Em ployees who are not receiving fixed monthly
compensation;3 and
(d) Employees who do n o t have monthly regular hours o f work and are
not receiving fixed monthly compensation.4
2.
DEPENDENTS AND BENEFICIARIES
a.
DEPENDENTS
1. KINDS O F D E PE N D E N T S.
Dependents shall be the following:
(a) The legitimate spouse dependent for support upon the member or
pensioner;
(b) The legitimate, legitimated, legally adopted child, including the
illegitimate child, who is unmarried, not gainfully em ptied, not over the
age of majority, or is over the age o f majority but incapacitated and
incapable of self-support due to a mental or physical defect acquired
prior to age of majority; and
(c) The parents dependent upon the member for support.5
Gainful Occupation - Any productive activity that provided the member with
income at least equal to the minimum compensation of government employees.6
b.
BENEFICIARIES
1. TWO KINDS.
There are two (2) kinds o f beneficiaries under the GSIS Law as follows:
1. Primary beneficiaries - The legal dependent spouse until he/she
remarries and the dependent children.
2. Secondary beneficiaries - The dependent parents and, subject to the
restrictions on dependent children, the legitimate descendants.7
1
7
3
4
5
8
7
Section 3.1.1., Rule II, Ibid.
Section 3.12„ Rule II, Ibid.
Section 3 .U ., Rule II, Ibid.
Section 3.1.4., Rule II, Ibid.
Section 2(f), bid.
Section 2(p), bid.
Section 2(g), R A No. 8291.
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3.
BENEFITS
1.
KINDS O F B E N E F IT S .
The following are the benefits under the GSIS Law.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Compulsory Life Insurance
Retirement
Separation
Unemployment
Disability
Survivorship
Funeral
1.
COMPULSORY LIFE INSURANCE
1.
L IFE E N D O W M E N T PO LICY (LEP)>
A member under this policy may be entitled to any of the following
benefits, depending on the circumstances:
a) Maturity benefits, which is the face amount payable to the member
upon maturity o f the policy.
b) Cash Surrender Value, which is earned values during the term o f the
insurance payable to the member when he is separated from the
service before maturity date o f the policy or when he is considered as
a case o f PTD.
c) Death Benefit, which is the face value of the policy payable to
designated beneficiary/benefidaries or legal heirs, in the absence o f
the former, upon the death o f a member.
d) Accidental Death Benefit fADB) is an additional benefit equivalent to
the amount o f Death Benefit when the member dies by accident. In
this connection, proof must be presented to sufficiendy establish that
the cause o f the member’s death is accidental.
e) The right to present sufficient proof to show that death was accidental
shall prescribe if the claim for ADB is filed four (4) years after the
death o f the member.
f) Cash Dividend. A policyholder is entided to dividends subject to the
guidelines as approved by the GSIS Board. This is not a guaranteed
benefit.*2
' Section 18., Rule IV, bid.
2 Sections 18.1. to 185., Rule IV, bid.
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2. E N H A N C ED LIFE POLICY (E L P ).1
A member under this policy may be entided to any o f the following
benefits, depending on the circumstances:
1. Death Benefit equivalent to the latest annual salary multiplied by
amount of insurance (AOI) factor which is 1.5 or 18 times the current
monthly salary o f the member or as determined by the GSIS, payable
to the legal heirs, less all outstanding obligations o f the member in
accordance with the CLIP.
2. Termination Value. The policy earns a Termination Value during the
life of the policy computed from the percentage o f life insurance
premiums actually remitted and paid to GSIS.
o Termination value is equivalent to a percentage o f monthly life
insurance premiums as determined by the GSIS, due and paid in
full, either by direct remittance or dirough an APL facility.
• The accumulated termination value will grow at such rate as
determined by the Actuary.
• The termination value shall be paid to the member upon his
separation from the government service less all indebtedness of the
member with the GSIS in accordance with CLIP.
3. Cash Dividend. A policyholder is entided to dividends, subject to the
guidelines as approved by the GSIS Board. This is not a guaranteed
benefit.2
2.
RETIREMENT BENEFIT
1. C O M PO N EN T.
The retirement benefit consists of a monthly pension which is computed
based on years o f creditable service and Average Monthly Compensation (AMQ
for the last 3 years.3
2. ELIGIBILITY.
The member.
1) has rendered at least fifteen (15) years of service;
2) is at least sixty (60) years o f age; and
3) is not receiving a monthly pension benefit from permanent total
disability.4
'
2
3
4
Section 19.. Rule IV. bd.
Sections 19.1. to 19.3, Rule IV, ibid
Section 20., Rule IV, Ibid.
Sections 20.1.1. to 20.1.3, Rule (V. Ibc
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3. R E T IR E M E N T B E N E F IT O P T IO N S .
A retiring member has the following options:
(1) Five (5) year lump sum equivalent to sixty (60) months of the basic
monthly pension (BMP), subject to qualification requirements, less all outstanding
obligations of the member in accordance with the Claims and Loans
Interdependency Policy (CLIP), plus an old-age pension benefit equal to the BMP
payable for life, starting on the first day o f the month following the expiration o f
the five year guaranteed period; or
(2) A cash payment benefit equivalent to eighteen (18) times o f the BMP,
subject to qualification requirements, less all outstanding obligations o f the member
in accordance with the CLIP, plus monthly pension for life payable on die first
month following the date of retirem ent1
4. C O N V E R SIO N IN T H E M O D E O F R E T IR E M E N T .
Conversion in the mode o f retirement from RA. No. 8291 to any other
retirement laws and vice versa administered by the GSIS shall not be allowed.
Those who became GSIS members prior to the implementation o f R.A.
No. 8291 shall have the option to retire under PD 1146, RA 660, or RA 1616,
subject to eligibility.2
5. C H A N G E O F R E T IR E M E N T B E N E F IT O P T IO N U N D E R RA 8291.
Change o f retirement benefit option from eighteen (18) months cash
payment plus immediate pension to five (5) year lump sum, or vice versa, shall n o t be
allowed. The GSIS shall process the claim for retirement benefits based on the
member’s records in the GSIS database.3
6. PR O C E SSIN G O F R E T IR E M E N T B E N E F IT S O F M E M B E R S W H O
D IE D W H IL E T H E IR CLAIMS A RE B E IN G PR O C ESSED .
For those qualified for retirement benefits:
1. If the deceased member opted for five year lump sum benefit as
indicated in his/her claim for retirement application, his legal heirs
shall be entided to five-year lump sum benefit equivalent to sixty (60)
months basic monthly pension (BMP). However, the survivorship
pension to qualified primary beneficiaries, if any, shall be granted after
the end o f the 5-year guaranteed period, but filing o f claim for
survivorship benefit should be done before the end o f the 4-year
prescription period.
2. If die deceased member opted for immediate pension as indicated in
his/her claim for retirement benefit his legal heirs shall be entided to
' Sections 202.1. to 2022. Rule IV. Ibid.
J Section 20.3., Rule IV. ibid.
3 Section 20.4., Rule IV, Ibid.
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retirement benefits equivalent to eighteen (18) months of BMP, plus
accrued pension, if any, up to the date o f death o f the retiree. The
corresponding survivorship pension shall be paid to the qualified
primary beneficiaries, if any, and shall be computed from the date of
death of the retiree, subject to filing of claim.
3. In case the deceased member failed to indicate in his/her retirement
option, it shall be computed as if he/she opted for immediate pension.
4. The proceeds o f retirement benefits shall be paid and distributed to
the legal heirs in accordance with the law^on succession under the
Civil Code of the Philippines.*1
For those not qualified for retirement benefits, the GSIS shall determine
if he/she is qualified to other applicable benefits under R.A. 8291 or such other
laws administered by the GSIS.2
7. EFFECTS OF R EEM PLO Y M EN T.
When a rctired/separated member is reemployed or reinstated in the
service, his/her previous services credited at the time o f his/her
retirement/separation for which a corresponding benefit had been awarded, shall
be excluded in the computation o f service. In effect, he/she shall be considered a
new entrant.
However, for those who retired prior to the enactment o f R.A. 8291, the
previous services of a rerired/'separated member may be added in the computation
of his creditable services (subject to premium-based policy) upon subsequent
retirement under RA. 8291 only when both conditions are met: (a) the retiree
reentered government service before June 24, 1997; and (b) the total amount of
benefit previously received, if any, including the prescribed interest was refunded to
GSIS on or before March 2, 2006.3
8. BASIS OF C OM PUTATIO N O F T O T A L SERVICE.
Total Length of Service (TLS) is the number o f years in government
sendee regardless of status o f employment, with or without premium contributions.
For purposes of computing the total length o f service under part-time
status of employment, services shall be converted to their full-time equivalent using
torty-hour week and fifty two-week a year as basis.4
’
•’
1
1
Section 20 51., Rule IV. Ibid.
Section 20.5 2 . Rule IV, Ibid.
Sections 20 6.1. to 20.6.2., Rule IV, Ibid.
Sections 20 M . to 20 7.2, Rule IV, bid.
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9. C O M PU T A T IO N O F C R E D IT A B L E SERV ICE.
The computation of creditable service for the purpose o f determining the
amount o f benefits payable shall include the period or periods o f sendee with the
required premium contributions.1
10. C O M PU T A T IO N O F AVERAGE M O N T H L Y C O M P E N S A T IO N
(AMC).
The AMC shall be computed on the basis o f the average salary of the
member for the last 36 months o f creditable service immediately preceding his
retirement or separation.
The basis for computing the AMC o f a separated or retired member
requesting for computation o f benefits shall be the prevailing policy on AMC at the
time the claim is being processed.2
11. C O M PU T A T IO N O F REV A LU ED M O N T H L Y C O M PEN SA T IO N .
AMC plu s Seven Hundred Pesos (P700.00).3
12. C O M PU T A T IO N O F BASIC M O N T H L Y P E N S IO N .
The formula for computing the BMP may be adjusted subject to the
approval of the Board upon the recommendation by the President and General
Manager.
As a general rule, the BMP shall only be computed for those members or
dependents/heirs of members who are eligible to receive benefits under this law. It
shall be computed on the basis o f a percentage o f the RAMC at the rate o f 2.5%
for every year o f creditable service, but in no case shall it exceed 90% of the AMC
of the member. The formula for computing BMP shall be: BMP = RAMC x (2.5%
x RCS)4
13. A D JU ST M E N T /IN C R E A S E IN P E N S IO N .
Periodic adjustments o f the monthly pension o f all existing pensioners
shall be done on the basis o f what is sustainable and prudent for the GSIS as
recommended by its Actuary and approved by the Board.5
14. PO LIC IES A FFE C T IN G P E N S IO N A D M IN IS T R A T IO N .
1)
Regardless of the date o f retirement, the monthly pension shall
commence on the Is' day of the month following the month o f retirement.
1
2
3
4
5
Section 20.8., Rule IV. Ibid.
Sections 20.9.1. to 20.92, Rule IV, bid.
Section 20.10., Rule IV, Ibid.
Section 20.11., Rule IV, Ibid.
Section 20.12, Rule IV, Ibid.
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2) Annual Renewal o f Active Status (ARAS) o f Old Age and Survivorship
Pensioners is required on their birth month every year.
3) Effects o f non-renewal o f active status as pensioner
b) Non-entitlement to cash gift if status is suspended at the time o f
declaration;
c) Non-entitlement to pension increases if status is suspended at the
time o f declaration.1
*
3.
SEPARATION BENEFIT
1. ENTITLEMENT.2
Separation benefit is either one o f the following:
(1) For those members who are separated from service and who have at
least 3 years o f service but less than 15 years shall be entitled to a s h payment
equivalent to 100% of the member’s AMC for each year o f creditable service, but
not less than Pl2,000.00, payable upon reaching age 60, or upon his separation if
he is already 60 years o f age at the time o f separation.3
(2) A cash payment equivalent to eighteen (18) times the basic monthly
pension payable at die time o f resignation or separation, provided the member
resigns or separates from the service after he has rendered at least 15 years of
service and is below 60 years o f age, plus an old-age pension benefit equal to the
basic monthly pension payable monthly for life upon reaching the age o f 60.4
(3) Reckoning Date o f Separation o f Uniformed PNP, BJMP and BFP
Personnel shall be February 1,1996. The computation o f benefit shall be based on
their basic monthly salary (premium-based) when they ceased to be members o f the
GSIS.5
(4)
Processing o f separation benefit o f members who died while their
claims are being processed:
a) I f die member dies during the pendency o f his claim for
separation benefit and he has rendered at least 15 years o f
creditable service, his legal heirs shall be entided to receive cash
payment equivalent to eighteen (18) times the basic monthly
pension, plus accrued BMP, if any, up to the date o f death o f the
1 Sections2113.1.b 20.133. RdeIV. bid.
* Section21, RuleW.ttiU.
> Section 21.1, Rite IV, hid.
< Section212, RuleIV, bid.
5 Section212, Rub IV, bid.
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member. Thereafter, the primary beneficiaries shall be entitled to
survivorship pension.1
b) I f die member dies during the pendency o f his claim for
separation benefit and he has rendered less than 15 years o f
creditable service, his legal heirs shall be entitled to cash payment
equivalent to one hundred percent (100%) o f AMC for each year
o f creditable service, b ut not less than P i 2,000.00.2
4.
UNEMPLOYMENT BENEFIT
L E N T IT L E M E N T .3
A member shall be entitled to the unemployment benefits if the following
conditions are met:
1) he/she was a permanent employee at time o f separation;
2) his/her separation was involuntary due to the abolition o f his/her
office or position resulting from reorganization; and
3) he/she has been paying the required premium contributions for at
least one (1) year but less than 15 years prior to separation.4
The amdunt o f unemployment benefit is equivalent to 50% o f the AMC
and shall be paid in accordance with the Schedule in die Implementing Rules.s
5.
DISABILITY BENEFITS
t D E F IN IT IO N .6
"Disability”ttftts to any loss o r impairment o f the normal functions o f the
physical an d /o r mental faculties o f a member, which permanendy or temporarily
prevents him to continue with his work or engage in any other gainful occupation
resulting in the loss o f income.7
2. BASIS O F R EC K O N IN G .
The corresponding disability benefits for each kind o f disability shall be
granted to a member based on die d u ratio n o f incapacity to w ork a n d actu al
loss o f incom e.8
Section214.1, RubIV, M l
SecBon21.42,fablV)ML
Section22, RuleIV,Ibid.
SecBons22.1.1.6)22.1.3, Ride(V,ML
Section222, ftde IV, ML
Section23, Rub IV, Ml.
Section23.1, Rub IV, Ml.
6L
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3. KINDS OF DISABILITY.
There are three (3) kinds o f disability which shall be determined by the
GSIS based on established medical standards:
• Permanent Total Disability
• Permanent Partial Disability
• Temporary Total Disability1
4. POLICIES G O V ER N IN G D ISABILITY B E N E F IT S .
1. Perm anent T otal D isability (P T D ) - disability due to injury or
disease causing complete, irreversible and permanent incapacity that will
permanently disable a member to work or to engage in any gainful occupation
resulting to loss o f income.
The following disabilities shall be deemed total and permanent:
a) Complete loss o f sight for both eyes;
b) Loss o f two limbs at or above the ankle o r wrists;
c) Permanent complete paralysis o f two limbs;
d) Brain injury resulting in incurable imbecility or insanity; and
e) Such other cases as may be determined and approved by the GSIS.2
2. Perm anent Partial D isability (PPD ) - arises due to the complete and
permanent loss o f the use of any o f the following resulting to the disability to work
for a limited pedod o f time:
1) any finger 2) any toe 3) one arm; 4) one hand; 5) one foot; 6) one leg; 7)
one or both ears; 8) heating o f one or both ears; 9) sight o f one eye; 10)
such other cases as may be determined and approved by the GSIS.3
3. Tem porary Total D isability fT T D ) - accrues or adses when the
impaired physical and/or mental faculties can be rehabilitated and/or restored to
their normal functions, but such disability shall result in temporary incapacity to
work or to engage in any gainful occupation.4
5. DISABILITY O R INJURY N O T C O V ERED .
Any disability or injury as a result of, or due to grave misconduct,
participation in riots, gross and inexcusable negligence, under the mfluence_of
' U.
* Section 2321.. Rule IV, ted.
> Section 2 3 2 2 , Rub IV, ted.
< Section 2323., Rule IV, Wd.
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drugs o t alcohol o r willful intention to injure o r kfll himself o r another, shall n o t be
compensable.1
6. ACTUAL LOSS OF INCOME.
The actual loss o f income shall refer to die number o f days when a
member went on leave o f absence without pay (LWOP) reckoned immediately
from the date o f commencement o f disability and for the duration o f entitlement
thereto, based on medical evaluation. Any LWOP incurred after the duration o f
entidement to die benefit shall not be compensable.2
7. ENTITLEMENT IN CASE OF TWO OR MORE DIFFERENT
CONTINGENCIES.
I f the member has two o r more different contingencies during the same
period o f benefit enddement, he shall be compensated only once for the
overlapping periods.3
8. EXCLUSIONS BY REASON OF P.D. 626.
All injuries, disabilities, illnesses and all other infirmities compensable
under P.D. 626 shall not be compensable under this Act (R.A. 8291).4
9. SUSPENSION OF BENEFIT.
Any applicable disability benefit shall be suspended when he/she:
a) is re-employed; or
b) recovers from h is/h er disability as determined by the GSIS, whose
dedsion shall be final and binding; or
c) fails to present himself for medical examination when required by
GSIS; or
d) is receiving any other pension either from GSIS or another local or
foreign insdtudon o r organization.56
10. COMPUTATION OF BENEFIT.
1. Permanent Total Disability (PTD). - A member who becomes
pecmanendy and totally disabled shall be endded to the monthly income benefits
for life equivalent to the basic monthly pension (BMP) effective from the date o f
Hisflhilitv.4
1
1
1
4
5
6
Section23.2.4., RUbIV. V i
Section2325., Ate IV, bid.
Section2325., RuleIV, bid.
Section232.7„ RuleIV, bid.
Section2328.. RideIV, bid.
Section2321., Ade IV. bid.
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2. Perm anent Partial Disability (PPD ). - The period o f entidement to
PPD benefit shall be determined after due medical evaluation; but such period of
entidement to the benefit shall not exceed 12 months for the same contingency.
Only the leave of absence/s without pay incurred during the period o f entidement,
duly certified by the authorized officer o f the agency where he is employed, shall be
compensable. The amount of PPD benefit shall be computed by dividing the BMP
by 30 days and multiplying the quotient by the number o f compensable calendar
days of leave of absence without pay (LWOP).1
3. Temporary Total Disability' HTTP). - The period of entidement to
TTD benefit shall be determined after due medical evaluation and proof o f actual
loss of work resulting in loss o: income by way o f the incurred actual number o f
days of leave of abscnce/s without pay duly certified by the authorized officer of
the agency where he is employed; but such period o f entidement to die benefit
shall not exceed 120 days in one calendar year. However, if the disability requires
more extensive treatment that lasts beyond 120 days, die payment o f the TTD may
be extended by die GSIS but not to exceed a total of 240 days.
Only die leave of absence/s without pay incurred during the period of
entitlement shall be compensable. Entidement, however, shall start from the fourth
day of the disability. The amount o f TTD benefit shall be computed by multiplying
75% of the daily salary' of the member by the number o f days of disability based on
die medical evaluation but net to exceed 240 days for the same contingency.
However, the computed daily salary shall not be less than P70.00 but not to exceed
P340.00 per day.2 For the purpose o f computing the corresponding benefit of
inactive members for each kind o f disability, die-BMP, with respect to PTD and
PPD, and daily salary, with respect to TIT), shall be computed as of the time of
separation from GSIS.3
11. C O N D ITIO N S FOR E N T IT L E M E N T .
1. Permanent Total D isability (PT D ) - A member who becomes
perraanendy and totally disabled shall be entided to the PTD benefits when:
a) he/she is in the service at the time of disability, or
b) if separated from die service, he lias paid at least thirty six (36) mondis
contnbutions within die five year (5) period immediately preceding
his/her disability; or has paid a total o f at least one hundred eighty
(180) months comributions prior to his/her disability;
Provided, however, that the following conditions shall be met:
’ Section 23.32. Rule IV. Ibid
J Section 2 3 2 1 . Rule IV. Ibd.
3 Section 232.4., Rule IV. Ibd.
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S0CIA1. WELFARE LEGISLATION
•
•
•
he/she is gainfully employed prior to the commencement of disability
resulting in loss o f income as evidenced by any incontrovertible proof
thereof;
hc/she is not a registered member of any social insurance institution;
and
he/she is not receiving any other pension cither from GSIS or another
local or foreign institution or organization.1
In addition to the monthly income benefits for life, a cash payment
equivalent to eighteen (18) times his/her basic monthly pension (BMP), shall be
paid to a member who was in the service at the time of his/her permanent total
disability and who has paid a total o f one hundred eighty (180) monthly
contributions.2
A separated member who has at least three (3) years of service and
becomes permanently and totally disabled but has not paid a total of at least one
hundred eighty (180) monthly contributions prior to his/her disability shall be
entided only to cash payment equivalent to one hundred percent (100%) o f his/her
average monthly compensation for each year of service with paid contributions but
not less than twelve thousand pesos (P12,000.00).3
2. Perm anent Partial Disability (PPD ). - A member whose disability is
partial shall be entided to the PPD benefit when:
a) he/she is in the service at the time o f disability, or
b) if separated from the service, he has paid at least thirty six (36) months
contributions within the five (5) year period immediately preceding
his/her disability; or has paid a total o f at least one hundred eight}'
(180) months contributions prior to his/her disability, Provided,
however, that the following conditions shall be met:
• he/she is gainfully employed prior to the commencement o f
disability resulting in loss of income as evidenced by any
incontrovertible proof thereof;
• he/she is not a registered member of any social insurance
institution; and
• he/she is not receiving any other pension either from GSIS or
another local or foreign institution or organization.4
3. T em porary Total Disability HTTP). - A member shall be entitled to
the TTD benefit when:
a) hc/she is in the service at die time o f disability; or
1
3
3
4
Section 23.4.1.1., Rule IV. Ibid.
Section 23.4.12. Rule IV, Ibid.
Section 23.4.13., Rute IV, Ibid.
Section 23.42, Rule IV, Ibid.
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b) if separated from the service, he has paid at least thirty six (36) months
contributions within the five (5) year period immediately preceding
his/her disability; or has paid a total of at least one hundred eighty
(180) months contributions prior to his/her disability; Provided,
however, that the following conditions shall be met:
• he/she is gainfully employed prior to the commencement of
disability resulting in loss of income as evidenced by any
incontrovertible proof thereof;
• he/she is not a registered member o f any social insurance
•
institution; and
he/she is not receiving any other pension either from GSIS or
another local or foreign institution or organization.1
The payment of IT 'D benefit may be extended by the GSIS up to a
maximum of two hundred forty (240) days, subject to medical evaluation.2
12. FO RFEITU RE OF D ISABILITY B EN E FIT S.
All the foregoing provisions notwithstanding, any meml>er who is
enjoying disability benefits shall automatically forfeit his/her right to the continued
enjoyment thereof if he/she refuses or deliberately fails to:
a) have himself/herself medically treated by a physician when required by
the GSIS; or
b) take the prescribed medications; or
c) have himself/herself confined in a hospital without justifiable reason,
when such confinement is required by the GSIS; or
d) avail himself/herself o f such rehabilitation facilities as may be duly
recommended by the GSIS and made available for him /her; or
e) observe such precautionary and/or preventive measures as prescribed
by a physician or expressly required of him /her to prevent the
aggravation or continuance o f his/her disability.
However, upon compliance with the requirements, his/her benefits shall
be resumed if he/she is still qualified.3
6.
SURVIVORSHIP BENEFITS
1. E N T IT L E M E N T .4
When a member or pensioner dies, the beneficiaries shall be entided to
the following survivorship benefits, whichever is applicable:
1
2
3
«
Section 2 3 .4 1 1 Rule IV, bid.
Section 23.4.32, Rule IV, bid.
Section 23.4.6., Rule IV, Ibid.
Section 24, Rule IV, Ibid.
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(1) Survivorship pension consisting of:
a) the basic survivorship pension which is fifty percent (50%) of the
BMP; and
b) the dependent children’s pension equivalent to 10% o f the BMP for
each child but not to exceed fifty percent (50%) o f the BMP.1
(2) Cash payment equivalent to eighteen (18) months BMP;2
(3) Cash payment equivalent to one hundred percent (100%) of the AMC
for every year of service with paid contributions but not less than Twelve
Thousand Pesos (P12,000.00).3
2. SU RV IV ORSHIP B E N E FIT S OF M EM B ERS IN ACTIVE SERVICE.
(1) If at the time of death, a member was in the service and has rendered
at least fifteen (15) years of creditable service:
a) his primary beneficiaries shall receive the survivorship pension and
cash payment equivalent to 18 x the BMP; or
b) in the absence of primary beneficiaries, his secondary' beneficiaries
shall receive die cash payment equivalent to 18 x the BMP; or
c) in the absence o f secondary beneficiaries, the legal heirs shall receive
the cash payment equivalent to 18 x the BMP.4
(2) If at the time of death, die member was in the service with less than
fifteen (15) years of creditable service; his primary beneficiaries shall receive the
cash payment equivalent to 100% of the AMC for every year of creditable service.5
3. SU RV IV ORSHIP B E N E FIT S O F IN A C TIV E M EM BERS.
Primary beneficiaries of inactive members who have at least 15 years of
creditable service shall receive the survivorship pension only.
