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TABLE OF CONTENTS
LABOR LAW 1............................................................. 1
I.
FUNDAMENTAL PRINCIPLES.......................... 1
A.
1.
2.
3.
B.
II.
LEGAL BASIS .........................................1
1987 Constitution .................................1
Civil Code ............................................2
Labor Code..........................................3
STATE POLICY TOWARDS LABOR ........3
1.
Security of tenure.................................3
2.
Social justice .......................................4
3.
Equal work opportunities ......................5
4. Right to self-organization and collective
bargaining..................................................5
5.
Construction in favor of labor ................6
6. Burden of proof and quantum of evidence ...7
III.
LABOR STANDARDS .................................. 26
A.
1.
2.
3.
B.
A.
DEFINITION OF RECRUITMENT AND
PLACEMENT .............................................7
B. REGULATION OF RECRUITMENT AND
PLACEMENT ACTIVITIES ...............................9
1.
Regulatory Authorities ..........................9
2.
Ban on Direct Hiring ........................... 11
3.
Entities Prohibited from Recruiting ...... 11
4. Suspension or Cancellation of License or
Authority .................................................. 12
5.
Prohibited Practices ........................... 13
C.
ILLEGAL RECRUITMENT ...................... 15
1.
Elements ........................................... 15
2.
Types ................................................ 17
3. Illegal Recruitment as Distinguished from
Estafa ...................................................... 18
D. LIABILITY OF LOCAL RECRUITMENT
AGENCY AND FOREIGN EMPLOYER .......... 18
1.
Solidary Liability................................. 18
2.
Theory of Imputed Knowledge ............ 20
1.
2.
LEAVES................................................ 57
Labor Code ....................................... 57
Special laws ...................................... 58
C.
D.
SEXUAL HARASSMENT IN THE WORK
ENVIRONMENT................................................ 63
1.
Definition........................................... 63
2.
Duties and Liabilities of Employers ..... 64
3.
Applicable Laws ................................ 65
E. WORKING CONDITIONS FOR SPECIAL
GROUPS OF EMPLOYEES .......................... 65
1.
Apprentices and Learners .................. 66
2.
Disabled Workers .............................. 69
3.
Gender.............................................. 72
4.
Minors............................................... 74
5.
Kasambahays ................................... 77
6.
Homeworkers .................................... 80
7.
Solo Parents ..................................... 81
8.
Night Workers ................................... 81
9.
Migrant Workers ................................ 83
10.
Security Guards ................................ 84
IV.
POST-EMPLOYMENT.................................. 85
A.
E. TERMINATION OF CONTRACT OF MIGRANT
WORKER ...................................................... 21
F. EMPLOYMENT OF NON-RESIDENT ALIENS 21
1.
Coverage........................................... 21
2.
Conditions for Grant of Permit ............ 23
3.
Validity of AEP and Renewal .............. 24
4.
Denial of Application .......................... 25
5.
Revocation; Cancellation.................... 25
6.
Appeal ............................................... 25
7.
Penalty .............................................. 26
2.
3.
4.
5.
6.
WAGES ................................................ 40
Definition, Components, and Exclusions
40
Principles .......................................... 49
Minimum Wage ................................. 50
Payment of wages ............................. 51
Prohibitions regarding wages ............. 52
Wage determination .......................... 54
1.
RECRUITMENT AND PLACEMENT ............. 7
CONDITIONS OF EMPLOYMENT ......... 26
Hours of Work ................................... 26
Rest Periods ..................................... 37
Service Charge ................................. 39
3.
EMPLOYER-EMPLOYEE RELATIONSHIP
............................................................. 85
Tests to Determine Existence ............ 86
Legitimate Subcontracting as
distinguished from Labor-Only
Contracting ....................................... 87
Kinds of Employment ......................... 91
1.
2.
3.
TERMINATION BY EMPLOYER ............ 99
Requisites for Validity ...................... 100
Preventive Suspension .................... 113
Illegal Dismissal .............................. 114
1.
2.
B.
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4. Money Claims arising from EmployerEmployee Relationship ........................... 121
5. When Not Deemed Dismissed; Employee on
Floating Status ....................................... 123
C.
TERMINATION BY EMPLOYEE ........... 124
1.
With notice to the employer .............. 124
2.
Without notice to the employer ......... 124
3. Distinguish voluntary resignation and
constructive dismissal ............................ 124
D.
1.
2.
3.
4.
5.
RETIREMENT ..................................... 125
Eligibility and Coverage.................... 125
Amount of Retirement Pay ............... 126
Retirement Benefits for Workers Paid by
Results .................................................. 127
Retirement Benefit of Part-Time Workers
....................................................... 127
Non-Taxable .................................... 127
LABOR LAW 2......................................................... 129
V.
LABOR RELATIONS ................................. 130
A.
1.
2.
3.
RIGHT TO SELF-ORGANIZATION....... 130
Who May or May Not Exercise the Right
....................................................... 130
Commingling or Mixture of Membership .
....................................................... 134
Rights and Conditions of Membership....
....................................................... 134
B.
BARGAINING UNIT ............................. 137
C.
BARGAINING REPRESENTATIVE ...... 140
D.
2.
RIGHTS OF LABOR ORGANIZATIONS
158
Check off, Assessment, Agency Fees
158
Collective Bargaining ....................... 160
1.
2.
3.
UNFAIR LABOR PRACTICES.............. 169
Nature, Aspects ............................... 169
By Employers .................................. 170
By Labor Organizations .................... 176
1.
E.
F.
VI.
PEACEFUL CONCERTED ACTIVITIES177
1.
By Labor Organization ..................... 178
2.
By Employer .................................... 188
3.
Assumption of Jurisdiction by Secretary
of Labor and Employment ............................ 189
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F.
BONA FIDE OCCUPATIONAL
QUALIFICATIONS .......................................... 195
G.
POST-EMPLOYMENT RESTRICTIONS ....
........................................................... 195
H.
MARRIAGE BETWEEN EMPLOYEES OF
COMPETITOR-EMPLOYERS ................ 195
VII.
A.
1.
2.
3.
DISCIPLINE ........................................ 192
B.
TRANSFER OF EMPLOYEES ............. 193
C.
PRODUCTIVITY STANDARDS ............ 194
D.
BONUS ............................................... 194
E.
CHANGE OF WORKING HOURS ........ 194
SOCIAL SECURITY SYSTEM LAW ..... 195
Coverage and Exclusions ................ 196
Dependents and Beneficiaries ......... 197
Benefits........................................... 197
B.
GOVERNMENT SERVICE INSURANCE
SYSTEM LAW ................................................ 200
1.
Coverage and Exclusions ................ 200
2.
Dependents and Beneficiaries ......... 201
3.
Benefits........................................... 201
C.
LIMITED PORTABILITY LAW .............. 206
D.
DISABILITY AND DEATH BENEFITS .. 208
1.
Labor Code ..................................... 208
2. Employees Compensation and State
Insurance Fund ..................................... 213
3. Philippine Overseas Employment
Administration-Standard Employment
Contract ................................................ 214
E.
SOLO PARENTS ................................ 218
F.
KASAMBAHAY ................................... 219
G.
AGRARIAN RELATIONS ..................... 219
1.
Concept of Agrarian Reform ............ 219
2. Existence and Concept of Agricultural
Tenancy ................................................ 219
3.
Rights of Agricultural Tenants .......... 220
4.
Concept of Farmworkers.................. 221
H.
1.
2.
3.
VIII.
A.
MANAGEMENT PREROGATIVE .............. 191
A.
SOCIAL LEGISLATION ............................. 195
UNIVERSAL HEALTH CARE ............... 222
Policy .............................................. 222
Coverage ........................................ 222
National Health Insurance Program.. 223
JURISDICTION AND REMEDIES ......... 224
LABOR ARBITER................................ 224
1. Jurisdiction of the Labor Arbiter as
distinguished from the Regional Director. 224
2. Requirements to perfect appeal to National
Labor Relations Commission.................. 225
3. Reinstatement and/or execution pending
appeal ................................................... 226
B. NATIONAL LABOR RELATIONS COMMISSION
226
1.
Jurisdiction/Powers.......................... 226
2.
Remedies........................................ 226
C.
COURT OF APPEALS......................... 229
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D.
SUPREME COURT ............................. 230
E.
1.
2.
3.
BUREAU OF LABOR RELATIONS....... 230
Jurisdiction ...................................... 230
Appeals ........................................... 232
Administrative Functions of the BLR . 232
F. NATIONAL CONCILIATION AND MEDIATION
BOARD ....................................................... 232
1.
Jurisdiction ...................................... 232
2. Conciliation as distinguished from mediation
233
3.
Preventive mediation........................ 234
G. DEPARTMENT OF LABOR AND
EMPLOYMENT REGIONAL DIRECTORS .... 234
1.
Jurisdiction ...................................... 234
2.
Recovery and adjudicatory power ..... 235
H. DEPARTMENT OF LABOR AND
EMPLOYMENT SECRETARY...................... 236
1.
Jurisdiction ...................................... 236
2.
Visitorial and enforcement powers .... 242
3.
Power to suspend effects of termination
....................................................... 244
4.
Remedies ........................................ 244
I.
1.
2.
VOLUNTARY ARBITRATOR.................... 244
Jurisdiction ...................................... 245
Remedies ........................................ 247
1.
2.
3.
4.
5.
PRESCRIPTION OF ACTIONS ................ 247
Money claims................................... 247
Illegal dismissal ............................... 248
Unfair labor practice ......................... 248
Offenses under the Labor Code........ 248
Illegal recruitment ............................ 249
J.
LAWS AND RULES OF PROCEDURE.................. 249
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FUNDAMENTAL
PRINCIPLES
A. LEGAL BASIS
1. 1987 Constitution
ART. II: Declaration of Principles and State
Policies
The State shall:
a. Promote full employment, a rising standard
of living, and an improved quality of life for
all [Sec. 9, Art. II]
b. Promote social justice [Sec. 10, Art. II]
c. Affirm labor as a primary social economic
force [Sec. 18, Art. II]
d. Protect rights of workers and promote their
welfare [Sec. 18, Art. II]
e. Recognize the indispensable role of the
private sector [Sec. 20, Art. II.]
f. Encourage private enterprise [Sec. 20, Art.
II.]
g. Provide incentives to needed investments
[Sec. 20, Art. II.]
SEC. 3, par. 1-2, ART. XIII: Social Justice
and Human Rights
The State shall:
a. Afford full protection to labor, local and
overseas, organized and unorganized
b. Promote full employment and equality of
employment opportunities for all.
c. Guarantee the rights (also known as the
“Cardinal Labor Rights”) of all workers to
1. Self-organization
2. Collective bargaining and negotiations
3. Peaceful concerted activities
4. Strike in accordance with law
5. Security of tenure,
6. Humane conditions of work
7. A living wage.
8. To participate in policy and decisionmaking processes affecting their rights
and benefits as may be provided by
law.
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Labor as Protected Class; Presumption of
Inherent Inequality
The presumption is that the employer and the
employee are on unequal footing, so the State
has the responsibility to protect the employee.
This presumption, however, must be taken on
a case-to-case basis. In situations where
special qualifications are required for
employment, such as a Master's degree,
prospective employees are at a better position
to bargain with the employer. Employees with
special qualifications would be on equal footing
with their employers, and thus, would need a
lesser degree of protection from the State than
an ordinary rank-and-file worker. [Perfecto
Pascua v. Bank Wise Inc., G.R. No. 191460 &
191464 (2018)].
SEC. 3, par. 3-4, ART. XIII: Social Justice
and Human Rights
The State shall:
a. Promote the principle
of shared
responsibility between workers and
employers
b. Promote the preferential use of voluntary
modes in settling disputes
c. Regulate the relations between workers
and employers,
d. Recognize the right of labor to its just share
in the fruits of production and the right of
enterprises to reasonable returns to
investments, and to expansion and growth.
Balancing of Interests
While labor laws should be construed liberally
in favor of labor, we must be able to balance
this with the equally important right of the
[employer] to due process [Gagui v. Dejero,
G.R. No. 196036 (2013)]
Due Process [Sec. 1, Art. III, 1987
Constitution]
Under the Labor Code, as amended, the
requirements for the lawful dismissal of an
employee by his employer are two-fold: the
substantive and the procedural.
Substantive: two requisites must concur: (1)
the dismissal must be for a just or authorized
cause; and (2) the employee must be afforded
an opportunity to be heard and to defend
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himself. [Jeffrey Nacague v. Sulpicio Lines,
Inc., G.R. No. 172589 (2010)]
Procedural: an opportunity to be heard and to
defend oneself must be observed before an
employee may be dismissed [Metro Eye
Security v. Salsona, G.R. No. 167367 (2007)]
Labor as Property Right
One’s employment is a property right, and the
wrongful interference therewith is an actionable
wrong. The right is considered to be property
within the protection of the constitutional
guarantee of due process of law. [Texon
Manufacturing v. Millena, G.R. No. 141380
(2004)]
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which impairs the obligation of a contract and
is null and void. [Clemens v. Nolting, G.R. No.
L-17959 (1922)]
Vis-à-vis the freedom of contract
The prohibition to impair the obligation of
contracts is not absolute and unqualified. In
spite of the constitutional prohibition and the
fact that both parties are of full age and
competent to contract, it does not necessarily
deprive the State of the power to interfere
where the parties do not stand upon an
equality, or where the public health demands
that one party to the contract shall be protected
against himself. [Leyte Land Transportation
Co. v. Leyte Farmers & Workers Union, G.R.
No. L-1377 (1948)]
The Right to Assemble
Sec. 4, Art. III. No law shall be passed
abridging the right of the people peaceably
to assemble and petition the government for
redress of grievances.
Labor Rights and Protection
All persons shall have the right to a speedy
disposition of their cases before all judicial,
quasi-judicial, or administrative bodies. [Sec.
16, Art. III.]
Right to peaceably assemble and petition for
redress of grievances is, together with freedom
of speech, of expression, and of the press, a
right that enjoys primacy in the realm of
constitutional protection. [BAYAN, et al. v.
Ermita, G.R. No. 169838, (2006)].
No involuntary servitude in any form shall exist.
[Sec. 18 (2), Art. III.]
Wearing armbands and putting up placards to
express one’s views without violating the rights
of third parties, are legal per se and even
constitutionally protected. [Bascon v. CA, G.R.
No. 144899 (2004)]
2. Civil Code
The Right to Form Associations [Sec. 8, Art.
III, 1987 Constitution]
The right to form associations shall not be
impaired except through a valid exercise of
police power. [Bernas, The 1987 Philippine
Constitution: A Comprehensive Reviewer]
They are impressed with public interest that
labor contracts:
a. Must yield to the common good
b. Are subject to special laws on
1. Labor unions,
2. Collective bargaining,
3. Strikes and lockouts,
4. Closed shop,
5. Wages,
6. Working conditions,
7. Hours of labor; and
8. Similar subjects
Non-impairment of Contracts [Sec. 10, Art.
III, 1987 Constitution]
A law which changes the terms of a legal
contract between parties, either in the time or
mode or performance, or imposes new
conditions, or dispenses with those expressed,
or authorizes for its satisfaction something
different from that provided in its terms, is a law
Except as a punishment for a crime whereof
the party shall have been duly convicted. [Sec.
18 (2), Art. III.]
Relations between labor and capital
The relations between capital and labor are
not merely contractual. [Art. 1700, CC]
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Neither capital nor labor shall
a. Act oppressively against the other, or
b. Impair the interest or convenience of the
public [Art. 1701, CC].
No contract which practically amounts to
involuntary servitude, under any guise
whatsoever, shall be valid. [Art. 1702, CC]
Provisions of applicable statutes are deemed
written into the contract. Hence, the parties are
not at liberty to insulate themselves and their
relationships from the impact of labor laws and
regulations by simply contracting with each
other. [Innodata Philippines, Inc. v. QuejadaLopez, G.R. No. 162839 (2006)]
Courts cannot stipulate for the parties or
amend the latter’s agreement, for to do so
would be to alter the real intention of the
contracting parties when the contrary function
of courts is to give force and effect to the
intention of the parties. [Maynilad Water
Supervisors Association v. Maynilad Water
Services, Inc., G.R. No. 198935 (2013)]
3. Labor Code
The State shall
a. Afford protection to labor,
b. Promote full employment,
c. Ensure
equal
work
opportunities
regardless of sex, race or creed, and
d. Regulate the relations between workers
and employers.
The State shall assure the rights of workers to
a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of work. [Art.
3]
The Department of Labor and other
government agencies charged with the
administration and enforcement of this Code or
any of its parts shall promulgate the necessary
implementing rules and regulations.
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of their adoption in newspapers of general
circulation. [Art. 5]
All rights and benefits granted to workers under
this Code shall, except as may otherwise be
provided herein, apply alike to all workers,
whether agricultural or non-agricultural. (As
amended by Presidential Decree No. 570-A,
November 1, 1974) [Art. 6]
B. STATE POLICY TOWARDS
LABOR
Labor Code Declaration of Basic Policy
[Art. 3, LC]
The State shall:
a. Afford protection to labor,
b. Promote full employment,
c. Ensure
equal
work
opportunities
regardless of sex, race or creed, and
d. Regulate the relations between workers
and employers.
The State shall assure the rights of workers to:
a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of work.
1. Security of tenure
All workers shall be entitled to security of
tenure. [1987 Constitution, Art. XIII, Sec. 3, par.
2]
Police power allows the State to regulate the
grant of the right to security of tenure. [St.
Luke’s
Medical
Center
Employee’s
Association-AFW v. NLRC, G.R. No. 162053
(2007)]
● Purpose: to safeguard the general welfare
of the public.
● Example: Persons who desire to engage
in the learned professions may be required
to take an examination as a prerequisite to
engaging in the same.
Such rules and regulations shall become
effective fifteen (15) days after announcement
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2. Social justice
Sec. 9, Art. II, 1987 Constitution: The State
shall promote a just and dynamic social order
that will:
a. Ensure the prosperity and independence of
the nation;
b. Free the people from poverty through
policies that provide adequate social
services; and
c. Promote:
1. Full employment,
2. A rising standard of living
3. Improved quality of life for all
Sec. 10, Art. II, 1987 Constitution: The State
shall promote social justice in all phases of
national development.
Social Justice as justification [Calalang v.
Williams, G.R. No. 47800 (1940)]
Social justice is neither communism, nor
despotism, nor atomism, nor anarchy BUT:
a. The humanization of laws; and
b. 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 justice means:
a. The promotion of the welfare of all the
people,
b. The adoption by the Government of
measures calculated to insure economic
stability of all the competent elements of
society –
1. through the maintenance of a proper
economic and social equilibrium in the
interrelations of the members of the
community, constitutionally;
2. through the adoption of measures
legally
justifiable,
or
extraconstitutionally; and
3. through the exercise of powers
underlying the existence of all
governments on the time-honored
principle of salus populi est suprema
lex.
Note: The welfare of the people should
be the supreme law.
Limits of Social Justice
Social justice should be used only to correct an
injustice [Agabon v. NLRC, G.R. No. 158693
(2004)]. It is not intended to countenance
wrongdoing simply because it is committed by
the underprivileged. It cannot be permitted to
be a refuge of scoundrels any more than can
equity be an impediment to the punishment of
the guilty. Those who invoke social justice may
do so only if their hands are clean and their
motives blameless and not simply because
they happen to be poor. [Tirazona v. Phil EDS
Techno-Service, Inc., G.R. 169712 (2009)].
Tilting the scales [Rivera vs. Genesis
Transport Service, Inc., G.R. No. 215568
(2015)]
Labor laws are meant to implement and effect
social justice. Thus, such considerations
should be taken into account when dealing with
labor cases.
The social justice suppositions underlying labor
laws require that the statutory grounds
justifying termination of employment should not
be read to justify the view that employees
should, in all cases, be free from any kind of
error.
Not every improper act should be taken to
justify the termination of employment. To infer
from a single error that an employee committed
serious misconduct or besmirched his
employer’s trust is grave abuse of discretion. It
is an inference that is arbitrary and capricious.
It is contrary to the high regard for labor and
social justice enshrined in our Constitution and
our labor laws.
Welfare State [Alalayan v. National Power
Corporation, G.R. No. L-24396 (1968)]
The welfare state concept is found in the
constitutional clause on the promotion of social
justice.
Purpose:
a. To ensure the well-being and economic
security of all the people, and
b. In the pledge of protection to labor with
specific authority to regulate the relations
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between landowners and tenants and
between labor and capital.
Separation pay as measure of social justice
[PLDT v. NLRC, G.R. No. 80609 (1988)]
The rule embodied in the Labor Code is that a
person dismissed for lawful cause is not
entitled to separation pay.
Exception: Considerations of equity. Equity
has been defined as justice outside law, being
ethical rather than jural and belonging to the
sphere of morals than of law.
Strictly speaking, however, it is not correct to
say that there is no express justification for the
grant of separation pay to lawfully dismissed
employees
other
than
the
abstract
consideration of equity.
Reason: Our Constitution is replete with
positive commands for the promotion of social
justice, and particularly the protection of the
rights of the workers.
3. Equal work opportunities
Declaration of Basic Policy [Art. 4, LC]
The State shall:
a. Afford protection to labor,
b. Promote full employment,
c. Ensure equal work opportunities
regardless of:
1. Sex,
2. Race, or
3. Creed,
d. Regulate the relations between workers
and employers.
The State shall assure the rights of workers to:
a. Self-organization,
b. Collective bargaining,
c. Security of tenure, and
d. Just and humane conditions of work.
Note: Art. 4 of the Labor Code must be read in
relation to the 1987 Constitution since this is
still based on the 1973 Constitution.
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Sec. 3, par. 1, Art. XIII, 1987 Constitution.
The State shall:
a. Afford full protection to labor 1. Local and overseas,
2. Organized and unorganized, and
b. Promote full employment and equality of
employment opportunities for all.
Sec. 2, R.A. No. 10911. Declaration of
Policies
The State shall promote equal opportunities in
employment for everyone. To this end, it shall
be the policy of the State to:
a. Promote employment of individuals on the
basis of their –
1. Abilities,
2. Knowledge,
3. Skills, and
4. Qualifications, rather than their age
b. Prohibit arbitrary age limitations in
employment.
c. Promote the right of all employees and
workers, regardless of age, to be treated
equally in terms of –
1. Compensation,
2. Benefits,
3. Promotion,
4. Training, and
5. Other employment opportunities.
4. Right to self-organization and
collective bargaining
1987 Constitution
The State shall guarantee:
a. 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. [Sec. 8,
Art. III.]
b. The rights of all workers to –
1. Self-organization [Sec. 3, Art. XIII]
2. Collective bargaining and negotiations
[Sec. 3, Art. XIII]
3. Peaceful concerted activities [Sec. 3,
Art. XIII]
4. Strike in accordance with law. [Sec. 3,
Art. XIII]
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Art. 253, Labor Code
All persons employed:
a. In commercial, industrial and agricultural
enterprises, and
b. In religious, charitable, medical or
educational institutions, whether operating
for profit or not,
shall have the right to –
a. Self-organization,
b. Form, join, or assist labor organization of
their own choosing for purposes of
collective bargaining.
Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those
without any definite employers may form labor
organizations for their mutual aid and
protection.
Art. 254, Labor Code
Employees of government corporations
established under the corporation code shall
have the right to:
a. Organize, and
b. Bargain collectively with their respective
employers.
All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law.
Infringement of the right to selforganization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise
of the right to self-organization [Art. 257, LC]
Scope of right to self-organization
1. Right to form, join or assist labor
organizations of their own choosing for
the purpose of collective bargaining
through representatives of their own
choosing [Art. 257];
2. Right to engage in lawful concerted
activities for the same purpose (collective
bargaining) or for their mutual aid and
protection [Art. 257]
3. The right of any person to join an
organization also includes the right to
leave that organization and join another
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one. [Heritage Hotel Manila v. PIGLASHeritage, G.R. No. 177024 (2009)]
4. The right to form or join a labor organization
necessarily includes the right to refuse or
refrain from exercising said right. It is
self-evident that just as no one should be
denied the exercise of a right granted by
law, so also, no one should be compelled
to exercise such a conferred right. [Reyes
v. Trajano, G.R. No. 84433 (1992)]
5. The right of the employees to selforganization is a compelling reason why
their withdrawal from the cooperative
must be allowed. As pointed out by the
union, the resignation of the memberemployees is an expression of their
preference for union membership over that
of membership in the cooperative. [Central
Negros Electric Cooperative v. SOLE, G.R.
No. 94045 (1991)]
6. Their freedom to form organizations would
be rendered nugatory if they could not
choose their own leaders to speak on
their behalf and to bargain for them. [PanAmerican World Airways, Inc v. PanAmerican Employees Association, G.R.
No. L-25094 (1969)]
5. Construction in favor of labor
All doubts in the implementation and
interpretation of the provisions of this Code,
including its implementing rules and
regulations, shall be resolved in favor of
labor. [Art. 4, Labor Code]
In case of doubt, all legislation and all labor
contracts shall be construed in favor of the
safety and decent living for the laborer. [Art.
1702, Civil Code]
Liberal Construction
Of the laws
Art. 4 of the Labor Code mandates that all
doubts in the implementation and interpretation
of the provisions thereof shall be resolved in
favor of labor. This is merely in keeping with
the spirit of our Constitution and laws which
lean over backwards in favor of the working
class, and mandate that every doubt must be
resolved in their favor. [Hocheng Philippines
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Corporation v. Farrales, G.R. No. 211497
(2015)]
Of labor contracts
A CBA, as a labor contract within the
contemplation of Art. 1700 of the Civil Code of
the Philippines which governs the relations
between labor and capital, is not merely
contractual in nature but impressed with public
interest, thus, it must yield to the common
good. 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. [Cirtek
Employees Labor Union-FFW v. Cirtek
Electronics, G.R. No. 190515 (2010)]
Mutual obligation
The employer's obligation to give his workers
just compensation and treatment carries with it
the corollary right to expect from the workers
adequate work, diligence and good conduct.
[Judy Philippines, Inc. v NLRC, G.R. No.
111934 (1998)]
6. Burden of proof and quantum of
evidence
Summary on Burden of Proof
1. Existence
of
ER-EE
Relationship:
Employee
2. Fact of dismissal: Employee
3. Validity of Dismissal: Employer
EE has burden of proving fact of
employment and of dismissal
Before a case for illegal dismissal can prosper,
an employer-employee relationship must first
be established by the employee. [Javier v. Fly
Ace Corp., G.R. No. 192558 (2012)]
The employee must first establish by
substantial evidence the fact of his dismissal
from service. If there is no dismissal, then there
can be no question as to the legality or illegality
thereof. [MZR Industries v. Colambot, G.R. No.
179001 (2013)]
LABOR LAW
ER has burden of proving valid dismissal
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss an employee. The
unflinching rule in illegal dismissal cases is that
the employer bears the burden of proof.
[Garza v. Coca-Cola Bottlers Philippines, Inc.,
G.R. No. 180972 (2014)]
Penalty must be commensurate with
gravity of offense
Not every case of insubordination or willful
disobedience by an employee reasonably
deserves the penalty of dismissal. The penalty
to be imposed on an erring employee must be
commensurate with the gravity of his offense.
[Joel Montallana v. La Consolacion College
Manila, G.R. No. 208890 (2014)]
II.
RECRUITMENT AND
PLACEMENT
A. DEFINITION OF RECRUITMENT
AND PLACEMENT
“Recruitment and placement" refers to any
act of: [CETCHUP-R-CPA]
1. Canvassing,
2. Enlisting,
3. Contracting,
4. Transporting,
5. Utilizing
6. Hiring, or
7. Procuring workers
And includes –
1. Referrals,
act of passing along or forwarding of an
applicant for employment after an initial
interview of a selected applicant for
employment to a selected employer,
placement officer or bureau." [Rodolfo v.
People, G.R. No. 146964 (2006)]
2. Contract services,
3. Promising, or
4. Advertising for employment, locally or
abroad, whether for profit or not
Provided, That any person or entity which, in
any manner, offers or promises for a fee
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employment to two or more persons shall be
deemed engaged in recruitment and
placement. [Art. 13 (b), Labor Code]
The proviso provides for a presumption that a
person or entity so described engages in
recruitment and placement. [People v. Panis,
G.R. No. 58674 (1988)]
Number of persons: not essential
The number of persons dealt with is not an
essential ingredient of the act of recruitment
and placement of workers. Any of the acts
mentioned in Art. 13(b) will constitute
recruitment and placement even if only one
prospective worker is involved. [People v.
Panis, supra.]
Worker – any member of the labor force,
whether employed or unemployed. [Art.13 (a)]
Overseas Filipino Worker/Migrant Worker –
a person who is to be engaged, is engaged, or
has been engaged in a remunerated activity:
1. in a state of which he or she is not a citizen,
or
2. on board a vessel navigating the foreign
seas other than a government ship used for
military or non-commercial purposes, or
3. on an installation located offshore or on the
high seas. [Sec. 2 (a), RA 8042, as
amended]
LABOR LAW
License and Authority [Art. 13(d) and (f); Sec.
3 (h)(g), DO 141-14]
License
Authority
document issued by the Department of
Labor and Employment (DOLE)
Authorize an entity
to operate as a
private employment
agency
Authorize an entity
to operate as a
private recruitment
entity
When a license is
given, one is also
authorized to collect
fees
Does not entitle a
private recruitment
entity to collect fees.
Private employment agency (PEA) v.
Private recruitment entity (PRE) [Art. 13 (c),
(e)]
Private
Employmen
t Agency
Private
Recruitment
Entity
Definition
Any person
or entity
engaged in
recruitment
and
placement of
workers for a
fee which is
charged,
directly or
indirectly,
from the
workers or
employers or
both
Any person or
association
engaged in the
recruitment
and placement
of workers,
locally or
overseas,
without
charging,
directly or
indirectly,
any fee
Requirement
License
Authority
Policy of Close Government Regulation
RA 9422 or the Act to Strengthen the
Regulatory Functions of the Philippine
Overseas Employment Administration of 2007
expressly repealed Sections 29 and 30 of RA
8042, which provided for the deregulation of
recruitment activities.
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Recruitment of Local and Migrant Workers:
Policy of Selective Deployment
The State shall allow the deployment of
overseas Filipino workers only in countries
where the rights of Filipino migrant workers are
protected. The government recognizes any of
the following as a guarantee on the part of the
receiving country for the protection of the rights
of overseas Filipino workers:
1. It has existing labor and social laws
protecting the rights of workers, including
migrant workers;
2. It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers, including migrant workers; and
3. It has concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of overseas Filipino
Workers:
Provided, That the receiving country is taking
positive, concrete measures to protect the
rights of migrant workers in furtherance of any
of the guarantees under subparagraphs (a), (b)
and (c) hereof. [Sec. 3, RA 8042, as amended]
[..] The Department of Foreign Affairs, through
its foreign posts, shall issue a certification to
the POEA, specifying therein the pertinent
provisions of the receiving country's labor/
social law, or the convention/ declaration/
resolution, or the bilateral agreement/
arrangement which protect the rights of migrant
workers.
The State shall also allow the deployment of
overseas Filipino workers to vessels navigating
the foreign seas or to installations located
offshore
or
on
high
seas,
whose
owners/employers
are
compliant
with
international laws and standards that protect
the rights of migrant workers.
The State shall likewise allow the deployment
of overseas Filipino workers to companies and
contractors with international operations:
Provided, That they are compliant with
standards, conditions and requirements, as
embodied in the employment contracts
prescribed by the POEA and in accordance
LABOR LAW
with internationally-accepted standards. [Sec.
3, RA 8042, as amended]
B. REGULATION OF RECRUITMENT
AND PLACEMENT ACTIVITIES
1. Regulatory Authorities
a. Philippine Overseas
Employment Administration
POEA supersedes OEDB and NSB
Executive Order 797, Reorganizing the
Ministry of Labor and Employment, Creating
the
Philippine
Overseas
Employment
Administration (POEA), and for other
purposes, has superseded Art. 17 and 20, and
provides for the POEA to take over the
functions of the Overseas Employment
Development Board (OEDB) and the National
Seamen Board (NSB).
POEA Powers and Functions
a. Regulate private sector participation in the
recruitment and overseas placement of
workers by setting up a licensing and
registration system;
b. Formulate
and
implement,
in
coordination with appropriate entities
concerned, when necessary, a system for
promoting and monitoring the overseas
employment of Filipino workers taking into
consideration their welfare and the
domestic manpower requirements;
c. Protect the rights of Filipino workers for
overseas employment to fair and equitable
recruitment and employment practices and
ensure their welfare;
d. Exercise
original
and
exclusive
jurisdiction to hear and decide all claims
arising out of an employer-employee
relationship or by virtue of any law or
contract involving Filipino workers for
overseas employment including the
disciplinary cases; and all pre employment
cases which are administrative in character
involving or arising out of violation or
requirement laws, rules and regulations
including money claims arising therefrom,
or violation of the conditions for issuance of
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e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
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license or authority to recruit workers. All
prohibited recruitment activities and
practices which are penal in character as
enumerated and defined under and by
virtue of existing laws, shall be prosecuted
in the regular courts in close coordination
with the appropriate Departments and
agencies concerned;
Maintain a registry of skills for overseas
placement;
Recruit and place workers to service the
requirements for trained and competent
Filipino workers by foreign governments
and their instrumentalities and such other
employers as public interest may require;
Promote the development of skills and
careful selection of Filipino workers;
Undertake overseas market development
activities for placement of Filipino workers;
Secure the best terms and conditions of
employment of Filipino contract workers
and ensure compliance therewith;
Promote and protect the well-being of
Filipino workers overseas;
Develop and implement programs for the
effective monitoring of returning contract
workers, promoting their re-training and reemployment or their smooth re-integration
into the mainstream of national economy in
coordination with other government
agencies;
Institute a system for ensuring fair and
speedy disposition of cases involving
violation or recruitment rules and
regulations as well as violation of terms and
conditions of overseas employment;
Establish a system for speedy and
efficient enforcement of decisions laid
down through the exercise of its
adjudicatory function;
Establish and maintain close relationship
and enter into joint projects with the
Department of Foreign Affairs, Philippine
Tourism Authority, Manila International
Airport Authority, Department of Justice,
Department of Budget and Management
and other relevant government entities, in
the pursuit of its objectives.
LABOR LAW
organizations, domestic or foreign, in the
furtherance of its objectives. [Sec. 3, EO 247]
POEA
Standard
Contract
Deemed
Integrated in every Employment Contract
While the seafarers and their employers are
governed by their mutual agreements, the
POEA rules and regulations require that the
POEA SEC, which contains the standard terms
and conditions of the seafarers' employment in
foreign ocean-going vessels, be integrated in
every seafarer's contract. [Wallem Maritime
Services, Inc. v. Tanawan, G.R. No. 160444,
(2012)]
POEA Jurisdiction vis-a-vis NLRC and RTC
POEA
Administrative
cases arising
out of
violations of
rules and
regulations
relating to
licensing and
registration of
recruitment
and
employment
agencies and
entities. [Sec.
28(a), Omb.
Rules
Implementing
RA 8042]
NLRC
Claims arising out of an EREE relationship or by virtue of
any law or contract involving
Filipino workers for overseas
deployment including actual,
moral, and exemplary and
other forms of damage. [Sec.
10, RA 8042]
RTC
The Administration shall also establish and
maintain
joint
projects
with
private
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Disciplinary
action cases
and other
special
cases,
involving
employers,
principals,
contracting
partners, and
Filipino
migrant
workers
[Sec. 28(b),
Omb. Rules
Implementing
RA 8042]
Criminal actions arising from
illegal recruitment [Sec. 9, RA
8042]
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b. Regulatory and Visitorial
Powers of the Department of
Labor and Employment
Secretary
LABOR LAW
2. Ban on Direct Hiring
Reports on Employment Status
Whenever the public interest requires, the
Secretary of Labor may direct all persons or
entities within the coverage of this Title to
submit a report on the status of employment,
including job vacancies, details of job
requisitions, separation from jobs, wages,
other terms and conditions and other
employment data. [Art. 33]
SOLE’s regulatory Power
The SOLE shall have the power:
a. To restrict and regulate the recruitment and
placement activities of all agencies within
the coverage of this Title. [Title 1,
Recruitment and Placement of Workers]
b. To issue orders and promulgate rules and
regulations to carry out the objectives and
implement the provisions of this Title. [Art.
36]
SOLE’s visitorial Power
The SOLE or
his duly authorized
representatives may, at any time, inspect the
premises, books of accounts and records of
any person or entity covered by this Title,
require it to submit reports regularly on
prescribed forms, and act on violation of any
provisions of this Title. [Art. 37]
SOLE’s arrest and seizure power declared
unconstitutional
After the promulgation of the 1987 Constitution,
only judges may issue search and arrest
warrants. The Secretary of Labor, not being a
judge, may no longer issue search of arrest
warrants. Article 38(c) of the Labor Code is
declared unconstitutional and of no force or
effect. [Salazar v. Achacoso, G.R. No. 81510,
(1990)]
General Rule: No employer may hire a Filipino
worker for overseas employment except
through the Boards and entities authorized by
the Secretary of Labor. [Art. 18]
No employer shall directly hire an Overseas
Filipino Worker for overseas employment.
[Sec. 123, 2016 Revised POEA Rules and
Regulations]
Exemptions:
a. Members of the diplomatic corps;
b. International organizations;
c. Heads of state and government officials
with the rank of at least deputy minister;
d. Other employers as may be allowed by the
Secretary of Labor and Employment, such
as:
1. Those provided in (a), (b) and (c) who
bear a lesser rank, if endorsed by the
Philippine Overseas Labor Office
(POLO), or Head of Mission in the
absence of 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 Overseas Filipino Workers hired
for the first time by the employer shall
not exceed five (5). For the purpose of
determining the number, workers hired
as a group shall be counted as one; OR
3. Workers hired by a relative/family
member who is a permanent resident
of the host country. [Sec. 124, 2016
Revised POEA Rules and Regulations]
3. Entities Prohibited from
Recruiting
Entities disqualified from Engaging in the
Business of Recruitment and Placement of
Workers for Local Employment
1. Travel agencies and sales agencies of
airline companies, whether for profit or not.
[Art. 26]
2. Those who are convicted of illegal
recruitment, trafficking in persons, anti-
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3.
4.
5.
6.
7.
8.
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child labor violation, or crimes involving
moral turpitude;
Those against whom probable cause or
prima facie finding of guilt for illegal
recruitment or other related cases exist
particularly to owners or directors of
agencies who have committed illegal
recruitment or other related cases.
Those agencies whose licenses have been
previously revoked or cancelled by the
Department under Sec. 54 of these rules.
Cooperatives whether registered or not
under the Cooperative Act of the
Philippines.
Law enforcers and any official and
employee of the Department of Labor and
Employment (DOLE).
Sole proprietors of duly licensed agencies
are prohibited from securing another
license to engage in recruitment and
placement.
Sole
proprietors,
partnerships
or
corporations licensed to engage in private
recruitment and placement for local
employment are prohibited from engaging
in job contracting or subcontracting
activities. [Sec. 5, DO 141-14, Revised
Rules
and
Regulations
Governing
Recruitment and Placement for Local
Employment]
Entities disqualified from Engaging or
Participating
in
the
Business
of
Recruitment and Placement of Workers for
Overseas Employment
1. Travel agencies and sales agencies of
airline companies, whether for profit or not.
[Art. 26]
2. Officers or members of the Board of any
corporation or partners in a partnership
engaged in the business of a travel agency;
3. Corporations and partnerships, where any
of its officers, members of the board or
partners is also an officer, member of the
board or partner of a corporation or
partnership engaged in the business of a
travel agency;
4. Individuals, partners, officers, or directors
of an insurance company who make,
propose or provide an insurance contract
under the compulsory insurance coverage
for agency-hired OFWs;
LABOR LAW
5. Sole proprietors, partners or officers and
members of the board with derogatory
records, such as, but not limited to the ff:
a. Those convicted or against whom
probable cause or prima facie finding of
guilt is determined by a competent
authority for illegal recruitment or for
other related crimes or offenses
committed in the course of, related to,
or resulting from, illegal recruitment, or
for crimes involving moral turpitude;
b. Those agencies whose licenses have
been revoked for violation of RA 8042,
PD 442, RA 9208, and their IRRs;
c. Those agencies whose licenses have
been cancelled, or those who, pursuant
to the order of the Administrator, were
included in the list of persons with
derogatory record for violation of
recruitment laws and regulations;
6. Any official employee of the DOLE, POEA,
OWWA, DFA, DOJ, DOH, BI, IC, NLRC,
TESDA, CFO, NBI, PNP, Civil Aviation
Authority of the Philippines, international
airport authorities, and other government
agencies directly involved in the
implementation of RA 8042, as amended,
and/or any of his/her relatives within the
fourth civil degree of consanguinity or
affinity. [Part II, Rule I, Sec. 3, 2016
Revised POEA Rules and Regulations]
4. Suspension or Cancellation of
License or Authority
The Secretary of Labor shall have the power to
suspend or cancel any license or authority to
recruit employees for overseas employment
for:
a. violation of rules and regulations issued by
the Department of Labor, the Overseas
Employment Development Board, and the
National Seamen Board;
b. violation of the provisions of this and other
applicable laws, General Orders and
Letters of Instructions. [Art. 35]
Acts prohibited under Art. 34 are grounds for
suspension or cancellation of license. Note that
these acts likewise constitute illegal
recruitment under RA 8042 as amended by RA
10022.
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Who can suspend or cancel the license?
1. DOLE Secretary
2. POEA Administrator
The power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with the
POEA and the Secretary of Labor. [People v.
Diaz, G.R. 112175 (1996)]
5. Prohibited Practices
Recruitment of Local Workers: Prohibited
Practices under Art. 34
a. To charge or accept, directly or indirectly,
any amount greater than that specified in
the schedule of allowable fees prescribed
by the Secretary of Labor, or to make a
worker pay any amount greater than that
actually received by him as a loan or
advance;
b. To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
c. To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of
securing a license or authority under this
Code;
d. To induce or attempt to induce a worker
already employed to quit his employment in
order to offer him to another, unless the
transfer is designed to liberate the worker
from oppressive terms and conditions of
employment;
e. To influence or to 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 the recruitment or placement
of workers in jobs harmful to public health
or morality or to the dignity of the Republic
of the Philippines;
g. To obstruct or attempt to obstruct
inspection by the Secretary of Labor or by
his duly authorized representatives;
h. To fail to file reports on the status of
employment,
placement
vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
LABOR LAW
other matters or information, as may be
required by the Secretary of Labor;
i. To substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing
thereof by the parties up to and including
the periods of expiration of the same
without the approval of the Secretary of
Labor;
j. To become an officer or member of the
Board of any corporation engaged in travel
agency or to be engaged directly or
indirectly in the management of a travel
agency; and
k. To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other
than those authorized under this Code and
its implementing rules and regulations.
Recruitment
of
Migrant
Workers:
Prohibited Acts under Sec. 6, R.A. No. 8042
a. To charge or accept directly or indirectly
any amount greater than that specified in
the schedule of allowable fees prescribed
by the Secretary of Labor and
Employment, or to make a worker pay or
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 or document in relation to
recruitment or employment;
c. To give any false notice, testimony,
information or document or commit any act
of misrepresentation for the purpose of
securing a license or authority under the
Labor Code, or for the purpose of
documenting hired workers with the
POEA, which include the act of
reprocessing workers through a job
order that pertains to nonexistent work,
work different from the actual overseas
work, or work with a different employer
whether registered or not with the
POEA;
d. To include or attempt 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 of
employment;
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e. To influence or attempt to influence any
person or entity not to employ any worker
who has not applied for employment
through his agency or who has formed,
joined or supported, or has contacted
or is supported by any union or
workers' organization;
f. To engage in the recruitment or placement
of workers in jobs harmful to public health
or morality or to the dignity of the Republic
of the Philippines;
g. To obstruct or attempt to obstruct
inspection by the Secretary of Labor and
Employment or by his duly authorized
representative
h. To fail to submit reports on the status of
employment,
placement
vacancies,
remittance of foreign exchange earnings,
separation from jobs, departures and such
other matters or information as may be
required by the Secretary of Labor and
Employment;
i. To substitute or alter to the prejudice of
the worker, employment contracts
approved and verified by the Department of
Labor and Employment from the time of
actual signing thereof by the parties up to
and including the period of the expiration of
the same without the approval of the
Department of Labor and Employment;
j. For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation engaged in travel agency or to
be engaged directly or indirectly in the
management of travel agency;
k. To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations, or for
any other reasons, other than those
authorized under the Labor Code and its
implementing rules and regulations;
l. Failure to actually deploy a contracted
worker without valid reason as determined
by the Department of Labor and
Employment;
m. Failure to reimburse expenses incurred by
the worker in connection with his
documentation
and
processing
for
purposes of deployment, in cases where
the deployment does not actually take
place without the worker's fault. Illegal
LABOR LAW
recruitment when committed by a
syndicate or in large scale shall be
considered an offense involving economic
sabotage; and
n. To allow a non-Filipino citizen to head or
manage a licensed recruitment/manning
agency. [Sec. 6, R.A. No. 8042]
Note: Bold parts differ from those stated in the
prohibited practices under Art. 34.
Prohibited Acts Added by Amendment
a. Grant a loan to an overseas Filipino worker
with interest exceeding eight percent (8%)
per annum, which will be used for payment
of legal and allowable placement fees and
make the migrant worker issue, either
personally or through a guarantor or
accommodation party, postdated checks in
relation to the said loan;
b. Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to avail of a loan only
from specifically designated institutions,
entities or persons;
c. Refuse 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 of his or her own;
d. Impose 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 of a
seafarer whose medical examination cost
is shouldered by the principal/shipowner;
e. Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to undergo training,
seminar, instruction or schooling of any
kind only from specifically designated
institutions, entities or persons, except for
recommendatory trainings mandated by
principals/shipowners where the latter
shoulder the cost of such trainings;
f. For a suspended recruitment/manning
agency to engage in any kind of
recruitment
activity
including
the
processing
of
pending
workers'
applications; and
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g. For a recruitment/manning agency or a
foreign principal/employer to pass on the
overseas Filipino worker or deduct from his
or her salary the payment of the cost of
insurance fees, premium or other
insurance related charges, as provided
under the compulsory worker's insurance
coverage. [Sec. 6, R.A. No. 8042 as
amended by R.A. No. 10022]
C. ILLEGAL RECRUITMENT
1. Elements
FIRST MAIN
Recruitment
TYPE:
Simple
Illegal
a. Illegal Recruitment of Local Workers
Two Types Accdg. to the Kind of Offender
The following are the types of illegal
recruitment of local workers and the elements
for each type:
1. By a licensee/holder of authority
a. Offender has a valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes any of the
prohibited acts under Art. 34
2. By a non-licensee/non-holder of authority
a. Offender has no valid license or
authority required by law to enable one
to lawfully engage in the recruitment
and placement of workers;
b. Offender undertakes either –
1. Any activity within the meaning of
recruitment and placement under
Art. 13(b)
2. Any of the prohibited practices
under Art. 34. [Art. 34 and 38]
Profit Immaterial
Recruitment may be "for profit or not." It is the
lack of the necessary license or authority, and
not the fact of payment, that renders
recruitment illegal. [Sharp v. Espanol, G.R. No.
155903 (2007)]
LABOR LAW
b. Illegal Recruitment of Migrant Workers
“Illegal Recruitment” Defined
Any act of 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,
when undertaken by a non-licensee or nonholder of authority contemplated under Art.
13(f), P.D. No. 442 or LC. [Sec. 5, R.A. No.
10022]
Note: The Migrant Workers’ Act (R.A. No.
8042) expanded the concept of illegal
recruitment found in the LC and provided stiffer
penalties, especially for when it constitutes
economic sabotage. [People v. Ocden, G.R.
No. 173198 (2011)]
Two Types Accdg. to the Offense (Elements)
1. Undertakes any recruitment activity
defined in Art. 13(b), LC without a valid
license/authority
Note: Can only be committed by one who has
no valid license or authority to engage in
recruitment and placement
2. Commits any of the prohibited acts in
Sec. 6, R.A. No. 8042, as amended by R.A.
10022
a. Note: Immaterial whether an offender
is a holder or a non-holder of a license
or authority
Contract Substitution = Illegal Recruitment
The reduced salaries and employment period
in the new employment contract contradicted
the POEA-approved employment contract. By
this act of contract substitution, respondents
committed a prohibited practice; consequently,
engaged in illegal recruitment. [PERT/CPM
Manpower Exponent Co. v. Vinuya, G.R. No.
197528 (2012)]
Possible Liability of Employee
Even the employee of a company engaged in
illegal recruitment can be held liable (along with
the employer) as a principal once it is shown
that he had actively and consciously
participated in the illegal recruitment. [People
v. Bayker, G.R. No. 170192 (2016)]
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Accused must give the impression of
ability to send complainant abroad for work
It must be shown that the accused gave
complainants the distinct impression that she
had the power or ability to send them abroad
for work such that the latter were convinced to
part with their money in order to be employed.
[People v. Ochoa, G.R. No. 173792 (2011)]
Lack of Receipts Not Fatal
Mere failure of the complainant to present
written receipts for money paid for acts
constituting recruitment activities is not fatal to
the prosecution, provided payment can be
proved by clear and convincing testimonies of
credible witnesses. [People v. Alvarez, G.R.
142981 (2002)]
c. Comparison of Local and Migrant
LOCAL
Licensee/
holder of
authority
Nonlicensee/
nonholder of
authority
Recruitment
and placement
Allowed
Prohibited
practices
Not allowed [Art. 34; 38,]
MIGRANT
Licensee/
holder of
authority
Not
allowed
[Art. 13(b);
Art. 38]
LABOR LAW
Prohibited
acts
SECOND MAIN TYPE: Illegal Recruitment
as Economic Sabotage
Two
Types
Accdg.
to
Qualifying
Circumstance
Illegal recruitment is considered economic
sabotage when attended by the ff. qualifying
circumstances:
1. By a syndicate - carried out by a group of
3 or more persons conspiring and
confederating with one another;
2. In large scale - committed against 3 or
more persons individually or as a group.
[Art. 38(b), LC; Sec. 6 of R.A. No. 8042 as
amended]
Note re: In Large Scale –
3+ complainants must be in a single case
“Committed against 3 or more persons
individually or as a group” must be understood
as referring to the number of complainants in
each case; otherwise, prosecutions for single
crimes of illegal recruitment can be cumulated
to make it in large scale .[People v. Reyes,
G.R. No. 105204 (1995)].
Nonlicensee/
nonholder of
authority
Recruitment
and placement
Allowed
Prohibited
practices
Not allowed [Sec. 6, R.A.
No. 8042, as amended]
Not allowed [7 acts under
Sec. 6, R.A. No. 8042 as
amended by R.A. No.
10022]
Not
allowed
[Sec. 6,
R.A. No.
8042, as
amended]
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LABOR LAW
confederating with one another in carrying
out any unlawful or illegal transaction,
enterprise or scheme. [People v. Sison,
G.R. No. 187160 (2017)]
Number of victims must be alleged
The information for illegal recruitment done in
large scale must allege the number of victims.
[People v. Fernandez, 725 SCRA 152 (2014)]
a. For Local Workers (Elements)
By a Syndicate
1. Offender undertakes either:
a. Any activity within the meaning of
"recruitment and placement" defined
under Art. 13(b)
b. Any of the prohibited practices under
Art. 34
2. Offender has no valid license or authority
required by law to enable one to lawfully
engage in recruitment and placement of
workers
3. Illegal recruitment is committed by a group
of 3 or more persons conspiring or
confederating with one another. [People v.
Gallo, G.R. No. 187730 (2010)]
In Large Scale
1. Offender undertakes either:
a. Any activity within the meaning of
"recruitment and placement" defined
under Art. 13(b)
b. Any of the prohibited practices under
Art. 34
2. Offender has not complied with the
guidelines issued by the SOLE, particularly
with respect to the securing of license or an
authority to recruit and deploy workers,
either locally or overseas
3. Offender commits the unlawful acts against
3 or more persons individually or as a
group [Art. 38 (b)]
b. For Migrant Workers (Elements)
By a Syndicate
1. Offender does not have the valid license or
authority required by law to engage in
recruitment and placement of workers
2. Offender undertakes either:
a. Any of the "recruitment and placement"
activities defined in Art. 13(b)
b. Any of the prohibited practices under
Sec. 6 of R.A. No. 8042
3. Illegal recruitment is carried out by a group
of 3 or more persons conspiring and/or
In Large Scale
1. Offender undertook any recruitment activity
as defined under Sec. 6 of R.A. No. 8042
2. Offender did not have the license or the
authority to lawfully engage in the
recruitment of workers
3. Offender committed the same against 3 or
more persons individually or as a group.
[People v. De los Reyes, G.R. No. 198795
(2017)]
2. Types
Summary of Types & Elements
There are at least 4 kinds of illegal recruitment.
[People v. Sadiosa [G.R. No. 107084 (1998)]
Simple Illegal Recruitment
1. Licensed/
Authorized
1. Licensee/Holder of
authority
2. Undertakes prohibited
practices under Art. 34,
LC (Local) or Sec. 6 of
R.A. No. 8042 as
amended (Migrant)
2.Unlicensed/ 1. Non-licensee/-holder of
authority
Unauthorized
2. Undertakes either:
a. Recruitment and
placement under
Art. 13(b)
b. Prohibited
practices/activities
under Art. 34, LC
(Local) or Sec. 6,
R.A. No. 8042
(Migrant)
Economic Sabotage
3. In a large
scale
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1. Undertakes either:
a. Recruitment and
placement under
Art. 13(b)
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b. Prohibited
practices/activities
under Art. 34
(Local) or Sec. 6 of
R.A. No. 8042
(Migrant)
2. No valid license or an
authority to recruit and
deploy workers, either
locally or overseas
3. Committed against 3 or
more persons
individually or as a
group
4. By a
syndicate
1. Undertakes either:
a. Any activity within
the meaning of
"recruitment and
placement" under
Art. 13(b)
b. Any of the
prohibited practices
enumerated under
Art. 34 (Local) or
Sec. 6 of R.A. No.
8042 (Migrant)
2. No valid license or
authority to recruit and
deploy workers, either
locally or overseas
3. Committed by a group
of 3 or more persons
conspiring and
confederating with one
another
3. Illegal Recruitment as
Distinguished from Estafa
Conviction for Illegal Recruitment NOT a
Bar to Conviction for Estafa and Vice versa
A person who commits illegal recruitment may
be charged and convicted separately of illegal
recruitment under the LC and estafa under Art.
315(2a), RPC. The offense of illegal
recruitment is malum prohibitum where the
criminal intent of the accused is not necessary
for conviction, while estafa is malum in se
where the criminal intent of the accused is
crucial for conviction. Conviction for offenses
LABOR LAW
under the LC does not bar conviction for
offenses punishable by other laws. Conversely,
conviction for estafa does not bar a conviction
for illegal recruitment. One's acquittal of the
crime of estafa will not necessarily result in his
acquittal of the crime of illegal recruitment in
large scale, and vice versa. [People v. Ochoa,
G.R. No. 173792 (2011); People v. Ocden,
G.R. No. 173198 (2011)]
As such, the filing of criminal cases for both
does not constitute double jeopardy. In illegal
recruitment, profit is immaterial; on the other
hand, a conviction for estafa requires a clear
showing that the offended party parted with his
money or property upon the offender’s false
pretenses, and suffered damage thereby. The
two are then completely different and distinct
crimes. [People v. Melissa Chua, G.R. No.
187052 (2012)]
D. LIABILITY OF LOCAL RECRUITMENT
AGENCY AND FOREIGN EMPLOYER
1. Solidary Liability
a. Local Recruitment Agency
Illegal recruitment of local workers [Art. 39]
Act
Penalty
License/authority
holder violating or
causing another to
violate Title 1, Book
1 (Art. 34)
2-5 years
imprisonment or
P10K-P50K fine or
both
Nonlicense/authority
holder violating or
causing another to
violate Title 1, Book
1 (Art. 38)
4-8 years
imprisonment or
P20K-P100K fine or
both
Illegal recruitment
constituting
economic sabotage
(Art. 38)
Life imprisonment
and P100K fine
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If the offender is a corporation, partnership,
association or entity, the penalty shall be
imposed upon the officer or officers
responsible for the violation.
In every case, conviction carries with it:
1. Automatic revocation of license/authority
and all permits and privileges granted
under this Title
2. Forfeiture of cash and surety bonds in favor
of POEA or the Regional Department with
jurisdiction over the place where the
agency or branch office is located
3. For aliens, in addition to the penalties
herein prescribed, deportation without
further proceedings. [Art. 39 (3)]
Illegal recruitment of migrant workers [Sec.
7, RA 8042 as amended]
Act
Penalty
liable as PRINCIPAL, together with his
employer if it is shown that he actively and
consciously
participated
in
illegal
recruitment. [People v. Sagayaga, GR 143726
(2004)]
Two jurisdiction rule
A criminal action arising from illegal recruitment
of migrant workers shall be filed with the RTC
of the province or city:
1. Where offense was committed, or
2. Where the offended party actually resides
at the time of the commission of the
offense. [Sec. 9, RA 8042]
Provided, the court where such action is first
filed acquires jurisdiction to the exclusion of
other courts. [Sec. 6, Rule IV, Omnibus Rules
implementing RA 8042, as amended]
Prescription
Prohibited Acts
6 years and 1 day - 12
years imprisonment and
P500K-P1M fine
Illegal
Recruitment
12 years and 1 day - 20
years imprisonment and
P1M-P2M fine
Illegal
recruitment
constituting
economic
sabotage
LABOR LAW
Crime
In every case, conviction carries with it:
1. Automatic revocation of license or
registration of the recruitment/manning
agency, lending institutions, training school
or medical clinic.
2. For aliens, in addition to the penalties
herein prescribed, deportation without
further proceedings.
Employees of a company or corporation
engaged in illegal recruitment may be held
Prescriptive
Period
Local
workers
Simple/economic 3 years [Art.
sabotage
305 LC]
Migrant
workers
Simple
5 years [Sec.
12, RA 8042]
Economic
Sabotage
20 years
[Sec. 12, RA
8042]
Life imprisonment and
P2M-P5M fine
Max penalty:
1. Illegally recruited
person is below 18
years old, or
2. Offense is committed
without license/
authority
Classification
b. Foreign Employer
Foreign employers shall assume joint and
solidary liability with the recruitment/
placement agency for all claims arising out of
an employer-employee relationship or by virtue
of any law or contract involving Filipino workers
for overseas deployment including claims for
damages. [Sec. 10 of RA 8042, as amended]
c. Solidary Liability of Agent &
Principal
Coverage
The liability of the principal/employer and the
recruitment/placement agency for the claims
involving Filipino workers for overseas
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deployment including claims for damages is
joint and several.
Incorporation into the contract
This shall be incorporated in the contract for
overseas employment and shall be a condition
precedent for its approval.
Performance bond
The performance bond filed by the
recruitment/placement agency shall be
answerable for all money claims or damages
awarded to workers.
representatives done in connection with
recruitment and placement [Part II, Rule II,
Sec. 4 (f) (7-9), 2016 Revised POEA Rules
and Regulations].
For corporations or partnerships, a duly
notarized undertaking by the corporate officers
and directors, or partners, that they shall be
joint and severally liable with the corporation or
partnership for claims and/or damages
awarded to workers is also required. [Part II,
Rule II, Sec. 4 (g), 2016 Revised POEA Rules
and Regulations]
Corporate officers and directors and
partners solidarily liable
If the recruitment/placement agency is a
juridical being, the corporate officers and
directors and partners as the case may be,
shall be joint and severally liable with the
corporation or partnership for the claims and
damages. [Sec. 10, RA 8042 as amended]
2. Theory of Imputed Knowledge
Purpose of solidary liability
The termination of agreement between the
manning agency and its principal does not
relieve the former of its liability. The agency
agreement extends until the expiration of the
employment contracts of the employees
recruited and employed. Otherwise, this
renders nugatory the purpose of the law which
is to assure aggrieved workers of immediate
and sufficient payment of what is due them.
A local employment agency is considered the
agent of the foreign employer, the principal.
Knowledge of the former of existing labor and
social legislation in the Philippines in binding
on the latter. Notice to the former of any
violation thereof is notice to the latter.
This is a doctrine in agency stating that the
principal is chargeable with and bound by the
knowledge of or notice to his agent received
while the agent was acting as such.
Notice to the agent is notice to the principal.
But, notice to the principal is NOT notice to the
agent. Notice to the foreign employer,
therefore, is not notice to the local employment
agency.
Requisite undertaking for application of
license
The written application for a license to operate
a private employment agency shall be
submitted with, among others, a duly
notarized undertaking that the applicant:
1. Shall assume full and complete
responsibility for all claims and liabilities
which may arise in connection with the use
of the license;
2. Assume joint and several liability with
the employer for all claims and liabilities
which may arise in connection with the
implementation of the contract, including
but not limited to unpaid wages, death,
disability compensation and repatriation.
3. Assume full and complete responsibility
for all acts of its officers, employees and
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E. TERMINATION OF CONTRACT
OF MIGRANT WORKER
In case of –
a. Termination of overseas employment
without just, valid, or authorized cause as
defined by law or contract, or
b. Any unauthorized deductions from the
migrant worker’s salary
... the worker shall be entitled to full
reimbursement of:
a. His placement fee and the deductions
made with interest at twelve percent (12%)
per annum; AND
b. His salaries for the unexpired portion of his
employment contract
(*or for three (3) months for every year of the
unexpired term, whichever is less)
[Sec. 10, RA8042, as amended by RA 10022]
LABOR LAW
In the case of Yap v. Thenamaris Ship’s
Management
and
Intermare
Maritime
Agencies, Inc [G.R. No. 179532, (May 30,
2011)], the SC affirmed the Serrano ruling, but
did not apply the Operative Fact doctrine: “As
an exception to the general rule, the doctrine
applies only as a matter of equity and fair play.”
Note: In 2010, a year after Serrano, RA 10022,
in amending RA 8042, reincorporated the
nullified 3-month salary cap clause. However,
the SC did not allow this and again struck the
revived clause as unconstitutional in the 2014
case of Sameer Overseas Placement
Agency v. Cabiles [G.R. No. 170139, (August
05, 2014)]. There, the SC said that: “when a
law or a provision of law is null because it is
inconsistent with the Constitution, the nullity
cannot be cured by a reincorporation or
reenactment of the same or a similar law or
provision. A law or provision of law that was
already declared unconstitutional remains as
such unless circumstances have so changed
as to warrant a reverse conclusion.” Hence, the
case of Serrano holds as binding precedent,
even after the passage of RA 10022.
Rule before
Serrano (19952009): 3-month
salary rule applied
Rule after Serrano:
invalidated the 3month salary cap
clause
The employment
contract involved in
the instant case
covers a two-year
period but the
overseas contract
worker actually
worked for only 26
days prior to his
illegal dismissal.
Thus, the three
months’ salary rule
applies [Flourish
Maritime Shipping v.
Almanzor, G.R. No.
177948 (2008)]
The SC there held
that “said clause is
unconstitutional for
being an invalid
classification, in
violation of the equal
protection clause.”
1. Coverage
Thus, the present
rule is that OFWs
whose contracts are
terminated without
just cause are
entitled to all the
salaries for the
entire unexpired
portion of their
employment
contract, irrespective
of the stipulated
term or duration
thereof.
Art. 40 of the Labor Code which requires
employment permit refers to non-resident
aliens. Resident aliens do not fall within the
ambit of the provision [Almodiel v. NLRC, 223
SCRA 341 (1993)]
F. EMPLOYMENT OF NONRESIDENT ALIENS
Who should apply for an Alien Employment
Permit
a. Any alien seeking admission to the
Philippines for employment purposes, and
b. Any domestic or foreign employer who
desires to engage an alien for employment
in the Philippines. [Art. 40, Labor Code]
An alien cannot file a labor complaint without
having obtained an employment permit.
[Andrew James McBurnie v. Eulalio Ganzon,
707 SCRA 646 (2013)]
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Who are exempted from securing an Alien
Employment Permit [DOISIPRRL]
1. All members of the Diplomatic service and
foreign government Officials accredited by
and with reciprocity arrangement with the
Philippine government;
2. Officers and staff of International
organizations of which the Philippine
government is a member, and their
legitimate Spouses desiring to work in the
Philippines;
3. Owners and representatives of foreign
principals whose companies are accredited
by the POEA, who come to the Philippines
for a limited period and solely for the
purpose of Interviewing Filipino applicants
for employment abroad;
4. Foreign national who comes to the
Philippines to teach, present and/or
conduct research studies in universities
and colleges as visiting, exchange or
adjunct
Professors
under
formal
agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign
government: provided that the exemption is
on a reciprocal basis;
5. Permanent Resident foreign nationals,
probationary or temporary resident visa
holders;
6. Refugees
and
stateless
persons
recognized by DOJ; and
7. All foreign nationals granted exemption by
Law. [Section 2, D.O. No. 186-17]
Who are excluded from securing an Alien
Employment Permit [BPTCICR]
1. Members of the governing Board with
voting rights only and do not intervene in
the management of the corporation or in
the day to day operation of the enterprise.
2. President and Treasurer, who are partowner of the company.
3. Those providing Consultancy services who
do not have employers in the Philippines.
4. Intra corporate transferee who is a
Manager, Executive or Specialist
5. Contractual service supplier who is a
Manager, Executive, or Specialist
LABOR LAW
6. Representative
of
the
Foreign
Principal/Employer assigned in the Office
of Licensed Manning Agency (OLMA) in
accordance with the POEA law, rules and
regulations. [Section 3, D.O. No. 186-17]
Intracorporate Transferee: Requisites for
exclusion
1. Must be an Executive, Manager, or
Specialist
Executive:
primarily
directs
the
management of the organization and
exercises wide latitude in decision making
and receives only general supervision or
direction from higher level executives, the
board of directors, or stockholders of the
business; an executive would not directly
perform tasks related to the actual
provision of the service or services of the
organization
Manager: a natural person within the
organization who primarily directs the
organization/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 the provision of the service
Specialist: a natural person within the
organization who possesses knowledge at
an advanced level of expertise essential to
the establishment/provision of the service
and/or possesses proprietary knowledge of
the organization’s service, research
equipment, techniques or management;
may include, but is not limited to, members
of a licensed profession.
2. At least 1 year of continuous employment
prior [Section 3, D.O. No. 186-17]
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Contractual Service Supplier: Requisites
for exclusion
1. Must be an Executive, Manager, or
Specialist
2. Enters the Philippines temporarily to supply
a service pursuant to a contract between
his/her employer and a service consumer
in the Philippines
3. Must possess the appropriate educational
and professional qualifications; and
4. Employed for at least 1 year prior [Section
3, D.O. No. 186-17]
Certificate of Exclusion
All foreign nationals excluded from securing
AEP shall secure Certificate of Exclusion from
the Regional Office. Further, Regional Offices
shall issue the Certificate of Exclusion within
two (2) working days after receipt of complete
documentary requirements and fees. [Section
4, D.O. No. 186-17]
2. Conditions for Grant of Permit
Non-availability of Competent, Able, and
Willing persons [CAW]
The employment permit may be issued to a
non-resident alien or to the applicant employer
after a determination of the non-availability of
a person in the Philippines who is
competent, able and willing at the time of
application to perform the services for
which the alien is desired.
For an enterprise registered in preferred areas
of investments, said employment permit may
be issued upon recommendation of the
government agency charged with the
supervision of said registered enterprise.
[Art 40, Labor Code]
Where to file Applications
All applications for AEP shall be filed and
processed at the DOLE Regional Office or
Field Office having jurisdiction over the
intended place of work. [Sec. 5(a), D.O. No.
186-17]
When to file Applications
Newly hired/appointed officers may file the
application for new AEP without penalty:
LABOR LAW
a. General Rule (GR): within 15 working days
after signing of contract/appointment
b. If commencement of employment is later
that the 15 working day grace period:
before the commencement of employment
[Sec. 17, D.O. No. 186-17]
What documents should be submitted
1. Application form
2. Photocopy of passport with visa, or Cert of
Recognition for Refugees or Stateless
Persons
3. Original copy of notarized appointment or
contract of employment enumerating the
duties and responsibilities, annual salary,
and other benefits of the foreign national
4. Photocopy of Mayor’s Permit to operate
business, in case of locators in economic
zones, certification from the PEZA or the
Ecozone Authority that the company is
located and operating within the ecozone,
while in case of a construction company,
photocopy of license from PCAB or D.O.