1) Primary beneficiaries of inactive members who have at least 3 years
but less than 15 years o f creditable service and were less dian 60 years
old at the time of death shall receive the cash payment equivalent to
100% o f the AMC for every year o f creditable service, but not less
than P I 2,000.00.
2) Primary beneficiaries o f inactive members who have less than 15 years
o f creditable service but were at least 60 years old at the time o f
separation and have received the corresponding separation benefit,
shall not be entided to survivorship benefits. However, if the member
1 Sedan 24.1.1., Rule IV, Ibid.
Section 24.12. Rule IV. bid.
3 Section 24 .1 1, Rule IV, bid.
4 Section 2421., Rule IV. bid.
5 Section 2 4 2 2 , Rule IV, Ibid.
1
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has not received vet his separation benefit within four years after
his/her separation, the primary beneficiaries shall receive die cash
benefit equivalent :o 100% o f die inactive member’s AMC for every
year o f creditable service, but not less than P I 2,000.00.1
4. PAYMENT O F SURVIVORSHIP B E N E F IT S .
The survivorship benefits shall be paid as foDows:
1. When the dependent spouse is the only survivor, he shall receive the
basic survivorship pension;
2. When only the dependent children are the survivors, they shall be
endded only to the dependent children’s pension equivalent to 10% of
the BMP for every dependent child, not exceeding five (5), counted
from the youngest and without substitution;
3. When the survivors are the dependent spouse and the dependent
children, the dependent spouse shall receive the basic survivorship
pension for life or until he remarries or cohabits, and die dependent
children shall receive the dependent children’s pension.
4. When the dependent spouse and dependent children are already
receiving the basic survivorship pension and dependent children’s
pension, respectively, any subsequent death, emancipation or
disqualification o f any one o f them shall not entitle the other
beneficiaries to the forfeited share.
5. In the absence of a natural guardian, the guardian de facto o f
dependent children, as well as the physically o r mentally incapacitated
dependent children, must file a Petition for Guardianship to be able to
claim the survivorship benefits on behalf o f die dependent children.
6. When the pensioner dies within the 5-year period after receiving the
five-year lump sum, the survivorship pension shall be paid only after
the end of the said five-year period. However, filing o f claim for
survivorship benefit should be done before die end o f die 4-year
prescription period.2
5. C O N D ITIO N S FO R E N T IT L E M E N T .
The primary and secondary beneficiaries, except dependent children, shall
be entided to applicable survivorship benefits, subject to the following:
a) not engaged in ar.y gainful occupation;
b) the surviving spouse and the deceased member were living together as
husband and wife;
c) not gainfully engaged in a business o r economic activity (selfemployed);
< Sec6oo24.3 t .ftJ e lV .tW .
* Section 24.4.1.. f t * IV, IW
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d) employed/engaged in a business or economic activity but receiving
income less than the minimum compensation o f government
employees.
e) not receiving any other pension from the GSIS o r another local or
foreign institution or organization; and
f) In the case o f the dependent spouse, payment o f the basic
survivorship pension shall discontinue when he remarries, cohabits, or
engages in common-law relationship.
The foregoing conditions, except the last one, must be present
immediately preceding the death o f the member or pensioner.1
7.
FUNERAL BENEFITS
1. N A T U R E O F B E N E F IT .
Funeral benefit is intended to help defray the expenses incident to the
burial and funeral o f the deceased member, pensioner or retiree under R.A. 660,
R A 1616, P.D. 1146 and R.A. 8291.2
2. T O W H O M PAYABLE.
It is payable to any qualified individual, in accordance with the M o w in g
order o f priority:
1) Legitimate spouse;
2) Legitimate child who spent for the funeral services; or
3) Any other person who can show incontrovertible proof that he
shouldered the funeral expenses o f the deceased.3
3. AMOUNT OF FUNERAL BENEFIT.
The amount o f funeral benefit are as M ow s:
1) The prevailing am ount approved by die Board o f Trustees at die time
o f death o f the member o r pensioner.
2) For uniformed members o f die PNP, BJMP and BFP, the amount o f
funeral benefit is fixed at P10,000.(X).4
4. CONDITIONS FOR ENTITLEMENT.
Funeral benefit shall be paid upon the death of.
1)
>
*
»
4
An active member, or
Section 24.5, Rule W, Hid.
Secfion2S.1^Ru)8lV<B»d.ThelaMsmentionedinlhissec6onrefertDpfeviousmnendabxylmMStotfieGSiS Law.
Id.
Section 2 5 2 , Rite IV, Ibid.
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2) A member who has been separated from the service with more than
15 years of creditable service, but entidcd to future separation or
retirement benefits; or
3) Old age or disability pensioner; or
4) A retiree who at the time of his retirement is at least 60 years o f age
and with at least 20 years o f service but who opts to retire under R.A.
1616 on or after June 24,1997; or
5) A member who retired under R.A. 1616 prior to June 24,1997 with at
least twenty (20) years o f service, regardless o f age.1
LIMITED PORTABILITY LAW23
1. R.A. N O . 7699.
R.A. N o. 7699,3 was enacted to enable those from the private sector
who transfer to the government service or from the government sector to the
private sector to combine their years o f service and contributions which have been
credited with the SSS or GSIS, as the case may be, to satisfy the required number
of years of service for entidement to the benefits under the applicable laws.4
'Totalisation” refers to the process o f adding up the periods of creditable
services or contributions under each of the Systems, SSS or GSIS, for die purpose
of eligibility and computation o f benefits.5 O n die other hand, the term ' 'portability”
refers to the transfer of funds for the account and benefit o f a worker who
transfers from one system to the other.67
The benefits provided under R.A. No. 7699 apply to active or inactive
members of eidier System (GSIS/SSS) as o f the date o f its effectivity on May 20,
19947
2. COVERAGE.
R.A. No. 7699 and its implementing rules apply to all worker-members of
the GSIS and/or SSS who transfer from the public sector to the private sector or
vice-versa, or who wish to retain their membership in both Systems.8
' Section 253., Rule IV. Ibid.
? This topic has been included in past Syllabi for labor law. In the 2019 SySabus, it is no looget included. However, a short
discussion thereof is justified in view of te importance.
3 RA. No. 7699, entitled 'An Act Instituting Limited Portability Scheme in the Social Security Insurance System by Totalizing
the Workers’ Creditable Services or Contributions in Each of the Systems' approved on May 1,1994
1 R.A. No. 8282, for SSS members and R A . No. 8291, for GSIS members.
5 Section 2, RA. No. 7699; Section 1 je|, Rule III, Rules and Regulations Implementing RA. No. 7699
6 Section 2, Ibid.; Section 1 [b]. Rule III, Ibid.
7 Section 1, Rule VII, Rules and Regulations Implementing RepubSc Act No! 7699.
8 Section 1, Rule I, Ibid.
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3. C RED ITA B ILITY AND T O T A L IZ A T IO N O F C O N T R IB U T IO N S
AND B E N E FIT S IN SSS A N D GSIS.
Under R.A. No. 7699,1 it is enunciated that provisions of any general or
special law or rules and regulations to the contrary notwithstanding, a covered
worker who transfers employment from one sector to another (/. e., from private
sector to public sector, or vice versa), or is employed in both sectors, shall have his
creditable services or contributions in both Systems (GSIS and SSS) credited to his
service or contribution record in each o f the Systems and shall be totalized for
purposes o f old-age, disability, survivorship and other benefits in case the covered
member does not qualify for such benefits in either or both Systems without totalisation
provided, however, that overlapping periods o f membership shall be credited only
once for purposes o f totalization.
4. L IM IT E D PO RTA BILITY O F FU N D S.
The processes involved in the prompt payment of money benefits to
eligible members are the joint responsibility of the GSIS and SSS.2 The System or
Systems responsible for the payment o f money benefits due a covered worker shall
release the same within fifteen (15) working days from receipt o f the claim, subject
to the submission o f the required documents and availability of complete
employee/employer records in the System or Systems.3
c.
D IS A B IL IT Y A N D D E A T H B E N E F IT S
1.
LABOR CODE4
a.
EMPLOYEES’ COMPENSATION PROGRAM
1. T H E STATE IN SU R A N C E FU N D [SIF].
a.
SIF created from contributions o f employers.
The State Insurance Fund (SIF) is built up by the contributions o f
employers based on the salaries o f their employees as provided under the Labor
Code.
1 See Section 3 thereof.
2 Section 1, Rule (V, Rules and Regulations Implementing R A No. 7699.
3 Section 2, Rule IV, Ibid.
* Relevant provisions: Articles 172 [166] to 215 [208-A], Title II, Book IV of the Labor Code.
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b. Two (2) separate SIFs.
There are two (2) separate and distinct State Insurance Funds: one
established under the SSS for private sector employees; and die other, under the
GSIS for public sector employees. The management and investment o f die Funds
are done separately and distincdy by the SSS and the GSIS. It is used exclusively for
payment o f the employees' compensation benefits and no amount thereof is
authorized to be used for any other purpose.1
c. Three (3) agencies involved in the implementation o f the ECP.
There are three (3) agencies involved in the implementation o f the
Employees’ Compensation Program (ECP). These are: (1) The E m ployees'
Compensation Commission (ECC) which is mandated to initiate, rationalize and
coordinate policies of the ECP and to review appealed cases from (2) the
Government Service Insurance System (GSIS) and (3) the Social Security
System (SSS), the administering agencies o f the ECP.
d. Role o f the GSIS and SSS.
Being administering agencies o f the ECP, both die GSIS and SSS are
tasked to:
1) evaluate all employees compensation (E Q claims filed within a given
period and pay the corresponding EC benefits;
2) collect EC premiums remitted by employers; and
3) manage the SIF.
Both the GSIS and the SSS invest die funds in profitable ventures to
generate earnings which will form part o f the State Insurance Fund (SIF) from
which payments for employees' compensation claims arc sourced.
e. Role o f the ECC.
The law applies the social security principle in the handling o f workmen’s
compensation. Towards this end, the Employees' Compensation Commission
(ECC) administers and setdes claims from a fund under its exclusive control The
employer does not intervene in die compensation process and it has no control, as
in die past, over payment o f benefits. The open-ended Table ofOccupationalDiseases
requires no proof o f causation. A covered claimant suffering from an occupational
disease is automatically paid benefits.
f. Role o f the employer.
On the part of the employer, its duty is only to pay the regular monthly
premiums to the System (GSIS/SSS). It does n o t look for insurance companies to
meet sudden demands for compensation payments or set up its own funds to meet
1 Ai6de179,asamendedbySection4,PX>.No. 1368.
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those contingencies. It does not have to defend itself from spuriously documented
or long past claims.
g. Role o f the employee.
The injured worker does not have to litigate his right to compensation.
There is no notice o f injury o r requirement o f controversion. T he rick worker is
simply required to file a claim with the ECC which determines, on the basis .of the
employee's supporting papers and medical evidence, whether o r not compensation
should be paid. T he payment o f benefits is m ore prom pt ad the cost o f
administration is low.
The employer no longer opposes o r fights a claim for compensation by
the employee. Resultandy, the lop-sided situation o f an employer against one
employee is absent1
2. SCOPE O F CO V ERA G E O F T H E EC P.
a. General coverage.
The following shall be covered by the Employees’ Compensation
Program (ECP):
1) All employers;
2) Every employee not over sixty (60) years o f age;
3) An employee over 60 years o f age who had been paying contributions
to the System (GSIS/SSS) prior to age sixty (60) and has not been
compulsorily retired; and
4) Any employee who is coverable by both the GSIS and SSS and should
be compulsorily covered by both Systems.2
b. Sectors o f employees covered by the BCP.
The following sectors are covered under the ECP:
1) All p u b lic sector employees including those o f government-owned
an d /o r controlled corporations and local government units covered by
the GSIS;
3) Overseas Filipino workers (OFWs), namely:
a. Filipino seafarers compulsorily covered under the SSS.
b. Land-based contract workers provided that their employer, natural
or juridical, is engaged in any trade, industry or business
undertaking in the Philippines; otherwise, they shall not be covered
by the ECP.
1 Sairiattov. ECC,GA No. 1-65680, May11.1888.161SCRA312.
2 Article 174 (168J, LaborCode; Section 2, Rule l, Amended Rules on Employees'Compensation,
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c. Start o f coverage o f em ployees under the ECP.
The coverage under the ECP o f employees in the private and public
sectors starts on the first day o f their employment.
d. Nature o f coverage.
Tire coverage is com pulsory in nature.'
b.
EMPLOYEES’ COMPENSATION BENEFITS
1.
KINDS OF BENEFITS.
The following are the benefits provided under the Labor Code:
1) Medical Benefits1
2
2) Rehabilitation Services.3
3) Disability Benefits4
a. Temporary total disability56
b. Permanent total disability*
c. Permanent partial disability7
4) Death Benefit8
5) Funeral Benefit9
I.
MEDICAL BENEFITS
1.
CONDITIONS FOR E N TIT L E M E N T TO MEDICAL SERVICES,
APPLIANCES AND SUPPLIES.
Any employee is entitled to such medical services, appliances and supplies
as the nature of his disability and the progress of his recovery may require, subject
to the expense limitation as contained in Annex “C" o f the Amended Rules on
Employees' Compensation, if all of the following conditions are satisfied:
1
7
3
4
Article 174 (168), Ibid.; See also Section 1. Rule I, Ibid.
Articles 191 (185] to 196 (190], Chapter V, Tide II, Book IV, Labor Code.
Article 196 (190], Ibid.
Articles 197 [191] to 199 (193], Chapter VI, Tide II, Book IV, Ibid.
3
Article 197 [191]. Ibid.
« Article 198 (192], Ibid.
' Article 199 (193], Ibid.
6 Article 200|194], Chapter VII, Tide II, Book IV, Ibid.
» Section 1, Rule XIV, Amended Rules on Employees' Compensation.
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(a) He has been duly reported to the System (GSIS/SSS);
(b) He sustains an injury or contracts sickness; and
(c) The System has been duly notified o f the injury or sickness.1
2. PERIOD OF EN TITLEM EN T.
The medical services, appliances and supplies are required to be provided
to the afflicted employee beginning on the first day of injury or sickness, during die
subsequent period o f his disability, and as the progress o f his recovery may
require.2 The obligation o f the SIF to provide medical services shall continue for as
long as the employee is sick. This duty is not ended even if employment was
terminated.3
3. EXTENT OF SERVICES.
The employee is entitled to the benefits only for the ward services of an
accredited hospital and accredited physician. However, if the employee chooses
accommodations better than ward services, the excess of the total amount o f
expenses incurred over the benefits provided under Annex “C”o { the Amended Rules
011 Employees' Compensation shall be bome by the employee.4
The hospital shall provide all the medicines, drugs or supplies necessary
for the treatment o f the employee at a cost n o t exceeding the retail prices
prevailing in local d ru g stores.5 In view o f the enactment of R.A. No. 9502,
otherwise known as "The Universally Accessible Cheaper and Quality Medicines Act of
2008" and its Implementing Rules and Regulations which provide that the
President o f the Philippines, upon recommendation of the Secretary o f the
Department o f Health, shall have the power to impose Maximum Drug Retail
Prices (MDRP) over any or all drugs and medicines as enumerated and provided
for in the law, the ECC passed Board Resolution No. 09-09-134 on September 25,
2009, approving as a policy that all reimbursements o f medicines under P.D. 626,
as amended, shall be in accordance with the amount that may be prescribed under
R.A. No. 9502 and its Implementing Rules and Regulations.
Payments shall be made directly to the providers of such services in such
amount as are prevailing in the community for similar services or provided under
the schedule set forth in said Annex (C ,’’whichever is less.6
The right o f flic employee to seek reimbursement for medical expenses
docs not only pertain to those incurred for the principal or primary ailment but
’
7
3
*
*
5
Section 1, Rule VIII, Amended Rules on Employees' Compensation.
Section 2. Rule VIII, Amended Rules on Employees' Compensation.
togon-Suyoc Nines, Inc. v. Dulay, G.R. No. L-18974, Sept 30,1963.
Section 3 (a]. Rule VIII, Amended Rules on Employees' Compensation.
Section 3 [b]. Rule VIII, Ibid.
Section 3 (c], Rule VIII, Ibid.
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extends to those incurred for complications arising therefrom even if the same
occurred after the employee had already retired.
4. LOSS OF WAGES OR E A R N IN G CAPACITY N O T R EQ U IR ED .
It is worthy to note that Article 191 [185] does not impose as a pre­
requisite for the grant of medical benefits, that the injured or sick employee should
show proof that he suffered loss o f wages or earning capacity as a result of such
injury or sickness. The law is clear that the injured or sick employee is “immediately”
entitled to be provided during the subsequent period of his disability, with such
medical services and appliances as the nature o f his sickness or injury and progress
of his recovery may require.1The only limitation imposed by law is in the matter of
expenses which the ECC may prescribe.2 A claimant who, despite his illness,
continues to work in order to avoid economic loss is nonetheless entided to
medical benefits.3
II.
REHABILITATION SERVICES
1. D E FIN IT IO N S.
"Person with Work-Related Disability (PWRD)" means a worker who has
suffered from a work-connected disease or injury adversely affecting the earning
capacity.4
'Rehabilitation is the process by which there is provided a balanced
program of remedial treatment, vocational assessment and preparation designed to
meet the individual needs of each handicapped employee to restore him to suitable
employment and to help each PWRD to develop his/her mental, vocational or
social potential.5
‘Rehabilitation Facility” is an organized service offering one or more types
of service for the rehabilitation o f a person with disability.6
2. NATURE AND C O N D IT IO N OF E N T IT L E M E N T .
Coverage under this benefit shall be voluntary. Entitlement to
rehabilitation services shall be upon approval o f the EC claim for disability benefits
by the Systems.7
Article 191 (185), Labor Code; Corales v. ECC, G R No. L-44053, Feb. 27,1979,88 SCRA 547.
Article 191 [185], Labor Code.
Corales v. ECC, supra.
Section 1 (a), Rule IX Amended Rules on Employees’ Compensation, as amended by Board Resolution No. 144)7-19, s.
2014, Februaiy 19,2014.
Section 1(b), Rule IX Id.
Section 1(c), Rule IX Id.
Section 2, Rule IX Id.
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3. PE R IO D O F E N T IT L E M E N T .
Rehabilitation services shall be provided during the period of the disability
as the nature and progress of the recovery of the PWRDs may require as
determined by the rehabilitation experts. Rehabilitation services shall be suspended
or terminated upon refusal o f the PWRD to continue rehabilitation.1
4. E X T E N T O F R E H A B IL IT A T IO N SERVICES.
Rehabilitation services may be in the form of any of the following:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Medical-surgical management;
Hospitalization;
Necessary appliances and supplies;
Physical restoration;
Psychosocial counseling;
Psychiatric evaluation;
Skillstraining;
Entrepreneurship training;
Hearing impairment rehabilitation;
Visual impairment rehabilitation.2
5. T R A IN IN G O F PW RD.
The PWRD trainee shall be entitled to tuition fees, reimbursement of the
cost of training materials, and meal and transportation allowances,3 as applicable,
within the amount prescribed by the Commission (ECC).4
The Commission shall enter into an agreement with any government or
private hospitals/institutions for purposes o f utilizing their service facilities for
rehabilitation.5
The Commission may establish a rehabilitation facility, as may be
necessary and appropriate, such facility being a part o f an existing medical facility
or in a separate site, offering one or more types of services for the rehabilitation o f
PWRDs.6
6. L IM IT A T IO N O F LIABILITY.
The System shall not be responsible for the payment of rehabilitation
services when the injury, sickness, disability or death during the rehabilitation
' Section 3, Rule IX, Id.
2 Section 4, Rule IX, Id.
3 Meal and transportation allowance was increased from P I,800.00 to P2,500.00. (As provided under Board Resolution No.
10-10-158, October 20,2010).
4 Section 5, Rule IX, Id.
s Section 6, Rule IX, Id.
6 Section 7, Rule IX. W.
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period of the PWRD is occasioned by any o f the following: (1) Intoxication; (2)
Willful intent to injure oneself or another, and (3) Notorious negligence.1
7. M O NITO RING OF A CTIV ITIES A ND PROGRESS O F PWRDs.
The Secretariat shall establish a mechanism to monitor the activities and
progress of PWRDs. For this purpose, the Secretariat may conduct home visits for
the successful implementation o f the delivery o f services/projects of the
rehabilitation program of the Commission.2
III.
DISABILITY BENEFITS
1. DISABILITY, M EA N IN G .
‘Disability” means the loss or damage o f a physical or mental function
resulting from an injury or sickness that prevents an employee from performing
his/her work, or from being engaged in any gainful occupation.3 In general, as a
basis for compensation, it is the combination of partial or total physical incapacity
and of inability to work, or inability to work with the same ease and competency as
prior to the injury, or the loss, total or partial, of earning power from the injury.4
2. T H R E E KINDS OF DISABILITY U N D E R T H E LABOR COD E.
There are three (3) kinds o f disability benefits under the Labor Code, as
amended by P.D. No. 626,5 namely:
(1) Temporary total disability (Article 197 [191]);
(2) Permanent total disability (Article 198 [192]); and
(3) Permanent partial disability (Article 199 [193]).
All the foregoing are discussed in seriatim herein-below.
The compensation for the disabilities mentioned and described in the law
is not mutually exclusive. For instance, recovery o f compensation for temporaiy total
or permanentpartial disability shall not preclude recovery for permanent total disability.
The purpose of the law in providing benefits to the injured or sick
employee during temporaiy disability is to compensate him for what he might have
earned during the period while his injury or sickness is being medically treated. The
object of the law in providing benefits for permanent disability is to compensate him
for the actual and permanent loss o f physical or mental function o f his body.6 This
1 Section 8, Rule IX. Id.
7 Section 9, Rule IX, Id.
3
1
5
4
Article 173 (n), LaborCode.
Hada Hataie v. ECC. G.R No. 92803, March 22,1991.195 SCRA 580.
The Employees' Compensation la *.
Ca/fete v. Insular Lumber Co., G.R. No. L-42175, July 10,1935,61 Phi. 592; Garcia v. Philippine Education Company, 62
PM. 634
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is as it should be; otherwise, the social justice policy underlying the enactment of
labor laws would lose its meaning.1
Ill-A.
TEMPORARY TOTAL DISABILITY
1. T O T A L DISABILITY, W H E N TEM PORA RY .
A total disability is temporaiy if, as a result of the injury or sickness, the
employee is unable to perform any gainful occupation for a continuous period of
not exceeding one hundred twenty (120) days, except when such disability still
requires medical attendance beyond 120 days, but not to exceed 240 days.2
If the disability is the result of an injury or sickness, the penod of
compensability shall be counted from the first day of such injury or sickness. An
employee who later had to stop working due to a compensable illness is also
entided to temporaiy total disability benefits.34An employee-claimant who retires or is
otherwise separated from employment after the 120 days of TTD but before 240
days, may present himself to the System (GSIS/SSS) for another physical and
medical examination to determine if h e/she is entided to additional benefits.*
2. C O N D IT IO N S T O E N T IT L E M E N T .
An employee shall be entided to an income benefit for temporaiy total
disability if all o f the following conditions are satisfied:
1. He has been duly reported to the System (GSIS/SSS);
2. He sustains die temporaiy total disability as a result o f the injury or
sickness; and
3. The System has been duly notified of the injur)' or sickness which
caused his disability.
His employer shall be liable for the benefit if such illness or injury
occurred before the employee is duly reported for coverage to the System
(GSIS/SSS).5
3. P E R IO D O F E N T IT L E M E N T .
The income benefit in the case o f temporaiy total disability should be paid
beginning on the first day of such disability. I f caused by. an injury or sickness, it
should not be paid longer than one hundred twenty (120) consecutive days except
where such injury or sickness still requires medical attention beyond 120 days but
1 Social Security Convnission v. CA, Gi?. No. 152058, Sept 27.2004.
2 Aitide 197 [191). Labor Code; Section 2 (a). Rule VII, Amended Rdes on Employees’ Compensation; ECC Boarf
Resolution 93-08-0068 issued on August 5.1993.
3 Fedfio v. WCC, G.R. No. L43642, Jan. 17,1985,134 SCRA 56.
4 ECC Board Resolution No. 93-08-0068, August 5,1993.
5 Section 1, Rule X, Amended Rules on Employees'Compensation.
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not to exceed 240 days from the onset o f the disability, in which case, benefit for
temporary total disability shall be paid. However, the System (GSIS/SSS) may declare
the total and permanent status at any time after 120 days of continuous temporary total
disability as may be warranted by the degree of actual loss or impairment of
physical or mental functions as determined by the System (GSIS/SSS).1
After an employee has fully recovered from an illness as duly certified to
by the attending physician, the period covered by any relapse he suffers or
recurrence of his illness, which results in disability and is determined to be
compensable, shall be considered independent of, and. separate from, the period
covered by the original disability in the computation of his income benefit for
temporary total disability.2
4. AMOUNT O F B E N E FIT .
Any employee entided to benefit for temporary total disability shall be
paid an income benefit equivalent to ninety percent (90%) of his average daily
salary credit, subject to die condition that the daily income benefit shall not be less
than P I0.00 or more dian P200.001 nor paid longer than 120 days for the same
disability, unless the injury or sickness requires more extensive treatment that lasts
beyond 120 days, but not to exceed 240 days from onset o f disability, in which
case, he shall be paid benefit for temporary total disability during the extended
period.4
lil-B.
PERMANENT TOTAL DISABILITY
1. DISABILITY, W H EN T O T A L AND P E R M A N E N T .
A disability is total and permanent if, as a result o f the injury or sickness, the
employee is unable to perform any gainful occupation for a continuous period
exceeding one hundred twenty (120) days.5 The fact, however, that the permanendy
and totally disabled employee continues to work after such disability does not
deprive him of the benefits provided under the law.6 For what is important
consideration is the inability to do substantially all material acts necessary for the
prosecution of a gainful occupation without serious discomfort or pain and without
material injury or danger to life. In disability compensation, it is not the injury perse
' Section 2 [a]. Rule X. bid.
Section 2 (b|, Rule X. bid.: ECC Resolution No. 1029, August 10.1978.
3 The amount c( daily income benefit tor temporary total disability (TTD| was increased from P90.00 to P200.00, as
provided under ECC Board Resolution No. 96-10-0429, October 10,1996 and ECC Board Resolution No. 12-09-21,
Septerriber 27,2012.
4 Section 3, Rule X. bid.; ECC Resolution No. 1029, August 10,1978.
5 Section 2 [b]. Rule VII, Amended Rules on Employees' Compensation; Crystal Shipping, Inc. v. Natwdad, G.R. No. 154798,
Oct 20.2005; GSIS v. Cadiz. G.R. No. 154093, July 8,2003,405 SCRA 450.454.
7
6 Makabai v. ECC, G.R. No. L-51533, Ncv. 29,1983.
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which is compensated but the incapacity to work.1The test to determine its gravity
is the impairment or loss o f one’s capacity to earn and not its mere medical
significance.2
2. C O N D IT IO N S T O E N T IT L E M E N T .
An employee is entitled to an income benefit for permanent total disability if
all of the following conditions are satisfied:
1) He has been duly reported to the System (GSIS/SSS);
2) He sustains the permanent total disability as a result of the injury or
sickness; and
3) The System has been duly notified of the injury or sickness which
caused his disability.3
His employer shall be liable for the benefit if such injury or sickness
occurred before the employee is duly reported for coverage to the System
(GSIS/SSS).4
3. T O T A L D ISA B ILITIES D E E M E D P E R M A N E N T .
The following total disabilities shall be considered permanent:
(1) Temporary total disability lasting continuously for more than 120
days, except as otherwise provided for temporary total disability.5
(2) Complete loss o f sight o f bodi eyes;
(3) Loss o f two limbs at or above the ankle or wrist;
(4) Permanent complete paralysis of two limbs.
(5) Brain injury resulting in incurable imbecility and insanity, and
(6) Such cases as determined by the System (GSIS/SSS) and approved
by the Commission.6
4. P E R IO D O F E N T IT L E M E N T .
The full monthly income benefit shall be paid for all compensable
months o f disability.7 After the benefit under the Employees' Compensation shall
have ceased as provided under the preceding paragraph, and if the employee is
otherwise qualified for benefit for the same disability under another law
administered by the System, he shall be paid a benefit in accordance with the
’
J
3
*
5
6
7
Bejerano v. ECC, G.R No. 84777, Jan. 30.1992; Crystal Shipping, Inc. v Natwidad.GR No. 154708. Oct 20.2005
Seagul Wartime Corp.v. Dee, G.R No. 165156, April 2,2007
Section 1 [a]. Rule X). Amended FUies on Employees' Compensation.
Rule XI, Amended Rules on Employees' Compensation
Temporary total disability as provided in Rule X, Amended Rules on Employees' Compensation.
Section 1 [b], Rule XI, Amended Rules on Employees' Compensation
Section 2 (a), Ruie XI, Id.
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provisions of that law. This paragraph applies to contingencies which occurred
prior to May 1, 1978.1
Except as otherwise provided for in other laws, decrees, orders or letters
of instructions, the monthly income benefit shall be guaranteed for 5 years and
shall be suspended under any o f the following conditions:
(1) Failure to present himself for examination at least once a year upon
notice by the System;
1.1. Compliance with the said requirement shall lift the suspension
and obligation of the System to rcturrt the suspended EC PTD
benefits automatically arises.2
(2) Failure to submit a quarterly medical report certified by his attending
physician;1
(3) Complete or full recovery from his permanent disability, or
(4) Upon being gainfully employed.4
5. AMOUNT O F B E N E F IT .
In the case of the SS3, any employee entitled to permanent total disability
benefit shall be paid by the System a monthly income benefit5 The number of
months of paid coverage shall be the number o f monthly contributions remitted
to the System including contributions other than
for Employees’
Compensation if paid before March 31, 1975. The full monthly income benefit
shall be paid for all compensable months of disability.6 The first day preceding the
semester of temporary total disability shall be considered for purposes of
computing the monthly income benefit for permanent total disability.7
It bears noting that in 2014, there has been a ten percent (10%) acrossthe-board increase in EC pension for all EC permanent total disability pensioner in
the private sector.8 The 10% across-the-board increase has a retroactive application
to September 2013.9
6. AMOUNT OF B E N E F IT FO R D E P E N D E N T C H IL D R E N .
Each dependent child, but not exceeding five (5), counted from die
youngest and without substitution, shall be entitled to ten percent (10%) o f the
'
2
3
4
5
6
2
8
9
Section 2 [b], Rule XI. Id.
As provided under ECC Board Resolution No. 10-02-03, dated February 26.2010.
As required under Section 5 of Rule IV of he Amended Rules on Employees' Compensation.
Section 2 {cj, Rule XI, Amended Rules on Employees' Compensation.
Section 3 (a), Rule XI, Id. As defned in Section 9 (a), Rule VI of the Amended Rules on Employees'Compensation.
Section3(b).RuleXI,Id.
Section 3(c), Rule XI, Id.
Per Section 2, Executive Order No. 167, dated May 26,2014.
As provided under Board Resolution No. 14-06-29, dated June 6,2014.
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monthly income benefit of the employee. This rule, however, shall not apply to
causes of action which accrued before May 1,1978.*
7. E N T IT L E M E N T T O T H E N E W IN C O M E B E N E F IT U N D E R P.D.
1641.
The new amount o f the monthly income benefit computed under the
Amended Rules shall be applicable to all contingencies occurring on or after January
1, 1980. However, for contingencies which occurred before May 1, 1978, the
limitation o f Pl2,000 or 5 years, whichever comes first, shall be enforced.*2
In the case o f the SSS, the present monthly income benefit of current
pensioners shall be increased by twenty percent (20%) effective January 1 ,1980.3
In the case o f the GSIS, the monthly income benefit of current
pensioners shall be adjusted and recomputed to reflect the twenty percent (20%)
increase over the benefit under P.D. 1146 effective January 1 ,1980.4
8. A G G REG A TE M O N T H L Y B E N E F IT PAYABLE.
-Except the benefit to dependent children,5 the aggregate monthly benefit
payable, in the case o f the GSIS, shall in no case exceed the monthly wage or salary
actually received by the employee as o f the date o f his permanent total disability.6
Ill-C.
PERMANENT PARTIAL DISABILITY
1. D ISABILITY, W H E N PARTIAL AND P E R M A N E N T .
A disability is partial and permanent if, as a result o f the injury or sickness,
the employee suffers a permanentpartial loss o f the use o f any part o f his body.7
2. C O N D IT IO N S T O E N T IT L E M E N T .
An employee shall be entitled to an income benefit for permanent partial
disability (PPD) if all o f the following conditions are satisfied:
1. He has been duly reported to the System (GSIS/SSS);
2. He sustains the permanent partial disability as a result o f the injury or
sickness; and
3. The System has been duly notified o f the injury or sickness which
caused his disability.
’
2
3
4
5
6
Section 4 (a), Rule XI, Amended Rules on Employees' Oxnpensafoo.
Section 5 (a). Rule XI. Id.
Id.
Id.
Under Section 4 of Ns Rule XI.
Section 6, Rule XI, Id.; See also ECC Resolution No. 2819, August 9,1984.
1 Section 2 jc], Rule VII, Amended Rules on Employees’ Compensation
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His employer shall be liable for the benefit if such injury or sickness
occurred before the employee is duly reported for coverage to the System
(GSIS/SSS).1
For purposes o f entitlement to income benefits for permanent partial
disability, a covered employee shall continue to receive the benefits provided
thereunder even if he is gainfully employed and receiving his wage o r salary.2
3. PERIOD O F ENTITLEME1SIT.
The income benefit shall be paid beginning on the first month o f such
disability, but not longer than the designated number o f months in accordance with
the schedule found in Article 199(b) [193(b)] o f die Labor Code.3
A worker who sustained work-related injuries that resulted to functional
loss and/or physical loss o f any part o f his body shall be granted Temporary Total
Disability (TTD) and Permanent Partial Disability (PPD) benefits successively.
Any earlier compensation for TTD that may have been paid to an injured worker
shall not be deducted from the PPD benefit that may be later granted to him.4
A loss o f a wrist shall be considered a loss o f the hand, and a loss o f an
elbow shall be considered a loss o f the arm; a loss o f an ankle shall be considered a
loss of the foot, and a loss o f a knee shall be considered a loss o f the leg, a loss o f
more than one joint shall be considered a loss o f die whole finger o r toe, and a loss
o f only the first joint shall be considered a loss o f one-half o f the whole finger or
toe. Other permanent partial disabilities shall be determined by the Medical Officer
o f the Sy$tem.s
The degree of permanent disability shall be equivalent to the ratio that the
designated number of compensability beats to IS.6
4. SCHEDULE O F IN C O M E B E N E F IT PAYM ENT.
The income benefit shall be paid beginning with the first month o f
disability, but no longer than the designated number o f months in the following
schedule:7
C o m p le te a n d P e tm n m n l
N o. o f
L a s s o f th e u s e o f
M o n th s
o n e th u m b
one index fin g e r
one m id d le fin g er
one rin g finger
one little fin g e r
10
8
6
S
3
Secbonl [aJ.RiieXII.AmencledRutesonErTployees’Compensation.
Secfcn 1(b), RuleXII. W.
Sedixi2|a).Ru3eXU,W
id.'.AsprowjdedundereoardResafajtionNo. 10-09-114.Senesof 2010, September2,2010.
Secfion2(b). RuleXH,M.
Secficn2(c). Rule»!, kid.
Per Section 2. Rule XBof (he Amended Rules on Employees' Compensalioa
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o n e b ig toe
an y toe
one band
o n e a im
o n e foot
o n e le g
one car
b o th ears
h e a rin g o f o n e c a r
h e a rin g o f b o th ears
sig h t o f o n e eye
6
3
39
SO
21
46
10
20
10
50
25
5. A M O U N T O F B E N E F IT .
Any employee entitled to permanent partial disability benefit shall be paid
by the System a monthly income benefit for the number o f months indicated in the
schedule embodied in the law (Articlel99(b) [193(b)]) and the Amended Rules} If the
indicated number o f months exceed twelve, the income benefit shall be paid in
monthly pension; otherwise, the System may pay income benefit in lump sum o r in
monthly pension.12
In case o f permanent partial disability less than the total loss o f the
member, die same monthly income shall be paid for a portion o f the period
established for the total loss o f the member in accordance with die proportion that
the partial loss bears to the total loss. If the result is a decimal fraction, the same
shall be rounded off to the next higher integer.3
In case o f simultaneous loss o f more than one member or a part thereof,
the same monthly income shall be paid for a period equivalent to die sum o f the
periods established for the loss o f the member or part thereof but not exceeding
75. If the result is a decimal fraction, the same shall be rounded o ff to the higher
integer.4
The new amount o f the monthly income benefit computed under the
Amended Rules shall be applicable to all contingencies occurring on o r after January
1, 1980. However, for contingencies which occurred before May 1, 1978, the
limitation o f PI 2,000.00 or five (5) years, whichever comes first, shall be enforced.5
In the case o f the SSS, the present monthly income benefit o f current
pensioners shall be increased by twenty percent (20%) effective January 1 ,1980.6
In the case o f die GSIS, the monthly income benefits o f current
pensioners shall be adjusted and recomputed to reflect'die twenty percent (20%)
increase over the benefit under P.D. 1146 effective January 1 ,1980.1
1 Section 2 tiered.
2
1
4
5
Section3 f t RifeXII, Md.
Section3 f t Rife XII, Wd.
Section3f t Rife XII, Ibid.
SecSon3ftRu)eXIi,BNd.
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It bears noting that there has been a ten percent (10%) across-the-board
increase in EC pension for all EC survivorship pensioner in the private sector.12 The
10% across-the-board increase has a retroactive application to September 2013.34
6. UNLISTED INJURIES AND ILLNESSES.
In cases of injuries or illnesses not listed in the schedule in Article 199(b)
[193(b)] and the Amended Rules* the benefit shall be an income benefit equivalent to
the percentage of the permanent loss of the capacity for work.5
7. LITMUS T EST AND D IS T IN C T IO N B E T W E E N P E R M A N E N T
TOTAL DISABILITY AND PE R M A N E N T PARTIAL DISABILITY.
In Vicente v. ECC,6 the Supreme Court laid down the litmus test and
distinction between Permanent Total Disability and Permanent Partial Disability, to wit.
"(Wjbile 'permanent total disability’ invariably results in an
employee’s loss of work or inability to perform his usual work,
'permanentpartial disability,’ on the other hand, occurs when an employee
loses the use of any particular anatomical part of his body which
disables him to continue with his former work. Stated otherwise, the
test of whedicr or not an employee suffers from ‘permanent total disability'
is a showing of the capacity of the employee to continue performing his
work notwithstanding the disability he incurred. Thus, if by reason of
the injury or sickness he sustained, the employee is unable to perform
his customary job for more than 120 days and he does not come within
the coverage of Rule X of the Amended Rules on Employees
Compensability (which, in a more detailed manner, describes what
constitutes temporary total disability), then the said employee
undoubtedly suffers from ‘permanent total disability’ regardless of whether
or not he loses the use of any part of his body. ’7
It bears emphasizing that a person’s disability may not manifest fully at
one precise moment in time but rather over a period of time. It is possible that an
injury which at first was considered to be temporary may later on become
permanent or one who suffers a partial disability becomes totally and permanendy
disabled from the same cause.8
1
2
3
4
5
6
Id.
Section 2, Executive Order No. 167, dated May 25,2014.
As provided under Board Resdution No. 14-06-29, dated June 6,2014.
Under Section 2 thereof
Noo-Scheduted DisabStes.
G.R. No. 85024, Jan. 23.1991,193 SCRA190
1 See also Sodat Security Cormssion, v CA. G R. No. 152058, Sept 27,2004; Ijares v. Court of Appeals, G.R No. 105854,
Aug. 26,1999,313 SCRA 141, Gonzaoa v. ECC, G.R No. L-62287, Jan. 31,1984,127 SCRA 443; Marcefmo v. Seven Up
Botfng Company of the Phfippnes, G.R No. L-30443, Oct 31 .1 972,150-C Phil 133; Landicho' v. WCC, G.R. No. I45996 March 26 1979.89 SCRA 147; .egaspi v. Province of Negros Oriental, G.R. No. L43066, Dec. 29,1978.
8 GSIS v. CA G.R No. 117572. Jan. 29.1998.285 SCRA 430 citing GSIS v. CA G R No. 116015, Jtiy 31.1996,260 SCRA
133.
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IV.
DEATH BENEFIT
1. D E A T H ; M E A N IN G .
Within the context o f the employees’ compensation program, the term
"death" means loss of life resulting from an injury or sickness.1 “Compensable death”
refers to death which is the result o f a work-related injury or sickness.
2. C O N D IT IO N T O E N T IT L E M E N T .
The beneficiaries of a deceased employee shall be entitled to an income
benefit if all of the following conditions are satisfied:
(1) The employee has been duly reported to the System;
(2) He died as a result o f an injury or sickness; and
(3) The System has been duly notified of his death as well as the injury or
sickness which caused his death. His employer shall be liable for the
benefit if such death occurred before the employee is duly reported
for coverage to the System.2
If the employee has been receiving monthly income benefit for
permanent total disability at the time of his death, the surviving spouse must show
that the marriage has been validly subsisting at the time o f his disability. In
addition, the cause o f death must be a complication or natural consequence o f the
compensated Permanent Total Disability.3
3. P E R IO D O F E N T IT L E M E N T .
A. For Prim ary Beneficiaries:
(a) The income benefit shall be paid beginning at the month of death and
shall continue to be paid for as long as the beneficiaries are entitled thereto. With
respect to the surviving legitimate spouse, the qualification is that he/she has not
remarried. For the dependent children, the qualifications are:
1) Unmarried;
2) N ot gainfully employed; and
3) Over 21 years of age provided he/she is incapable o f selfsupport due to a physical or mental defect which is congenital or
acquired during minority.4
1 Artcie 173(m) [167(m)}, Labor Code.
Section 1 [a]. Rule XIII. Amended Rules on Employees' Compensation.: Gau Stieng Phis., Inc. v. Joaquin, G R. No.
144655, Sept 8,2004, citing Boniiia v. CA. G.R. No. 136453, Sept 21,2000,340 SCRA 760.
3 Section 1 [b]. Rule XIII, Id.; As provided under Board Resolution No. 19-09-116, dated Septembef2,2010.
4 Section 2 (A) (a], Rule XIII, Id.; As provided under Board ResoWon No. 12-07-16, dated July 27,2012.
2
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(b) The monthly income benefit shall be guaranteed for five (5) years
which in no case shall be less than Pi 5,000.00. Thereafter, the beneficiaries shall be
paid the monthly income benefit for as long as they are entided thereto.1
B. For Secondary Beneficiaries:
(a) The income benefit shall be sixty (60) rimes the monthly income
benefit of a primary beneficiary which in no case be less than P15,000.00, which
shall likewise be paid in monthly pension.2
4. AMOUNT OF B E N E FIT .
*
(a) In the case of prim ary beneficiaries - The monthly income benefit
shall be equivalent to the monthly income benefit for permanent total disability,
which shall be guaranteed for five years, increased by ten percent for each
dependent child but not exceeding five (5), beginning with the youngest and
without substitution: Provided, That, the aggregate monthly benefit payable in the
case of the GSIS shall in no case exceed the monthly wage or salary actually
received by the employee at the time of his death; and Provided, Further, That the
minimum income benefit shall not be less than P15,000.00. The death benefit shall
be paid during the entire period for which they are entitled thereto.
If the employee has been receiving income benefits for permanent total
disability at the time of his death, the primary beneficiaries shall be paid the
monthly income benefit equivalent to eighty percent plus the dependent's pension
equivalent to ten percent (10%) thereof for every dependent child but not
exceeding five (5) counted from the youngest and without substitution.3
(b) In the case of secondary beneficiaries - The income benefit is
payable in monthly pension which shall not exceed the period o f 60 months
and the aggregate income benefit shall not be less than P i5,000.00. If the
employee has been receiving monthly income benefit for permanent total disability
at the time of his death, the secondary beneficiaries shall be paid the monthly
pension, excluding the dependent's pension o f the remaining balance of the five
year guaranteed period.4 It bears stressing that there has been a ten percent (10%)
across-the-board increase in EC pension for all EC survivorship pensioner in the
private sector.5 The 10% across-the-board increase has a retroactive application to
September 2013.6
(c) Qualified wives and children beneficiaries o f M uslim s.
In relation thereto, the following are the guidelines on the grant o f EC
death benefits to qualified wives and children beneficiaries o f Muslims:
1
2
3
4
5
6
Section 2 (A) [b], Rule XIII. Id.; ECC Resolution No. 2799, Jut/ 25,1984.
Section 2 (B), Rule XIII, Id.; Id.
Section 3 (a), Rule XIII, Id.
Section 3 (b), Rule XIII, Id.; ECC Resolution No. 2799, July 25,1984.
Section 2, Executive Order No. 167, dated May 26,2014.
As provided under Board Reso&Jtion No. 14-06-29, dated June 6,2014.
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1) The basic monthly pension shall be divided equally among the
surviving wives;
2) Upon the death or re-marriage o f any o f the wives, her basic monthly
pension shall be equally re-distributed to the remaining wives;
3) The qualified dependent children not exceeding five (5) beginning
with the youngest and without substitution, who are entitled to
dependent’s pension, shall be counted from among the collective
number o f children o f the wives o f the Muslim and not counted from
the children o f each wife o f the Muslim.1
(d) Benefits u p o n the death of a pensioner.
The provision o f paragraph (b) o f Article 200 [194] of the Labor Code, as
amended, applies to death occurring on or after January 1,1980, regardless o f the
date of the onset of the permanent total disability.2
Upon die death of a pensioner as mentioned in the said paragraph (b) of
Article 200 [194], eighty percent (80%) o f the monthly income benefit and die
dependents’ pension shall be paid to the primary beneficiaries in cases where the
cause o f death is a complication or natural consequence o f his compensated
Permanent Total Disability.3
This provision does not apply to cases where a member under permanent
partial disability dies during the period dial he is receiving monthly income benefit
for permanentpartial disability.4
Upon the death o f a pensioner who is survived by secondly beneficiaries,
the latter are entided only to the balance of the five (5) year guaranteed period,
provided that the total amount o f compensation benefits for the five-year period
shall not be less than Fifteen thousand pesos (P I5,000.00). But if the member
under permanent total disability dies after the five-year guaranteed period, secondary
beneficiaries are no longer entided to any benefits.5
5. E N T IT L E M E N T T O T H E N E W IN C O M E B E N E F IT U N D E R P.D.
1641.
The new amount o f the monthly income benefit computed under
the Amended Rules shall be applicable to all contingencies occurring on or after
January 1,1980. However, for contingencies which occurred before May 1,1978,
the limitation of PI 2,000 or 5 years, whichever comes first, shall be enforced.
' As provided under Board Resoluiion No. 14-07-34, dated July 28,2014; See also No. I (1], Annex *D \ Supptetory Rules to
Amended Rules on Employees' Compensation [Resolution No. 90-03-0022 dated March 23,1990].
7 No. II [1], Annex TT, Suppletory Rules to Amended Rules on Employees' Compensation [Resolution No. 96030022 dated
March 23,1990].
3 No. II [2], Ibid., as amended by Board Resolution No. 1609-116. Series of 2010, September 2,2010.
* No. II [3], Ibid.
5 No. II [4], Ibid.
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In the case of die SSS, the present monthly income benefit of current
pensioners shall be increased by twenty percent (20%) effective January 1,1980.
In die case of the GSIS, die monthly income benefit o f the current
pensioners shall be adjusted and recomputed to reflect the twenty percent (20%)
increase over the benefit under P.D. 1146 effective January 1 , 1980.1
The new amount of lump sum benefit computed under the Amended Rules
shall be applicable to all contingencies occurring on or after May 1,1980, otherwise
entidement thereto shall be governed by the foregoing rules?
6. DEATH B EN EFITS, N O T PART OF T H E ESTA TE O F T H E
DECEASED.
The deadi benefits being paid under the law are not part o f the deceased’s
estate. They are not in die nature of inheritance. They arc granted by operadon of
law as financial compensadon and aid for the death of the employee.
It must be noted that the dependents mentioned in the law are not
referred to as the ‘heirs" but rather as “beneficiaries." It may be further observed that
the dependents are not necessarily the “heirs” o f the deceased, as this term is
understood in civil law.
7. PRESUMPTIVE D EA TH.
In 2014, ECC Board Resolution No. 14-07-20 [July 28, 2014], was issued
promulgating the Guidelines on the Grant of EC Benefits Due to Calamity or Fatal Event
Amendingfor this Purpose, Paragraph 5 of Board Resolution No. 93-08-0068 [August 5,
1993J. Accordingly, said Paragraph 5 shall now read as follows:
5.
"Guidelines on the Grant of EC benefits for the Beneficiaries of
Missing Persons while in the Performance of Duty during Calamity or Fatal Events
5.1. Coverage. "These guidelines shall apply to all covered workers or
employees' and uniformed personnel who had been reported missing while they
were in the performance of their duties during calamities or fatal events such as,
but not limited to, police or military operation, earthquake, typhoon, and volcanic
eruption.
5.2. Period of Filing. "The beneficiaries may file their claims for EC death
with funeral benefits within the three year-prescriptive period from the time the
missing person has been presumed dead after the lapse o f four years from the
occurrence of the incident.
In lieu of Death Certificate, the Systems may require the submission of
cernfication from any concerned government institution showing that the
' Section 4, Rule XIII. Amended Rules on Employees' Compensation.
1 Section 5. Rule XIII, Id (The Rules refeired to are the ones found in Section 4 of this Rule XIII).
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concerned employee or uniformed personnel has been included in the list o f
missing persons due to a calamity or fatal event an d /o r has been missing for a
period of four years.
5.3. Grant of EC funeral benefits. “EC funeral benefits shall be provided to
the qualified beneficiaries despite the absence of burial ceremony.
5.4. Non-Refund of EC benefits. "If the missing employee appears or without
appearing his/her existence is proved, the EC death with funeral benefits which
have been previously provided shall no longer be returned by the concerned
beneficiaries to the Systems."
ECC Circular No. 15-01-20 (January 20, 2015], is a clarificatory Advisory
on the Definition o f Missing Persons under EC Board Resolution No. 14-07-20
[supm\. The following arc the series of events which should be considered in the
grant of EC benefits:
1. The word "m issing" refers to unknown fate or there is no trace o f
whereabouts of a worker, employee and uniformed personnel while
he/she is in the performance of his/her duties during calamities or
fatal events.
2. The worker, employee or uniformed personnel was not seen or heard
from after die lapse o f four years from the occurrence of the incident.