No. 174-17 Registration should be
submitted in lieu of Mayor’s Permit; and
5. Business
Name
Registration
and
Application Form with the Department of
Trade and Industry (DTI) or SEC
Registration and GIS;
6. If the position title of the foreign national is
included in the list of regulated professions,
a Special Temporary Permit (STP) from the
Professional Regulations Commission
(PRC); and
7. If the employer is covered by the AntiDummy Law, an Authority to Employ
Foreign National (ATEFN) from the DOJ or
from the DENR in case of mining. [Section
5a, D.O. No. 186-17]
In case of additional position of change in
position
Additional position of the foreign national in
the same company or subsequent assignment
in related companies during the validity or
renewal of the AEP will be subject for
publication requirement. A change of
position or employer shall require an
application for new AEP [Section 5(c), D.O.
No. 186-17]
Only one AEP at a time
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At any given time only one AEP shall be issued
to a foreign national. A foreign national may be
issued one AEP only at any given time. [Sec.
5d, D.O. No. 186-17]
b. Information or criminal offense and grave
misconduct in dealing with or ill treatment
of workers filed with the Regional Offices
any time.
Fees
1. Upon filing:
a. One year validity: P9000
b. More than 1 year: plus P4000 per year
c. Renewal: P4000 per year
2. Courier fee: P200
3. Loss/change of info, AEP replacement:
P1500
4. Certificate of exclusion: P500
[Sec. 6, D.O. No. 186-17]
Processing and Issuance
AEP shall be issued:
a. Within three working days after publication
and payment of fees: new AEP
b. One day after receipt: renewal of AEP [Sec.
8, D.O. No. 186-17]
Labor Market Test [Sec. 7, D.O. No. 186-17]
AEP application (new/change in or additional
position/subsequent assignment) should be
published by the DOLE Regional Office in:
1. Newspaper of general circulation within 2
working days from receipt of application
2. DOLE Website (30 days)
3. PESO (30 days)
Contents of the Publication:
1. Name,
2. Position,
3. Employer and address,
4. A brief description of the functions to be
performed by the foreign national,
5. Qualifications,
6. Monthly salary range and other benefits, if
there are any.
7. Indicate that any person in the Philippines
who is competent, able and willing at the
time of the application to perform the
services for which the foreign national is
desired may file an objection at the DOLE
Regional Office.
Where to file objection
Regional Office within
publication.
30
days
after
Other information that DOLE may refer to
a. Philjobnet and PESO Information System
(PEIS), the PRC Registry of professionals,
and the TESDA registry of certified workers
to establish availability or non availability of
able and qualified Filipino workers.
Verification Inspection
The authorized representatives of the Regional
Director may conduct inspection to verify
legitimacy of employment of the foreign
national as deemed necessary, based on the
documents submitted within two working days
upon payment of fees. [Sec. 9, D.O. No. 18617]
3. Validity of AEP and Renewal
Duration of Validity
The AEP shall be valid for the position and the
company for which it was issued for
GR: 1 year
Exception: period not exceeding 3 years; if the
employment contract/mode of engagement
provides otherwise. [Sec. 10, D.O. No. 186-17]
When to apply for renewal
GR: not earlier than 60 days before expiration
Exceptions:
a. Alien needs to leave the country;
b. Other similar circumstances that will hinder
the filling of renewal within this prescribed
period.
In case of officers to be appointed/elected
a. Before AEP expiration: not later than 15
working days after appointment, or before
its expiration, whichever comes later
b. After AEP expiration: before the expiration
of the AEP, renewed for 1 year
c. Within 15 working days after the date of
appointment or election, the foreign
national shall submit to the issuing
Regional Office the Board Secretary’s
Certification
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1. The Regional Director shall revoke the
AEP after 1 month from its issuance, if
no Certification is filed. [Sec. 11, D.O.
No. 186-17]
Expired AEP
Expired AEP shall be processed as a new
application subject to the payment of required
fees and penalties in relation to Section 17
(Penalty for Working without AEP). [Sec. 11,
D.O. No. 186-17]
4. Denial of Application
Grounds for Denial [Mi-Fa-Co-Mi-CAW-WoEx]:
a. Misrepresentation of facts in the
application
including
fraudulent
misrepresentation
1. i.e. false statement that has a negative
effect in the evaluation of the
application made knowingly, or without
belief in its truth, or recklessly whether
it is true or false;
b. Submission of Falsified documents;
c. Conviction to a criminal offense or a
fugitive from justice in the country or
abroad;
d. Grave Misconduct in dealing with or ill
treatment of workers;
e. Availability of a Filipino who is Competent,
Able and Willing to do the job;
f. Worked without valid AEP for more than a
year;
g. Application for renewal with Expired visa or
with temporary visitor’s visa [Sec. 112,
D.O. No. 186-17]
Effect of Denial
Denial of application for AEP shall cause the
forfeiture of the fees paid by the applicant.
[Sec. 12, D.O. No. 186-17]
LABOR LAW
5. Revocation; Cancellation
Grounds for Cancellation [Non-Mi-Fa-MeCon-Te-Mi]
a. Non-compliance with any of the
requirements or conditions for which the
AEP was issued;
b. Misrepresentation of facts in the
application
including
fraudulent
misrepresentation;
c. Submission of Falsified or tampered
documents;
d. Meritorious objection or information
against the employment of the foreign
national;
e. Foreign national has been Convicted of a
criminal offense or a fugitive from justice;
f. Employer Terminated the employment of
foreign national;
g. Grave Misconduct in dealing with or ill
treatment of workers. [Sec. 13, D.O. No.
186-17]
Effect of denial/revocation or cancellation
Disqualified to re-apply for 10 years in case the
ground for denial or cancellation is:
a. Conviction of criminal offense or fugitive
from justice in the country or abroad; or
b. Grave misconduct in dealing with or ill
treatment of workers [Sec. 14, D.O. No.
186-17]
Effect of fraudulent application
Employers, employer’s or foreign national’s
representatives, and/or agents acting in behalf
of the applicant found to have filed fraudulent
application for AEP for three (3) counts shall be
barred from filing application for a period of five
(5) years after due process. [Sec. 15, D.O. No.
186-17]
6. Appeal
When and where to file
With the Secretary of the DOLE within 10 days
after receipt of denial/cancellation/revocation
order.
The decision of the DOLE Secretary shall be
final and executory unless a motion for
reconsideration is filled within 10 days after
receipt of the decision. No second motion for
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reconsideration shall be allowed.
D.O. No. 186-17]
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[Sec. 16,
7. Penalty
Fines
Working without valid AEP: P10,000 for every
year or fraction thereof
Employing aliens without valid AEP: P10,000
for every year or fraction thereof
Failure to pay penalty: not allowed to employ
foreign national for any position [Sec. 17, D.O.
No. 186-17]
III. LABOR STANDARDS
Labor Standards refers to the minimum
requirements prescribed by existing laws, rules
and regulations relating to wages, hours of
work, cost-of-living allowance and other
monetary and welfare benefits, including
occupational, safety and health standards.
[Maternity Children’s Hospital v. Secretary of
Labor, G.R. 78909 (1989)]
Note: All Articles from hereon refer to the Labor
Code, unless otherwise indicated.
A. CONDITIONS OF
EMPLOYMENT
1. Hours of Work
a. Principles in determining hours
worked and employees
exempted or not covered
Principles in determining hours worked
Hours worked shall include:
1. All time during which an employee is
required to be on duty or to be at a
prescribed workplace; AND
2. All time during which an employee is
suffered or permitted to work. [Art. 84]
LABOR LAW
General principles in determining if time is
considered as hours worked
All hours are hours worked which the employee
is required to give their employer, regardless
of whether or not such hours are spent in
productive labor or involve physical or mental
exertion.
An employee need not leave the premises of
the work place in order that their rest period
shall not be counted, it being enough that
they stop working, may rest completely and
may leave their work place to go elsewhere,
whether within or outside the premises of their
work place. [Sec. 4(b), Rule I, Book III, IRR]
If the work performed was necessary, or it
benefited the employer, or the employee
could not abandon his work at the end of his
normal working hours because he had no
replacement, all time spent for such work shall
be considered as hours worked, if the work
was with the knowledge of his employer or
immediate supervisor. [Sec. 4(c), Rule I,
Book III, IRR]
The time during which an employee is inactive
by reason of interruptions in his work
beyond his control shall be considered
working time either:
a. If the imminence of the resumption of work
requires the employee’s presence at the
place of work, or
b. If the interval is too brief to be utilized
effectively and gainfully in the employee’s
own interest. [Sec. 4, Rule I, Book III, IRR]
Employees exempted or not covered
General rule: Title I: Working Conditions and
Rest Periods shall apply to employees in all
establishments and undertakings whether for
profit or not. [Art. 82]
Note: Article 82 applies to the whole of Title I.
This includes Service Incentive Leaves, which
will be discussed in a separate section.
Exceptions (i.e. those NOT covered by Title I):
1. Government employees [Art. 82; Art. 76]
(exception to the exception: Employees
of GOCCs created under the Corporation
Code)
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2.
3.
4.
5.
Managerial Employees [Art. 82]
Members of the managerial staff [Art. 82]
Field Personnel [Art. 82]
Members of the family of the employer who
are dependent on him for support [Art. 82];
6. Domestic workers or kasambahay [Art.
141, RA 10361] (exception to the
exception: Assignment in a Commercial,
Industrial or Agricultural Enterprise)
7. Persons in the personal service of another
8. Workers who are paid by result as
determined by DOLE regulation [Art. 82]
(1) Government Employees
The terms and conditions of employment of all
government employees, including employees
of GOCCs, are governed by the Civil Service
rules and regulations, not by the Labor Code
[Art. 291].
However, not all GOCCs are governed by the
Civil Service Rules; only those created by
original charter are governed by the Civil
Service rules:
“Following Sec. 2(i) Art. IX-B of 1987 Phil.
Constitution, the test in determining whether a
government owned corporation is subject to
the Labor Code or the Civil Service law is
finding out what created it – if it is created by
a special charter, then, Civil Service Law
applies, if it is created by the General
Corporation Law, then the Labor Code
applies.” [PNOC Energy Development Corp.
v. NLRC, G.R. No. 79182 (1991)]
(2) Managerial Employees
Two definitions of “managerial employee”
in the Labor Code:
1. One whose primary duty consists of the
management of the establishment in which
they are employed or of a department or
subdivision thereof and to other officers or
members of the managerial staff. [Art. 82]
2. One who is vested with the powers or
prerogatives to lay down and execute
management policies and/or to hire,
transfer, suspend, lay off, recall, discharge,
assign or discipline employees. [Art.
219(m)]
LABOR LAW
Characteristics of managerial employees
[Sec. 2(b), Rule I, Book III, IRR]
Managerial employees are exempted from the
coverage of Book III Articles 83 through 96 if
they meet all of the following conditions:
1. Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or subdivision thereof.
2. They customarily and regularly direct the
work of two or more employees therein.
3. They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as
to hiring and firing and as to the promotion
or any other change of status of other
employees, are given particular weight.
Managerial employees and managerial staff
are determined by their job description and not
their job title. [Peñarada v. Baganga Plywood
Corp., G.R. No. 159577 (2006)]
(3) Members of the managerial
(supervisory employees)
staff
Definition
Supervisory employees are those who, in the
interest
of
the
employer,
effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment. [Art. 219(m)]
Art. 82 also includes managerial staff
(supervisory employees) in the definition of
managerial employees. The definition in Art. 82
covers more people than that in Art. 219(m). In
effect, managerial employees in Art. 82
includes supervisors, but Art. 219(m) does not,
for purposes of the right to self-organization.
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Managerial Staff is included as they are
considered managerial employees as well
[Sec. 2(c), Rule I, Book III, IRR]
Officers or members of a managerial staff are
also exempted if they perform the following
duties and responsibilities:
1. Their primary duty consists of the
performance of work directly related to
management policies of their employer;
2. Customarily and regularly exercise
discretion and independent judgment;
3. (a) Regularly and directly assist a
proprietor or a managerial employee
whose primary duty consists of the
management of the establishment in which
he is employed or subdivision thereof; 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;
4. Do not devote more than 20% of their hours
worked in a work week to activities which
are not directly and closely related to the
performance of the work described in
paragraphs (1), (2) and (3) above.
be determined with reasonable certainty by the
employer. In so doing, an inquiry must be
made as to whether or not the employee’s
time and performance are constantly
supervised by the employer. [Far East
Agricultural Supply v. Lebatique, G.R. No.
162813 (2007)]
Effective recommendatory power
Supervisory employees are those who, in the
interest of the employer, effectively
recommend such managerial actions and the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment [Art. 219(m)].
Definition
Domestic worker or “Kasambahay” refers to
any person engaged in domestic work within
an employment relationship such as but not
limited to the following:
1. general househelp,
2. nursemaid or “yaya”,
3. cook,
4. gardener or
5. laundry person
(4) Field Personnel
Field personnel are non-agricultural
employees:
1. Who regularly perform their duties away
from the principal or place of business or
branch office of the employer; and
2. Whose actual hours of work in the field
cannot be determined with reasonable
certainty. [Art. 82]
Although the fishermen perform nonagricultural work away from petitioner’s
business offices, the fact remains that
throughout the duration of their work they are
under the effective control and supervision
of petitioner through the vessel’s patron or
master. Hence, the fishermen are not “field
personnel”. [Mercidar Fishing Corporation v.
NLRC, G.R. No. 112574 (1998)]
(5) Dependent Family Members
Workers who are family members of the
employer, and who are dependent on him for
their support, are outside the coverage of this
Title on working conditions and rest periods
[Art. 82].
(6) Domestic Helpers (Workers)
"Domestic work" refers to work performed in
or for a household. [Sec. 3(d), IRR of RA10361]
"Household" refers to the immediate
members of the family or the occupants of the
house who are directly and regularly provided
services by the kasambahay. [Sec. 3(g), IRR of
RA 10361]
Legal Test: Control & Supervision of
employer
In order to determine whether an employee is
a field employee, it is also necessary to
ascertain if actual hours of work in the field can
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The definition of “Kasambahay” excludes:
1. Any person who performs domestic work
only occasionally or sporadically and not
on an occupational basis.
2. Children who are under foster family
arrangement, and are provided access to
education and given an allowance
incidental to education [Sec. 4(d), Art. 1,
RA 10361]
3. Service providers,
4. Family drivers. [Sec. 2 of the IRR,
RA10361]
Exclusivity of function required
Note that the definition contemplates a
domestic helper who is employed in the
employer’s home to minister exclusively to the
personal comfort and enjoyment of the
employer’s family. [Azucena]
Thus, it has been held that the following
personnel are NOT domestic employees:
1. House-help or laundry-women working in
staffhouses of a company, as well as
drivers,
houseboys,
or
gardeners
exclusively working in the company, the
staffhouses and its premises [Apex Mining
Company v. NLRC, G.R. No. 94951
(1991)]
2. House-help doing chores for the
employer's family, while also fulfilling tasks
connected with the employer's business
(bakery) such as cooking, filling orders,
baking orders, and other clerical work
[Fernando Co v. Vargas, G.R. No. 195167
(2011)]
(7) Persons in Personal Service of Another
Persons in the personal service of another are
not covered by Title I: Working Conditions and
Rest Periods if they:
a. Perform such services in the employer’s
home which are usually necessary or
desirable for the maintenance and
enjoyment thereof; or
b. Minister to the personal comfort
convenience or safety of the employer as
well as the members of his employer’s
household. [Sec. 2 (d), Rule I, Book III,
IRR]
(8) Workers Paid by Result (piece-workers)
LABOR LAW
Definition
Workers who are paid by results are those
whose output rates are in accordance with the
standards prescribed under Sec. 8, Rule VII,
Book Three of these regulations, or where such
rates have been fixed by the Secretary of Labor
and Employment in accordance with the
aforesaid Section.
These include those who are paid on piece
work, “takay,” “pakiao” or task basis, and other
nontime work. [Sec. 2(e), Rule I, Book III, IRR]
Workers under piece-rate employment have no
fixed salaries and their compensation is
computed on the basis of accomplished tasks.
That their work output might have been
affected by the change in their specific work
assignments does not necessarily imply that
any resulting reduction in pay is tantamount to
constructive dismissal. It is the prerogative of
the management to change their assignments
or to transfer them. [Best Wear Garments v. De
Lemos and Ocubillo, G.R. No. 191281 (2012)]
Workers paid by results may be grouped into
two: 1) those whose time and performance is
supervised by the employer and 2) those
whose time and performance is unsupervised
by the employer [Azucena, p. 289].
Must be unsupervised to be excluded
Those who are engaged on task basis,
purely commission basis, or those who are
paid a fixed amount for performing work
irrespective of the time consumed in the
performance thereof are excluded from
receiving benefits such as nightime pay,
holiday pay, service incentive leave, inter alia,
provided their time and performance is
unsupervised by the employer. [Labor
Congress of the Philippines v. NLRC, G.R. No.
123938 (1998)]
Rule on overtime pay
Workers who are paid by results, if their
output rates are in accordance with the
standards prescribed under Sec. 8, Rule VII,
Book III, of those regulations, or where such
rates have been fixed by the Secretary of Labor
in accordance with the aforesaid section, are
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not entitled to receive overtime pay. [Sec.
2(e), Rule I; Labor Congress of the Philippines
v. NLRC, G.R. No. 123938 (1998)]
b. Compensable Time
i. Normal hours of work
Summary of benefits payable
Benefit
Unsupervised
Supervised
Applicable
Yes
statutory
minimum wage
[Art. 101]
General Rule: 8-Hour Labor Law
The normal hours of work of any employee
shall not exceed eight (8) hours a day. [Art. 83]
Note: Art. 83 of the Labor Code only sets a
maximum of number of hours as "normal hours
of work" but did not prohibit work of less than
eight hours. [Legend Hotel v. Realuyo, G.R.
153511 (2012)]
Night
differential
[Sec. 1(e),
Rule II]
No
Yes
Service
incentive leave
[Sec. 1(d),
Rule V]
No
Holiday pay
[Sec. 8(b),
Rule IV]
Yes
13th month
pay [Revised
Guidelines on
the
Implementation
of the 13th
Month Pay
Law (1987)]
Yes, provided the worker
has rendered at least 1
month of service during the
calendar year
Other statutory
benefits [Labor
Congress of
the Philippines
v. NLRC, G.R.
No. 123938
(1998)]
No
Exception to 8-Hour Law: Work Hours of
Health Personnel
Health personnel in:
a. Cities and municipalities with a population
of at least one million (1,000,000) OR
b. Hospitals and clinics with a bed capacity of
at least one hundred (100)
shall hold regular office hours for eight (8)
hours a day, for five (5) days a week,
exclusive of time for meals.
Yes
HOWEVER, where the exigencies of the
service require that they work for six (6) days
or forty-eight (48) hours, they shall be entitled
to an additional compensation of at least thirty
percent (30%) of their regular wage for work on
the sixth day.
“Health personnel" shall include:
1. Resident physicians, nurses, nutritionists,
dietitians, pharmacists, social workers,
laboratory
technicians,
paramedical
technicians, psychologists, midwives,
attendants and all other hospital or clinic
personnel. [Art. 83]
2. Medical secretaries [Azucena]
Yes
Not determinative of EER
Payment by result is not determinative of
employer-employee relationship. It is a method
of compensation and does not define the
essence of the relation. It is a method of
computing compensation, not a basis for
determining the existence or absence of
employer-employee relationship. [Tan v.
Lagrama, G.R. No. 111042 (1999)]
ii. Night shift differential
Definition
Night Shift Differential is the additional
compensation of 10% of an employee’s
regular wage for each hour of work performed
between 10pm and 6am. [Art. 86]
Illustration: If an employee has a regular wage
of P100 for each hour of work performed
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between 10PM and 6AM, he/she shall be paid
P110 per hour worked during such time
interval.
Coverage
Aside from those enumerated under Art. 82 as
excluded from Title I: Working Conditions and
Rest Periods, those employed in retail and
service establishments regularly employing not
more than five (5) workers are also NOT
entitled to Night Shift differential [Sec. 1, Rule
II, Book III, IRR]
Rest days (night-off)
Night shift employees are entitled to a weekly
night-off (usually Saturday evening) or a
weekly rest period of 24 hours beginning at the
start of the night shift [See also Art. 91].
Work on special days
Night shift employees are also entitled to the
premium pay on special days and holidays.
These days are reckoned as calendar days
which start at midnight and end at the following
midnight. The premium pay for the night shift
also starts or ends at midnight. However, the
employment contract, company policy or CBA
may provide that in the case of night shift
workers, days—including special days and
regular holidays—shall begin on the night
before a calendar day. [Chan, Pre-Week
Guidelines]
LABOR LAW
Work may be performed beyond eight hours a
day, provided that the employee is paid an
additional compensation equivalent to his
regular wage plus at least 25% thereof. [Art. 87]
Overtime work on holiday or rest day
Work performed beyond eight hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least
30% thereof. [Art. 87]
Computation of additional compensation
Base of Computation: Regular wage – means
regular base pay.
It includes the cash wage only without
deduction on account of facilities provided by
the employer. [Art. 90]
It excludes money received in different
concepts, such as Christmas bonus and other
fringe benefits. [Bisig ng Manggagawa ng
Philippine Refining Co. v. Philippine Refining
Co., G.R. L-27761 (1981)]
BUT when the overtime work was performed
on the employee’s rest day or on special
days or regular holidays (Art. 93 and 94), the
premium pay, must be included in the
computation of the overtime pay. [See: p. 19 of
Handbook on Workers’ Statutory Monetary
Benefits, issued by the Bureau of Working
Conditions, 2006]
iii. Overtime work
Overtime compensation is additional pay for
service or work rendered or performed in
excess of eight hours a day by employees or
laborers covered by the Eight-hour Labor Law.
[National Shipyard and Steel Corp. v. CIR,
G.R. No. L-17068 (1961)]
Rationale
There can be no other reason than that he is
made to work longer than what is
commensurate with his agreed compensation
for the statutorily fixed or voluntary agreed
hours of labor he is supposed to do. [PNB v.
PEMA, G.R. No. L-30279 (1982)]
ILLUSTRATIONS
Overtime on a Regular Day (OTRD)
Work may be performed beyond eight (8) hours
a day provided that the employee is paid for the
overtime work, an additional compensation
equivalent to his regular wage plus at least
twenty-five percent (25%) thereof [Art. 87]
OTRD = Hourly wage x 125% x number of
hours of OT work
Overtime on ordinary working day
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conditions where performance or quality of
work is dependent thereon. [added by Rule
1, Sec. 10]
Work on Scheduled Rest Day (WRD)
Work performed on a rest day shall be paid an
additional compensation equivalent to 30% of
the regular wage. [Art. 93]
WRD = Regular Wage x 130%
Overtime on Scheduled Rest Day (OTSRD)
Where an employee is made or permitted to
work on his scheduled rest day, he shall be
paid an additional compensation of at least
thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional
compensation for work performed on Sunday
only when it is his established rest day. [Art.