3. The disappearance o f the worker, employee or uniformed personnel
gives rise to presumption o f death.
4. The death of the worker, employee or uniformed personnel arises out
of and in the course o f employment.
8. JU R ISPR U D E N C E .
Under the law on employees’ compensation, death is compensable only
when it results from a work-connected injury or sickness.1Thus, if the death o f the
employee did not occur while in the performance o f his duties as a gasoline
attendant, the claimant cannot be extended the death benefits under the law.234
In Tolosa v. ECC,1 it was pronounced that the employee’s widow is n o t
entided to death benefits because her husband had stopped working when he
became physically disabled to do his work at the time o f his retirement in 1975 and
died on February 14,1984, or almost nine (9) years after, which is clearly not within
the two-year period required by the old Workmen’s Compensation Act. But in
M anual v. ECC,* where the employee died about 4 V2 years after retiring from the
service due to a stroke, a cardiovascular accident caused by thrombosis, the
'
2
3
4
Buena Obrav. SSS. G R No. 147745. A p i 9.2003.
Lu v. WCC. G R No. L-43181, Oct 27,1986.145 SCRA170.
G R No. 60509, May 8,1985,136 SCRA 335.
G R No. 88573. June 25,1990,185 SCRA 738.
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Supreme Court, in reversing the denial of the claim by the ECG, ruled that the
dependents are entitled to the benefits, although the death occurred after the
retirement, because the cause o f death, rryocardial infarction, is closely related to the
cause of his compulsory retirement.
In GS1S v. Cuanong} where the employee died a year after retirement, the
Supreme Court held that indeed, if a death which occurred almost 4 Vz years after
retirement was held to be within the coverage of the death benefits under P.D. No.
626, as in the Manuyon case, with more reason should a death which occurred
within one year after retirement be considered as covered under the same law. A
claim for benefit for such death cannot be defeated by the mere fact of separation
from service.1
2
Upon the death of a covered member during the period that he/she was
receiving permanent partial disability (PPD) benefits, the remainder of his PPD
benefits shall be paid to lus primary beneficiaries. However, the beneficiaries shall be
entitled to the same benefits enjoyed by the beneficiaries o f a permanent total
disability (PTD) pensioner upon his death, provided, that the cause o f death was
the same illness or injury for which he/she was awarded PPD benefits.
V.
FUNERAL BENEFIT
1. E N T IT L E M E N T TO FU N ER A L B E N E F IT .
A funeral benefit o f P20.000.003 shall be paid upon the death o f a covered
employee in both the private and public sectors or permanently totally disabled
pensioner to one of the following:
(a) The surviving spouse; or
(b) The legitimate child who spent for the funeral services; or
(c) Any other person who can show incontrovertible proof or proof of
his having borne the funeral expenses.4
2. C O N D IT IO N TO E N T IT L E M E N T .
The EC funeral benefits shall be granted after the SSS or the GS1S has
declared the following in the evaluation of claims for EC death benefits:
1 G.R. No. 158846, June 3,2004.
2 Ciing |aresv. CA, G.R. No. 105854,Aug. 26.1999,313 SCRA141.
3 Funeral benefit was increased to Twenty “housand Pesos (P20.000 00). as provided under Executive Order No. 167, dated
May 26,2014, in relation to Board Resolutions Nos 144)5-29 [GuideSnes in the Implementation of Executive Order No. 167
in the Private Sector) aid 144)6-30 (Guidetines in the Implementation of Executive Order No. 167 in the Public Sector), both
dated June 06,2014. See also the earlier Board Resolution No. 13-07-14, July 2,2013
< Section 1, Rule XIV, Amended Rules on Employees' Compensation, See also ECC Resolution No. 3582, July 21,1987.
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1. Death due to sickness - causal relationship between the death and the
working conditions of the covered member.
2. Death due to injury - causal relationship between the death and
the work-related accident.
3. Death o f EC Permanent Partial Disability (PPD) or Permanent Total
Disability (PTD) pensioner - the cause of death is a complication or
natural consequence of previously compensated PPD or PTD.1
c.
B E N E F IC IA R IE S
1. D E F IN IT IO N .
The term "beneficiaries” means the dependent spouse until h e/sh e
remarries and dependent children who are the primary beneficiaries. In their
absence, the dependent parents and subject to the restrictions imposed on
dependent children, the illegitimate children and legitimate descendants, who are
the secondary beneficiaries, provided that the dependent acknowledged natural child
shall be considered as a primary beneficiary when there are no other dependent
children who are qualified and eligible for monthly income benefit.2
2. G EN ER A L CLA SSIFICA TIO N .
Beneficiaries under the Labor Code may be classified as follows:
1. Primary, or
2. Secondary.3
Beneficiaries shall be determined at the time o f the employee’s death.4
3. PRIMARY B E N E F IC IA R IE S .
The following beneficiaries shall be considered primary.
(A) The legitimate spouse until he/she remarries. The surviving spouse
found not to be living with the covered employee at the time the employee died
should be entitled to employees’ compensation benefits provided that the
separation occurred owing to any of the following circumstances:
1
2
3
4
Section 2, Rule XIV, Id.; As provided under Board Resolution Nos. 14-06-29 and 1406-30, both dated June 6,2014.
Article 173® (167(j)], Labor Code.
Section 1 (a]. Rule XV, Amended Rules on Employees’ Compensation
Id.; Consequently, aJhough in other jurisdictions, posthumous children who died before the emptyee's death ate considered
as dependents, hewever, under the laws of the Phiippines, they cannot generally be so considered snee beneficiaries are
determined at the time of the death of the employee However, in Vda de Makabenta v Davao Stevedore Terminal
Company, G.R. No. L-27489, April 30,1970, the daughter bom after the death of the employee and therefore a posthumous
chid, was considered a legal dependent of the deceased employee. See also King v. Peninsulas Portland Cement Co., 216
Mch. 335).
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1. Refusal of the covered employee to continue living with the surviving
spouse; or die employee’s abandonment of the said spouse, without
justifiable or valid cause;
2. Attempt of the coveted employee against the life of the surviving
spouse, common ctuld/children of the spouse;
3. Commission of an act o f sexual abuse against the surviving spouse,
common child/childrcn or child/children o f the spouse by the
covered employee;
•„
4. The covered employee’s recurrent commission of physical violence, or
grossly, abusive conduct, against the surviving spouse, common
child/children or child/children of the spouse;
5. The covered employee’s infliction o f physical violence, or imposition
of moral duress, to compel die surviving spouse, common
child/children or child/children of the spouse to change their religious
or political affiliation;
6. Attempt of the covered employee to corrupt, or induce the surviving
spouse, common child/children or child/children o f the spouse to
engage in prostitution, or to make them connive with the employee in
such an act of corruption or inducement;
7. Drug addiction or habitual alcoholism o f the covered employee;
8. Lesbianism or homosexuality o f the covered employee;
9. Contraction of bigamous marriages by the covered employee, whether
in the Philippines or abroad;
10. Sexual infidelity ot perversion o f the covered employee;
11. The covered empbyce’s act o f allowing the surviving spouse, common
child/children or child/children of the spouse to be subjected to acts
of lasciviousness; and
12. The covered employee’s contraction of serious, sexually transmitted
disease extra-maritally.1
(B) Legitimate, legitimated, legally adopted or acknowledged natural
children, who are unmarned not gainfully employed, not over 21 years of age, or
over 21 years of age: Provided, chat he is incapacitated and incapable o f self-support
due to physical or mental defect which is congenital or acquired during minority,
Provided, further, that a dependent acknowledged natural child shall be considered as
a primary beneficiary only when diere are no other dependent children who are
' Section 1 pi), Rule XV, Amended Rules on Employees’ Compensation, as provided under Board Resolution No. 97-090500, Septenter 4,1997 entiled ‘Policy on Surviving Spouse.'
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qualified and eligible for monthly income benefit; provided finally, that if there are
two or more acknowledged natural children, they shall be counted from the
youngest and without substitution, but not exceeding five (5).1
4. SEC O N D A R Y B E N E F IC IA R IE S .
The following beneficiaries shall be considered secondary.
(1) The legitimate parents wholly dependent upon the employee for
regular support;
(2) The legitimate descendants and illegitimate children who are
unmarried, not gainfully employed, and not over 21 years of age, or over 21 years
o f age provided that he is incapacitated and incapable o f self-support due to
physical or mental defect which is congenital or acquired during minority.2
5. PR IO R ITY .
Primary beneficiaries shall have priority claim to death benefit over
secondary beneficiaries. Whenever there are primary beneficiaries, no death benefit
shall be paid to his secondary beneficiaries.3
If the deceased employee has no primary beneficiaries at the time o f his
death, the death benefit shall be paid to his secondary beneficiaries.4
If the deceased employee has no beneficiaries at the time of his death, the
death benefit shall accrue to the Employees’ Compensation fund.5
6. M O N T H L Y IN C O M E B E N E F IT .
Primary beneficiaries shall be entided to a monthly income benefit. In
their absence, the secondary beneficiaries shall be entided to a monthly
income benefit not to exceed 60 months and the death benefit shall not be less
than P15.000.00.6
7. E V ID E N C E T O PROVE R E L A T IO N S H IP AND D E P E N D E N C Y .
A marriage certificate issued by the parish priest who solemnized the
marriage between the surviving spouse and the deceased is sufficient to establish
marriage relationship.7
The baptismal certificates and birth certificates of the children are also
sufficient evidence to prove the relationship of the dependents with the deceased.
'
2
3
4
5
6
Section 1 [b], Rule XV, Id.; ECC Resolution No. 2799, July 25,1984.
Section 1|c], Rule XV. Id.
Section2|a],RuleXV,Id.
Section 2 [b], Rule XV, Id.
Section 2(c). Rule XV, Id.
Section 3, Rule XV, Id.; ECC Resolution No. 2799 dated July 25,1984.
1 Tfculan v. Indong, G.R. No. 48576, Aug. 11,1989,176 SCRA 316
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Strict observance of the technical rules of evidence is not properly demanded in
employees’ compensation cases.1
2.
POEA-STANDARD EMPLOYMENT CONTRACT
(POEA-SEC)
1.
ORDER OF TOPICAL PRESENTATION.
For an orderly discussion, the topics in this section are discussed in the
following order:
I. MONETARY CLAIMS OF SEAFARERS FOR SICKNESS AND DISABILITY
BENEFITS
II. EXISTENCE AND EXTENT OF SEAFARER'S DISABILITY, HOW
DETERMINED AND DECLARED
III. MONETARY CLAIMS OF SEAFARERS FOR DEATH BENEFITS
MONETARY CLAIMS OF SEAFARERS
FOR SICKNESS AND DISABILITY BENEFITS
1.
BASES FOR DISABILITY B E N E F IT S CLAIM,
a.
L egal bases.
It is settled that the entidement o f a seafarer on overseas employment to
disability benefits is governed by the following:
1) Law,
2) Parties’ contracts; and
3) Medical findings.2
i. Law
By law, the claim for disability benefits is governed by Articles 197 [191] to
199 [193], Chapter VI (Disability Benefits) o f the Labor Code, in relation to Section
2 (a), Rule X3 of the Amended Rules on Employee Compensation (AREC).1
1 Id.
2 Deocariza v. Fleet Management Services Phfppines. Inc., G.R. No. 229955, July 23, 2018; Tdabcng v. MST Marine
Services (Phils.), Inc., G.R. Nos. 202113 X 202120, June 06,2018; Phasynergy Maritime, Inc. v. Gallano, Jr„ G.R. No.
228504, June 05,2018; Career Philippines Shipmanagement Inc. v. Sfvestre, G.R. No. 213465, Jan. 08,2018; Ventura. Jr.
v. Crewtech Shipmanagement Philippines. Inc., G.R. No. 225995, Nov. 20,2017.
3 Deocaiza v. Fleet Management Services Philippines. Inc., supra, Section 2 (a), Rule X of AREC provides:
*RuleX
Temporary Total Disability
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ii. P atties’ Contracts
By parties' contracts, there are material contracts that bind the seafarer and
his employer to each other, namely:
(a) The POEA-Standard Employment Contract (SEC) the latest version
o f which is enunciated in Memorandum Circular No. 10, Series o f
2010,*12 otherwise known as the 2010 Amended Standard Terns and
Conditions Governing the Overseas Employment of Filipino Seafarers On-Board
Ocean-Going Ships issued on O ctober 26,2010;
(b) Individual Employment Contract between the seafarer and the
employer,3
(c) The parties’ CBA;4 and/or
(d) ITF Agreement.
As part o f a seafarer's deployment for overseas work, he and the vessel
owner or its representative local manning agency arc required to execute the first
contract above, the POEA-SEC.5 Containing the standard terms and conditions o f
seafarer’s employment, the POEA-SEC is deemed included in the second contract
- the individual contract o f employment - in foreign ocean-going vessels.6
Consequently, the rule insofar as the first and second contracts above are
concerned is that the terms under the POEA-SEC, considered fundamentally as
the law between the parties,7 are to be read in accordance with what the Philippine
law provides and thus, for all legal intents and purposes, they are deemed
incorporated in and integrated with the individual employment contract.8
Resultantly, in resolving disputes regarding disability benefits, their provisions must
be “construed and applied fairly, reasonably, and liberally in the seafarer’s favor,
because only then can the provisions be given full effect.”9
'Section 2. P erio d o f e rfife rm n l - (a) The income benefit shall be paid beginning on the fast day of such disability. If caused
by an injury or sickness it shall not be paid longer than 120 consecutive days except where such injury or sickness still
requires medical attendance beyond 120 days but not b exceed 240 days from onset erf disabfity in which case benefit for
temporary total cfeability shaB be paid. However, file System may declare the total and permanent status at any time after
120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical
or mental functions as determined by the System.
XXX*
1 (July 21,1987); Phteynergy Maritime, he. v. Gcflano, Jr., G.R. No. 228504, June 06.2018.
2 See also the previous DOLE Department Order No. 4, Series of 2000, Amenrfing (he Standard Terms and Conditions
Governing the Employment of Fffipcno Seafarers On Board OceamGoing Vessels.
3 This was cited separately in Gamboa v. Maunlad Trans, Inc., G.R. No. 232905, Aug. 20,2018.
4 Philsynergy Maritime, Inc. v.Gallano, Jr., G.R. No. 228504. June 06,2018.
5 Sharpe Sea Personnel, Inc. v. Mabunay, Jr.. G.R. No. 206113, Nov. 6,2017.
6 Id.; Waflem Maritime Services, Inc.v.Tanawan, G.R. No. 160444, Aug. 29,2012.
1 Phfippine Hammonia Ship Agency, he. v. Dumadag, G il No. 194362, June 26,2013; See also OSG Ship Management
Mania, Inc. v. Monje, G.R. No. 214059, Oct 11,2017; Jebsens Maritime, he, v. Rapiz, G.R. No. 218871, Jan. 11,2017;
Seacrest Maritime Management he. v. Roderos, G.R No. 230473, April 23,2018.
6 Id.; Loadstar International Shipping, he. v. Yamson, G.R No. 228470, Apri 23, 2018; Sharpe Sea Personnel, Inc v.
Mabunay, Jr., G.R. No. 206113, Nov. 6,2017, C.F. Sharp Crew Management he. v. Legal Heirs of the late Godofredo
Repiso, G il No. 190534, Feb. 10,2016.
9 Maersk FiSpinas Crewing Inc. v. Ramos, G.R No 184256, Jan. 18,2017.
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uw
The third contract, rhe CBA, is the law between the parties because its
provisions are the product of negotiation and mutual consent. It is a fundamental
doctrine in labor law that the CBA is the contract between both tire employer and
the employees. An executed CBA, thus, is a valid and binding contract between the
parties with the force and effect o f law.1 A CBA refers to the negotiated contract
between a legitimate labor organization and the employer concerning wages, hours
of work and all other terms and conditions of employment in a bargaining unit. As
in all contracts, the parties in a CBA may establish such stipulations, clauses, terms
and conditions as they may deem convenient provided these are not contrary to
law, morals, good customs, public order or public policy. Thus, where the CBA is
clear and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of tire law.2
The fourth contract is technically denominated as the International
T ransport Workers Federation Standard Collective A greem ent (/T77
Agreement) whose provisions on benefits, as held in one case,3 if found to be
more superior and thus favorable to the seafarers, shall prevail over the POEASEC and the parties’ CBA. The ITF Standard Collective Agreement dated January
01, 2015 sets out the standard terms and conditions applicable to all seafarers
serving on any ship in respect o f which there is in existence a Special
Agreement made between the union, an affiliate o f the International Transport
Workers’ Federation (the ITF) and the company who is the owner/agent of the
owner of the ship. This agreement is deemed to be incorporated into and to
contain the terms and conditions of employment o f any seafarer whether or
not the company has entered into an individual Contract o f Employment with
the seafarer. The Special Agreement requires the company (inter alia) to
employ the seafarers on die terms and conditions o f this Agreement, and to
enter into individual contracts o f employment widi each seafarer incorporating
the terms and conditions o f this Agreement.
The interplay of these legal and contractual provisions is best exemplified
in the case of Mairsk-Filipinas* which involves the principal issue of applicability of
the following contracts: the POEA-SEC, the CBA, and the ITF Agreement. The
entitlement to disability benefits o f seafarers on overseas work is a matter governed
not only by medical findings [infra1, but also by law and contract.5 By contract, the
POEA-SEC and the CBA bind seafarers and their employers.6 An overriding
' Anuat v. Pacific Ocean Manning, Inc/Trans Star Shipping Agency Corporation, G.R. No. 220898, July 23,2018.
Id., Id.
3 Maersk-Ffipinas Crewing. Inc. v. Maicse, G.R. Nos 200576 & 200626, Nov. 20.2017.
4 Maersk-Ffip'mas Crewing, Inc. v. Maicse, G.R. Nos. 200576 & 200626, Nov. 20,2017. This case involves a seafarer who
died of "multiple organ dysfunction. Septicemia and Mononudeosis due to Cytomegalovirus."
5 Id., citing Tagalog v. Oossworid Marine Services, Inc., G.R. No. 191899, June 22,2015,759 SCRA 632.
6 Id., citing Vergara v.HarnrrmaMantirrie Services, lnc ,G.R. No 172933, Oct 6,2008,567 X R A 610.
7
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instrument, such as the instant ITF Agreement, also forms part o f the covenants o f
the parties to each other.1
Insofar as the ITF Agreement is concerned, it was held here that the
following conditions for its applicability must concur, to wit (1) the seafarer is a
member o f a union, (2) which is affiliated with the ITF, (3) that has entered into a
Special Agreement with petitioners. It was, however, established, based on the
records, that while the first requirement o f membership with a union23was satisfied,
none of the pieces o f evidence adduced by the parties has depicted with clarity the
relationship of the seafarer’s labor union - Singapore Organisation o f Seamen with the ITF. Furthermore, none o f the documents herein portray that petitioners
entered into any Special Agreement. In this light, the High Court found grave abuse
of discretion on the part of the CA for awarding the death benefits provided by the
ITF Agreement sans any proof o f the applicability thereof. What was thus applied
were the death benefits provided in the CBA and not those provided in the PO EA SEC, the former being more beneficial to the seafarer because Section 25(5)
thereof grants USD40,000 regardless o f whether the seafarer died of a work-related
illness, provided that he died while in the employment of petitioners. In the case at
bar, none o f the parties dispute that the seafarer died o f multiple organ failure
secondary to septicemia caused by severe infection on 29 May 2007 or during the
term o f his contract with petitioners.
In Legal Heirs oj Deauna} it was clarified that beneficial CBA clauses
prevail over the POEA-SEC:
“More importantly, the special clauses in collective
bargaining agreements must prevail over the standard terms and
benefits formulated by the POEA in its Standard Employment
Contract A contract of labor is so impressed with public interest that
the more beneficial conditions must be endeavored in favor of the
laborer. This is in consonance with the avowed policy of the State to
give maximum aid and full protection to labor as enshrined in Article
XIII of the 1987 Constitution.”45
However, if, conversely, the CBA docs not apply to a claimant-seafarer’s
case, this does not imply that he is not entitled to disability benefits just because o f
such CBA’s inapplicability since, aside from the CBA, the POEA-SEC may find
application, such as in the 2018 case o f Buenaventura} In other words, ”[t]hc PO EA SEC and the CBA govern the employment relationship between [Buenaventura]
and the [respondents]. The two instruments are the law between them. They are
bound by then: terms and conditions, particularly in relation to this case, the
1
2
3
4
5
Id., citing Magsaysay Maritime to p v. Panogafinog, G il No. 212049, July 15.2015,763 SCRA140.
Referring to toe Singapore Organization of Seamen which has a CBA with toe seafarer’s employer, petitioner Maersk.
Legal Heirs of Deauna v.RLStar Maritime to p ., G.R. No. 191563, June 20.2012.
Emphasis supplied.
Buenaventura v. Career Philippines Shipmanagement, Inc., G.R. No. 224127, Aug. 15,2018.
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mechanism prescribed to determine liability for a disability benefits claim."1 In
cases therefore where the disability claim cannot be granted under the CBA, resort
to the POEA-SEC should be made to determine if the claim can be granted
therein. The best illustration of this situation is the 2018 case of Gen? The CBA
between AMOSUP and the respondents3 states that: (1) only when the disability
grading is at 50% or more, or (2) only when the company-designated physician
certifies that the seafarer is medically unfit to continue work - even if the disability
grading is less than 50% - could the seafarer be entitled to total and permanent
disability benefits in accordance with the medical unfitness clause. In the present
case, even the petitioner's personal physician assessed hinAonly at Grade 8 disability
grading. According to the schedule of disability allowances indicated in the POEASEC, this impediment grade translates to only 33.59%, which definitely falls short
in the 50% requirement o f Article 20.1.4 of the CBA. O n the other hand, neidier
did the company-designated physician issue a certification that the petitioner was
medically unfit to continue performing his seafaring duties. O n these grounds, the
medical unfitness clause of the CBA finds no application.
Nonetheless, the petitioner is not without any benefit to lean back on.
The POEA-SEC provides that seafarers suffering from total and permanent
disability are entitled to 120% o f US$50,000.00, or a total of US$60,000.00. Indeed,
the Court of Appeals is correct in applying the provisions o f the POEA-SEC rather
than die provisions of the CBA when it said:
"As correctly argued by Petitioners, the permanent medical
unfitness clause under the parties' CBA awarding a total and permanent
disability benefit of US$95,949.00 does not apply to private respondent
because neither the company doctor nor his own doctor assessed
his disability at 50% or more. Moreover, while die permanent medical
unfitness clause provides that any seafarer assessed at less than 50%
disability is entitled to full compensation, the same clause mandates
that the certification must be made by the company doctor which
is not the situation in the present case.”4
In the 2019 case of Torillos,* the Court found that petitioner Torillos did
not meet any accident on board the ship that could have entided him to disability
benefit under the CBA. It was held, however, that this finding of inapplicability of
the CBA does not mean that he is no longer entided to any disability benefit since
his illness is work-related and dierefore compensable under the POEA-SEC and
' Citing Phiipp'ne Hammonia Ship Agency, Inc. v. Dumadag, G.R. No. 194362, June 26,2013.
Gere v. Anglo-Eastern Crew Management Phils., Inc., G R Nos. 226656 & 226713, April 23,2018
3 Collective Bargaining Agreement (AMOSUP / ANGLO-EASTERN) Between Associated Marine Offers' and Seamen's
Union of the Philippines and Anglo-Eastern Crew Management (SG) PTE. LTD. Represented by Anglo-Eastern Crew
Management Philippines, Inc.
4 Emphasis and underscoring supp&ed in the deaskxi itself citations omitted.
5 Torillos v. Easlgate Maritime Corporation, G .R Nos. 215904 &216165, Jan. 10,2019.
7
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relevant labor laws which are deemed written in the contract o f employment with
Eastgate.
iii. Medical Findings
Lasdy, the medical findings o f the company-designated physician, the
seafarer's personal physician, and those of the mutually-agreed third physician,
pursuant to the POEA-SEC, govern.1
2. APPLICABLE LAW IN CASESE INVOLVING T H E POEA-SEC.
By express provision o f Section 31 of the 2010 POEA-SEC, “ fa]ny
unresolved dispute, claim or grievance arising out o f or in connection therewith,
including the annexes thereof, shall be governed by the laws of the Republic o f the
Philippines, international conventions, treaties and covenants to which the
Philippines is a signatory.” This provision signifies that the terms agreed upon by
the parties pursuant to the POEA-SEC are to be read and understood in
accordance widi Philippine laws, particularly, Articles 197 [191],2 198 [192]3 and
199 [193]4 o f the Labor Code and the applicable implementing rules and
regulations in case o f any dispute, claim or grievance.5
3. OFW’S BEN EFIT CLAIMS VIS-A-VIS BENEFITS IN T H E LABOR
CODE.
It must be underscored that the claims for disability, death and burial
benefits involving OFWs over which the Labor Arbiters o f the NLRC have
jurisdiction, are not the same as the claims against the State Insurance Fund under
Tide II, Book IV o f the Labor Code for the same benefits, over which the
Employees’ Compensation Commission (ECC) has jurisdiction.
In Inter-Orient,67involving the death of a migrant worker suffering from
mental disorders in the hands o f a policeman in Bangkok while he was being
repatriated to the Philippines, the Supreme Court debunked the claim of the
employer which invoked the ruling in De Jesus v. ECC,1 that it is not liable because
the cause o f the death of the worker is not an occupational disease listed by law.
Finding no parallelism with De Jesus, the Highest Court ruled:
“Petitioner’s (employer’s) reliance on De Jesus is misplaced, as the
death and burial benefits being claimed in this case are not payable by
the Employees’ Compensation Commission and chargeable against
*
2
3
4
5
Jebser. Maritime Inc. v. Ra/ena, G il No. 200556, Sept 17,2014.
Temporary total disability.
Permanent total disability.
Permanent partial disablity.
New Ripho Maritime Agencies, Inc, v. Despabeladeras, G R No. 209201, Nov. 19,2014,747 Phfl. 626,640; Magsaysay
Marifime Corporation v. NLRC, G R No. 191903. June 19,2013.
6 Inter-Orient Maritime Enterprises, Inc. v. NLRC, G R No. 115497, Sept 10,1996.
7 G R No. L-56191, May 27,1986,142 SCRA 92.
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on
La b o r L a w
the State Insurance Fund These claims arose from the responsibility
of the foreign employer together with the local agency for the safety of
the employee during his repatriation and until his arrival in this
country, U , the point of hire. Though the termination of the
employment contract was duly effected in Dubai, still, the
responsibility of the foreign employer to see to it that Pineda (the
seaman-employee) was duly repatriated to the point of hiring,
subsisted Section 4, Rule VIII of die Rules and Regulations
Governing Overseas Employment dearly provides for the dotation of
the mandatory personal accident and life insurance covering accidental
health, dismemberment and disability of overseas workers.”1
4. T H E LA BO R C O D E ’S C O N C E P T O F P T D A P P L IE S T O C LA IM S O F
SEAFARERS.
Permanent disability
transpires w hen the inability to w ork continues
beyond 120 days, regardless o f w hether o r n o t h e loses the use o f any part o f his
body.2 O n the other hand, total disab ility m eans the incapacity o f an employee to
earn wages in the same o r similar kind o f w ork that he was trained for, o r is
accustomed to perform, or in any kind o f w ork that a person o f his mentality and
attainments can do. It does n o t m ean absolute helplessness.3
Accordingly, permanent total d isa b ility (PTD ) means th e inability to do
substantially all material acts necessary to the prosecution o f a gainful occupation
without serious discomfort o r pain and w ithout material injury or danger to life. In
disability compensation, it is not the injury per st which is com pensated b u t the
incapacity to work.4 The concept o f this kind o f disability under A rticle 198 [192]
permanent total d isab ility o f seafarers.
RemiguP is instructive o n this p o in t Petitioner here claims to have
from permanent total disability as defined under Article 198(c), (1) [192(c),
o f the Labor Code is applicable to the
T he ruling in
suffered
(1)] o f the Labor Code,
“Art 198 [192] (c). The following disabilities shall be
deemed total and permanent:
“(1) Temporary total disability lasting continuously for more
than one hundred twenty days, except as otherwise provided in die
Rules; xtx”
Petitioner likewise cited
Vicent£
and
Abqya, Jr.?
both o f w hich w ere
decided applying the Labor C ode provisions on disability benefits. Private
respondents, on the other hand, contended that petitioner erred in applying the *
*
2
3
4
*
*
'
War-OrientMaritmeEnterprises,tnc.v.NIRC, [OR No. 115497,Sept 10,19961CareerPh^ipinesShprnanagernert, tnc.v. SiVestre, Gi^. No.213465, January08,2018.
Id;, WCShbmanagementInc.v. Rosales,GRNa 195832,OcL01,2014.
W;OSdanav Jet)sensMatime.lnc,GRNo.215313,Oct21.2015.
Rerrigov. NLRC.G-R. No. 1S9887,Apii 12,2006,487SCRA190.
Vicentev. ECC,G.R. No.85024.Jan.23,1991,193SCRA190,195.
Abaya.Jr v. ECC. 6 R. No. 64255.Aug. 16.1989.176 SCRA507.511.
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definition o f ' 'perm anent to ta l disability" u nder the L abor C ode and in invoking cases
decided u n d er the E C C as the instant case involves a contractual claim u n d e r the
1996 PO EA -SE C .
In affirm ing the contention o f the petitioner, the Suprem e C o u rt
pronounced, thus:
‘T he standard employment contract for seafarers was
formulated by the POEA pursuant to its mandate under E O . No. 247
to ‘secure the best terms and conditions of employment of Filipino
contract workers and ensure compliance therewith’ and to ‘promote and
protect the well-being of Filipino workers overseas.’ Section 29 of the
1996 POEA SEC itself provides that ‘[ajll rights and obligations of the
parties to (the) Contract, including the annexes thereof, shall be
governed by the laws of the Republic of the Philippines, international
conventions, treaties and covenants where the Philippines is a
signatory.’ Even without this provision, a contract of labor is so
impressed with public interest that the New Civil Code expressly
subjects it to ‘the special laws on labor unions, collective bargaining,
strikes and lockouts, dosed shop, wages, working conditions, hours of
labor and similar subjects.”’
Based o n th e foregoing disquisition in Remig'o, it was ruled in Kestrel
Shipping that it is n o w well-settled that the provisions o f th e Labor C ode and
Amended Rules on Employees**Compensation (A R E Q im plem enting T id e 'll, B ook IV o f
the Labor C ode o n disabilities are applicable to the case o f seafarers such th at the
P O EA -SE C is n o t th e sole issuance th a t governs their tights in d ie event o f w orkrelated death, injury o r illness.
In
Wallem,2
the H igh C ourt cited the consistent application o f th e
definition o f permanent disability under S e c 2 (b), R ule V II o f the Im plem enting
Rules o f B ook V o f th e L abor C ode, as am ended by P .D . N o. 626, which provides:
"(b) A disability is to ta l and permanent if as a m u lt o j tbe injury or
sickness tbe employee is unable to perform any gainfod occupationfo r a continuous
period exceeding 120 detys, except as otherwise provided far in Rule X of
these Rules.”
M oreover, it was further explained in
Wallem th a t the lapse o f die
120-day
threshold period is n o t the benchm ark fo r considering a perm anent disability d u e
to injury o r illness; “rather, th e true test o f w hether respondent suffered from a
perm anent disability is w hether there is evidence that h e was unable to perform his
customary w ork as m essm an for m o te than 120 days.” It is, therefore, n ow a well-
’ Kestrel ShippingCo., inc.v. (Anar. G R No. 198501.Jan 30,2013.
* WallemMarifimeSetvioes, Inc. v.NLRC.GR No. 163838, Sept 25.2008,566 SCRA338,349.
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settled rule in jurisprudence that the Labor Code concept o f perm anent to ta l disability
is applicable to the case of seafarers.1
5. COM PENSATION AND B E N E F IT S FO R IN JU RY OR ILLNESS.
The compensation and benefits for injuries or illnesses suffered by
seafarers are provided for in Section 20 (A) o f the 2010 Amended Standard Terms and
Conditions Governing the Overseas Employment of Filipino Seafarers On-Board Ocean-Going
Ships} thus:
“SECTION 20. COMPENSATION AND BENEFITS
“A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
‘The liabilities of the employer when the seafarer suffers work-related
injury or illness during the term of his contract are as follows:
“1. The employer shall continue to pay the seafarer his wages during the
time he is on board the ship;
“2. If the injury or illness requires medical and/or dental treatment in a
foreign port, the employer shall be liable for the full cost of such
medical, serious dental, surgical and hospital treatment as well as
board and lodging until the seafarer is declared fit to work or to be
repatriated. However, if after repatriation, the seafarer still requires
medical attention arising from said injury or illness, he shall be so
provided at cost to the employer until such time he is declared fit or
the degree of his disability has been established by the companydesignated physician.
“3. In addition to the above obligation of the employer to provide
medical attention, the seafarer shall also receive sickness allowance
from his employer in an amount equivalent to his basic wage
computed from the time he signed off until he is declared fit to work
or the degree of disability has been assessed by the companydesignated physician The period within which the seafarer shall be
entitled to his sickness allowance shall not exceed 120 days. Payment
of the sickness allowance shall be made on a regular basis, but not
less than once a month.
“The seafarer shall be entitled to reimbursement of the cost of
medicines prescribed by the company-designated physician. In case
treatment of the seafarer is on an out-patient basis as determined by
the company-designated physician, the company shall approve the
appropriate mode of transportation and accommodation. The
reasonable cost of actual traveling expenses and/or accommodation*7
1 See, for exam ple, P hilippine Transm arine Cam era v. N LR C , G R No. 123891, Feb. 2 8 ,2 0 0 1 ; C rystal S hipping, Inc. v.
Natividad G .R . No. 154798, O ct 20,2005; M cronesia R esources v . Cantom ayor, G .R N o. 156573, June 19,2007; P afsoc
v. Easways M arine, Inc. G .R No. 152273, S e p t 1 1,2007; Ikxeta v . P hilippine Transm arine C arriers, Inc., G .R No. 183908,
Dec. 4 ,2 0 09 ; O riental Shipm anagem ent C o , Inc. v . B astot, G .R N o. 186289, June 2 9,2010.
7 Amended Standard Term s and Conditions G overning the O verseas Em ploym ent t f F ilipino S eafarers O n-Board O ceanGoing Ships (PO EA Memorandum C ircular No. 10, S eries o f 2010, O ctober 2 6,2 01 0 ). Form erly, S ection 20 (B) o f Standard
Term s and C onditions G overning the Em ploym ent o f F i'p 'n o S eafarers O n Board O cean-G oing V essels, issued pursuant to
DOLE D epartm ent O rder No. 4, Series o f 2000 [M ay 3 1,2000).
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shall be paid subject to liquidation and submission of official receipts
and/or proof of expenses.
"For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated
physician within three working days upon his return except when he
is physically incapacitated to do so, in which case, a written notice to
the agency within the same period is deemed as compliance. In the
course of the treatment, the seafarer shall also report regularly to the
company-designated physician specifically on the dates as prescribed
by the company-designated physician and agreed to by the seafarer.
Failure of the seafarer to comply with the mandatory reporting
requirement shall result in his forfeiture of the right to claim the
above benefits.
“If a doctor appointed by the seafarer disagrees with the assessment,
a third doctor may be agreed jointly between the employer and the
seafarer. The third doctor’s decision shall be final and binding on
both parties.
“4. Those illnesses not listed in Section 321 of this Contract arc
disputably presumed as work-related.
“5. In case a seafarer is disembarked from the ship for medical reasons,
the employer shall bear the full cost of repatriation in the event the
seafarer is declared (1) fit for repatriation; or (2) fit to work but the
employer is unable to find employment for the seafarer on board his
former ship or another ship of the employer.
“6. In case of permanent total or partial disability of the seafarer caused
by either injury or illness, the seafarer shall be compensated in
accordance with the schedule of benefits enumerated in Section 322
of his Contract Computation of his benefits arising from an illness
or disease shall be governed by the rates and the rules of
compensation applicable at the time the illness or disease was
contracted.
‘The disability shall be based solely on the disability gradings
provided under Section 323 of this Contract, and shall not be
measured or determined by the number of days a seafarer is under
treatment or the number of days in which sickness allowance is paid.
“7. It is understood and agreed that the benefits mentioned above shall
be separate and distinct from, and will be in addition to, whatever
benefits which the seafarer is entitled to under Philippine laws such
as from the Social Security System, Overseas Workers Welfare
Administration, Employees’ Compensation Commission, Philippine
Health Insurance Corporation and Home Development Mutual
Fund (Pag-IBIG Fund).”
'
Section 32 is entitled ’ S chedule o f D isability o r Im pedim ent lo r Injuries S uffered and D iseases In ctidin g O ccupational
D iseases o r Illness C ontracted.’
2 Id.
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6. R E Q U IS IT E S F O R C O M P E N S A B IL IT Y O F IN JU R Y O R IL L N E S S .
T o be entitled to disability benefits, the C ourt refers to the provisions o f
the POEA-SEC, as it sets forth the rninimnm rights o f a seafarer and the
concomitant obligations o f an em ployer.1 F o r disability to be com pensable un d er
Section 20 (A) o f the 2010 PO EA -SE C , two elem ents m ust c o n c u r
(1) The injury o r illness m u st be w ork-related; and
(2) T he w ork-related injury o r illness m ust have existed d u rin g th e
te rm o f the seafarer's em ploym ent contract2^
The same provision defines a work-related illness as "any sickness as a
result o f an occupational disease listed under Section 32-A o f (the PO EA -SEC )
with the conditions set therein satisfied."3 T here should be a "reasonable linkage
between the disease suffered by the employee and his work."4 M eanwhile, illnesses
not mentioned under Section 32 o f th e 2010 PO E A -SE C are disputably presum ed
as work-related.5 Notwithstanding die presum ption o f work-relatedness o f an
illness under Section 20 (A) (4), the seafarer m ust still prove by substantial evidence
that his work conditions caused or, a t least, increased die risk o f contracting the
disease.4 This is because awards o f com pensation cannot rest entirely o n bare
assertions and presumptions.7 In order to establish compensability o f a nonoccupational disease, reasonable p ro o f o f w ork-connecdon is sufficient - direct
causal relation is not required.8 It is thus this probability o f connection, and n o t the
ultimate degree o f certainty, that is th e test o f p ro o f o f com pensation proceedings.9
7. R E Q U IS IT E S F O R C O M P E N S A B IL IT Y O F O C C U P A T IO N A L
D ISE A SE .
In order for an o c c u p a tio n a l d ise a se and the resulting d isa b ility or
d e a th to be compensable, Section 32-A o f die 2010 P O E A -S E C 10 requires that all
o f die following conditions,
as supported by substantialevidence, m ust be established:
l.T h e seafarer's work m ust involve the risks described in th e P O E A SEC;
' ScannerMar&neServicesInc, v. DeLeon,GJl No. 199977,Jan. 25,2017.
7 GuenErov.Ri^ppneTransn^Camas, Ino. GJl No. 222523,0(103,2018.
3 bstitimo v. NYK-fl Ship Management toe- GR No. 237487, June 27,2018; See No. 16, OetnBon of Tams, 2010
POGfrSEC; SeacrestMaii&neManagement ha v. Rodens,GR No. 230473,Aprs23.2018.
4 Bwenaav. SoulhfielclAgencies. Ino. G it Na 208396. litemh14,2018.
5 afingSec.20^J(4) of8re20t0 POEA-SECwhichstates:'4. ThoseianessesncdSsfedinSecSon32ofthisContractam
<Bs|)Utafa^pm9un«daswo(k-mlate(f”SBaarestManG(neManasement.bic.v.Rode(DS,supia.
* Id., effingRtityhe TransmarineCarriers, me. v. ASgway, GR No. 201793, SepL 16,201$; Magatv. inierotientMarine
Enterprises, he, GR No.232892,Apd04,2018; DeLeonv. MaunladTrans, to, GR No. 215293,Feb.8,2017.
1 Magdiv.InleiaierlMabieEntaprises, Inn, GR No.232692,Apt!04,2018.
« id.,tiiirigGraceMarineStqjj^Corporafionv.Alaron.GRNa 201536.SepL09,201$.
* Id,ringGabunas,9r.v.ScannwMariSmeServices,lna,GRNa 188637,Dec15,2010.
® See"Section32 - A. OCCUPATIONALDISEASES," AmendedStandardTermsandContifons Gwerraig he Overseas
Employment of F£pino Seafcrers OvBoard OcearvGcing Ships (POEA MemorandumCircular No. 10, Series of 2010,
October26,2010).
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2. T h e disease was contracted as a result o f the seafarer's exposure to the
described risks;
3. T h e disease was contracted within a period o f exposure and under such
o th er factors necessary to contract it; and
4. T here was no notorious negligence on the part o f the seafarer.1
8. C O R R E L A T IO N O F S E C T IO N 20 (A) A N D S E C T IO N 32-A O F P O E A SEC.
A s pointed o u t above, Section 20 (A)2 o f the PO E A -SE C governs the
com pensation and benefits fo r th e w ork-related injury o r illness th a t a seafarer o n
bo ard sea-going vessels m ay have suffered during the term o f his em ploym ent
c o n tra c t T his section should be read together with Section 32-A3 o f the P O E A SE C that enum erates the various diseases deem ed occupational and, therefore,
com pensable. T hus, for a seafarer to be entitled to die com pensation and benefits
un d er Section 20 (A), th e disability causing illness o r injury m ust b e one o f those
listed u nder Section 32-A.4
O f course, the law recognizes that under certain circumstances, certain
diseases n o t otherwise considered as an occupational disease under d ie PO E A -SE C
may nevertheless have been caused o r aggravated by the seafarer's w orking
conditions. In these situations, the law recognizes the inherent paucity o f the list
and die difficulty, if n o t the outright improbability, o f accounting for all the know n
and unknow n diseases that may be associated with, caused o r aggravated by, such
w orking conditions.3
H ence, the PO EA -SE C provides fo r a disputable presum ption o f workrelatedness for non-PO EA -SEC-listed occupational disease and the resulting illness
o r injury w hich he may have suffered during the term o f his em ploym ent co n tra c t4
9. S E A F A R E R H A S B U R D E N O F P R O O F IN D IS A B IL IT Y C LA IM S.
a. Disputable presumption does not signify an automatic grant of
compensation and/or benefits claim.
T h e above-m entioned disputable presum ption is m ade in the law to
signify that die non-inclusion in the list o f com pensable diseases/ilbesses does not
translate to an absolute exclusion from disability benefits.7 In o th e r w ords, the
' Id; Ba&av.Twala HumanResources, Inc, GA No. 184933,Apr! 13,201&
7 SecSon20 ot POEA MemorandumOmuls No. tO. Series of 20t0, Odober 26,20Uk Fonnedy. Secfion 20 (|Byof
StandardTams andGomffionsGoverningdie EmploymentofHjpino SeafarersOn BoardOceangoingVessds, issued
pureuanlbDOLEDepartmentOrderNo.4, Seriesof2000[May31,2000).
1 * *Seclion32-A. OCCUPATONALDISEASES.*POEAMemorandumOroJarNa 10, Seriesof2010, October26.2010.
< JebsenMafiine ha v.Rawna,G.R. No.200566, Sept 17,2014.
* lit
• Id.
7 Madridejosv. NYK-fJShipManagement he.. GR No. 204262, June07,2017.
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disputable presumption does not signify an automatic grant of compensation an d /o r
benefits claim.1 The seafarer must still prove his entitlem ent to disability
benefits by substantial evidence of his illness* work-relatedness2 and that the
ailment was acquired during the term of his contract.3 He must show that he
experienced health problems while at sea, the circumstances under which he
developed the illness,4 as well as the symptoms associated with it.5
The seafarer cannot solely rely on die disputable presumption.6
Accordingly, the disputable presumption "does not allow him to just sit down and
wait for respondent company to present evidence to. overcome the disputable
presumption of work-relatedness o f the illness." Concomitantly, there is still a need
for him to corroborate his claim for disability benefits.
The rule therefore is clear that whoever claims entitlement to the benefits
provided by law should establish his or her right thereto by substantial evidence.7
Thus, the burden is placed upon the claimant-seafarer to present substantial
evidence, or such relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion that there is a causal connection between the nature
of his employment and his injury or illness, or that the risk of contracting the illness
was increased by his working conditions.8 The onus probandi fell on the claimantseafarer to establish his claim for disability benefits by the requisite quantum o f
evidence that would serve as basis for the grant of the relieP and as such, it cannot
rest on mere speculations, presumptions or conjectures.10
Thus, in situations where the seafarer seeks to claim the compensation
and benefits that Section 20 (A)11 grants to him, the law requires the seafarer to
prove that:
(1) he suffered an illness;
(2) he suffered this illness during the term o f his employment contract;
(3) he complied with the procedures prescribed under Section 20 (A);u
'
Id.. Id.
3
Id.
3 Scanm ar M aritim e Services Inc., v. De Leon, G il N o. 199977, Jan. 25,2017.
4 Id., citing Tagle v. A n g lo Eastern Crew M anagem ent, P hils., Inc., G R N o. 209302, Ju ly 9 ,2 0 1 4 ,7 2 9 SCRA 677.
5
Id., citing Oohle-PhSman Manning Agency, Inc. v . H eirs o f G azzingan, G .R . No. 199568, June 17,2015.
6 Quizora v. Denholm Crew M anagem ent (P h iip pin e s), Inc., G .R . N o. 185412, N ov. 16,2011.
I
G uerrero v. P hlip p he Transm arine C arriers, Inc., G R N o. 222523, O c t 0 3,2018.
4
M agsaysay M aritim e Corporation v.N L R C .G R N o. 186180, M arch 2 2.2010.
5 G uerrero v. PhSpp'ne Transm arine C arriers, In c , supra; M aunlad Trans Inc. v . Isidro. G R N o. 222699, July 2 4 ,2 0 1 7 ;
Scanm ar M aritim e Services In c , v. De Leon, G R N o. 199977, Jan. 2 5,2017.
10
G abunas.S r.v Scanm ar M aritim e S ervices, Inc., G R No. 188637, Dec 15,2010;
II Section 20 (A) o f the Am ended Standard Term s and C onditions G overning the O verseas Em ploym ent o f F iip in o S eafarers
O n-B carr Ocean-Going Ships (POEA M em orandum O c u la r No. 10, Series o f 2010, O ctober 26,2 01 0 ). Form erly, Section
20 (8 ) of Standard Term s and Conditions G overning the Em ploym ent o f F fip in o S eafarers On Board O cean-G oing V essels,
issued pursuant to DOLE Departm ent O rder No. 4 , S eries o f 2000 (M ay 3 1.2 00 0 ].
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(4) his illness is one o f the enumerated occupational diseases or that his
illness or injury is otherwise work-related; and
(5) he complied with the four (4) conditions enumerated under Section
32-A for an occupational disease or a disputably-presumed workrelated disease to be compensable.1
10. P R IN C IP L E O F W O RK -R ELA TED N ESS.
The principle o f work-relatedness o f an injury or illness means that the
seafarer's injury or illness has a possible connection to one's work, and thus, allows
the seafarer to claim disability benefits therefor.2
The 2010 POEA-SEC defines a w ork-related injury as an "injury resulting
in disability or death arising out of and in the course of employment," and a w ork-related
illness as "any sickness resulting to disability or death as a result of an occupational disease
listed under Section 32-A of this Contract with the conditions set therein satisfied. ’3
For illnesses not mentioned under Section 32, the 2010 POEA-SEC4
creates a disputable presumption in favor o f the seafarer that these illnesses are
work-related. However, the presumption does not necessarily result in an automatic
grant of disability compensation. The claimant, on due process grounds, still has
the burden to present substantial evidence that his work conditions caused or at
least increased the risk o f contracting the illness.5 This is because awards of
compensation cannot rest entirely on bare assertions and presumptions. In order to
establish compensability o f a non-occupadonal disease, reasonable proof o f workconnection is sufficient - direct causal relation is not required. Thus, probability,
not the ultimate degree of certainty, is the test of proof in compensation
proceedings.6
As a general rule, the principle of work-relatedness requires that the
disease in question must be one o f those listed as an occupational disease under
Section 32-A o f the POEA-SEC. Nevertheless, should it be not classified as
occupational in nature, Section 20 (A),7 paragraph 4 o f the 2010 POEA-SEC
provides that such diseases are disputably presumed as work-related.8 This
disputable presumption operates in favor o f the employee as the burden rests upon
his employer to overcome the statutory presumption. Hence, unless contrary
1 Id .; C utanda v . M arlow N avigation P h fc , In c , G R N o. 219123, S e p t 11,2017.
2 G uerrero v .P h lip p h e T ra n s m a rh e C arriers, In c , G .R . N o. 2 2 2 5 2 3 ,0 1 0 3 ,2 0 1 8 .
3
Skippers U nited P acffic, h a v . Lagne, G R N o. 217036, A ug. 2 0 ,2 0 1 8 ; O SG S hip M anagem ent M a nia, h e . v . M onje, G .R .
No. 214059, O c t 1 1,2017; O e Leon v. M aurtad Trans, h e , G R N o 215293, Feb. 8 ,2 0 17 .
4
See S ection 20 (A) (4 ) o f h e 2000 PO EA-SEC.
5
Ventura, J r. v . C revvtedi S hipm anagem ent P hiip p in e s, In c , G .R . N o. 225995, N w . 20,2017.
6
Skippers U nited P acific, h e . v. Lagne, G R N o. 217036, A ug. 2 0 ,2 0 1 8 , De Leon v. M aunlad Trans, In c , G R N o 215293,
Feb. 8, 2017; M agsaysay M ol M arine, Inc. v . A traje , G R N o. 229192, July 23, 2018; M agat v. Interorient M aritim e
Enterprises, In c , G R No. 232892, A pril 4 ,2 0 1 8 ; Leonis N avigation C o , Inc. v. O brero, G .R. No 192754, S ep t 7 ,2 0 1 6 .
L e e rs N avigation C o , Inc. v . V illa m a le r, G .R. N o. 179169, M arch 3 ,2 0 10
7
Form erly S ection 2 0 (B ) o f the 2000 POEA-SEC.
8
Ventura, J r. v. C rew lech S hipm anagem ent P hiip p in e s, In c , G R N o. 225995, Nov. 20,2017.