93(a)]
OTSRD = Hourly Wage x 169% x number of
hours of OT work
Note: 169% was derived by adding 39% (which
is 30% of 130 or 1.3x.3 to 130%
Emergency overtime
Any employee may be required by the
employer to perform overtime work in any of
the following cases:
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;
2. When it is necessary to prevent loss of life
or property or in case of imminent danger
to public safety due to an actual or
impending emergency in the locality
caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other
disaster or calamity;
3. When there is urgent work to be performed
on machines, installations, or equipment, in
order to avoid serious loss or damage to
the employer or some other cause of
similar nature;
4. When the work is necessary to prevent loss
or damage to perishable goods; and
5. Where the completion or continuation of
the work started before the eighth hour is
necessary to prevent serious obstruction or
prejudice to the business or operations of
the employer. [Art. 89]
6. Where overtime work is necessary to avail
of favorable weather or environmental
Overtime pay does not preclude night
differential pay
When the tour of duty of a laborer falls at
nighttime [between 10:00pm and 6:00am], the
receipt of overtime pay will not preclude the
right to night differential pay. The latter is
payment for work done during the night, while
the other is payment for the excess of the
regular eight-hour work. [Naric v. Naric
Workers Union, G.R. No. L-12075 (1959)]
SYNTHESIS OF RULES
1. An employer cannot compel an employee
to work overtime
Exception: Emergency overtime work as
provided for in Art. 89
2. Additional compensation is demandable
only if the employer had knowledge and
consented to the overtime work rendered
by the employee.
Exception: Express approval by a superior
NOT a requisite to make overtime
compensable:
a. If the work performed is necessary, or
that it benefited the company; or
b. That the employee could not abandon
his work at the end of his eight-hour
work because there was no substitute
ready to take his place. [Sec. 4(c), Rule
I; Manila Railroad Co. v. CIR, G.R. L4614 (1952)]
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Note: However, the Court has also ruled
that a claim for overtime pay is NOT
justified in the absence of a written
authority to render overtime after office
hours during Sundays and holidays.
[Global Incorporated v. Atienza, G.R. L51612-13 (1986)]
Daily time records cannot prove the
performance of overtime work if the same
had no prior authorization by the
management. [Robina Farms Cebu/
Universal Robina Corp. v. Villa, G.R. No.
175869 (2016)]
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3. Compensation for work rendered in excess
of the 8 normal working hours in a day:
a. For ordinary days, additional 25% of
the basic hourly rate.
b. For rest day/special day/holiday,
additional 30% of the basic hourly rate.
4. A given day is considered an ordinary day,
unless it is a rest day.
5. Undertime does NOT offset overtime.
Undertime work on any particular day shall
not be offset by overtime work on any other
day. Permission given to the employee to
go on leave on some other day of the week
shall NOT exempt the employer from
paying the additional compensation
required in this Chapter. [Art. 88]
Offsetting work on a regular day with work
rendered on a holiday or rest day is prohibited
because such deprives the employee of
additional pay or premium. [Lagatic v. NLRC,
G.R. No. 121004 (1998)]
(a) Compressed work week
(CWW)
[DOLE Advisory No. 02, Series of 2004]
A CWW refers to one where the normal
workweek is reduced to less than 6 days but
the total number of work hours of 48 hours per
week shall remain. Under the CWW scheme,
the normal workday goes beyond eight
hours but not exceed 12 hours, without the
corresponding overtime premium. [DOLE
Advisory No. 04, Series of 2010].
In excess of such, the employer is obliged to
pay the worker the overtime premium.
Conditions for CWW
1. The CWW scheme is undertaken as a
result of an express and voluntary
agreement of majority of the covered
employees or their duly authorized
representatives. This agreement may be
expressed through collective bargaining or
other legitimate workplace mechanisms of
participation such as labor management
LABOR LAW
councils,
employee
assemblies
or
referenda.
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
employees’ health and safety, there must
be a certification from an accredited
health and safety organization or
practitioner from the firm’s safety
committee that work beyond eight hours is
within threshold limits or tolerable levels of
exposure, as set in the OSHS.
3. The employer shall notify DOLE, through
the Regional Office having jurisdiction over
the workplace, of the adoption of the CWW
scheme. The notice shall be in DOLE
CWW Report Form attached to this
Advisory. [DOLE Advisory No. 02-04]
Effects of CWW
1. Unless there is a more favorable practice
existing in the firm, work beyond eight
hours will not be compensable by
overtime premium provided the total
number of hours worked per day shall not
exceed twelve (12) hours. In any case, any
work performed beyond 12 hours a day or
48 hours a week shall be subject to
overtime premium.
2. Consistent with Art. 85, employees under a
CWW scheme are entitled to meal periods
of not less than 60 minutes. There shall be
no impairment of the right of the employees
to rest days as well as to holiday pay, rest
day pay or leaves in accordance with law
or
applicable
collective
bargaining
agreement or company practice.
3. Adoption of the CWW scheme shall in no
case result in diminution of existing
benefits. Reversion to the normal eighthour workday shall not constitute a
diminution of benefits.
Rationale: Although the right to overtime pay
cannot be waived as per Cruz v. Yee Sing
[G.R. No. L-12046 (1959)], D.O. No. 21
sanctions the waiver of overtime pay in
consideration of the benefits that the
employees will derive from the adoption of a
compressed workweek scheme, thus:
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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. 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 that will
accrue to the employees (e.g. savings on meal
and snack expenses; longer weekends etc).
[Bisig Manggagawa sa Tryco v. NLRC, et al.,
G.R. No. 151309 (2008)]
(b) Built-in overtime
Composite or Package Pay NOT per se
illegal; Conditions for Validity
Composite or “package pay” or “all-inclusive
salary” is an arrangement where the
employee’s salary includes the overtime pay.
In other words, the overtime pay is “built-in”.
Such arrangement is valid provided that:
1. There is a clear written agreement
knowingly and freely entered by the
employee; and
2. The mathematical result shows that the
agreed legal wage rate and the overtime
pay, computed separately, are equal to or
higher than the separate amounts legally
due. [Damasco v. NLRC, G.R. 115755
(2000)]
c. Non-compensable hours; When
compensable
i. Meal break
General Rule: Subject to such regulations as
the Secretary of Labor may prescribe, it shall
be the duty of every employer to give his
employees not less than sixty (60) minutes
time-off for their regular meals. [Art. 85]
Exceptions: Employees may be given a meal
period of not less than twenty (20) minutes
provided that such shorter meal period is
credited as compensable hours worked of the
employee:
LABOR LAW
1. Where the work is non-manual work in
nature or does not involve strenuous
physical exertion;
2. Where the establishment regularly
operates not less than sixteen (16) hours a
day;
3. In case of actual or impending
emergencies or there is urgent work to be
performed on machineries, equipment or
installations to avoid serious loss which the
employer would otherwise suffer; OR
4. Where the work is necessary to prevent
serious loss of perishable goods [par. 1,
Sec. 1, Rule I, Book III, IRR]
The eight-hour work period does not include
the meal break. Employees are not prohibited
from going out of the premises as long as they
return to their posts on time. Nowhere in the
law may it be inferred that employees must
take their meals within the company premises.
[Philippine Airlines v. NLRC, G.R. No. 132805
(1999)]
SYNTHESIS OF THE RULES
General Rule: Meal periods
compensable.
are
NOT
Exception:
It becomes compensable:
1. Where the lunch period or meal time is
predominantly spent for the employer’s
benefit. [Azucena citing 31 Am. Jur. 881;
Duka, Labor Laws and Social Legislation]
2. Meal periods of 1 hour are deemed
compensable when the employee is on
continuous shift. [National Development
Co. v. CIR, G.R. No. L-15422, (1962)]
3. Shortened meal period of less than 1 hour
(say, 30 minutes) must be compensable.
[Sec. 7, Rule I, Book III, IRR]
Note: To shorten meal time to less than 20
minutes is not allowed. If the so-called meal
time is less than 20 minutes, it becomes only a
REST PERIOD and is considered working
time.
Exception to the Exception: Shortened meal
breaks upon the employees’ request – NOT
compensable.
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The employees themselves may request that
the meal period be shortened so that they can
leave work earlier than the previously
established schedule. [Drilon: Letter to Kodak
Philippines, Nov. 27, 1989; Cilindro: BWCWHSD, Opinion No. 197, s. 1998]
Conditions for shortened meal breaks upon
employee’s request
1. The employees voluntarily agree in writing
to a shortened meal period of 30 minutes
and are willing to waive the overtime pay
for such shortened meal period;
2. There will be no diminution whatsoever in
the salary and other fringe benefits of the
employees existing before the effectivity of
the shortened meal period;
3. The work of the employees does not
involve strenuous physical exertion and
they are provided with adequate “coffee
breaks” in the morning and afternoon;
4. The value of the benefits derived by the
employees from the proposed work
arrangement
is
equal
to
or
commensurate with the compensation
due them for the shortened meal period as
well as the overtime pay for 30 minutes as
determined by the employees concerned;
5. The overtime pay of the employees will
become due and demandable if ever they
are permitted or made beyond 4:30pm;
and
6. The effectivity of the proposed working
time arrangement shall be of temporary
duration as determined by the Secretary
of Labor. [BWC-WHSD Opinion No. 197, s.
1998]
ii. Power interruptions or
brownouts
LABOR LAW
2. the employees can use the time effectively
for their own interest.
In this case, the employer may extend the
working hours beyond the regular schedule on
that day to compensate for the loss of
productive man-hours without being liable for
overtime pay. [Policy Instruction No. 36, May
22, 1978]
Note: The time during which an employee is
inactive by reason of work interruptions beyond
his control is considered working time, either if
the imminence of the resumption of work
requires the employee’s presence at the place
of work or if the interval is too brief to be utilized
effectively and gainfully in the employee’s own
interest. [Sec. 4(d), Rule I, Book III, IRR]
iii. Idle time
The idle time that an employee may spend for
resting and dining which he may leave the spot
or place of work though not the premises of his
employer, is not counted as working time
only where the work is broken or is not
continuous. [National Development Co. v. CIR,
G.R. No. L-15422 (1962)]
A laborer need not leave the premises of the
factory, shop or boat in order that his period of
rest shall not be counted, it being enough that
he "cease to work", may rest completely and
leave or may leave at his will the spot where he
actually stays while working, to go somewhere
else, whether within or outside the premises of
said factory, shop or boat. If these requisites
are complied with, the period of such rest
shall not be counted. [Luzon Stevedoring Co.
v. Luzon Marine Department Union, G.R. No.
L-9265 (1957)]
Brownouts of short duration, but not
exceeding 20 minutes, shall be treated as
hours worked, whether used productively by
the employees or not.
If they last more than 20 minutes, the time
may not be treated as hours worked if:
1. the employees can leave their workplace or
go elsewhere whether within or without the
work premises; OR
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iv. Travel time
Travel time [Department of Labor Manual]
Travel from home to work – An employee
who travels from home before his regular
workday and returns to his home at the end of
the workday is engaged in ordinary home-towork travel which is NOT considered hours
worked, EXCEPT:
a. When called to travel during emergency;
b. When travel is done through a conveyance
furnished by the employer;
c. Travel is done under vexing and dangerous
circumstances;
d. Travel is done under the supervision and
control of the employer.
Travel that is all in the day’s work – Time
spent by an employee in travel from jobsite to
jobsite during the workday, must be counted
as hours worked. Where an employee is
required to report at a meeting place to receive
instructions or to perform other work there, the
travel from the designated place to the
workplace is part of the day’s work.
Travel away from home – Travel that keeps
an employee away from home overnight is
travel away from home. Travel away from
home is worktime when it cuts across the
employee’s workday. The time is hours worked
not only on regular working hours but also
during the corresponding hours on nonworking days.
Lectures, meetings, trainings
Attendance at lectures, meetings, training
programs, and other similar activities shall
NOT be counted as working time if ALL of the
following conditions are met:
1. Attendance is outside of the employee’s
regular working hours;
2. Attendance is in fact voluntary; and
3. The employee does not perform any
productive work during such attendance.
[Sec. 6, Rule I, Book III, IRR]
Notes:
1. Attendance in lectures, meetings, and
training periods sanctioned or required by
the employer are considered hours
worked.
LABOR LAW
2. Attendance in CBA negotiations or
grievance meeting is compensable hours
worked provided that such is stipulated in
the CBA. [Department of Labor Manual,
Sec. 4323.03]
3. Attendance in hearings in cases filed by the
employee is NOT compensable hours
worked.
4. Participation
in
strikes
is
NOT
compensable working time.
Attendance in lectures, meetings, and training
periods must necessarily beneficial to the
employer. [Sec. 6(c), Rule I, IRR]
v. Commuting time
Employees performing tasks during their
commute which are not merely incidental to the
employee’s job, and are primarily for the
benefit of the employer (such as a company
driver performing a carpool service for coworkers according to an agreement with the
company), are entitled to overtime pay. [Hilario
Rada v. NLRC, G.R. No. 96078 (1992)]
vi. Waiting time
Rest period – short duration or “coffee
break”
1. Rest periods of short duration during
working hours shall be counted as hours
worked. [par. 2, Art. 84, par. 2]
2. Rest periods or coffee breaks running from
five (5) to twenty (20) minutes shall be
considered as compensable working time.
[par. 2, Sec. 7, Rule I, Book III, IRR]
On call
Compensable work time, if employee is:
1. Required to remain on call in the
employer’s premises or so close thereto
2. That he cannot use the time effectively and
gainfully for his own purpose shall be
considered as working while on call.
Note: An employee who is not required to leave
word at his home or with company officials
where he may be reached is NOT working
while on call. [Sec. 5 (b), Rule I, Book III, IRR]
Inactive due to work interruptions
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The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered working time
either:
1. If the imminence of the resumption of work
requires the employee's presence at the
place of work OR
2. If the interval is too brief to be utilized
effectively and gainfully in the employee's
own interest. [Sec. 4 (d), Rule I, Book III,
IRR]
2. Rest Periods
It shall be the duty of every employer, whether
operating for profit or not, to provide each of his
employees a rest period of not less than
twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.
[Art. 91 (a)]
Preference of the employee
The employer shall determine and schedule
the weekly rest day of his employees subject to
collective bargaining agreement and to such
rules and regulations as the Secretary of Labor
and Employment may provide. However, the
employer shall respect the preference of
employees as to their weekly rest day when
such preference is based on religious grounds.
[Art. 94 (b)]
The employee shall make known his
preference to the employer in writing at least
seven days before the desired effectivity of the
initial rest day so preferred.
When the choice of the employee as to his rest
day based on religious grounds will inevitably
result in serious prejudice or obstruction to the
operations and the employer cannot normally
be expected to resort to other measures, the
employer may so schedule the weekly rest day
of his choice for at least two days in a month.
[Rule III, Sec. 4]
LABOR LAW
COMPULSORY WORK ON REST DAY
The employer may require his employees to
work on any day:
1. In case of actual or impending
emergencies caused by serious accident,
fire, flood, typhoon, earthquake, epidemic
or other disaster or calamity to prevent loss
of life and property, or imminent danger to
public safety;
2. In cases of urgent work to be performed on
the machinery, equipment, or installation,
to avoid serious loss which the employer
would otherwise suffer;
3. In the event of abnormal pressure of work
due to special circumstances, where the
employer cannot ordinarily be expected to
resort to other measures;
4. To prevent loss or damage to perishable
goods;
5. Where the nature of the work requires
continuous operations and the stoppage of
work may result in irreparable injury or loss
to the employer; and
6. Under other circumstances analogous or
similar to the foregoing as determined by
the Secretary of Labor and Employment.
[Art. 92]
Synthesis of the Rules
1. Rest day of not less than 24 consecutive
hours after 6 consecutive days of work.
2. No work, no pay principle applies.
3. If an employee works on his designated
rest day, he is entitled to a premium pay.
4. Premium pay is additional 30% of the basic
pay.
5. Employer selects the rest day of his
employees
6. However, employer must consider the
religious reasons for the choice of a rest
day.
PREMIUM PAY
Premium pay refers to the additional
compensation for work performed within 8
hours on non-work days, such as rest days and
special days.
Coverage [Sec. 7, Rule III, Book III, IRR]
General Rule: All employees
Exceptions:
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1. Those of the government and any of the
political subdivision, including governmentowned and controlled corporations;
2. Managerial employees as defined in Book
III;
3. Househelpers and persons in the personal
service of another;
4. Workers who are paid by results, including
those who are paid on piece rate, takay,
pakyaw, or task basis, and other noontime
work, if their output rates are in accordance
with the standards prescribed in the
regulations, or where such rates have been
fixed by the Secretary of Labor and
Employment;
5. Field personnel, if they regularly perform
their duties away from the principal or
branch office or place of business of the ER
and whose actual hours of work in the field
cannot be determined with reasonable
certainty.
Premium pay rates [Handbook on Workers
Statutory Monetary Benefits, 2018]
When Work Performed
On scheduled rest day
On Sunday ONLY IF this
is the ESTABLISHED
rest day
Premium Pay
130% of regular
wage
130% of regular
wage
On Sunday and holidays, 130% of regular
when no regular work
wage
and rest days
On any special
holiday/special day
130% of regular
wage
On any special holiday/
special day falling on
scheduled rest day
150% of regular
wage
On a regular holiday
falling on a rest day
260% of regular
wage
LABOR LAW
Work on a Sunday or holiday which is also
a scheduled rest day
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 benefits as
provided in this Rule. [Sec. 2, Rule III, Book III,
IRR]
Compensation on rest day/Sunday/holiday
Except those employees referred to under Sec.
2, Rule I, Book III:
1. An employee who is made or permitted to
work on his scheduled rest day shall be
paid with an additional compensation of at
least 30% of his regular wage.
2. An employee shall be entitled to such
additional
compensation
for
work
performed on a Sunday only when it is his
established rest day.
3. An employee shall be paid an additional
compensation of at least 30% of his regular
wage for work performed on Sundays and
holidays, where the nature of the work of
the employee is such that he has no regular
work days and no regular rest days can be
scheduled. [Sec. 7, Rule III, Book III, IRR]
CBA on higher premium pay/Rate
Adjustments
Where the collective bargaining agreement or
other
applicable
employment
contract
stipulates the payment of a higher premium
pay than that prescribed under this Article, the
employer shall pay such higher rate. [Art. 93
(d)] The employer and his employees or their
representatives are not prevented from
entering into any agreement with terms more
favorable to the employees. [Sec. 9, Rule II,
Book III, IRR]
Nothing in this rule shall justify an employer in
reducing the compensation of his employees
for the unworked Sundays, holidays, or other
rest days, which are considered paid off days
or holidays by agreement or practice subsisting
upon the effectivity of the Code. [Sec. 8, Rule
III, Book III, IRR]
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LABOR LAW
Hotel-Nikko v. NUWHRAIN-APL-IUF-Dusit
Hotel Nikko Chapter, G.R. No. 181972
(2009)]
3. Service Charge
Coverage
Employers
This rule shall apply only to establishments
which collect service charges such as:
a. Hotels, restaurants, lodging houses, night
clubs, cocktail lounge, massage clinics,
bars, casinos and gambling houses;
b. Similar enterprises including those entities
operating primarily as private subsidiaries
of the Government [Sec. 1, DO 206-19,
IRR of RA11360]
Employees
Shall apply to ALL employees of covered
employers:
1. Regardless of their positions, designations,
or employment status, and
2. Irrespective of the method by which their
wages are paid. [Sec. 2 (a), DO 206-19,
IRR of RA11360]
Exceptions
Managerial employees [Sec. 2 (c), DO 201619, IRR of RA11360]
Distribution, amended by RA11360
Pursuant to the 2019 amendments to Art. 96,
all service charges collected by hotels, shall
be distributed completely and equally
among the covered workers except managerial
employees, based on actual hours or days of
work or service rendered, among the covered
employees, including those already receiving
the benefit of sharing in the service charges.
[Sec. 3, DO 206-19, IRR of RA11360]
The shares shall be distributed to employees
not less than once every 2 weeks or twice a
month at intervals not exceeding 16 days. [Sec.
4, DO 206-19, IRR of RA11360]
Notes:
1. The P2,000.00 salary ceiling for
entitlement thereto is no longer applicable.
2. [The employees’] right to their shares in the
service charges collected by [the employer]
is distinct and separate from their right to
ECOLA; gratification by the [employer] of
one does not result in the satisfaction of the
other. [Philippine Hoteliers, Inc., Dusit
Service charge not included in determining
compliance with minimum wage
In the event that the minimum wage is
increased by law or wage order, service
charges paid to the covered employees shall
not be considered in determining the covered
establishment’s compliance with the increased
minimum wage. [Sec. 5, DO 206-19, IRR of
RA11360]
In Relation to Collective Bargaining
Agreements
and
Employer-Employee
Agreements
Nothing in the Rules shall prevent the employer
and employee from entering into any
agreement with terms more favorable to the
employees than those granted therein, or be
used to diminish any benefit granted to the
employees under existing laws, agreement
AND voluntary employer practice. [Sec. 6, Rule
VI, Book III, IRR]
The rule is without prejudice to existing, future
collective bargaining agreements. [Sec. 7, Rule
VI, Book III, IRR]
Synthesis of the Rules
1. Service charges must be pooled;
2. Where
a
restaurant
or
similar
establishment does not collect service
charges but has a practice or policy of
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 services charges
[Handbook
on
Workers’
Statutory
Monetary Benefits, 2018];
3. The amount collected shall be distributed
completely and equally among the covered
workers;
4. It shall be given twice a month with
intervals of not more than 16 days;
5. Payment of service charges will not be
considered in compliance with any
increase in the minimum wage by law or
wage order.
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LABOR LAW
Note: Workers in registered barangay micro
business enterprise are only exempted from
the Minimum Wage Law, not from the Title on
Wages [RA 9178].
B. WAGES
1. Definition, Components, and
Exclusions
a. Wage vs. Salary
Definition
It is the remuneration or earnings, however
designated:
1. Capable of being expressed in terms of
money;
2. Whether fixed or ascertained on a time,
task, piece, or commission basis, or other
method of calculating the same;
3. Payable by an employer to an employee
under a written or unwritten contract of
employment –
a. for work done or to be done; or
b. for services rendered or to be rendered
[Art. 97(f)]
Coverage/Exclusions
Wage includes the fair and reasonable value of
facilities furnished by the employer to the
employee. [Art. 97(f)] while allowances are
excluded from the basic salary or wage
computation. [Cebu Institute of Technology v.
Ople, G.R. No. L-58870 (1987)]
Note: Fair and reasonable value shall not
include any profit to the employer, or to any
person affiliated with the employer. [Art. 97(f)]
Applicability
The Labor Code Title on wages shall not apply
to the following [Art. 98 and Sec. 3, Rule VII,
Book III, IRR]:
a. Farm tenancy or leasehold;
b. Household or domestic helpers, including
family drivers and other persons in the
personal service of another;
c. Homeworkers engaged in needlework;
d. Workers in registered cottage industries
who actually work at home;
e. Workers in registered cooperatives when
so recommended by the Bureau of
Cooperative Development upon approval
of the Secretary of Labor.