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evidence is presented' by the seafarer's employer, this disputable presum ption
stands.1
This principle was best discussed in jebsens M aritim e.1 T he 2000 P O E A SEC3 contract governs the claims for disability benefits by respondent Babol as he
was employed by the petitioners in Septem ber o f 2006. Pursuant to the said
contract, the injury or illness m ust be w o rk -related god m ust have existed d u rin g
th e term o f the seafarer's em ployment in order for compensability to arise.4 W orkrelatedness must, therefore, be established. It is undisputed that N asopharyngeal
Carcinoma (N P Q afflicted respondent while o n board petitioners' vessel As a nonoccupational disease, it has die disputable presum ption o f being work-related. This
presumption obviously works in th e seafarer's favor.5 H ence, unless contrary
evidence is presented by the employers, the work-relatedness o f the disease m ust
be sustained.6 In this wise, the petitioners, as em ployers, failed to disprove die
presumption o f N P C s work-relatedness. They primarily relied on die medical
report issued by D r. Co Pefia. T h e report, however, failed to make a categorical
statement confirming the total absence o f w ork relation.
Black's Law Dictionary defines likely as *'probable** and lik e lih o o d as
“probability. ‘e T h e use o f the w ord likely indicates a hesitant and an uncertain tone
in die stated medical opinion and does n o t foreclose the possibility that
respondent's N PC could be work-related. In other w ords, as the doctor opined
only a probability, there was no certainty that his condition was n o t work-related.
T here being no certainty, the C ourt will lean in favor o f d ie seafarer consistent w ith
die mandate o f the PO EA -SEC to secure the b est term s and conditions o f
employment for Filipino workers. H ence, the presum ption o f N PC 's w orkrelatedness stays.
11. P R IN C IP L E O F W O R K -A G G R A V A T IO N .
In the same 2013 case o f jebsens M aritim e? the principle o f workaggravation was discussed. T hus, assuming for the sake o f argum ent that the
presumption o f work-relation was refuted by petitioners, compensability may still
be established on the basis o f die theory o f w ork aggravation if, by substantial
1 PbJManMarineAgency, he v.Dedaoe,Jr., G.R. No. 199162,.toy04,2018,r^Magsaysay MartimeServicesv. Laurel,
Git No. 195518,March20.2013,707PuL210,227-228.
7 JebsensMar&ne, hav.BabctGJl No.204076.Dec.04.2013.
3 TTiscasewasdecidedoothebasisof&is provisionofSie2000 POEA-SEC^4iichtatatyhasbeensi^iersededbythe 2010
POEA-SEC, pursuant totie Amended Standard Tams and CorxEons Govemiig he Overseas Employment of Fffipino
SeaferasOnboardOceavGdngShips(POEAMemorandumCkcutarNo. 10, Seriesof2010, October26,2010).
4 CfingMagsaysayMafSmeServicesandPrincessCniseLines, LUv. Laurei, GR No. 195518, March20,2013,694 SCRA
225,tilingJebsensMaitime, Inc.v. Undag,GA No. 191491, Dec. 14.2011,662 SCRA670,677.
5 C5ngJessieV Davidv. OSGShipmanagemertManta, Inc. andtorMchaeimarShippingServices, G.R. No. 197205. Sept
26,2012.
« CangF^StarMartSmeCorporafionv.Ro6ele.GilNa 192686,Nov.23,2011,661 SCRA247.255.
’ rah Etffon. p.534.
• W.
* GRNa 204076,Dec.04,2013.
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evidence,1it can be demonstrated that the working conditions aggravated or at least
contributed in the advancement o f respondent's cancer.2 As held in Rosano* "[t]he
burden is on the beneficiaries to show a reasonable connection between the
causative circumstances in the employment of the deceased employee and his death
or permanent total disability."
In the 2018 case of Lagae,* both the NLRC and the CA found Lagne's
rectal illness to be compensable for permanent and total disability, because they
found that his dietary provisions while at sea increased his risk of contracting colon
cancer because he had no choice o f what to eat on board. Suffice it to say, the
strenuous nature of Lagne's job, combined with his poor diet which consists of
mosdy carbohydrates and meat, usually with saturated fat, his advanced age as he
was 55 at the time of hiring, we find it reasonable to conclude that Lagne acquired
or developed his illness during the term of his contract There is a probability that
Lagne's work as an oiler caused or contributed even to a small degree to the
development or aggravation of his rectal illness.
It was, thus, stressed that in determining the compensability of an illness,
the Court does not require that the employment be the sole factor in the growth,
development, or acceleration of a claimants' illness to entide him to the benefits
provided for. It is enough that his employment contributed, even if only in a small
degree, to die development of die disease.5
Indeed, setded is the rule drat for illness to be compensable, it is not
necessary that the nature o f the employment be the sole and only reason for the
illness suffered by the seafarer.6 It is sufficient that there is a reasonable linkage
between die disease suffered by die employee and his work to lead a rational mind
to conclude that his work may have contributed to the establishment or, at the very
least, aggravation of any pre-existing condition he might have had.7
Even assuming that the ailment of the worker was contracted prior to his
employment, this still would not deprive him of compensation benefits. For what
matters is that his work had contributed, even in a small degree, to the
development of die disease. Neither is it necessary, in order to recover
compensation, that die employee must have been in perfect health at the time he
contracted the disease. A worker brings with him possible infirmities in the course
1 Ashekl inReyesv. ECC, GJL No. 93003. March3.1992,206 SCRA726,732, citingMagistradov. ECC, GR No. 52641,
June30,1989.174 SCRA605. SubstsnSalevidencemeanssuchrete/antevidenceasa reasonablemixl might acceptas
adequatetosupportsconclusion.
3 GStSv. Emmanuel P.Cuntapay,GA No. 168862. Apia30,2008,553 SCRA520; 576 Phil. 482 492.
3 ResolutioninRosariov. DenXiavMaine, GR No. 166906, March16,2005.
< Stype&Uh&dPacfe.Incv. Lagne,GANo.217036,Aug.20,2918.
5 CF.ShapCrewManagement,ln&v.jLegdHeirsofIheLatnGodofinedoRepiso.GJ^.No. 190534.Feb. 10.^)t6.
5 Sustridmov. NYK-FI ShipManagement, he, GA No. 237487, June27,2018, citing .Grieg Philippines, Inc v. Gonzales,
GA No. 228296,July26,2017.
1 kL,c£ng MagsaysayMaSmeServicesv.Laurel,GANo.195518,March20,2013.
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of his employment, and while the employer is not the insurer of the health o f die
employees, he takes them as he finds them and assumes the risk of liability.1
12. IN JU R Y O R IL L N E SS M U S T O C C U R D U R IN G T E R M O F
CON TRA CT.
As earlier quoted, Section 20 (A)2 of the 2010 POEA-SEC categorically
reads:
“The liabilities of the employer when the seafarer suffers
work-related injury fir illness during the term of his contract are as
follows: to"
Based on this provision, an injury or illness is compensable when, first, it
is work-related and, secon d, the injury or illness existed, during tk t.ty m o f the
seafarer’s employment contract The correct approach in adjudging claims of
seafarers for death and disability benefits is to determine whether the claimants
have proven the requisites of compensability3 under Section 32-A of the 2010
POEA-SEC.4 This provision states that for an occupational disease and the
resulting disability or death to be compensable, all of the following conditions
need to be satisfied:
(1) The seafarers work must involve the risks described therein;
(2) The disease was contracted as a result of the seafarer's exposure to
the described risks;
(3) The disease was contracted within a period of exposure and under
such other factors necessary to contract it; and
(4) There was no notorious negligence on the part of the seafarer.5
13. W O R K IN G C O N D IT IO N S A L O N E N O T S U F F IC IE N T .
It need not be overemphasized, according to Panganiban,6 that in die
absence of substantial evidence, working conditions cannot be accepted to have
caused or at least increased the risk o f contracting the disease, in this case, brief
psychotic disorder. Substantial evidence is more than a mere scintilla. The evidence
must be real and substantial, and not merely apparent; for the duty to prove work-
1 SeagdShipmanagementandTransporLInc.v.NIRC.GANa 123619.June8.2000.
2 Sec&onZOWoftheAmeniledStandaalTennsandConrSBonsGavenungheOueiseasBnpioyinentofF^pirioSBa&ras
OrvBoardOcearvGoing Shps (POEAMemomndumDncular Nol 10, Seriesof2010, October 26,2010). Ttus provision is
vertia&n fte same as in (he former provision of Section 20 (B) of be Standard Terms and CcntSnns Governing fte
Employment of FEpino Seataras On Board Oceangoing Vessels, issued pusuant to DOLE Department Order No- 4,
Seriesd 2000[May31,2000).TMsis alsohe sameaste previous1996POEA-SEC.
3 Maerstc-Fa^inasCrewinfi, tnc.v. Mdkse, G.l^ Na200576, Nov. 2Q,2017;Tu(riesav.AbacaslS^pping Co^ h&,Gi^Na.
229779,Api 17,2017;JebsensMaritime, Inc.v. Babol. GA No. 204076.Dec.04,2013.
4 TNs provision *saveftefim reproductionof be samepotion of Section 32-Aof fte 2000 POEA45K (StandardTerms
andCondSonsGoverning he Employmentof Ffyho SeafarersOnBoardOcean-GoingVessels, issuedpusuanttoD0l£
DepartmentOrderNo.4, Seriesof2000(May31.2000]).
5 PhlsynergyMaritime, Inc.v. Gafeno,Jr., G.R. No.228504,June06,2018.
5 Panganfcanv. Tara TradingSNpmanagement, too,GA No. 187032,Oct 18,2010.
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causation ot work-aggravation imposed by law is real and not merely apparent.
Petitioner in this case, who suffered brief psychotic disorder, pointed out that his
illness was work-related simply because had it been a land-based employment,
petitioner would have easily gone home and attended to the needs of his family.
H ie Supreme Court, however, did not submit to this argument since this is not the
^ rk-relaled" instance contemplated by the provisions o f the employment contract
(POEA SEC) in order to be entitled to die benefits. Otherwise, every seaman
would automatically be entitled to compensation because the nature of his work is
not land-based and die submission of the seaman to the company-designated
physician as to the nature o f the illness suffered by him would just be an exercise o f
futility. The. fact is that the petitioner failed to establish, by substantial evidence,
that his brief psychotic disorder was caused by the nature o f his work as oiler o f the
company-owned vessel. In fact, he failed to elaborate on the nature o f his job or to
specify his functions as oiler o f respondent company. It is thus difficult to find any
link between his position as oiler and his illness. The fact that petitioner was a
seaman for 10 years serving 10 to 18-month contracts and never did he have any
problems with his earlier contracts cannot be given less importance. It can only be
surmised that the brief psychotic disorder suffered by him was brought about by a
family problem. His daughter was sick and, as a seafarer, he could not just decide to
gp home and be with his family. Even the psychiatric report prepared by the
evaluating private psychiatrist o f petitioner showed that the hospitalization o f
petitioner’s youngest daughter caused him poor sleep and appetite. Later, he started
hearing voices and developed fearfulness.
Even in case of death o f a seafarer, the grant of benefits in favor of the
heirs of the deceased is not automatic. As in the case of Rivera,1 without a post­
medical examination or its equivalent to show that the disease for which the
seaman died was contracted during his employment or that his working conditions
increased the risk of contracting the ailment, the employer/s cannot be made liable
for death compensation.
In fact, in Mabuhay Shipping** the Court held that the death of a seaman
even during the term of employment does not automatically give rise to
compensation. Several factors must be taken into account, such as the
circumstances which led to the death, the provisions o f the contract, and die right
and obligation of the employer and the seaman with due regard to the provisions o f
die Constitution on the due process and equal protection clauses.
14. DISABILITY ARISING FROM ACCIDENT.
Black’s Law Dictionary defines “accident" ns “ [a]n unintended and unforeseen
injurious occurrence; something that does not occur in the usual course o f events or
that could not be reasonably anticipated, xxx [a]n unforeseen and injurious occurrence
' R^v.VV^fcfeSneSeMKS,tna.GR.No. 160315,Nw. It, 2005,474 SRA714,723.
* MahteyShjpphgSavices, lnc.v. NLRC. GR No. 94167,Jai. 21,1991,193SCRA141,145.
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not attributable to mistake, negligence, neglect or misconduct.” The Philippine Law
Dictionary defines the word ’accident” as “ [t]hat which happens by chance or
fortuitously, without intention and design, and which is unexpected, unusual and
unforeseen.”1*3
Raised as issue in NFD International. i s whether or not the incident where
respondent figured should be classified as accident or an injury. On May 16, 2003,
when respondent had been on board the vessel M /V Shinrei for seven months as
Third Officer, the Captain and Chief Officer ordered him to carry 25 fire hydrant
caps from the deck to the engine workshop, then back to the deck to refit the caps.
The next day, while carrying a heavy basketful of fire hydrant caps, respondent felt a
sudden snap on his back, with pain that radiated down to the left side o f his hips. He
immediately informed the ship captain about his condition, and he was advised to
take pain relievers. As the pain was initially tolerable, he continued with his work.
After a few days, the pain became severe, and respondent had difficulty walking. The
Court held that the snap on the back o f respondent was not an accident, but an injury'
sustained by respondent from carrying the heavy basketful of fire hydrant caps, which
injury resulted in his disability'. The injury cannot be said to be the result of an
accident, that is, an unlooked for mishap, occurrence, or fortuitous event, because the
injury resulted from the performance o f a duty. Although respondent may not have
expected the injury, yet, it is common knowledge that carrying heavy objects can
cause back injury, as what happened in this case. Hence, the injury cannot be viewed
as unusual under the circumstances, and is not synonymous with the term “accident” as
defined above.
15. N ON -COM PEN SABILITY O F S E L F -IN F L IC T E D INJURY.
Section 20 (D) of the 2010 POEA-SEC is clear, vi%:
“SECTION 20. COMPENSATION AND BENEFITS
XXX
“D. No compensation and benefits shall be payable in respect
of any injury, incapacity, disability or death of the seafarer resulting from
his willful or criminal act or intentional breach of his dudes; Provided,
however, that the employer can prove that such injury, incapacity,
disability or death is directly attributable to the seafarer.”
From the above provision, the onus probandi falls on the employer to
establish or substantiate its claim that the seafarer's injury was caused by his willful
or intentional act with the requisite quantum o f evidence.5 In labor cases, as in
other administrative proceedings, only substantial evidence or such relevant
evidence as a reasonable mind might accept as sufficient to support a conclusion is
1 Philsynefgy Maitime, Inc. v. Gaitano, Jr. G.R. No. 228504, June 06,2018; C.F. Sharp Crew Management, Inc. v. Perez,
G.R No 194885,Jan. 26,2015
J NFD International Manning Agents, Inc. m ISescas. G.R. No. 183054, Sept 29,2010.
3 Career PhSpphes Shpmanagement Inc v. S&estre, G R No. 213465, Jan. 08,2018.
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required.1*3 Hence, as held in Career.} if it can be gleaned from the records that
petitioners never presented any evidence before the Labor Arbiter to support the
conclusion that the seafarer's injury is directly attributable to his willful or criminal
act or intentional breach o f duty, as when the accident report, by itself, does not
support the finding that his act was willful or intentional, clearly then, the seafarer
suffered an injury that is work-related during the term of his employment contract
and such is compensable. A willful act differs essentially from a negligent act. The
one is positive and the other one is negative. Intention is always separated from
negligence by a precise line o f demarcation. If at all, there was merely inadvertence
or negligence on the part of the seafarer but not a willful or intentional breach of
duty.-5
In Moradas,4 which was decided under the 1996 POEA-SEC, it was ruled
that self-inflicted injury' which was established through substantial evidence is not
compensable pursuant to Section 20 (D) thereof. Respondent here was employed
as wiper for the vessel MV Commander by petitioner INC Shipmanagement, Inc. for
its foreign principal for a period of 10 months. He was later diagnosed to have
sustained “thermal bunts, upper and lower extremities and abdomen, 2°-3", / / % ” for which
he underwent debridement. Based on evidence, however, it was declared that this
injury was self-inflicted.
19. N O N -C O M P E N S A B IL IT Y O F S E L F -IN F L IC T E D D EA T H .
(NOTE: For a more comprehensive discussion on this topic, please read the annotation
below under the heading: “MONETARY CLAIMS OF SEAFARERS FOR DEATH
BENEFITS”).
II.
EXISTENCE AND EXTENT OF SEAFARER’S DISABILITY,
HOW DETERMINED AND DECLARED
1. P R E -E M P L O Y M E N T M ED IC A L E X A M IN A T IO N (PEM E); N O N ­
C O M PE N SA B IL IT Y O F D ISA B ILITY FR O M PR E-EX IST IN G
ILLN ESS.
a. L egal basis.
Pursuant to Section 20 (A) o f the 2010 POEA-SEC, the employer is liable
for disability benefits when the seafarer suffers from a work-related injury or illness
during the term o f his contract. In this regard, Section 20 (E) thereof mandates the
1 Id., citing INC Shipmanagement Inc. v. Moradas, G R No. 178564, Jan. 15.2014.
7 Career Phiippines Shipmanagement Inc. v. Silvestre, supra. Note: This case was decided under the 2000 POEA-SEC,
whose provision in its Section 20(D) is similar to the 2010 POEA-SEC.
3 Id.
* INC Shipmanagement Inc. v. Moradas, G.R. No. 178564, Jan. 15,2014.
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seafarer to disclose all his pre-existing illnesses or conditions in his PEME; fading
in which shall disqualify him from receiving disability compensation,1«>.:
“SECTION 20. COMPENSATION AND BENEFITS
XXX
“E. A seafarer who knowingly conceals a pre-existing illness
or condition in the Pre-Employment Medical Examination (PEME)
shall be liable for misrepresentation and shall be disqualified from any
compensation and beneGts. This is likewise a just cause for termination
of employment and imposition of appropriate administrative
sanctions.”
At the outset, it bears to point out that Section 20 (E) o f the 2010 POEASEC speaks of an instance where an employer is absolved from liability when a
seafarer suffers a work-related injury or illness on account o f the latter's willful
concealment or misrepresentation o f a pre-existing condition or illness.2 Thus, the
burden is on the employer to prove such concealment o f a pre-existing illness or
condition on the part of the seafarer to be discharged from any liability. In this
regard, an illness shall be considered as pre-existing if prior to the processing o f the
POEA contract, any of the following conditions is present, namely:
(a) The advice of a medical doctor on treatment was given for such
continuing illness or condition; or
(b) The seafarer had been diagnosed and has knowledge of such illness or
condition but failed to disclose the same during the PEME, and such
cannot be diagnosed during the PEME.3
b. PEME is not a totally in-depth and diorough exam ination o f an
applicant’s m edical condition.
The PEME cannot be a conclusive proof that the seafarer was free from
any ailment prior to his deployment.4 A seafarer only needs to pass the mandator}7
PEME in order to be deployed on duty at sea.5 The fact that the seafarer passed the
company’s PEME is of no moment. The PEME could not have divulged the
seafarer’s illness considering that the examinations were not exploratory in nature
and cannot be relied upon to arrive at his true state of health.6 It is not intended to
be a totally in-depth and thorough examination of an applicant’s medical condition.
It does not allow the employer to discover any and all pre-existing medical
conditions with which the seafarer is suffering and for which he may be presently
’ Ventua, Jf. v. Crewtech Shipmanagement Philippines. Inc., G.R No. 225995, Nov 20,2017.
7 Deocaiza v. Fleet Management Services FMppjies, Inc., G.R No. 229955, July 23,2018.
3 Id.; See Philsynergy Maritime, Inc. v. Gafano, Jr., G.R No. 228504, June 6, 2018; See also Item No. 11 (a) and (b).
Definition of Terms, 2010 POEA-SEC.
* Taiosig v. United Philippine Lines, Inc., G.R No. 198338, July 28,2014, Doroteo v. Philimare Inc . 'G R No 184917 &
184932, March 13,2017.
5 Madridejos v. NYK-FI Ship Management Inc, G.R. No. 204262, June 07,2017.
6 C.F. Sharp Crew Management Inc. v. Castle, G.R. No. 208215, April 19.2017.
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taking medication.1It is nothing more than a summary examination o f the seafarer's
physiological condition.23It merely determines whether one is ‘fit to work" at sea or
'fit for sea service; ’5 it does not state the real state of health o f an applicant.4
For the seafarer therefore to claim that the issuance o f a clean bill of
health to him after a PEME means that his illness was acquired during his
employment is a non sequilur. In the case o f NYTC-F/L Ship Management, Inc. v.
NLRC,5 it was held:
“Wc do not agree with the respondent’s claim that by the
issuance of a clean bill of health to Roberto, made by the physicians
selected/accredited by the petitioners, it necessarily follows that the
illness for which her husband died was acquired during his employment
as a fisherman for the petitioners.
“The pre-employment medical examination conducted on
Roberto could not have divulged the disease for which he died,
considering the fact that most, if not all, arc not so exploratory. The
disease of GFR, which is an indicator of chronic renal failure, is
measured thru the renal function test In pre-employment examination,
the urine analysis (urinalysis), which is normally included measures only
the creatinine, the presence of which cannot conclusively indicate
chronic renal failure.”
An honest mistake of claimants in giving account o f their state o f health
does not negate compensability. This is so because as laypersons, seafarers cannot
be expected to make completely accurate accounts o f their state o f health. Unaware
o f the nuances o f medical conditions, they may, in good faith, make statements that
turn out to be false. These honest mistakes do not negate compensability for
disability arising from pre-existing illnesses shown to be aggravated by their
working conditions. It is only when a seafarer's proper knowledge of pre-existing
conditions and intent to deceive an employer are established that compensability is
negated.6
c.
N o concealm ent i f em ployer know s the seafarer’s m edical history.
But if employer is well aware of the seafarer’s medical history, there can
be no concealment to speak of. For instance in Ventura, Jr.,1 the Court pronounced
that contrary to the findings o f the CA, there was no concealment on the part o f
petitioner when he failed to disclose in his 2013 PEME that he was previously
treated for prostatitis in 2011. As culled from the records, respondents were well
'
2
3
4
5
6
1
Status Maritime Capocalionv. Spouses Detalamon.GR No. 198097. July 30,2014.
Espere v. NFD International Manning Agents, Inc., G il No. 212098, July 26,2017.
NYK-Fi Ship Management Inc. v. The NLRC. G.R No. 161104, Sept 27,2006.
EstateofPosedioOrtegav.CA,G.RNo.175005,April30.2008.
NYK-FIL Ship Management, Inc. v. NLRC, supra.
Manansala v. Marlow Navigation Phils., Inc., G.R No. 208314, Aug. 23,2017.
Ventura, Jr. v. Crewtech Shipmanagement Philippines, Inc., G.R No. 225995, Nov. 20,2017.
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aware of petitioner's past medical history given that the company-designated
physician was able to provide a detailed medical history o f the latter in the Medical
Report dated May 2, 2014 which showed all o f his past illnesses, the year he was
treated and where he obtained his treatment. Moreover, since petitioner's prostatitis
was shown to have been treated in 2011 with no indication that he was required to
undergo further medical attention or maintenance medication for the same, he
cannot be faulted into believing that he was completely cured and no longer
suffering from said illness. This is further bolstered by the fact that he was rehired
by respondents the following year in 2012 and no longer found to be suffering
from prostatitis during his PEME. Evidently, petitioner's non-disclosure o f the
same in his PEME in 2013 did not amount to willful concealment o f vital
information and he was in fact, truthful in answering "no" to the query on whether
or not he was "suffering" from any medical condition likely to be aggravated by sea
service or render him unfit for such service on board the vessel.
2. T H E 120-DAY/240-DAY T R E A T M E N T P E R IO D RULE.
a. Significance o f the period.
Pursuant to Section 20 (A) of the 2010 POEA-SEC, when a seafarer
suffers a work-related injury or illness in the course o f employment, the companydesignated physician is obligated to arrive at a definite assessment of the former's
fitness or degree of disability w ithin a period of 120 days from repatriation.1
During the said period, the seafarer shall be deem ed on tem porary total
disability and shall receive his basic wage until he is declared fit to work or his
temporary disability is acknowledged by the company to be permanent, eith er
partially or totally, as his condition is defined under the POEA-SEC and by
applicable Philippine laws. However, if the 120-day period is exceeded and no
definitive dcclarauon is made because the seafarer requires further m edical
attention, then the tem porary total disability period may be extended up to a
maximum of 240 days, subject to the right o f the employer to declare within this
period that a perm anent partial or total disability already exists.2
But before the company-designated physician may avail o f the allowable
240-day extended treatment period, he must perform some significant act to justify
the extension of the original 120-day penod.3 Otherwise, the law grants the
seafarer the relief of perm anent total disability benefits due to such noncompliance.4
Case law thus states that without a valid final and definitive assessment
from the company-designated physician within the 120-day/240-day period, the
' Gamboa v.Maunlad Trans, Inc, G.R. No. 232905, Aug. 20,2018.
7 Id.; See also DOHLE Ph2man Manning Agency, Inc. v Doble, G.R. Nos. 223730 & 223782, O ct'04, 2017; Jebsens
Maritime, Inc. v. Rapiz. G.R. No. 218871,. an. 11,2017.
3 Id., citing Talaroc v. A/papta! Shpping Corporation. G R. No 223731, Aug. 30,2017.
4 Id, Ebutg Shipmanagement PMs, Inc. v. Qubgue. Jr.. G R. No 211882, July 29,2015.
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law already steps in to consider petitioner's disability as total and p erm an en t.1
Thus, a temporary total disability becomes total and permanent by operation o f
law.2 Consequendy, in a case where it was only after the lapse o f more than six (6)
months that the company-designated physician issued a certification declaring the
seafarer to be entided to a disability rating o f Grade 10, going beyond the period o f
120 days, without justifiable reason, the Court held that his disability was correcdy
adjudged to be permanent and total.34
b. Summary o f Rules on the p eriod s to assess the seafarer.
The 2015 case o f E/burg,* and later reiterated in a number o f cases,5
summarized the rules on the periods when the company-designated physician
must, as a duty, assess the seafarer and issue a final medical assessment, as follows:
1. The company-designated physician must issue a final medical
assessment on the seafarer’s disability grading within a period o f 120
days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment
within the period o f 120 days without any justifiable reason, then the
seafarer’s disability becomes p erm an en t and total;
3. If the company-designated physician fails to give his assessment
within the period o f 120 days with a sufficient justification (e.g.,
seafarer required further medical treatment or seafarer was
uncooperative67), then the period o f diagnosis and treatment shall be
extended to 240 days. The employer has the burden to prove that the
company-designated physician has sufficient justification to extend
the period; and
4. If the company-designated physician still fails to give his assessment
within the extended period of 240 days, then the seafarer’s disability
becomes p erm anent and total, regardless of any justification.
The above rule was further refined in the 2015 case o f Marlow Navigation
Phifippines, Inc. t. Osias,1 where the Court declared - and this is the current rule - as
follows:
(1) that mere inability to work for a period of 120 days does not entide a
seafarer to permanent and total disability benefits;
' Id., Talaroc v. Arpaphi Shipping Corporation, supra.
2 Id., Tamil v. Magsaysay Maritime Corporation, G.R. No. 220608, Aug. 31,2016; See also Phil-Man Marine Agency. Inc. v.
Dedace, Jr., G R No. 199162, July 04,2018.
3 Career Philippines Ship Management Inc. v. Acub, GiR. No. 215595, Afxil 26,2017.
4 Eburg Shipmanagement Phils., Inc. v. Quiogue, Jr., G R No. 211882, July 29,2015,764 SCRA 431.
5 Such as Gere v. Angb-Eastem Crew Management Phils., Inc., G.R. Nos. 226656 & 226713, April 23,2018: Magsaysay
Mtsui OSK Marine, Inc v. Buenaventura, G.R. No. 195878, Jan. 10,2018.
6 An example ot uncooperativeness is the case otMariow Navigation Philippines, Inc. v. Osias, supra, where Osias. based on
he evidence presented, did not fufy comply wth the preserved medical therapy.
7 G R No. 215471, Nov. 23,2015.
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(2) that the determination o f the fitness o f a seafarer for sea duty is
within the province o f the company-designated physician, subject to
the periods prescribed by law,
(3) that the company-designated physician has an initial 120 days to
determine the fitness or disability o f the seafarer; and
(4) that the period of treatm ent may only be extended to 240 days if
a sufficient justification exists such as w hen further m edical
treatment is required or w hen the seafarer is uncooperative.1
For as long as the 120-day period under the Labor Code and the POEASEC and the 240-day period under the IRR co-exist, the Court must bend over
backwards to harmoniously interpret and give life to both of the stated periods.
Ultimately, the intent of our labor laws and regulations is to strive for social justice
over the diverging interests of the employer and the employee.2
c.
Conditions required for the claim for total and perm anent
disability benefits to prosper.
In sum, according to the 2019 case o f Torillos,34in order for a seafarer’s
claim for total and permanent disability benefits to prosper, any of the following
conditions should be present:
(a) The company-designated physician failed to issue a declaration as to
lus fitness to engage in sea duty or disability even after the lapse of
the 120-day period and there is no indication that further medical
treatment would address his temporary total disability, hence, justify
an extension of the period to 240 days;
(b) 240 days had lapsed without any certification issued by the company
designated physician;
(c) The company-designated physician declared that he is fit for sea duty
within the 120-cay or 240-day period, as'the case may be, but his
physician of choice and the doctor chosen under Section 20 (B) (3)*
of the POEA-SEC arc o f a contrary opinion;
(d) The company-designated physician acknowledged that he is partially
permanendy disabled but other doctors who he consulted, on his
own and joindy with his employer, believed that his disability is not
only permanent but total as well;
(e) The company-designated physician recognized that he is totally and
permanendy disabled but there is a dispute on the disability grading;
1 See also TradepM Shipping Agencies. Inc v. Deta Cruz, G.R. No. 210307, Feb. 22,2017; Emphasis supplied.
1 Philippine Hammonia Shp Agency v. Israel, G.R. No. 200258, Oct 03,2018; See also Tulabing v. MST Marine Services
(Phils), Inc., G.R Nos 202113 8 202120, June 06,2018.
3 Torilbs v. Eastgate Maritime Corporation, G.R Nos. 215904 & 216165, Jan. 10,2019.
4 This ts the pwtsior under the 2000 POEA-SEC. It is now designated as Section 20 (A) (3) of the 2010 POEA-SEC.
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The company-designated physician determined that his medical
condition is not compensable or work-related under the POEA-SEC
but his doctor-of-choice and the third doctor selected under Section
20 (B) (3)12 o f the POEA-SEC found odierwisc and declared him
unfit to work;
(g) The company-designated physician declared him totally and
permanently disabled but the employer refuses to pay him the
corresponding benefits; and
(h) The company-designated physician declared him partially and
permanently disabled within the 120-day or 240-day period but he
remains incapacitated to perform his usual sea duties after the lapse
of said periods.
d. The extent o f disability (w hether total or partial) is determ ined,
not by the num ber o f days that one could not work, but by the
disability grading the doctor recognizes.
The CA, in the 2018 case of C.F. Sharp} found that since respondent was
unable to work as a seafarer for more than 120 days, he is deemed to have a
permanent and total disability. The Court, however, disagreed. While a seafarer is
entitled to temporary total disability benefits during his treatment period, it does
not follow that he should likewise be entided to permanent total disability benefits
when Iris disability was assessed by the company-designated physician after his
treatment. He may be recognized to have permanent disability because o f the
period he was out o f work and could not work, b u t the extent of his disability
(w hether total or partial) is determ ined, not by the n um ber of days th at he
could n o t work, b u t by the disability g rad in g the doctor recognizes b ased on
his resulting incapacity to w ork and earn his w ages.3
Certainly, the disability should not be determined by simply counting the
duration o f the seafarer’s illness. This system would inevitably induce the
unscrupulous to delay treatment for more than 120 days to avail o f the more
favorable award o f permanent total disability benefits.4
It is the doctor's findings that should prevail as he or she is equipped with
the proper discernment, knowledge, experience and expertise on what constitutes
total or partial disability. The physician's declaration serves as the basis for the
degree o f disability that can range anywhere from Grade 1 to Grade 14. Notably,
this is a serious consideration that cannot be determined by simply counting the
number of treatment lapsed days. Accordingly, the timely medical assessment of a
company-designated physician is given great significance by the Court to determine
' id.
C f. Sharp Crew Management Inc. v. Santos, G.R. No. 213731, Aug. 01.2018.
3 Citing INC Shipmaiagement Inc. v. Rosales, G.R. No. 195832, Oct 01,2014.
* INC Shipmanagement Inc. v. Rosales, G.R. No. 195832, Oct 01,2014.
2
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whether a seafarer is entitled to disability benefits. Indeed, the mere inability of a
seafarer to work for a period of 120 days is not the sole basis to determine a
seafarer's disability.
In this case, respondent was repatriated in the Philippines on January 12,
2012. The next day, or on January 13, 2012, he was immediately referred to CF
Sharp’s company-designated physicians. He was then subjected to different tests
and treatments, which were recorded in several medical reports. It was confirmed
that he had Diabetes Mellitus II and hypertension. On May 4, 2012, respondent
was cleared from the nephrology standpoint and was ^advised to continue his
maintenance medications. Thereafter, after 118 days from repatriation, the
company-designated physicians issued a certification stating that respondent's
condition was not work-related and that his final disability grading assessment for
his hypertension and diabetes was Grade 12.
Verily, the company-designated physicians suitably gave their medical
assessment of respondent's disability before the lapse of the 120-day period. It was
even unnecessary to extend the period of medical assessment to 240 days. After
rigorous medical diagnosis and treatments, the company-designated physicians
found that respondent only had a partial disability and gave a Grade 12 disability
rating. As the medical assessment of the company-designated physicians was
meticulously and timely provided, it must be given weight and credibility by the
Court.
3. POST-EM PLOYM ENT M ED IC A L E X A M IN A TIO N .
a. Mandatory subm ission fo r post-em ploym ent m edical
examination by a com pany-designated physician.
Section 20 (A) (3) of the 2010 POEA-SEC, reads:
“COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
“The liabilities of the employer when the seafarer suffers
work-related injury or illness during the term of his contract are as
follows:
XXX
“For this purpose, the seafarer shall submit himself to a post­
employment medical examination by a company-designated
physician within three working days upon his return except when he
is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance. In the course of
the treatment, the seafarer shall also report regularly to the companydesignated physician specifically on the dates as prescribed by the
company-designated physician and agreed to by the seafarer. Failure of
the seafarer to comply with the mandatory reporting requirement shall
result in his forfeiture of the right to claim the above benefits.”
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It is clear from the foregoing that for a seafarer’s claim for disability to
prosper, it is m andatory and must be strictly observed that w ithin three (3)
w orking days from his repatriation, he is exam ined by a com panydesignated physician.1 Non-compliance with this mandatory requirement results
in the forfeiture o f the right to claim for compensation and disability benefits.2
Consequently, the complaint filed by a non-compliant seafarer should be dismissed
outright.3
The rationale for this rule is that reporting the illness or injury within
three (3) working days from repatriation fairly makes it easier for a physician to
determine the cause o f the illness or injury'.4 It would be fairly manageable for the
physician to identify whether the disease was contracted during the term o f his
employment or that his working conditions increased the risk o f contracting the
ailment5 Ascertaining the real cause o f the illness or injury beyond the period may
prove difficult To ignore the rule might set a precedent with negative
repercussions, like opening floodgates to a limitless number o f seafarers claiming
disability benefits, or causing unfairness to the employer who would have difficulty
determining the cause of a claimant’s illness because of the passage o f time. The
employer would then have no protection against unrelated disability claims.6
b. E xceptions.
This rule is not absolute, however. It admits o f excepdon as (1) when the
seafarer is incapacitated to report to the employer upon his repatriation; and (2)
when the employer inadvertently or deliberately refused to submit the seafarer to a
post-employment medical examination by a company-designated physician.78
In the first instance above, a written notice to the agency within the same
period is deemed as compliance. An example of this exception is Wallem Maritime,9'
where the claimant, Faustino Inductivo, admittedly did not subject himself to post­
employment medical examination within three (3) working days from his return to
the Philippines, as required by the POEA-SEC. Indeed, for a man who was
terminally ill and in need o f urgent medical attention, one could not reasonably
expect that he would immediately resort to and avail of the required medical
examination, assuming that he was still capable of submitting himself to such
examination at that time. It is quite understandable that his immediate desire was to
be with his family in Nueva Ecija whom he knew would take care of him. Surely,
1 De Andres v. Diamond H Marine Services & Shipping Agency. Inc, G R No. 217345, July 12.2017.
Manila Shipmanagement&Manning, Inc. v.Aninang.GR No. 217135. Jan 31,2018.
3 Interorient Maritime Enterprises, Inc. v. Creer III, supra.
4 Scanmar Maritime Services Inc., v. De Leon, G R No 199977. Jan. 25.2017
5 Ebuengav.SouthfieW Agencies, Inc, G R No. 208395, March 14,2018.
6 WaSem Maritime Services. Inc. v. Tanawan, G R No. 160444. Aug. 29,2012
1 De Andres v. Diamond H Marine Services & Shipping Agency, Inc, G R No 217345, July 12,2017.
8 WaJem Maritime Services, Inc. v. NLRC, GR. No. 130772, Nov. 19,1999,376 Phil. 738.
7
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under the circumstances, he or his surviving heirs after his death cannot be denied
the right to claim benefits under the law.
Another example is Delalamon} where the very same factual circumstances
in Wallem Maritime exist. When Margarito was repatriated on September 6, 2006, he
was already suffering from “Renal Insufficiency: Diabetes Me/litus; IHD
Blood+CBC+Anemia. ’’Less than a week thereafter, he was confined at the Las Pinas
Doctor’s Hospital for the same ailment of renal insufficiency, but this time
aggravated by coronary artery disease. He started undergoing hemodialysis
treatments in December when his ailment worsened to end stage renal disease due
to a cyst at the right renal cortical. He became bedridden thereafter until he passed
away on September 11, 2007. The medical episodes that transpired after his
disembarkation from the vessel show that he was already in a deteriorating physical
condition when he arrived in the Philippines. Thus, it cannot be reasonably
expected of him to prioritize the errand o f personally reporting to the petitioners’
office instead of yielding to the physical strain caused by his serious health
problems.
In the second situation above, an example is Interorient} where the Court
recognized and addressed the unscrupulous practice of employers o f deliberately or
inadvertently refusing to refer the seafarer to the company-designated physician to
deny his disability claim. The seafarer here reported to the employer for post­
employment medical examination within three (3) working days from repatriation.
The employer, however, did not refer him to a company-designated physician
because he already signed a quitclaim, releasing it from liability. The Court ruled
that the absence of post-employment medical examination should not be taken
against the seafarer because the employer declined to provide the same. Likewise,
the quitclaim was declared void due to lack of consideration and unconscionable
terms. Hence, the Court granted full disability benefits to the seafarer's family.
4. FINDINGS OF COM PAN Y-D ESIG NA TED PH YSICIA N N O T
AUTOMATICALLY FIN AL, B IN D IN G A ND C ON CLU SIV E.
While jurisprudence is replete with pronouncements that it is the
company-designated physician’s findings and evaluations which should form as the
basis of the seafarer's disability claim,3 the same, however, are not automatically
final, binding or conclusive on the claimant-seafarer, the labor tribunals or the
courts,4 as their inherent merits would still have to be weighed and duly considered.*23
'
2
3
*
Status Maritime Caporationv. Spouses Delalamon.GR No. 198097, July 30,2014.
tnterorient Maritime Enterprises, Inc. v. Remo, G.R. No. 181112, June 29,2010.
Seacrest Maritime Management Inc. v. Roderos, G R No. 230473, April 23,2018.
DOHLE PtiJman Manning Agency, Inc. v. DoWe, G.R. Nos. 223730 & 223782, Oct 04,2017; Andrada v. Agemar Manning
Agency. Inc., G.R. No. 194758, Oct 24,2012; See also Magsaysay Mtsui OSK Marine, Inc. v. Buenaventura, G R No.
195878, Jan. 10,2018, TradepM Shipping Agencies, Inc. v. Dria Cruz, G.R No. 210307, Feb. 22,2017.
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The seafarer may thus dispute such assessment by seasonably exercising
his prerogative to seek a second opinion and consult a doctor o f his choice, in
which case the medical report issued by the latter shall be evaluated by the labor
tribunal and die court, based on its inherent merit.1 In case of disagreement
between the findings o f the company-designated physician and the seafarer's doctor
of choice, the employer and die seaman may agree joindy to refer die latter to a
third doctor whose decision shall be final and binding on them.2 Based on
jurisprudence, the findings o f the company-designated physician prevail in cases
where die seafarer did not observe the third-doctor referral provision in the
POEA-SEC.3 However, if the findings o f the company-designated physician are
clearly biased in favor o f the employer, then courts may give greater weight to the
findings of the seafarer's personal physician.4
On the part o f the labor tribunals and the courts, they need not adopt the
company-designated doctor’s findings hook, line and sinker as they may set them
aside if it is shown that the diagnosis is attended widi clear bias, manifested by die
lack of sciendfic relation between the diagnosis and the symptoms felt by the
seafarer or if the final assessment o f the company-designated doctor is not
supported by the medical records o f the seafarer.5
6. A U T H O R IT Y O F LABOR T R IB U N A L S A N D COU RTS T O MAKE
O W N EVA LUA TION .
Labor authorities like the Labor Arbiter and die NLRC as well as the
courts have the power to make their own evaluation of the merits of the medical
findings in case there is a conflict between the medical finding o f the companydesignated physician and that o f the doctor appointed by the seafarer and there was
no third doctor appointed by both parties whose decision would be binding on
diem.6 The POEA-SEC78 provides that “ [i]f a doctor appointed by the seafarer
disagrees with the assessment [of the company-designated doctor], a third doctor
may be agreed joindy between the Employer and the seafarer,” and “ [t]he third
doctor’s decision shall be final and binding on both parties.” According to
Dalusong* in case there was no third doctor appointed by both parties whose
decision would be binding on them, it is up to the labor tribunal and the courts
to evaluate and weigh the merits o f the medical reports o f the companydesignated doctor and the seafarer’s doctor.9
’
2
3
4
5
6
7
8
9
Tradepha Slipping Agencies, Inc. v. Deia O uz, supra; G R No. 210307, Feb. 22,2017.
Maunlad Transport, Inc. v. Manigo, Jr., G R No. 161416, June 13,2008.
NorthSeaMarineServtesCorpv.Enriquez,GRNo.201806,Aug. 14,2017.
C.F. Sharp Crew Management, Inc. v. Casfik), G.R. No. 208215, April 19,2017.
Magsaysay Mitsui OSKMarine, Inc. v. Buenaventura, G R No. 195878, Jan. 10,2018.
Espere v. NFD International Manning Agents, Inc., G R No. 212098, July 26,2017.
See Section 20(B) (3)15 thereof.
Dalusong v. Eagle Clare Slipping PhiSppines. Inc., G R No. 204233, Sept 03,2014.
See also Balatero v. Senator Crewing (Manila) Inc, G R Nos. 224532 & 224565, June 21,2017; Ubang, Jr. v. Indochina
Ship Management Inc., G R No. 189863, Sept 17,2014.
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7. RIGHT O F SEAFARER T O SEEK A SE C O N D O P IN IO N .
a. When right to seek second opinion accrues.
At the outset, it bears pointing out that the seafarer has the right to seek a
second opinion once the company-designated physician makes a definitive and final
assessment within the 120-day period; otherwise, no such obligation devolves on
die seafarer to consult his own doctor.
This was the pronouncement in the 2018 case of Phil-Man.* Thus, it was
held that Dedace was under no obligation to consult with a physician of his choice
under the given circumstances as the duty of a seafarer to consult with his own
physician arises only if the company-designated physician was able to issue an
assessment within 120 days from the date o f his repatriation. In this case, since the
petitioners' company-designated physician, Dr. Cruz, failed to make an assessment
within the aforesaid period, Dedace's failure to adduce a medical certificate from a
physician of his choice is not fatal to his cause. It is not the issuance o f a medical
certificate showing that the seafarer's illness is work-related or diat he is totally and
permanendy unfit for sea duties which makes the employer liable. A seafarer's
cause of action for total and permanent disability benefits accrues when, among
others, the company-designated physician fails to issue a declaration as to his
fitness to engage in sea duty or disability rating even after the lapse o f the 120-day
period and there is no indication that further medical treatment would address his
temporary total disability.1
2
b. Second opinion must not be sought while the case is already
pending with the Labor Arbiter or on appeal with the NLRC.
The second opinion, however, should not be the product o f a mere
afterthought, such as when the second opinion was rendered two (2) months after
the filing by the seafarer o f his complaint, as in the case o f Ocangos,3 or when die
case was already pending appeal with the NLRC.'4 According to Ocangas,
compelling the Court to consider the opinion rendered by respondent's physician
of choice, submitted two (2) months after the filing o f the complaint, would
undermine the right of the petitioners to refute the findings and avail o f the option
to joindy refer with the respondent the disputed diagnosis to a third doctor o f the
parties' choice, as agreed upon by the parties under the POEA-SEC.
c. P roof o f bad faith or m alice o f company-designated physician,
not required to enable seafarer to seek second opinion.
Further, under the POEA-SEC, the presence of bad faith or malice on the
part of company-designated physicians is not required before a seafarer may seek
1
*
3
4
PhitMan Marine Agency, Inc. v. Dedace, Jr., G.R No. 199162, July 04,2018.
See also C f. Sharp Crew Management Inc vs. Taok, G.R No. 193679, July 18.2012.691 PH. 521.538.
Oriental Shipmanagement Co., Inc. v. Ocangas, G.R No. 226766,27 Sept 27,2017.
As in the case ofTuiab'ng v. MST Marine Services (Phils.). Inc., G.R Nos. 202113 & 202120, June 06,2018.
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the opinion of another doctor.1
8. TH E THIRD DOCTOR R U LE - M ANDATORY PR O C E D U R E IN
JO IN T L Y E N G A G IN G A T H IR D D O C T O R .
a. R eferral to a third-party doctor, when required.
The conflicting Endings of the company's doctor and the seafarer's
physician often stir suits for disability compensation. As an extrajudicial measure o f
settling their differences, the POEA-SEC gives the parties the option o f agreeing
jointly on a third doctor whose assessment shall break die impasse and shall be the
final and binding diagnosis.2
While it is the company-designated doctor who is given the responsibility
to make a conclusive assessment on the degree of the seafarer's disability and his
capacity to resume work within 120/240 days, die parties, however, are free to
disregard the findings o f the company doctor as well as the chosen doctor o f the
seafarer, in case they cannot agree on the disability gradings issued and joindy seek
the opinion of a third-party doctor pursuant to Section 20 (A) (3) of the 2010
POEA-SEC3 which states:
“SECTION 20. COMPENSATION AND BENEFITS
“COMPENSATION AND BENEFITS FOR INJURY OR
ILLNESS
“The liabilities of the employer when the seafarer suffers
work-related injury or illness during the term of his contract are as
follows:
3. xxx
“If a doctor appointed by the seafarer disagrees with the
assessment, a third doctor may be agreed jointly between the
Employer and the seafarer. The third doctor's decision shall be
final and binding on both parties.”4
In other words, the referral to a third doctor is mandatory when:
(1) there is a valid and timely assessm ent by the company-designated
physician; and
(2) the appointed doctor o f the seafarer refuted such assessment.5
The assessm en t refers to the declaration of fitness to work or the degree
of disability, as can be gleaned from the first paragraph o f Section 20 (A) (3). It
presupposes that the company-designated physician came up with a valid, fin a l, a n d
1 MagsaysayMtsuiOSK Marine, Inc. v. Buenaventura, G.R No. 195878, Jan 10,2018.
2 C.F. Sharp Crew Management, Inc. v. CastjJo, G.R No. 208215, April 19.2017
3 Sonit v. OSM Maritime Services, G.R. No. 223035, Feb. 27,2017; See also North Sea Marine Services Corp v. Enriquez,
G.R No. 201806, Aug. 14,2017; Magsaysay fvitsui OSK Marine, Inc. v. Buenavenlura, G.R. No. 195878, Jan. 10,2018.
4 Emphasis supplied.
5 CF. Sharp Crew Management Inc. v. Santos, G R No. 213731, Aug. 01.2018; DOrlLE Philman Manning Agency, Inc. v.
Doble, G.R Nos. 223730 & 223782, Oct 04,2017; Silagan v. Southfield Agenoes. Inc., G.R. No 202808, Aug. 24,2016.
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definite assessment on the seafarer's fitness o r unfitness to w ork before the
expiration o f the 120-day or 2^0-day period.1 Resultantly, the third doctor-referral
provision does not apply if there is no definite disability assessm ent from the
company-designated physician.2 Alternatively put, absent a certification from the
company-designated physician, the seafarer had nothing to contest and the law
steps in to conclusively characterize his disability as total and perm anent3
b. Conflict-Resolution Procedure for referral to third-party doctor.
In
INC Shipmanagtment* the
C ourt stated that to definitively clarify h o w
a conflict situ a tio n sh o u ld b e h a n d le d , u p o n notification that th e seafarer
disagrees with die company doctor's assessm ent based on the duly and fully
disclosed contrary assessment from the seafarer's ow n doctor, d ie s e a fa re r sh a ll
th e n signify h is in ten tio n to resolve th e c o n flic t b y d ie referral o f th e
con flictin g assessm en ts to a th ird d o c to r w hose ruling, under d ie PO E A -SE C ,
shall be final and binding o n the pardes. U p o n n o tific a tio n , th e c o m p a n y c a rrie s
th e b u rd e n o f initiating th e p ro c e ss fo r d ie re fe rra l to a th ird d o c to r
commonly a g re e d betw een th e p arties.
c.
Some principles.
•
N o n -referral to a th ird p h y sic ia n , w h o se d e c is io n s h a ll b e
co n sid ered a s final a n d b in d in g , c o n s titu te s a b re a c h o f th e
P O E A -SE C . T his referral to a third d o cto r h a s been held by the
High C ourt to be a m a n d a to ry p ro c e d u re as a consequence o f
die provision that it is the company-designated d o cto r w hose
assessment should prevail In o th e r w ords, the com pany can
insist on its disability rating even against a contrary opinion by
another doctor, unless the seafarer expresses his disagreem ent by
asking for the referral to a third d o cto r w ho shall make his o r h er
determination and whose decision is final and binding on die
parties. This rule has been followed in a string o f cases.5 T hus, at
this point, the m atter o f referral pursuant to the provision o f the
POEA-SEC is a settled ruling.6
• T h e em ployer h a s n o d u ty to refer to th ird d o c to r if th e re is n o
re q u e s t from cla im a n t-se a fa re r. Clearly, the duty to secure the
' MagsaysayMrtMaihe, he v.Atoje,GR No 229192.July23.2018.
2 Magsa^MolMarine.Inc.v.Alraje.sipa.
3 Id, effing Kesfei Shipping Co, Inc. v. Munar, GR No. 198501, Jan. 30,2013; See also Phisyneigy Maritime, Inc. v.
Gafeno,Jr, GRNo.228504,June06.2018;Talafocv.Aipaphi ShippingCoqxxa5on,GRNa223731,Aug.30,2017.