Wages and salary are in essence synonymous.
[Songco v. NLRC, G.R. No. L-50999 (1990)]
There are slight differences:
Wage
Salary
Paid for skilled or
unskilled manual
labor
Paid to white collar
workers and denote
a higher grade of
employment
Not subject to
execution,
garnishment or
attachment except for
debts related to
necessities [Art.
1708]
Subject to
execution,
garnishment or
attachment [Gaa v.
CA, G.R. No. L44169 (1985)]
b. Distinguish: Facilities and
Supplements
Criterion: In determining whether a privilege is
a facility, the criterion is not so much its kind
but the PURPOSE for which it is given.
[Millares v. NLRC & PICOP, G.R. No. 122827
(1999)]
Comparison
Supplements
between
Facilities
Facilities
and
Supplements
What it is
Articles or
services/items of
expense;
EXCLUDES tools of
the trade or articles
or service primarily
for the benefit of the
ER [Sec. 5, Rule 7A, Book III, IRR]
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Extra remuneration or
special benefits/
articles or services/
tools of the trade
given to or received
by laborers over and
above their ordinary
earning or wages
[Sec. 5, Rule 7-A,
Book III, IRR;]
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General Rule: A bonus is an act of gratuity on
the part of the employer, and is a management
prerogative which cannot be forced upon the
employer. [Kamaya Point Hotel v. NLRC, G.R.
No. 75289, August 31, 1989]
Who benefits
For the benefit of
the employee and
his family; for their
existence and
subsistence
For the benefit or
convenience of the
employer
Part of the wage?
Yes [Art. 97]
No [Art. 97]
Deductible from wage?
Yes – part of the
wage so it is
deductible [Art. 97]
No – independent of
the wage so not
deductible [Art. 97]
Requirements for deducting value of
facilities
Mere availment is not sufficient to allow
deductions from employees’ wages. Before the
value of facilities can be deducted from the
employees’ wages, the following requisites
must all be attendant:
a. Proof must be shown that such facilities are
customarily furnished by the trade;
b. The provision of deductible facilities must
be voluntarily accepted in writing by the
employee; and
c. Facilities must be charged at reasonable
value. [SLL International Cable Specialists
v. NLRC, G.R. No. 172161 (2011)]
“Customary” means long-established and
constant practice connoting regularity. [Millares
v. NLRC & PICOP, G.R. No. 122827 (1999)]
Computation
Value of Facilities = Cost of Operation and
maintenance + Adequate depreciation +
reasonable allowance (not more than 5.5%
interest on the depreciated amount of capital
invested by the employer)
If the fair rental value is lower than the
computed value, fair rental value will be used.
[Rule VII-A, Sec. 6]
c. Bonus, 13th Month Pay
BONUS
LABOR LAW
Exception: For a bonus to be enforceable:
1. It must have been promised by the
employer and expressly agreed upon by
the parties; or
2. It must have had a fixed amount and had
been a long and regular practice on the part
of the employer. [American Wire and Cable
Union v. American Wire, G.R. No. 155059,
April 29, 2005]
See also VI.
comprehensive
practices*
D. Bonus for a more
discussion on company
13th MONTH PAY
[PD 851 (The 13th-Month Pay Law) and the
Revised Guidelines on the Implementation of
the 13th Month Pay Law]
Coverage
General Rule: ALL EMPLOYERS are hereby
required to pay all their rank and file
employees a 13th month pay not later than
Dec 24 of every year, Provided that they have
worked for at least one (1) month during a
calendar year. [Memorandum Order No. 28]
N.B.: The law distinguishes managerial
employees from rank-and-file employees;
hence, managerial employees are not legally
entitled to 13th month pay.
Exempted Employers:
a. Government, its political subdivisions,
including GOCCs except those operating
essentially as private subsidiaries of the
Government;
b. Employers already paying their employees
a 13th month pay or more in a calendar
year or its equivalent at the time of this
issuance; and
c. Employers of those who are paid on purely
commission, boundary or task basis and
those who are paid a fixed amount for
performing specific work, irrespective of
the time consumed in the performance
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thereof (except those workers who are paid
on piece~rate basis, in which case their
employer shall grant them 13th month pay).
Notes:
“Equivalent” of a 13th month pay includes:
a. Christmas bonus, mid-year bonus, cash
bonuses; and
b. Other payments amounting to not less than
1/12 of the basic salary
But shall NOT INCLUDE cash and stock
dividends, cost of living allowances and all
other allowances regularly enjoyed by the
employee, as well a non-monetary benefits.
Workers paid on a piece-rate basis – 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. Their employer shall grant
them 13th month pay.
Minimum Amount
1/12 of the total basic salary earned by an
employee within a calendar year.
Base Amount
General Rule: basic salary shall include:
a. Cost of living allowances (COLA)
integrated into the basic salary of a
covered employee pursuant to EO 178.
b. All remunerations or earnings paid by this
employer for services rendered.
Excluding the 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. Unused vacation and sick leave credits,
2. Overtime,
3. Premium,
4. Night differential,
5. Holiday pay and, and
6. Cost-of-living allowances.
Exception: A company practice favorable to
the employees had indeed been established if
for a considerable length of time, the employer
had freely, voluntarily and continuously
included in the computation of its employees'
thirteenth month pay, the payments for sick,
vacation and maternity leaves, premiums for
LABOR LAW
work done on rest days and special holidays,
and pay for regular holidays. Thus, the
payments made pursuant thereto, ripened into
benefits enjoyed by the employees, and any
benefit and supplement being enjoyed by them
cannot be reduced, diminished, discontinued
or eliminated by the employer. [Davao Fruits
Corp. v. ALU, G.R. No. 85073 (1993)]
Time of payment
General Rule: paid not later than Dec 24 of
each year.
Exception: ER may give to his employees half
(½) of the required 13th Month Pay before the
opening of the regular school year and the
other half on or before the 24th of December
every year.
The frequency of payment of this monetary
benefit may be the subject of agreement
between the employer and the recognized CBA
of the employees.
Rationale behind 13th Month Pay
a. To further protect the level of real wages
from the ravage of world-wide inflation;
b. There had been no increase in the legal
minimum wage rates since 1970;
c. The Christmas season is an opportune
time for society to show its concern for the
plight of the working masses so they may
properly celebrate Christmas and New
Year. [Whereas clauses of PD 851]
13th Month Pay in Special Cases
a. Paid by Results: Employees who are paid
on piece work basis are, by law, entitled to
the 13th Month Pay. [Revised Guidelines
on the Implementation of the 13th Month
Pay Law]
b. Fixed or Guaranteed Wage: Employees
who are paid a fixed or guaranteed wage
plus commission are entitled to 13th month
pay (not purely commission); the basis for
computation shall be both their fixed or
guaranteed wage and commission.
[Revised Guidelines]
c. Those
with
Multiple
Employers:
Government Employees working part time
in a private enterprise, including private
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educational institutions, as well as
Employees working in two or more private
firms, whether on full or part time bases,
are entitled to the required 13th Month
Pay from all their private Employers
regardless of their total earnings from each
or all their employers. [Revised Guidelines]
d. Private School Teachers: Private school
teachers, including faculty members of
universities and colleges, are entitled to the
required 13th month pay, regardless of the
number of months they teach or are paid
within a year, if they have rendered service
for at least one (1) month within a year.
[Revised Guidelines]
Overload pay is NOT included in the
computation for 13th month pay; overload is
not overtime as it is additional work done
within the normal shift. [Letran Calamba
Faculty v. NLRC, G.R. No. 156225 (2008)]
e. Resigned or Separated Employee: An
Employee who has resigned or whose
services were terminated at any time
before the time for payment of the 13th
month pay is entitled to this monetary
benefit in proportion to the length of time he
worked during the year, reckoned from the
time he started working during the calendar
year up to the time of his resignation or
termination
from
service.
[Revised
Guidelines]
f.
Terminated Employees: The payment of
the 13th month pay may be demanded by
the employee upon the cessation of
employer-employee relationship. [Archilles
Manufacturing Corp. v. NLRC, G.R. No.
107225 (1995)]
Additional Rules
a. Commissions: If the commissions may be
properly considered part of the basic
salary, then they should be INCLUDED. If
they are not an integral part of the basic
salary, then they should be EXCLUDED.
[Phil. Duplicators Inc. v. NLRC, G.R. No.
110068 (1995)]
b. Substitute Payment not allowed:
Benefits in the form of food or free
LABOR LAW
electricity, assuming they were given, were
not a proper substitute for the 13th month
pay required by law. Neither may year-end
rewards for loyalty and service be
considered in lieu of 13th month pay.
[Framanlis Farms, Inc. v. MOLE, G.R. No.
72616-17 (1989)]
c. Wage Difference: The difference between
the minimum wage and the actual salary
received by the Employee cannot be
deemed as his 13th month pay as such
difference is not equivalent to or of the
same import as the said benefit
contemplated by law. [JPL Marketing
Promotions v. CA, G.R. No. 151966
(2005)]
d. 14th Month Pay is not mandated:
Employers already paying their employees
a 13th month pay or its equivalent are not
covered by this Decree. [Kamaya Point
Hotel v. NLRC, G.R. No. 75289 (1989)]
e. Non-inclusion in regular wage: The
mandated 13th month pay need not be
credited as part of regular wage of
employees for purposes of determining
overtime and premium pays, fringe benefits
insurance fund, Social Security, Medicare
and private retirement plans. [Revised
Rules]
Commissions vis-à-vis 13th month pay
The Rule on Productivity Bonuses.
“Productivity bonuses” have no clear direct or
necessary relation to the amount of work
actually done by each individual employee. If
an employer cannot be compelled to pay a
productivity bonus to its employees, it should
follow that such productivity bonus, when
given, should not be deemed to fall within the
“basic salary” of employees when the time
comes to compute their 13th month pay. [BoieTakeda v. de la Serna, G.R. No. 92174 and
G.R. No. L-102552 (1993)]
The sales commission earned by the salesmen
who make or close a sale constitute part of the
compensation or remuneration paid to
salesmen for serving as salesmen, and hence
as part of the “wage” or salary of petitioner’s
salesmen. The sale commissions were an
integral part of the basic salary structure used
as the base amount for the computation of 13th
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month pay. [Phil. Duplicators v. NLRC, G.R.
No. 110068 (1995)]
CBA vis-à-vis 13th month pay
P.D. No. 851 is specific and mandatory.
However, if the employers actually grant such
13th month pay in the monetary benefits
provided for in the CBA, they could be
exempted from the operation of the decree. To
be exempted, there must be actual payment.
[Marcopper Mining Corp. v. Ople, G.R. No. L51254 (1981)]
Effect of Deficiency in 13th month pay
An employer who pays less than 1/12th of the
employees’ basic salary as their 13th month
pay is only required to pay the difference.
[Revised Rules]
LABOR LAW
Exceptions:
a. Those of the government and any of the
political subdivision, including governmentowned and controlled corporation;
b. Those of retail and service establishments
regularly employing less than 10 workers;
c. Domestic helpers and persons in the
personal service of another;
d. Managerial employees and officers or
members of the managerial staff as defined
in Book III;
e. Field personnel and other employees
whose time and
performance is
unsupervised by the employer including
those who are engaged on task or contract
basis, purely commission basis, or those
who are paid a fixed amount for performing
work irrespective of the time consumed in
the performance thereof. [Sec. 1, Rule IV]
d. Holiday Pay
Holiday pay is a one-day pay given by law to
an employee, even if he does not work on a
regular holiday. This gift of a day’s pay is
limited to each of the 12 regular holidays.
Note: Art. 94 (c), was superseded by E.O. 203,
which was subsequently amended by RA
9177, 9256, 9492, and 9849. The current state
of the law is discussed below.
Coverage
General Rule: All employees [Art. 94(a); Rule
IV, Sec. 1]
Retail Establishment is one principally
engaged in the sale of goods to end-users for
personal or household use.
Service Establishment is one principally
engaged in the sale of service to individuals for
their own or household use and is generally
recognized as such. [RA 6727 (The Wage
Rationalization Act) IRR]
Regular holidays
RA 9492 and 9849 (which added the two
Muslim holidays) provide for the observance of
the following regular holidays:
1. New Year’s Day – Jan. 1
2. Maundy Thursday – Movable date
3. Good Friday – Movable date
4. Araw ng Kagitingan – Monday nearest Apr.
9
5. Labor Day – Monday nearest May 1
6. Independence Day – Monday nearest June
12
7. Eid’l Fitr – Movable date
8. Eid’l Adha – Movable date
9. National Heroes Day – Last Monday of
August
10. Bonifacio Day – Monday nearest Nov. 30
11. Christmas Day – Dec. 25
12. Rizal Day – Monday nearest Dec. 30
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Special (Non-Working Days)
RA 9492 and RA 10966 provide for the
observance of the following special holidays:
1. Ninoy Aquino Day – Monday nearest Aug.
21
2. All Saints Day – Nov. 1
3. Immaculate Conception of Mary [RA
10966] – Dec. 8
4. Last day of the year – Dec. 31
Note: Proclamation 269 fixed the data for the
observance of the regular and special holidays
including additional special holidays for 2018
and 2019
The dates for Eid’l Fitr and Eid’l Adha (special
holidays) shall follow after approximate dates
of the Islamic holidays have been determined.
Arts. 169-173, P.D. 1083 (Code of Muslim
Personal Laws)
Specifically for the Muslim Areas, P.D. 1083, in
its Book V, IRR Title, recognizes five (5) Muslim
Holidays, namely:
1. Amun Jadid (New Year) which falls on the
first (1st) day of the lunar month of
Muharram;
2. Mauli-un-Nabi (Birthday of the Prophet
Muhammad) which falls on the twelfth
(12th) day of the third (3rd) lunar month of
Rabi-ul-Awwal;
3. Lailatul Isra Wal Mi Rai (Nocturnal Journey
and
Ascencion
of
the
Prophet
Muhammand) which falls on the twentyseventh (27th) day of the seventh (7th)
lunar month of Rajab;
4. Id-ul-Fitr (Hari Raja Pausa) which falls on
the first (1st) day of the tenth (10th) lunar
month of Shawwal commemorating the
end of the fasting season; and
5. Id-ul-Adha (Hari Raha Haji) which falls on
the tenth (10th) day of the twelfth (12th)
lunar month of Dhu’l-Hijja.
Notes:
1. Id-ul-Fitr (Eid’l Fitr) and Id-ul-Adha (Eid’l
Adha) have been added to the list of
national legal holidays [RA 9849].
2. There should be no distinction between
Muslims & non-Muslims as regards to
the payment of benefits for Muslim
holidays. Wages & other emoluments
LABOR LAW
granted by law to the workingman are
determined on the basis of the criteria laid
down by laws, and not on worker’s faith.
Art. 3(3), PD 1083 states that nothing
herein shall be construed to operate to the
prejudice of a non-Muslim. [San Miguel
Corp v. CA, G.R. No. 146775 (2002)]
Holiday pay computation [Art. 94; Rule IV,
Book III, IRR; RA 9424; DOLE Memorandum
Circular 1 Series of 2004]
General Rule: An employer may require an
employee to work on a regular holiday but such
employee shall be paid a compensation
equivalent to twice his regular rate. If an
employee is required to work on a special
holiday, the additional compensation should be
30% of his regular rate.
Work on
holiday
Work on a
Regular
Holiday
(WRH)
Computation
WRH = Regular wage x
200%
Note: The employer may
require an employee to work
on any holiday but such
employee shall be paid a
compensation equivalent to
twice his regular rate [Art.
94(b)]
Overtime on OTRH = Hourly wage x
a Regular
260% x number of hours
Holiday
of OT work
(OTRH)
Note: Work performed
beyond eight hours on a
holiday or rest day shall be
paid an additional
compensation equivalent to
the rate of the first eight
hours on a holiday or rest
day plus at least thirty
percent (30%) thereof. [Art.
87]
200% of regular daily wage
(for the 1st 8 hours)+ 60% of
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hourly rate on said day
[260%]
Work on
Regular
Holiday
which falls
on a Rest
Day
(WRHRD)
WRHRD = Regular wage x
260%
Note: Where an employee is
made or permitted to work
on his scheduled rest day,
he shall be paid an
additional compensation of
at least 30% of his regular
wage. [Art. 93(a)]
200% of regular daily wage
+ 60% (which is 30% of
200%) [260%]
Overtime on
Regular
Holiday
which falls
on a Rest
Day
(OTWRHRD)
OTWRHRD = Hourly Rate
x 338% x number of hours
of OT
Work on
Special
Holiday
(WSH)
WSH = Regular wage x
130%
Note: Regular holiday-onrest day rate (200% of
regular daily wage plus 30%
of such amount) + 30% of
hourly rate on said day.
[338%]
LABOR LAW
which falls
on a Rest
Day
(WSHRD)
Note: Where such holiday
work falls on the employee’s
scheduled rest day, he shall
be entitled to an additional
compensation of at least
50% of his regular wage.
Regular daily wage + 50%
thereof [150%]
Overtime
during Work
on Special
Holiday
which falls
on a Rest
Day
(OTWSHRD)
OTWSHRD = Hourly wage
x 195% x number of hours
of OT work
Note: 45% (which is 30% of
150%) + 150% [195%]
According to DOLE Memo Circular 1-04, a
“special holiday”/”special day” includes the
National Special Days, and declared special
days such as Special Non-working Holiday,
Special Public Holiday and Special National
Holiday. Such days are entitled to the rates
prescribed above. These days are not the
same as a special working holiday.
A special working holiday is considered an
ordinary working day, so there is no premium
pay.
Note: Work performed on
any special holiday shall be
paid an additional
compensation of at least
30% of the regular wage of
the employee. [Art. 93(c)]
Regular daily wage + 30%
thereof [130%]
Overtime
during Work
on Special
Holiday
(OTWSH)
OTWSH = Hourly wage x
169% x number of hours
of OT work
Work on
Special
Holiday
WSHRD = Regular wage x
150%
Note: 130% of regular daily
wage + 39 (which is 30% of
130%) [169%]
Double holiday pay
According to “DOLE Explanatory Bulletin on
Worker’s Entitlement to Holiday Pay on 9 April
1993,” if two holidays fall on the same day:
a. If unworked, 200% of basic wage.
b. If worked, 300% of basic wage. [Azucena]
Double Holiday Rule for Monthly-paid
employees
For covered employees whose monthly
salaries are computed based on 365 days and
for those other employees who are paid using
factor 314, or 262, or any other factor which
already considers the payment for the 11 [now
12] regular holidays, NO additional payment is
due them. [BWC-WHSD Opinion No. 053, s.
1998]
Successive holiday pay
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According to IRR, Rule IV, Sec. 10, an
employee is entitled to holiday pay for both
days, IF:
a. He is present on day immediately
preceding first holiday; or
b. He works on first holiday, which entitles him
to pay on second holiday.
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he worked
on the day immediately preceding the nonworking day or rest day. [Sec. 6, Rule IV, Book
III, IRR]
Divisors
The divisor assumes an important role in
determining whether or not holiday pay is
already computed.
a. Monthly paid employees are not entitled to
the holiday pay if their total annual income
is divided by 365 days resulting in a wage
which is beyond the minimum wage per
day because they are considered paid
everyday of the year including holidays,
rest days, and other non-working days.
b. As a general rule, for a company with a 6day working schedule, the divisor 313
already means that the legal holidays are
included in the monthly pay of the
employee. The divisor is arrived at by
subtracting all Sundays from the total
number of calendar days in a year.
c. As a general rule for a company with a 5day working schedule, the divisor 277
means that the holiday pay is already
included in the monthly salary of the
employee. [Trans Asia Phils. v. NLRC,
G.R. No. 118289 (1999)]
An increase in the divisor that results in the
prejudice of the employees is a violation of the
proscription against non-diminution of benefits
under Sec. 100 of the Labor Code. Such
increases should only be used for
computations which would be advantageous to
the employer (i.e. deduction for absences) and
not for computations which would diminish the
existing benefits of the employees (i.e.,
LABOR LAW
overtime pay, holiday pay and leave
conversions). [Trans Asia Phils. v. NLRC,
supra]
Sundays
(See “Work on a Sunday or holiday which is
also a scheduled rest day”)
a. When a holiday falls on a Sunday, the
following Monday will not be considered a
holiday unless a proclamation says so.
b. A legal holiday falling on a Sunday does not
create a legal obligation to pay extra, aside
from the usual holiday pay, to monthly-paid
employees. [Azucena, citing Letter of
Instruction No. 1087]
No provision of law requires any employer to
make adjustments in the monthly salary rate
set by him to take account of legal holidays
falling on Sundays in a given year, otherwise to
reckon a year at more than 365 days.
[Wellington Investment and Manufacturing
Corporation v. Trajano, G.R. No. 114698
(1995)]
Non-working/scheduled rest day
Where the day immediately preceding the
holiday is a non-working day in the
establishment or the scheduled rest day of the
employee, he shall not be deemed to be on
leave of absence on that day, in which case he
shall be entitled to the holiday pay if he
worked on the day immediately preceding
the non-working day or rest day. [Sec. 6(c),
Rule IV, Book III, IRR]
Example:
If a holiday falls on Monday, and Sunday is a
non-working day in the establishment or is the
scheduled rest day of the employee, the
employee shall be entitled to holiday pay if he
worked on Saturday (which is the day
immediately preceding Sunday, the nonworking day or rest day).
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Right to holiday pay in case of absences
If an employee is on leave of absence with pay
on the day immediately preceding a regular
holiday, he is entitled to holiday pay. [Sec. 6(a),
Rule IV, Book III, IRR]
If an employee is on leave of absence without
pay on the day immediately preceding a
regular holiday, he is not entitled to holiday pay
unless he works on such regular holiday. [Sec.
6(a), Rule IV, Book III, IRR]
In case of temporary cessation of work
a. In cases of temporary or periodic shutdown
and temporary cessation of work of an
establishment, as when a yearly inventory
or when the repair or cleaning of
machineries and equipment is undertaken,
the regular holidays falling within the
periods shall be compensated in
accordance with this Rule.
b. The regular holiday during the
cessation of operation of an enterprise
due to business reverses as authorized
by the Secretary of Labor may not be paid
by the employer. [Sec. 7, Rule IV, Book III,
IRR]
An employee is entitled to holiday pay for the
regular holidays falling within the period in
cases of temporary shutdowns or cessation of
work, when:
a. An annual inventory; or
b. Repair or cleaning of machineries and
equipment is undertaken.
The employer may not pay his employees for
the regular holidays during the suspension of
work if: the cessation of operation is due to
business reverses, and is authorized by the
Secretary of Labor.