* NCSNpmanagementhe v. Rosales,supra
* Sudi as tustirimov. NYK-fi ShipManagement. Inc. GR No. 237487, Jire 27,2018; Seatrest Mari&ne Managerrent,
he.v. Roderos,GR No. 230473,April23.2018.
6 INCShipmanagemert,he.v. Rosales,GR No. 195832.Oct 01,2014.
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opinion o f a third doctor belongs to the employee asking for
disability benefits.1 H e m ust actively o r expressly request for it.2
• N o p e rio d w ith in w h ic h th ird d o c to r sh o u ld m a k e a d is a b ility
a s s e s s m e n t T he 120/240-day period in Article 198 (c), (1) [192 (c),
(1)] o f the Labor C ode and Rule X, Section 2 o f the A REC only
applies to die company-designated doctor, and n o t to th e third
doctor.3
• T h e th ird -p a rty d o c to r’s a s s e s s m e n t m u s t b e d e fin ite a n d
c o n clu siv e. T he em ployer and the seafarer are bound by the
disability assessm ent o f die third-party physician in the event that
they choose to appoint one.45
• D e lib e ra te ly c o n c e a lin g o r d e la y in g d ie re le a se o f d ie d is a b ility
ra tin g , a n a c t o f b a d fa ith . Respondent, in d ie 2018 case o f
Magsqysay MoP was kept in
the dark about his medical condition. I t is
die height o f unfairness, bordering o n bad faith, for petitioners to
dem and from respondent com pliance w ith die third doctor rule w h en
they a n d their designated physicians, in the first place, did n o t fulfill
their obligations u n d er die law and th e P O E A -S E C G iven th e
company-designated physicians’ inaction o r failure to
disclose
respondent’s m edical progress, the extent o f his illnesses, and their
effect o n his fitness o r disability, respondent w as justified in seeking
the medical expertise o f the physician o f his choice.
9. M E D IC A L A B A N D O N M E N T A N D P R E M A T U R E F IL IN G O F
C O M P L A IN T F O R D IS A B IL IT Y C LA IM .
T h e act o f a seafarer in refusing to undergo m edical treatm ent o r in
refusing to continue his medical treatm ent w ith the com pany-designated physician
is called
"medical abandonment” which
would result in the denial o f his disability
claim. M oreover, the filing o f a com plaint for disability claim before the lapse o f
the 120-day/240-day treatm ent period will result in its dismissal o n the ground o f
prem aturity as at that point, the cause o f action may be said to have not yet accrued
as a m atter o f rig h t6
T h e following cases sufficiently illustrate this principle:
1 Hernandez v .M a p a j^ Maritime C opraG m G R No 226100, Jan. 24.2018; MagsaysayMsriOSK Maine, he. v.
Buenaventura, G R No. 195078, Jan. 10.2018.
2 Id., See C.F. Sharp Crew Management, he. v. Sartos, G R No. 213731, Aug. 01,2018.
3 SUnJv.OSMMarSne Sendees, G R No. 223035, Feb. 27,2017.
« Id.
5 MaBsaysayMotMarine.lnav.AinfeGANo.229192.July23.2018.
* Anuatv. Pacific Ooean Manning, Inc/Trans Star Shipping Agency Corporation. G R No. 220898, July 23,2018; Scanmar
Marfine Sendees, h e v. Hernandez,Jr.. G R No. 211187, April 16,2018.
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(1) Solpia Marine and Ship Management, Inc. v. Postrano,1 where die Court
declared that the award of permanent and total disability benefits to respondent
seafarer, Postrano, was not proper as he abandoned his treatment which prevented
the company-designated physician from making any final and definitive assessment.
In this case, Postrano was repatriated on January 1, 2013. Upon his return, he was
referred to the company-designated physician for examination and the latter
prescribed medication for Postrano's condition. He was then advised to undergo
physical therapy sessions for the betterment of his condition. After completing ten
sessions of physical therapy or on March 14, 2013, he reported to the companydesignated physician who further advised him to continue with said therapy as his
condition was notably improving. He was also asked to report again for a follow­
up. However, Postrano failed to return to the company-designated physician after
completing another series o f physical therapy sessions. Without the final
assessment of the company-designated physician, Postrano is deemed suffering
from temporary total disability. More so, the 120 day-period provided by law had
not yet lapsed.
(2) Anuat v. Pacific Ocean Manning, Inc./Trans Star Shipping Agency
Corporation} where petitioner Anuat no longer went back to respondent Pacific's
company-designated physician on 30 September 2011. Instead, Anuat filed a claim
against Pacific for total and permanent disability benefits on 26 October 2011 or
160 days from the onset of his work-connected injury. The Court thus ruled that
Anuat prematurely filed his total and permanent disability claim. When Anuat filed
his disability claim he was still under medical treatment by Pacific's companydesignated physician. In fact, he was advised by Pacific's company-designated
physician to return on 30 September 2011 for a medical examination and he chose
not to do so. Notably, the 240-day extended period o f medical treatment provided
by Sections 2 and 3(1), Rule X of the Amended Rules on Employees'
Compensation had not yet lapsed.
(3) C.F. Sharp Crew Management, Inc. v. Orbcta? where for a little over 120
days, or from February 10, 2010 to June 16, 2010,126 days to be exact, respondent
underwent treatment by the company-designated physician. On June 16, 2010, he
was partially diagnosed with "lumbosacral muscular spasm with mild spondylosis L3-LA;"
the company physician also concluded that there was no compression fracture, and
respondent was told to return for a scheduled bone scan. However, instead of
returning for further diagnosis and treatment, respondent opted to secure the
opuiion of an independent physician o f his own choosing who, although arriving at
a finding of permanent total disability, nonetheless required respondent to subject
himself to further Bone Scan and Electromyography and Nerve Conduction
Velocity tests "to determine the exact problem on his lumbar spine." Instead o f heeding the*3
' G.R. No. 232275. July 23.2018.
? Anuat v. Pacific Ocean Vanning, Inc/Frans Star Shipping Agency Caporafion, G.R No. 220898, July 23,2018.
3 G R N o 211111 Sept 25.2017.
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recommendations o f his own doctor, respondent went on to file the labor
complaint. In point o f law, respondent's filing o f the case was premature. This is so
because the company-designated physician and his own doctor, Dr. Escutin, are
one in recommending that respondent undergo at least a bone scan to determine
his current condition while undergoing treatment, thus indicating that respondent's
condition needed further attention.
10. RULE IN CASE OF CONFLICT OF O PIN IO N S.
In any case, the Supreme Court underscored in Naqareno1 that “the
bottomline is this: In a situation where the certification o f the company-designated
physician would defeat the O F ^ s claim while the opinion of the independent
physicians would uphold such claim, the Court adopts the findings favorable to the
OFW. The law looks tenderly on the laborer. Where the evidence may be
reasonably interpreted in two divergent ways, one prejudicial and the other
favorable to him, the balance must be tilted in his favor consistent with the
principle o f social justice.”2
11. EFFECT OF M ISREPRESENTATION O N DISABILITY CLAIMS.
Misrepresentation on the part o f the claimant would defeat the claim for
total permanent disability. Misrepresentation is a question o f fact which may be
reversed on appeal by a contrary factual finding.3 In Ayungo,4 petitioner did not
disclose that he had been suffering from hypertension and/or had been actually
taking medications therefor (i.e., Lifezar) during his PEME. As the records would
show, the existence o f Ayungo’s hypertension was only revealed after his
repatriation, as reflected in the Medical Report dated March 26, 2008 and
reinforced by subsequent medical reports issued by Metropolitan Medical Center.
To the Court’s mind, Ayungo’s non-disclosure constitutes fraudulent
misrepresentation which, pursuant to Section 20 (E) of the 2000 POEA-SEC,5
disqualifies him from claiming any disability benefits from his employer.
The same ground o f misrepresentation was cited as basis for not awarding
any of the claims for total and permanent disability benefits, sickness allowance,
and reimbursement o f medical expenses, o f respondent in Vetyard.6 Respondent’s
claim that his eye ailment, "right eye-posterior subs capsular cataract” and "left eyepseudophakia, posterior capsule opacification, ” was occasioned when paint accidentally hit
his eye for which he suffered pain and that he afterwards experienced blurred
’
3
3
4
5
G.R. No. 209201. Nov. 19.2014.
Citing Abante v. KJGS Fleef Management Manila, GJL No. 182430, Dec. 4.2009.
OSM Shipping Phi. lx . v. de la Cruz, G.R. No. 159146 Jan. 28,2005.
Ayungo v. Beamko Shipmanagerrent Corporation, G.R. No. 203161, Feb. 26,2014.
Section 20. Compensation and Benefits, xxx E. A seafarer who knowingly conceals and does not dsdose past medical
condition, (fisabfity and history in the preemployment medical examination constitutes fraudulent misrepresentation and
shal disqualify him from any compensation and benefits. This may also be a valid ground for termination of employment and
imposition of the appropriate administratve and legal sanctions.
6 Vetyard T erm inals & S hipphg S ervices, tec. v . Suarez. G .R . N o. 199344. M arch 5.2 0 14 .
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vision, was belied by the subsequent finding by a Medical City doctor which he
admitted that it was cataract extraction, not paint droppings, that caused his
ailment
12. SEAFARERS’ PROTECTION AGAINST AMBULANCE CHASING
AND EXCESSIVE FEES.
R.A. No. 10706* [November 26, 2015], otherwise known as the “Seafarers
ProtectionAct, ” considers it unlawful for any person to engage in ambulance chasing
or the act of soliciting, personally or through an agent, from seafarers, or their
heirs, the pursuit of any claim against their employers for*the purpose of recovery
of monetary claim or benefit, including legal interest, arising from accident, illness
or death, in exchange for an amount or fee which shall be retained or deducted
from the monetary claim or benefit granted to or awarded to the seafarers or their
heirs.2
When any contract or arrangement between a seafarer or his/her heirs,
and a person who appears for or represents them in any case for recovery of
monetary Haim or benefit, including legal interest, arising from accident, illness or
death before the NLRC or any Labor Arbiter, the NCMB, the POEA, the DOLE
or its regional offices, or other quasi-judicial bodies handling labor disputes,
stipulates that the person who appears for or represents them shall be entitled to
fees, such fees shall not exceed ten percent (10%) of die compensation or benefit
awarded to the seafarer or his/her heirs. For purposes of this Act, fees referred to
in this section shall mean the total amount of compensation of the person who
appears for or represents the seafarer, or his/her heirs for services rendered.3
MONETARY CLAIMS OF SEAFARERS
FOR DEATH BENEFITS
L LEGAL BASES.
It is setded that the employment of seafarers, including claims for death
benefits, is governed by the contracts they sign at the time of their engagement4 As
long as the stipulations in said contracts are not contrary to law, morals, public
order, or public policy, they have the force of law between the parties.5
Nonetheless, while the seafarer and his employer are governed by their mutual
* Entitled 'AN ACT PROTECTING SEAFARERS AGAINST AMBULANCE CHASING AND IMPOSITION OF EXCESSIVE
FEES,ANDPROViDtNG PENALTIESTHEREFOR*
* SecGon3,RANa 10706.
» Secfcn4,W.
4 Marlow Navigation Philippines. Inc. v. Heirs of Ricardo S. Ganai. G R No. 220168. June 07.2017; C.F
Management, h a v.Legal Heirs offfie late GodofedoRepiso,G.R No. 190534, Feb. 10,2016.
Sharp Crew
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agreement, the POEA Rules and Regulations require that the POEA-Standard
Employment Contract be integrated with every seafarer's contract1
Section 20 (B)2 of die 2010 POEA-SEC,3 and a long line of jurisprudence4
explaining this provision, require that for the seafarer to be entided to death
benefits, he must have suffered a work-related death during the term of his
contract The provision reads:
“B. COMPENSATION AND BENEFITS FOR DEATH
“1. In case of work-related death of the seafarer, during the term of
his contract, the employer shall pay his beneficiaries the Philippine
currency equivalent to the amount of Fifty Thousand US dollars
(US$50,000) and an additional amount of Seven Thousand US dollars
(US$7,000) to each child under die age of twenty-one (21) but not
exceeding four (4) children, at the exchange rate prevailing during the
time of payment
“2. Where death is caused by warlike activity while sailing within a
declared war zone or war risk area, the compensation payable shall be
doubled. The employer shall undertake appropriate war zone insurance
coverage for this purpose.
“3. It is understood and agreed that the benefits mentioned above shall
be separate and distinct from, and will be in addition to whatever
benefits which the seafarer is endded to under Philippine laws from the
Social Security System, Overseas Workers Welfare Administration,
Employee's Compensation Commission. Philippine Health Insurance
Corporation and Home Development Mutual Fund (Pag-EBIG Fund).
"4. The other liabilities of the employer when the seafarer dies as a
result of work-related injury or illness during the term of
employment are as follows:
“a. The employer shall pay the deceased’s beneficiary all
outstanding obligations due die seafarer under this Contract.
“b. The employer shall transport the remains and personal
effects of the seafarer to die Philippines at employer’s expense except if
the death occurred in a port where local gpvemment laws or regulations
do not permit the transport of such remains. In case death occurs at sea,
die disposition of die remains shall be handled or dealt with in
accordance with the master’s best judgment In all cases, the
employer/master shall communicate with the manning agency to advise
for disposition of seafarer’s remains.
**c. The employer shall pay the beneficiaries of the seafarer
the Philippine currency equivalent to the amount of One Thousand US
1 M.
1 Fbmwty, Secfon 20 (A) of Standard Terns and CondSons Governing Ite Employment of FBpho Seafarers On Board
Ocean-Going Vessels, isated pursuantto DOLEDepartmentOnto No.4, Series of 2000 [May 31,2000).
1 Amended Standard Terms and Condfions Governing he Overseas Employmenl d FBpino Seafarers OrvBoari OcsanGohgShlps(POEAMeniorandumQiailarNo. 10, Seriesof2010, October26,2010).
*
MedfneManagement,he.v.Ros&id^GRNo. 168715,Sept 15.2010.
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dollars (US$1,000) for burial expenses at the exchange rate prevailing
during the time of payment."
2. REQUISITES.
Clearly from the foregoing, to be entitled to death compensation benefits
from die employer, the death o f the seafarer
(1) must be work-related; and
(2) must happen during the term of the employment contract
Under the Amended POEA Contract, mrk-nlateims is now an important
requirement The qualification that dead) must be work-related has made it
necessary to show a causal connection between a seafarer’s work and his death to
be compensable.1
2.1. p r R E Q U IS IT E : DEATH MUST BE WORK-RELATED.
a. M eaning o f w ork-related death.
While the 2010 and the earlier 2000 POEA-SEC do not expressly define
what a “work-related death” means, it is evident from Part B (4) as above-quoted
that the said term refers to the seafarer’s death resulting from a w ork-related
injury or illness.2 This denotation complements die definitions accorded to die
terms “work-related injury” and ^ode-related illness” under the 2010 POEASEC as follows:
“Definition ofTerms:
"For purposes of this contract, the following terms are defined as follows:
XXX
“16. Work-Related Illness - any sickness as a result of an occupational disease
listed under Section 32~A of this Contract with the conditions set therein
satisfied.
“17. Work-Related Injury - injury arising out of and in the course of
employment3
What is dear from the. foregoing is that work-related injury is one
resulting in disability or death arising out of and in the course of employm ent
Thus, there is a need to show that the injury resulting to disability or death must
arise (1) out of employment; and (2) in the course of employment.4
1 Syv.RiiippineTransmarineCameis.inc.,GRNo.191740.Feb.il,2013.
2 See rfiscussionon Ibis point aflhough cSng sinrdar pmvi^on in Part4(A) dTIhe 2000 POEA-SEC, in GonchSaJ. RaceBs v.
UnitedPhSppinelines, Inc., GR No. 198408, Nov. 12,2014.
1 The de&ifions aocoded to Ihe terms ‘wxlwefeted injur/ and *wori«elatod Dress' under the 2000 POEA-SEC are as
Mows:Yfcxtotelated Injuiy-injuryfies) resulting in (fisabByvdeafii arisingoutofand in Ihe courseofemployment1and
■VM-Refeied Illness - any sickness resulting Id disab&y or death as a resea of an occupaSonai disease fsted under
Sec&m 32Aritt«cor^ win tnconc&m setthecerisa&slied.'(See(^nudv.Ma^aysay Mariam Corpaet»n,GR
No. 190161, Oct 13,2014; See alsoConchfeJ. Racefev. Unted Pl^ppineLhes, hc.,GR No. 188408, Nov. 12,2014).
4 Syv. PNBpf^ie TransmarineCaniers. Ina. G.R No. 191740, Feb. 11,2013.
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As defined under the above-dted Standard Terms and Conditions, workrelated injury, or in this case, death, is any injury arising out o f and in the course of
employment1*3According to Canned the legal attribution o f the phrase “arising out
o f and in the course of employment*’ per Iloilo Dock? is still apt and relevant,
thus:
“The two components of the coverage formula - 'arising
out oP and ‘in the course of employment* - are said to be separate
tests which must be independently satisfied; however, it should not be
forgotten that the basic concept of compensation coverage is unitary,
not dual, and is best expressed in the word ‘work-connection,’
because an uncompromising insistence on an independent application
of each of the two portions of the test a n , in certain ases, exclude
deady work-connected injuries. Hie words 'arising out oP refer to the
origin or cause of the accident, and are descriptive of its character,
while the words 'in the course oP refer to the time, place and
circumstances under which the accident takes place.4
“As a nutter of general proposition, an injury or acadent is
said to arise 'in the course of employment* when it takes place within
the period of the employment, at a place where the employee
reasonably may be, and while he is fulfilling his duties or is engaged in
doing something incidental thereto.”5
As held in More Maritime,6 “ (i]f the injury is the proximate cause o f [the
seafarer’s] death or disability for which compensation is sought, [his] previous
physical condition xxx is unimportant and recovery may be had for injury
independent of any pre-existing weakness or disease.”
b. E ffe c t i f illn e ss w hich caused death n o t lis te d as an occupational
disease.
As a general rule, the principle of work-relatcdness requires that the
disease in question must be one o f those listed as an occupational disease under
Section 32-A of the POEA-SEC Nevertheless, should it be not classified as
occupational in nature, Section 20 (B) paragraph 4 of the POEA-SEC provides that
such diseases are disputablv presumed as work-related.7 This disputable
presumption that a particular injury or illness that results in disability, or in some
cases, death, is work-related stands in the absence of contrary evidence.8 Hence,
even if die illness is not listed under Section 32-A o f the POEA-SEC as an
occupational disease or illness, the same shall still be presumed as work-related and
1 MartowNavig^PWppiies, Inc.v.HeasofffenfeS.Gartal,GRNo. 220168,June07,2017.
1 AnrtaCanuelv.Ma9S3ys3yMariSrneCo(poration,GR Mo. 190161,0ct 13,2014.
3 M o Dodc & Engineefrg Co. v. Workmen's Compensation Commissioa, G R No. L-2S341, Nov. 27.1968.
4 SeeatoSyv.PhappineTransnrafineCanieis.ha.GRNo. 191740, Feb.11,2011
5 Bnphasessuppled.
8 More Marfirm Agoides, Ina v. NLRC, GJL No. 124927. May 18.1999; 366 Ptd. 646.
7 JebsensMari&ne;Incv.BdxdGRNo.204076,Oec.4,2013.
8 RSlarMarifineGoiporatov.Rosete.GftNa 192686. Nw.23,2011,661 SCRA247.
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it is incumbent on the employer to overcome die presumption.1This presumption
should obviously work in the seafarer's favor. Hence, unless contrary evidence is
presentedbytheemployer, thework-relatedness of the disease must be sustained.2
2.2. 2"DREQUISITE r DEATH MUST OCCUR DURING TER M O F
EMPLOYMENT.
a. The death should happen during employment.
The general rule has been declaredin a number of cases,3that in order to
avail ofdeathbenefits, thedeathof die OFWshould occpr duringthe effecdvityof
the employment contract For emphasis, die death of a seafarer during the termof
employment makes the employer liable to his heirs for death compensation
benefits.4This is the onlycondition for compensability. The employer is therefore
liable upon proof that the seafarer died during the effecdvity of his employment
contract.5
b. I f death happens after termination o f employment, no death
benefits should, as a general rule, be paid.
But if the seafarer dies after the termination of his contract of
employment, his beneficiaries ate not endded to die death benefits.6 Thus, in
Medline,1 it was pronounced that the heirs/benefidaries of Juliano Roslinda, a
seafarer, are not endded to the death benefits under die Standard Employment
Contract for Seafarers since he did not die while he was under die employ of
petitioners. His contract of employment ceasedwhenhe was discharged onJanuary
20,2000, after havingcompleted his contract thereat He died on August 27,2001
or 1year, 7months and7days after the expiration ofhis contract8
c. When to reckon the termination o f employment ofa seafarer who
died.
Section 18 of the 2010 POEA-SEC definitively reckons the termination
ofemploymentofaseafarerin two (2)ways, to w it
(A) Whendie seafarer completes his pedod of contractual service aboard
theship, signs-offfromdie ship andarrives at die point ofhire.
• G x id fe ^ .R a c e b v .lh W P t% h e lines, te ,G R N a 198408,Nov. 12,2014.
2 JebsensMarih»,lnav.Babcl,supta.
3 Such as he cases of Gau Sheng Phis* he. v. Joaquin, G il No. 144665, Sept 8,2004; Hermogenes v. Oseo Shipping
Services, hex. G P. No. 141505.Aug. 1S, 2005,467 SCRA 301; Pnxle^a] Shaping and Managernent CcxporaSon v. Sta
Rte, G R No. 186680, Feb. 8,2007; and Waveness M arine Agency, he. v. Beneficiaries of Alas, G.R. No. 168560, Jan.
4 Estateof Fose& O itegav.C A G R N a 175005, Apr)30,2008,553 SCRA649.6SS656.
s Escadnv.leonisNa^S3fionCo^lnt,GRNo. 182740,July5,2010.
3 EstateofP ose*) Orte5av .C A .G R N a 175005.Apri 30,M 08,553 SCRA649,655^56.
7 M ed5neM ana3ernenthtv.RosW a.GRNa 168715,Sept 15,2010.
* See also Sea Power Shipping Enterprise^ h a v.Am iandoLSaiazar.GR No. 188595, Aug. 28,2013.
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(B) Effective upon arrival at the point of hire for any of the following
reasons:
1) When the seafarer signs-off and is disembarked for medical
reasons;1
2) When the seafarer signs-off due to shipwreck, ship's sale, lay-up of
ship, discontinuance ofvoyage or change ofship principal;2
3) When the seafarer, in writing, voluntarily resigns and signs off
prior to expiration of contract;3
4) When the seafareris discharged for just cause.4*
On this issue of when to reckon die termination of the employment of a
seafarer, Escarcha,s which was decided under the regime of die 1996 POEA-SEC,
instructs that under Section 18(B) (1) thereof the employment of the seafarer is
terminated when he “signs-offand is disembarkedfor medical reasonspursuant to Section 20
(B) [4] of [the] Contract." Consequendy, the seafarer here (Eduardo) was repatriated
for medical reasons; he arrived in the Philippines on June 17, 1999 to undergo
further evaluation and treatment after being diagnosed with advanced mycobacterium
tuberculosis, advanced H IV disease, cardiac dysrhythmias, and anemia. Eduardo’s
employment was therefore terminated upon his repatriation on June 17,
1999. Thus, when Eduardo died onJune 9, 2001, approximately two (2)years after
his repatriation, his employment with the respondents had longbeen terminated.
d. Exception when death after termination o f employment is
compensable.
Secdon 32-A of the POEA-SEC considers the possibility of
compensation for the death of the seafarer occurring after the termination of the
employment contract on account of a work-related illness. But for death under this
provision to be compensable, die claimant must satisfy all of the following
conditions:
(1) The seafarer's work must involve the risks described in the POEASEQ
(2) The diseasewas contracted as a result of the seafarer's exposure to the
describedrisks;
(3) The disease was contracted within a period of exposure and under
suchother factors necessaryto contractit; and
(4) Therewas no notorious negligence on die part of die seafarer.6
’ Pumuarti to Section 20 (A)f51 of the 2010 POEA-SEC (ConfracQ.
* tnaocodanm wi^SecSons22,23and26of9i8Coniacl
3 PuRsuarrttoSecSon19(G)of1heContract
* AsprowktedfbrinSec6on33(if(teOon&acL
6 Escarchav.UonisNa^36onCo,[nc,GJR.No.182740.Ju!y5l 2010.
6 Thesecm(S6cnsin Secto32^dBiePOEA-SECnem ainunchangednte2000 and 2010versions.
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In fulfillingtheserequisites, substantial evidence must be presented which
is more than a mere scintilla; it must reach the level of relevant evidence as a
reasonablemindmightaccept as sufficient to support a conclusion.*
e. M edical repatriation a s an exception.
Expoundingfurther on this second requirement for death compensability,
die Supreme Court clarified in Canueh12 that while die general rule is that the
seafarer’s death should occur during die term of his employment, die seafarer’s
death occurring after the termination of his employment due to his medical
repatriation on account of a work-related injury dr illness constitutes an
exception thereto. Thisis based on a liberal construction of the 2000 POEA-SEC34
as impelled by the plight of the bereaved heirs who stand to be deprived of a just
and reasonable compen