Teachers, Piece Workers, Seafarers,
Seasonal Workers, Etc.
a. Private school teachers, including faculty
members of colleges and universities, may
not be paid for the regular holidays during
semestral vacations. They shall, however,
be paid for the regular holidays during
Christmas vacation;
b. Where a covered employee, is paid by
results or output, such as payment on
LABOR LAW
piece work, his holiday pay shall not be less
than his average daily earnings for the last
seven (7) actual working days preceding
the regular holiday; Provided, However,
that in no case shall the holiday pay be less
than the applicable statutory minimum
wage rate.
c. Seasonal workers may not be paid the
required holiday pay during off-season
when they are not at work
d. Workers who have no regular working days
shall be entitled to the benefits provided in
this Rule. [Sec. 8, Rule IV, Book III, IRR]
Holiday Pay of Hourly-Paid Faculty
Members
Not Entitled: Regular Holiday Pay
Entitled: Regular hourly rate on days declared
as special holidays or for some reason classes
are called off or shortened for the hours they
are supposed to have taught, whether
extensions of class days be ordered or not; in
case of extensions said faculty members shall
likewise be paid their hourly rates should they
teach during said extensions.
a. They are not entitled to payment of
holiday pay because they are paid only for
work actually done. Since regular
holidays are known to both the school and
faculty members as “no class day”;
certainly the latter do not expect payment
for said unworked holidays.
b. They are entitled to their hourly rate on
days declared as special holidays. When
a special public holiday is declared, the
faculty member paid by the hour is
deprived of expected income, and it does
not matter that the school calendar is
extended in view of the days or hours lost,
for their income that could be earned from
other sources is lost during the extended
days.
c. Similarly, when classes are called off or
shortened on account of typhoons, floods,
rallies, and the like, these faculty members
must likewise be paid, whether or not
extensions are ordered. [Jose Rizal
College v. NLRC, G.R. No. L-65482
(1987)]
Piece workers
The philosophy underlying the exclusion of
piece workers from the 8-hour law is that said
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workers are paid depending upon the work
they do irrespective of the amount of time
employed in doing said work. [Red V Coconut
Products Ltd. v. CIR, G.R. No. L-21348 (1966)]
Seafarers
Any hours of work or duty including hours of
watch-keeping performed by the seafarer on
designated rest days and holidays shall be paid
rest day or holiday pay. [Sec. 11.C, Standard
Terms and Conditions Governing the
Employment of Filipino Seafarers on Board
Ocean-Going Vessels]
LABOR LAW
management and employee is that a "fair day's
wage for a fair day's labor." It is hardly fair or
just for an employee or laborer to fight or litigate
against his employer on the employer's time.
[Sugue v. Triumph International, G.R. No.
164804 (2009)]
Exception: When the laborer was able,
willing and ready to work but was illegally
locked out, suspended or dismissed, or
otherwise illegally prevented from working.
[Sugue v Triumph International, supra]
d. Non-diminution of benefits
Seasonal workers
Seasonal workers who do not work during offseason are not entitled to pay for the regular
holidays occurring during their off-season.
Workers assigned to “skeleton crews” that
work during the off-season have the right to be
paid on regular holidays falling in that duration.
General Rule: There is a prohibition against
elimination or diminution of benefits. [Art. 100]
No wage order issued by any regional board
shall provide for wage rates lower than the
statutory minimum wage rates prescribed by
Congress. [Art. 127, as amended by RA 6727]
2. Principles
a. No work, no pay
General Rule: If there is no work performed by
the employee, there can be no wage or pay.
Exception: Unless the laborer was able,
willing and ready to work but was prevented by
management or was illegally locked out,
suspended or dismissed. [Azucena, citing
Philippine Airlines v. NLRC, G.R. No. 55159,
June 22, 1989]
b. Equal pay for equal work
Employees working in the Philippines, if they
are performing similar functions and
responsibilities
under
similar
working
conditions, should be paid equally. If an
employer accords employees the same
position and rank, the presumption is that these
employees perform equal work. [International
School Alliance of Educators v. Hon.
Quisumbing, G.R. No. 128845 (2000)]
c. Fair wage for fair work
General Rule: The age-old rule governing the
relation between labor and capital or
Requisites
If the following are met, then the employer
cannot remove or reduce benefits [Vergara Jr.
v. Coca-Cola Bottlers Phils, G.R. No. 176985
(2013)]:
1. Ripened company policy – Benefit is
founded on a policy which has ripened into
a practice over a long period;
2. Practice is consistent and deliberate; and
3. Not due to error in the construction or
application of a doubtful or difficult question
of law. [Globe Mackay Cable v. NLRC,
G.R. No. L-74156 (1988)]
4. The diminution or discontinuance is done
unilaterally by the employer.
See also VI. D. Bonus.
When not applicable: At least one of the
requisites is absent.
a. Mistake in the application of the law [Globe
Mackay Cable v. NLRC, supra.]
b. Negotiated benefits [Azucena]
c. Reclassification of Positions – e.g. loss of
some benefits by promotion.
d. Contingent or Conditional Benefits – the
rule does not apply to a benefit whose grant
depends on the existence of certain
conditions, so that the benefit is not
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demandable if those preconditions are
absent.
Benefits initiated through negotiation between
Employee and Employer, e.g. CBA, can only
be eliminated or diminished bilaterally.
3. Minimum Wage
Definition - “Statutory minimum wage” is the
lowest wage fixed by law that an employer can
pay his workers. [Rules Implementing RA
6727]
Payment of statutory minimum wage is
mandatory
Lack of funds is not a valid defense from paying
the statutory minimum wage, which is a
mandatory statutory obligation. To uphold such
defense of lack of available funds would render
the Minimum Wage Law futile and defeat its
purpose. [De Racho v. Municipality of Ilagan,
G.R. No. L-23542, January 2, 1968]
a. Payment by hours worked
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 the Regional Tripartite
Wages and Productivity Boards. [Art. 99]
See III. A. 1. Hours of work.
LABOR LAW
whether the employees in any industry or
enterprise are being compensated in
accordance with the minimum wage
requirements of this Rule.
b. The basis for the establishment of rates for
piece, output, or contract work shall be the
performance of an ordinary worker of
minimum skill or ability.
c. An ordinary worker of minimum skill or
ability is the average worker of the lowest
producing group representing 50% of the
total number of employees engaged in
similar employment in a particular
establishment,
excluding
learners,
apprentices and handicapped workers
employed therein.
d. Where the output rates established by the
employer do not conform with the
standards prescribed herein, or with the
rates prescribed by the DOLE in an
appropriate order, the employees shall be
entitled to the difference between the
amount to which they are entitled to receive
under such prescribed standards or rates
and that actually paid them by the
employer. [Sec. 8, Rule VII-A, Book III,
IRR]
From the above rules, piece rate workers may
be categorized into two:
1. Those who are paid piece rates which are
prescribed in Piece Rate Orders issued by
DOLE.
Wages or earnings in this category are
determined by simply multiplying the
number of pieces produced by the rate per
piece. [Azucena]
b. Payment by results
The Secretary of Labor and Employment shall
regulate the payment of wages by results,
including pakyao, piecework, and other nontime work, in order to ensure the payment of
fair and reasonable wage rates, preferably
through time and motion studies or in
consultation with representatives of worker’s
and employer’s organizations. [Art. 101]
Basis of output pay rate
a. On petition of any interested party, or upon
its initiative, the Department of Labor shall
use all available devices, including the use
of time and motion studies and consultation
with representatives of employers’ and
workers’ organizations, to determine
These workers are not covered by the Rule
on Hours of Work which provides for
premium and overtime payments.
See III. A. 1. a. Principles in determining
hours worked and employees exempted or
not covered for more details.
2. Those who are paid output rates which are
prescribed by the employer and are not yet
approved by the DOLE.
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The number of pieces produced is multiplied by
the rate per piece as determined by the
employer.
1. If the resulting amount is equivalent to or
more than the applicable statutory
minimum daily rate in relation to the
number of hours worked, the worker will
receive that amount.
2. If the amount is less than the applicable
legal rate, it is possible that the rates per
piece are not in accordance with the
standards prescribed by the rules
implementing the Labor Code. The
employer is thus required by law to pay the
difference between the resulting amount
and the applicable legal minimum wage
rate. [Azucena]
4. Payment of wages
LABOR LAW
When payment through check, postal
orders or money orders is allowed:
a. When payment is customary (on the date
of Code effectivity);
b. Where it is so stipulated in a collective
agreement;
c. Where all of the following conditions are
met:
1. Bank/Facility for encashment is within
1-km radius from the workplace
2. ER did not receive any pecuniary
benefit because of said arrangement
3. EEs are given reasonable time during
banking hours to withdraw their wages
(compensable hours, if during working
hours)
4. The payment by check is with the
written consent of the EEs concerned,
in the absence of a CBA. [Sec. 2, Rule
VIII]
a. Form of Payment [Art. 102;
Secs. 1-2, Rule VIII, Book III,
IRR]
b. Time of Payment [Art. 103; Sec.
3, Rule VIII, Book III, IRR]
General Rule: Legal Tender Only
Time of Payment
Exception: Check/Money Order if customary
OR
necessary
because
of
special
circumstances, as specified by the Secretary of
Labor or the CBA.
Not allowed:
1. Promissory Notes
2. Vouchers
3. Tokens
4. Tickets
5. Chits; or
6. Any other form alleged to represent a legal
tender, even when expressly requested by
the employee. [Art. 102]
Frequency
At least once every 2
weeks or 2x per month
Intervals
Must not be more than
16 days
Force Majeure or
circumstances
beyond ER’s
control
Valid excuse for
delayed payment
Tasks which
cannot be
completed in 2
weeks
Payments should be
made with intervals
not more than 16
days, in proportion to
work completed
BUT ER must pay
immediately after
cessation and not less
than once a month
Final settlement is
made upon completion
of the work.
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c. Place of Payment [Art. 104; Sec.
4, Rule VIII, Book III, IRR]
General Rule: Shall be made at or near the
place of undertaking (workplace).
Exceptions:
1. Deterioration of peace and order
conditions, or by reason of actual or
impending emergencies (fire, flood,
epidemic);
2. Free transportation to the employees back
and forth;
3. Under any other analogous circumstances
provided, that the time spent by the
employees in collecting their wages shall
be considered as compensable hours
worked.
NO PAYMENT in any bar, night or day club,
drinking establishment, massage clinic, dance
hall, or other similar places or in places where
games are played with stakes of money or
things representing money, except in the case
of persons employees in such places
Condition for ATM payment [Labor
Advisory on Payment of Salaries thru ATM
(1996)]
1. ATM system of payment is with the written
consent of the EEs.
2. EEs are given reasonable time to withdraw
their wages from the banking facility
(compensable hours, if during work hours).
3. System shall allow workers to receive their
wages within
the
period/frequency
provided by law.
4. There is a bank/ATM facility within 1km
radius from the place of work.
5. Upon request of the concerned EEs, the
ER shall issue a record of payment of
wages, benefits and deductions for a
particular period.
6. There shall be no additional expenses and
no diminution of benefits and privileges.
7. The ER shall assume responsibility in case
the wage protection provisions of law and
regulations are not complied with under the
arrangement.
d. Person to Pay [Sec. 5, Rule VIII,
Book III, IRR]
General Rule: Directly to EE
Exceptions:
1. Member of EE’s family → if ER is
authorized in writing by the EE.
2. A 3rd person → if authorized by law (e.g.
insurance companies for premiums, union
dues where the right to check-off has been
recognized by ER in accordance with a
CBA or authorized in writing by EE
concerned).
3. Heirs → in case of death of EE, without
necessity of intestate proceedings.
a. If heirs are of age → they shall execute
an affidavit attesting to their
relationship to the deceased and the
fact that they are his heirs to the
exclusion of others
b. If any of the heirs is a minor → such
affidavit shall be executed in his behalf
by his natural guardian or next of kin.
When the employer engages the services of an
organized group of workers, payment to their
leader cannot be considered a violation of the
rule on direct payment. [Bermiso v. Escano,
G.R. No. L-11606 (1959)]
5. Prohibitions regarding wages
a. Interference in disposal of wages [Art. 112]
b. Wage deduction [Art. 113]
c. Requirement to make deposits for loss or
damage [Arts. 114-115]
d. Withholding of wages [Art. 116]
e. Deduction to ensure employment [Art. 117]
f. Retaliatory measures [Art. 118]
g. False reporting [Art. 119]
a. Prohibition against Interference
in Disposal of Wages
No employer shall:
1. Limit or otherwise interfere with the
freedom of any employee to dispose of his
wages
2. Force, compel, or oblige his employees to:
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a. Purchase merchandise, commodities
or other property from any other
person; or
b. Make use of any store or services of
such employer or any other person.
[Art. 112]
LABOR LAW
Note: RA 10142 (FRIA) subsequently
amended Art. 2244, CC and Art. 110 by
elevating trade-related claims to 1st priority.
c. Prohibition Against
Requirement to Make Deposits
for Loss or Damage [Art. 114,
115]
b. Prohibition against Wage
Deduction [Art. 113]
General Rule: ER cannot make any deduction
from the wages of his EE.
Exceptions:
1. Insurance premiums
2. Union dues
3. Other
deductions
authorized
by
law/Secretary of Labor [e.g. SSS,
withholding tax]
4. When the deductions are with written
authorization of the employees for payment
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. [Labor
Advisory No. 11 (2014)]
If the law prohibits a deduction, the
authorization given by the employee does not
validate the deduction.
In case of Bankruptcy or Liquidation of an
ER’s business
Workers shall enjoy first preference as regards
their wages and other monetary claims, any
provision
of
law
to
the
contrary
notwithstanding. Such unpaid wages and
monetary claims shall be paid in full before the
claims of the Government and other creditors
may be paid. [Art. 110]
Article 110 of the Labor Code has modified
Article 2244 of the Civil Code in two respects:
1. Firstly, by removing the one year
limitation found in Article 2244, number 2;
and
2. Secondly, by moving up claims for unpaid
wages of laborers or workers of the
Insolvent from second priority to first
priority in the order of preference
established I by Article 2244. [Republic v.
Peralta, G.R. 150537 (1987)]
General Rule: No employer shall require his
worker to make deposits from which
deductions shall
be made for
the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the
employer
Exception: It is allowed when the employer is
engaged in such trades, occupations or
business where the practice of making
deductions or requiring deposits is:
1. A recognized one, or is necessary; or
2. Desirable as determined by the Secretary
of Labor and Employment in appropriate
rules and regulations. [Art. 114]
No deduction from the deposits of an EE for the
actual amount of the loss/damage shall be
made unless:
1. There is reasonable opportunity for EE to
show cause why deduction should not be
made;
2. EE’s responsibility has been clearly shown
3. Amount is fair and reasonable and shall not
exceed the actual loss of damage; and
4. Must not exceed 20% of weekly pay. [Art.
115; Rule VIII, Sec. 11]
Attorney’s fees in any judicial or administrative
proceedings for the recovery of wages shall not
exceed 10% of the amount awarded.
d. Prohibition Against Withholding
of Wage
General Rule: It shall be unlawful for any
person, directly or indirectly, to:
1. Withhold any amount from the wages of a
worker or;
2. Induce him to give up any part of his wages
by force, stealth, intimidation, threat or by
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any other means whatsoever without the
worker’s consent. [Art. 116]
e. Prohibition Against 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 in employment.
[Art. 117]
Prohibition Against Retaliatory
Measures
It shall be unlawful for an employer to:
a. Refuse to pay or reduce the wages and
benefits
b. Discharge, or
c. Discriminate in any manner against
any employee who has filed any complaint or
instituted any proceeding under this Title or
has testified or is about to testify in such
proceedings. [Art. 118]
This covers offenses only under the title of
Wages in the Labor Code.
g. Prohibition Against False
Reporting
It shall be unlawful for any person to make any
statement, report, or record filed or kept
pursuant to the provisions of this Code knowing
such statement, report or record to be false in
any material respect. [Art. 119]
Covers all offenses under the Labor Code.
6. Wage determination
a. Wage order
Exceptions:
1. Deduction is for insurance premium
2. For union dues
3. Authorized by law/ DOLE Sec
4. Due & demandable debt to ER
f.
LABOR LAW
Wage Order (WO) – an order issued by the
Regional Tripartite Wages and Productivity
Boards (“Regional Boards”) that establishes
the minimum wage rates to be paid by ERs in
the region, which shall in no case be lower than
the applicable statutory minimum wage rates.
[NWPC Rules of Procedure on Minimum Wage
Fixing].
State Policy
It is hereby declared the policy of the State to:
1. Rationalize the fixing of minimum wages
2. Promote productivity-improvement and
gain-sharing measures to ensure a decent
standard of living for the workers and their
families;
3. To guarantee the rights of labor to its just
share in the fruits of production;
4. To enhance employment generation in the
countryside through industry dispersal;
5. To allow business and industry reasonable
returns on investment, expansion and
growth. [Sec. 2, Wage Rationalization Act
(RA 6727)]
Powers & Functions of the Regional Board
1. To determine and fix minimum wage rates
applicable in their region, provinces or
industries therein
2. To issue the corresponding wage orders,
subject to guidelines issued by the
Commission [Art. 122]
Wage fixing takes place whenever the
conditions in the region so warrant, after
investigating and studying all pertinent facts
and based on the standards and criteria
prescribed by the Labor Code. [Art. 123, as
amended by RA 6727]
Standards/Criteria in Wage Fixing
a. The demand for living wages;
b. Wage adjustment vis-a-vis the consumer
price index;
c. The cost of living and changes or increases
therein;
d. The needs of workers and their families;
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e. The need to induce industries to invest in
the countryside;
f. Improvements in standards of living;
g. The prevailing wage levels;
h. Fair return of the capital invested and
capacity to pay of employers;
i. Effects on employment generation and
family income; and
j. The equitable distribution of income and
wealth along the imperatives of economic
and social development. [Art. 124, as
amended by RA 6727]
WO Effectivity: After 15 days from its
complete publication in at least one newspaper
of general circulation. [Art. 123]
Note: Public hearing and publication are
mandatory [Cagayan Sugar Milling Co. v. Sec.
of Labor, G.R. No. 128399 (1998)].
Frequency: A WO issued by the Board may
not be disturbed for a period of 12 months from
its effectivity and no petition for wage increase
shall be entertained during said period. [Rule
IV, Sec. 4, Revised rules of Procedure on
Minimum Wage Fixing]
Exceptions:
a. When Congress itself issues a law
increasing wages.
b. Supervening conditions (i.e. extraordinary
increases in prices of petroleum products
and basic goods/services.
Appeal: Any party aggrieved by the Wage
Order issued by the Regional Board may
appeal such order to the Commission within
ten (10) calendar days from the publication of
such order. It shall be mandatory for the
Commission to decide such appeal within sixty
(60) calendar days from the filing thereof [Art.
123].
Effect of Appeal
General Rule: Does not operate to stay the
order.
LABOR LAW
affected by the order of the corresponding
increase in the event such order is affirmed
[Art. 123].
Grounds for Appeals for Review of WO
a. Non-conformity with prescribed guidelines
and/or procedure
b. Questions of law
c. Grave abuse of discretion [Sec. 2, Rule V,
Revised Rules of Procedure on Minimum
Wage Fixing]
Double Indemnity Doctrine
Double Indemnity is the payment to a
concerned EE of the prescribed increase or
adjustments in the wage rate which was not
paid by an ER in an amount equivalent to 2x
the benefits owing to such employee.
[Philippine Hoteliers, Inc. v. National Union of
Workers, GR No. 181972 (2009); RA 6727, as
amended]
Unpaid Benefits
The prescribed wage rates which the ER failed
to pay upon the effectivity of a WO, exclusive
of other wage-related benefits.
Unpaid benefits serve as the principal basis for
computing the double indemnity. [Sec. 2, D.O.
No. 10-98]
Wages of apprentices, learners and
handicapped workers shall in no case be less
than 75% of the statutory minimum wage rates.
[Sec. 10, IRR of RA 6727]
METHODS OF FIXING
a. Floor Wage Method- fixing a determinate
amount to be added to the prevailing
statutory minimum wage rates (e.g. setting
P25 increase for min. wage rates).
b. Salary-Ceiling Method- Wage adjustment
to be applied to EEs receiving a certain
denominated salary or workers being paid
more than existing min. wage (e.g. WO
granting P25 increase to those earning up
to P250).
Exception: Party appealing such order shall
file with the Commission an undertaking with a
surety/sureties (surety bond) satisfactory to the
Commission for payment to employees
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LABOR LAW
not by management prerogative. [Bankards
Employees’ Union v. NLRC, G.R. No. 140689
(2004)]
Salary Ceiling
What it does
Adds to previous All wages under a certain
minimum wage
wage increases to that
wage
Example
P456 + P100 = All wages under P456
P556
must be increased to
P556
b. Wage distortion
Wage Distortion/Rectification
A situation where an increase in prescribed
wage rates results in the elimination or severe
contraction
of
intentional
quantitative
differences in wage or salary rates between
and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure
based on skills, length of service, or other
logical bases of differentiation. [Art. 124]
Elements of wage distortion
1. Existing hierarchy of positions with
corresponding salary rates;
2. A significant change in the salary rate of a
lower pay class without a concomitant
increase in the salary rate of a higher one
(must be caused by a wage order)
[Philippine Geothermal Inc. v. Chevron,
G.R. No. 190187 (2018)];
3. The elimination of the distinction between
the two levels; and
4. The existence of the distortion in the same
region of the country. [Prubankers Assn. v.
Prudential Bank and Co., G.R. No. 131247
(1999)]
The implementation of wage orders in one
region but not in others does not in itself
necessarily result in wage distortion.
[Prubankers Assn. v. Prudential Bank and Co.,
G.R. No. 131247 (1999)]
Wage distortion can only exist where the wage
adjustment is brought about by a wage order,
HOW TO RESOLVE WAGE DISTORTION
[Art. 124]
Organized Establishment
a. Employer and the union shall negotiate to
correct the distortions.
b. Disputes shall be resolved through the
grievance procedure.
c. If still unresolved, voluntary arbitration.
Grievance Procedure (under the CBA) → if
unresolved, VOLUNTARY arbitration
Unorganized Establishment
a. ERs and Ees shall endeavor to correct
such distortions.
b. Disputes shall be settled through the
National Conciliation and Mediation Board.
c. If still unresolved after 10 calendar days of
conciliation, it shall be referred to the
appropriate branch of the NLRC –
compulsory arbitration
Both the employer and employee cannot
use economic weapons.
d. Employer cannot declare a lock-out;
Employee cannot declare a strike because
the law has provided for a procedure for
settling
e. The salary or wage differential does not
need to be maintained. [National
Federation of Labor v. NLRC, G.R. No.
103586 (1994)]
National Conciliation and Mediation Board → if
unresolved, COMPULSORY arbitration by the
NLRC
CBA vis-à-vis Wage Orders – CBA
creditability
In determining an employee’s regular wage,
the pertinent stipulations in the CBA are
controlling, provided the result is not less than
the statutory requirement [Philippine National
Bank v. PEMA, G.R. No. L-30279 (1982)]
Note: The manner of resolving wage distortion
is largely based on the applicable wage order.
The current one for NCR, WO 20, refers to the
procedure in Art. 124 of the Labor Code
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The law grants annual SIL of five days to
domestic workers, but their SIL shall not be
converted to cash or carried over to
succeeding years. [Sec. 5, RA 10361]
C. LEAVES
1. Labor Code
a. Service Incentive Leave (SIL)
Coverage
Every employee who has rendered at least one
year of service shall be entitled to a yearly
service incentive leave of five days with pay.
[Art. 95(a)]
Service Incentive Leave DOES NOT apply to
the following employees:
a. Those of the government and any of its
political subdivisions, including GOCCs;
b. Domestic helpers and persons in the
personal service of another;
c. Managerial employees as defined in Book
III of this Code;
d. Field personnel and other employees
whose performance is unsupervised by the
employer including those who are engaged
on task or contract basis, purely
commission basis, or those who are paid a
fixed amount for performing work
irrespective of the time consumed in the
performance thereof;
e. Those who are already enjoying the benefit
herein provided;
f. Those enjoying vacation leave with pay of
at least 5 days;
g. Those employed in establishments
regularly employing less than 10
employees. [Sec. 1, Rule V, Book III, IRR]
Piece-rate employees are entitled to service
incentive leave pay provided that they are
supervised. If they are unsupervised, they are
not entitled to SIL. [Labor Congress of the
Phils. v. NLRC, G.R. No. 123938 (1998)]
Teachers of private school on contract basis
are entitled to service incentive leave. [Cebu
Institute of Technology v. Ople, G.R. No. L58870 (1987)]
Meaning of “1 year of service”
General Rule: "At least one year service" shall
mean service for NOT LESS than 12 months,
whether continuous or broken, reckoned from
the date the employee started working,
including authorized absences and paid
regular holidays.
Exception: Service for LESS than 12 months
is counted as “at least one year service” when:
1. The working days of the establishment, as
a matter of practice or policy, is less than
12 months; or
2. The employment contract provides working
days that is less than 12 months. [Sec. 3,
Rule V, Book III, IRR]
Arbitration or Administrative Action
The grant of benefit IN EXCESS of that
provided herein shall not be made a subject of
arbitration or any court or administrative action.
[Art. 95 (c)]
Commutable nature of benefit
The service incentive leave shall be
commutable to its money equivalent if not used
or exhausted at the end of the year. [Sec. 5,
Rule V, Book III, IRR]
When Entitled EE’s Cause of Action
Accrues
1. If the employee did not make use of said
leave credits but instead chose to avail
of its commutation into money:
The cause of action to claim his SIL pay
accrues from the moment the employer
refuses to remunerate its monetary
equivalent.
2. If the employee wishes to accumulate
his leave credits and opts for its
commutation upon his resignation or
separation from employment:
The cause of 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. [Auto Bus
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Transport v. NLRC, G.R. No. 156367
(2005)]
LABOR LAW
j.
2. Special laws~
a. Parental leave for solo parents
[RA 8972 (Solo Parents’ Welfare Act of 2000)]
Parental leave for solo parents – Leave
benefits granted to a solo parent to enable
him/her to perform parental duties and
responsibilities where physical presence is
required. [Sec. 3 (d), RA 8972]
Coverage
Any solo parent or individual who is left alone
with the responsibility of parenthood due to:
a. Giving birth as a result of rape or and other
crimes against chastity even without a final
conviction of the offender: Provided, That
the mother keeps and raises the child;
b. Death of spouse;
c. Spouse is detained or is serving sentence
for a criminal conviction for at least one (1)
year;
d. Physical and/or mental incapacity of
spouse as certified by a public medical
practitioner;
e. Legal separation or de facto separation
from spouse for at least one (1) year:
Provided, that he/she is entrusted with the
custody of the children;
f. Declaration of nullity or annulment of
marriage as decreed by a court or by a
church: Provided, that he/she is entrusted
with the custody of the children;
g. Abandonment of spouse for at least one (1)
year;
h. Unmarried
father/mother
who
has
preferred to keep and rear his/her
child/children, instead of having others
care for them or give them up to a welfare
institution;
i. Any other person who solely provides
parental care and support to a child or
children: Provided, that he/she is duly
licensed as a foster parent by the
Department of Social Welfare and
Development (DSWD) or duly appointed
legal guardian by the court; and
Any family member who assumes the
responsibility of head of family as a result
of
the
death,
abandonment,
disappearance, or prolonged absence of
the parents or solo parent for at least one
(1) year. [Sec. 3 (a), RA 8972]
Conditions for Entitlement
A solo parent employee shall be entitled to the
parental leave under the following conditions:
a. He/she has rendered at least one (1) year
of service, whether continuous or broken;
b. He/she has notified his/her employer that
he/she will avail himself/herself of it, within
a reasonable period of time; and
c. He/she has presented to his/her employer
a Solo Parent Identification Card, which
may be obtained from the DSWD office of
the city or municipality where he/she
resides. [Sec. 19, Art. V, IRR, RA 8972]
Availment
The parental leave is in addition to leave
privileges under existing laws with full pay,
consisting of basic salary and mandatory
allowances. It shall not be more than seven (7)
working days every year. [Sec. 8, RA 8972]
Grant of 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, further, That
any employer may request exemption from the
above requirements from the DOLE on certain
meritorious grounds. [Sec. 6, RA 8972]
Protection against Work Discrimination
No employer shall discriminate against any
solo parent employee with respect to terms and
conditions of employment on account of his/her
status. [Sec. 7, RA 8972]
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Termination of the Benefit
A change in the status or circumstance of the
parent claiming the benefit under the law, such
that he/she is no longer left alone with the
responsibility of parenthood, shall terminate
his/her eligibility for these benefits. [Sec. 3 (a),
RA 8972]
See III. E. 7. for discussion on other working
conditions for solo parents*
See also VII. E. for discussion on support for
solo parents*
LABOR LAW
the probable date of her childbirth, which
notice shall be transmitted to the SSS in
accordance with the rules and regulations
it may provide. [Sec. 1, Rule VI, IRR of
RA11210]
Maternity leave benefit after termination of
employment possible
General Rule: Maternity leave with full pay
shall be granted even if the childbirth,
miscarriage, or emergency termination of
pregnancy occurs not more than 15
calendar days after the termination of an
employee’s service.
b. Expanded maternity leave
[RA 11210 (105-Day Expanded Maternity
Leave Law)]
Expanded Maternity Leave -- Maternity leave
of 105 days with full pay, with an option to
extend for an additional 30 days without pay.
[Sec. 3, RA 11210]
Coverage
Every female worker in government and the
private sector, including those in the informal
economy, regardless of civil status or the
legitimacy of her child, is entitled to the
maternity leave benefits.
This is applicable to pregnancy and
miscarriage, or emergency termination of
pregnancy, regardless of frequency. [Sec. 3,
RA 11210]
Maternity leave for female workers in
private sector, requisites
a. Contribution: The female worker must
have paid at least 3 monthly contributions
in the 12-month period immediately
preceding the semester of her childbirth,
miscarriage, or emergency termination of
pregnancy.
Exception: When the employment of the
pregnant woman worker has been terminated
without just cause, the employer must pay her
the full amount equivalent to her salary for 105
days for childbirth and 60 days for miscarriage
and emergency termination of pregnancy
based on her full pay, in addition to the other
applicable daily cash maternity benefits that
she should have received had her employment
not been illegally terminated. [Sec. 5, Rule IV,
IRR of RA 11210]
Benefit received
A daily maternity benefit equivalent to 100% of
her average daily salary credit for:
a. 105 days in cases of live childbirth
b. 60 days in cases of miscarriage or
emergency termination of pregnancy.
The maternity leave can be credited as
combinations of prenatal and postnatal leave
as long as it does not exceed 105 days or 60
days as the case may be. In no case shall
postnatal care be less than 60 days. [Sec. 2,
Rule IV, IRR of RA 11210]
In case the employee qualifies as a solo parent
(see III. C. 2. a., above), the employee shall be
paid an additional maternity benefit of 15 days.
[Sec. 5 (a), RA 11210]
In determining the female member’s
entitlement to the benefit, the SSS shall
consider only those contributions paid prior
to the semester of contingency; and
b. Notice: The female worker shall have
notified her employer of her pregnancy and
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Extended maternity leave option, requisite
notice
In cases of live childbirth, an additional
maternity leave of 30 days, without pay, can be
availed of, at the option of the female worker,
provided that the employer shall be given
notice.
Due notice must be in writing must be given at
least 45 days before the end of the female
worker’s maternity leave.
Exception: No prior notice shall be necessary
in the event of a medical emergency, but
subsequent notice shall be given to the
employer.
The period of extended maternity leave without
pay shall not be considered a gap in the
service. [Sec. 3, Rule IV, IRR of RA 11210]
Allocation of maternity leave credits
A female worker entitled to maternity leave
benefits may, at her option, allocate up to 7
days of said benefits to the child’s father,
whether or not the father is married to the
mother.
The allocated benefit granted to the child’s
father is over and above the paternity benefits
provided under RA 8187 (Paternity Leave Act).
In case of death, absence, or incapacity of the
child’s father, the female worker may allocate
to an alternate caregiver who may be:
a. A relative within the 4th degree of
consanguinity; or
b. The current partner, regardless of 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 cases of miscarriage
or emergency termination of pregnancy. [Sec.
1, Rule VIII, IRR of RA 11210]
Death or permanent incapacity
If the female worker dies or becomes
permanently incapacitated, the balance of her
maternity leave benefits shall accrue to the
child’s father or to a qualified alternate
caregiver subject to the following conditions:
LABOR LAW
a. That the maternity leave benefits have not
yet been commuted to cash, if applicable;
and
b. That a certified true copy of the death
certificate or medical certificate or abstract
is provided to the employers of both the
female worker and the child’s father or
alternate caregiver.
In case the maternity leave benefits have
already been paid to the female worker in full,
the child’s father or alternate caregiver shall be
entitled to enjoy the remaining unexpired leave
credits of the female worker, if any.
Provided, That such leave without pay shall not
be considered a gap in the service of the child’s
father or alternate caregiver. [Sec. 4, Rule VIII,
IRR of RA 11210]
Other conditions
a. Employer shall advance the full payment
subject to reimbursement by the SSS
within 30 days from filing of leave
application. [Sec. 3, Rule VI, IRR of RA
11210]
b. SSS shall immediately reimburse the
employer the maternity benefits advanced
to the employed female member, only to
the extent of 100% of her average daily
salary credit for 105 days, 120 days or 60
days, as the case may be, upon receipt of
satisfactory and legal proof of such
payment. [Sec. 4, Rule VI, IRR of RA
11210]
c. Availment shall be a bar to the recovery of
sickness benefits provided under RA 1161
(Social Security Law) for the same period
for which daily maternity benefits have
been received. [Sec. 6, Rule VI, RA 11210]
d. Sanction: That if an employee should give
birth or suffer miscarriage or emergency
termination of pregnancy:
1. Without the required contributions
having been remitted for her by her
employer to the SSS, or
2. Without the latter having been
previously notified by the ER of time of
the pregnancy,
the employer shall pay to the SSS
damages equivalent to the benefits which
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said employee would otherwise have been
entitled to. [Sec. 5, RA 11210]
c. Paternity leave
[RA 8187 (Paternity Leave Act of 1996)]
Paternity Leave – leave of 7 calendar days
with full pay for every married male employee
in the private and public sectors
Coverage and Purpose
Paternity leave is granted to all married male
employees in the private and public sectors,
regardless of their employment status (e.g.
probationary, regular, contractual, project
basis).
The purpose of this benefit is to allow the
husband to lend support to his wife during her
period of recovery and/or in nursing her
newborn child. [Sec. 3, RA 8187]
Benefit
It shall be for 7 calendar days, with full pay,
consisting of basic salary and mandatory
allowances fixed by the Regional Wage Board,
if any, provided that his pay shall not be less
than the mandated minimum wage. [Sec. 2, RA
8187]
It shall apply to the first 4 deliveries of the
employee’s lawful wife with whom he is
cohabiting.
Cohabiting means the obligation of the
husband and wife to live together. [Sec. 1, IRR,
RA 8187] If the spouses are not physically
living together because of the workstation or
occupation, the male employee is still entitled
to the paternity leave benefit.
Usage of the benefit
Usage of the leave shall be after the delivery,
without prejudice to an employer’s policy of
allowing the employee to avail of the benefit
before or during the delivery, provided that the
total number of days shall not be more than 7
days for each covered delivery. [Sec. 5, IRR,
RA 8187]
LABOR LAW
Conditions for entitlement [Sec. 3, IRR, RA
8187]
a. He is married;
b. He is an employee at the time of the
delivery of his child
c. He is cohabiting with his spouse at the time
that she gives birth or suffers a miscarriage
d. He has applied for paternity leave with his
ER within a reasonable period of time from
the expected date of delivery by his
pregnant spouse, or within such period as
may be provided by company rules and
regulations, or by CBA; and,
e. His wife has given birth or suffered a
miscarriage.
Application for paternity leave
See d. under conditions for entitlement.
In case of miscarriage, prior application for
paternity leave shall not be required. [Sec. 4,
IRR, RA 8187]
Non-conversion to cash
In the event that the paternity leave is not
availed of, it shall not be convertible to cash
and shall not be cumulative. [Sec. 7, IRR, RA
8187]
Crediting of existing benefits
a. If the existing paternity leave benefit under
the CBA, contract, or company policy is
greater than 7 calendar days as provided
for in RA 8187, the greater benefit shall
prevail.
b. If the existing paternity leave benefit is less
than that provided in RA 8187, the ER shall
adjust the existing benefit to cover the
difference. [Sec. 9, IRR, RA 8187]
Where a company policy, contract, or CBA
provides for an emergency or contingency
leave without specific provisions on paternity
leave, the ER shall grant to the employee 7
calendar days of paternity leave. [Sec. 9, IRR,
RA 8187]
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d. Gynecological leave
[RA 9710 (Magna Carta for Women)]
Gynecological Leave - A female employee’s
leave entitlement of two (2) months with full
pay from her employer based on her gross
monthly compensation following surgery
caused by gynecological disorders, provided
that she has rendered continuous aggregate
employment service of at least six (6) months
for the last 12 months.
Gynecological Disorders
Disorders that would require surgical
procedures such as, but not limited to:
1. Dilatation and curettage;
2. Those involving female reproductive
organs such as the vagina, cervix, uterus,
fallopian tubes, ovaries, breast, adnexa
and pelvic floor, as certified by a competent
physician;
3. Hysterectomy,
ovariectomy,
and
mastectomy.
Gross Monthly Compensation
The monthly basic pay plus mandatory
allowances fixed by the regional wage boards.
[Sec. 7, Rule II, IRR, RA 9710]
Basic Requirement
The woman employee should have been with
the company for 12 months prior to surgery. An
aggregate service of at least six (6) months
within the said 12-month period is sufficient to
entitle her to avail of the special leave benefit.
Employment service includes absences with
pay such as use of other mandated leaves,
company-granted leaves and maternity leaves.
Competent Physician
A medical doctor preferably specializing in
gynecological disorders or is in the position to
determine the period of recuperation of the
woman employee. [Sec. 1, D.O. No. 112, as
amended
(Guidelines
Governing
the
Implementation of the Special Leave Benefits
for Women Employees in the Private Sector)]
LABOR LAW
Conditions for Entitlement
Any female employee, regardless of age and
civil status, shall be entitled to a special leave
benefit, provided she has complied with the
following conditions:
a. She has rendered at least 6 months
continuous aggregate employment service
for the last 12 months prior to surgery;
b. She has filed an application for special
leave
c. She has undergone surgery due to
gynecological disorders as certified by a
competent physician. [Sec. 2, D.O. No.
112]
Application for Special Leave Before
Surgery
The employee shall file her application for
leave with her employer within a reasonable
period of time from the expected date of
surgery, or within such period as may be
provided by company rules and regulations or
by CBA.
Application for Special Leave After Surgery
Prior application for leave shall not be
necessary in cases requiring emergency
surgical procedure, provided that the employer
shall be notified verbally or in written form
within a reasonable period of time and provided
further that after the surgery or appropriate
recuperating period, the female employee shall
immediately file her application using the
prescribed form. [Sec. 3, D.O. No. 112]
Period of Entitlement
The 2 months special leave is the maximum
period of leave with pay that a woman
employee may avail of under RA 9710.
For purposes of determining the period of leave
with pay that will be allowed to a female
employee, the certification of a competent
physician as to the required period of
recuperation shall be controlling. [Sec. 4, D.O.
No. 112, as amended]
Availment
The special leave shall be granted to the
qualified employee after she has undergone
surgery. [Sec. 5, D.O. No. 112, as amended]
Frequency of Availment
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A woman employee can avail of the SLB for
every instance of surgery due to gynecological
disorder for a maximum total period of 2
months per year. [Sec. 6, D.O. No. 112, as
amended]
Special Leave Benefit vis-à-vis SSS
Sickness Benefit
The SLB is different from the SSS sickness
benefit. The former is granted by the employer
in accordance with RA 9710.
It is granted to a woman employee who has
undergone surgery due to gynecological
disorder. The SSS sickness benefit, on the
other hand, is administered and given by the
SSS in accordance with RA 1161 as amended
by RA 8282. [Sec. 7, D.O. No. 112, as
amended]
LABOR LAW
A victim leave may be availed of at any time
during the application of any protection order,
investigation, prosecution and/or trial of the
criminal case [Sec. 42, Rule VI, IRR]
Requirement
In order to be entitled to the leave benefit, the
only requirement is for the victim-employee to
present to her employer a certification from the
barangay chairman (Punong Barangay) or
barangay councilor (barangay kagawad) or
prosecutor or the Clerk of Court, as the case
may be, that an action relative to the matter is
pending [Sec. 42, Rule VI, IRR].
The usage of the ten-day leave shall be at the
option of the woman employee. In the event
that the leave benefit is not availed of, it shall
not be convertible into cash and shall not be
cumulative [Sec. 42, Rule VI, IRR].
e. Battered woman leave
[RA 9262 (Anti-Violence Against Women and
Their Children Act of 2004 or VAWC)]
Victims of any of the acts covered by VAWC
shall be entitled to take a paid leave of
absence up to ten (10) days in addition to
other paid leaves under the Labor Code and
Civil Service Rules and Regulations,
extendible when the necessity arises as
specified in the protection order [Sec. 43, RA
9262]
Acts covered by VAWC
1. “Physical violence” - refers to acts that
include bodily or physical harm
2. “Sexual violence” - refers to an act which is
sexual in nature, committed against a
woman or her child.
3. “Psychological violence” - acts or
omissions causing or likely to cause mental
or emotional suffering of the victim.
4. “Economic abuse” - acts that make or
attempt to make a woman financially
dependent.
Note: To fall under VAWC, the offender must
have had a sexual or dating relationship with
the offended woman.
When availed of
When denied; employer’s liability
The employer/agency head who denies the
application for leave, and who shall prejudice
the victim-survivor or any person for assisting
a co-employee who is a victim-survivor under
the Act shall be held liable for discrimination
and violation of R.A 9262. [Sec. 42, Rule VI,
IRR].
D. SEXUAL HARASSMENT IN
THE WORK ENVIRONMENT
1. Definition
[RA 7877 - Anti-Sexual Harassment Act of
1995; RA 11313 - Safe Spaces Act]
ANTI-SEXUAL HARASSMENT ACT
Work, education or training-related sexual
harassment is defined in Sec. 3, RA 7877.
Demanding, requesting or
Acts
otherwise requiring any
covered
sexual favor from the other,
regardless of whether these
are accepted by the object of
said Act
Committed An employer, employee,
manager, supervisor, agent
by
of the employer, teacher,
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instructor, professor, coach,
trainor, or any other person
who, having authority,
influence or moral
ascendancy over another
In a work or training or
education environment
Employment or Work-Related Sexual
Harassment
1. The sexual favor is made as a condition:
a. in the hiring or in the employment, reemployment or continued employment
of said individual; or
b. in granting said individual favorable
compensation,
terms,
conditions,
promotions, or privileges; or
c. in the refusal to grant the sexual favor
results in limiting, segregating or
classifying the EE which in any way
would discriminate, deprive or diminish
employment opportunities or otherwise
adversely affect said employee;
2. The above acts would either:
a. impair the employee’s rights or
privileges under existing labor laws; or
b. result in an intimidating, hostile, or
offensive
environment
for
the
employee. [Sec. 3, RA 7877]
SAFE SPACES ACT
Gender-based Sexual Harassment (GBSH)
in the Workplace
The crime of GSBH in the workplace includes
the following:
1. An act or series of acts:
a. involving any unwelcome sexual
advances, requests or demand for
sexual favors or any act of sexual
nature;
b. whether done verbally, physically or
through the use of technology such as
text messaging or electronic mail or
through any other forms of information
and communication systems;
c. that has or could have a detrimental
effect on the conditions of an
individual's employment or education,
job performance or opportunities.
2. A conduct of sexual nature and other
conduct based on sex:
LABOR LAW
a. affecting the dignity of a person, which
is unwelcome, unreasonable, and
offensive to the recipient;
b. whether done verbally, physically or
through the use of technology such as
text messaging or electronic mail or
through any other forms of information
and communication systems.
3. A conduct that is unwelcome and pervasive
and creates an intimidating, hostile or
humiliating environment for the recipient.
Workplaces include all sites, locations, spaces,
where work is being undertaken by an
employee within or outside the premises of the
usual place of business of the employer. [Sec.
18, Rule VI, IRR of RA11313]
2. Duties and Liabilities of
Employers
ANTI-SEXUAL HARASSMENT ACT
Persons who may be liable
1. Any employer, employee, manager,
supervisor, agent of the employer, teacher,
instructor, professor, coach, trainer or any
other person, regardless of whether the
demand, request for requirement for
submission is accepted by the object of
said act having authority, influence or
moral ascendancy over another in a
work or training or education environment,
who demands, requests or otherwise
requires any sexual favor from another;
2. Any person who directs or induces another
to commit any act of sexual harassment as
herein defined; OR
3. Any person who cooperates in the
commission by another without which it
would NOT have been committed, shall
also be held liable under this Act. [Sec. 3,
RA 7877]
It is not necessary that the demand, request or
requirement of a sexual favor be articulated in
a categorical oral or written statement. It may
be discerned, with equal certitude, from the
acts of the offender. [Domingo v. Rayala, G.R.
No. 155831 (2008)]
Role of the employer or Head of Office
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The Employer or Head of Office shall have the
duty:
1. to prevent the commission of such acts and
2. to lay down the procedure for the
resolution, settlement or prosecution of
committed acts. [Sec. 4, RA 7877]
He shall be solidarily liable for damages:
1. if he is informed of such acts by the
offended party, and
2. no immediate action is taken thereon. [Sec.
5, RA 7877]
Independent action for damages
The victim of work, education or trainingrelated sexual harassment can institute a
separate and independent action for damages
and other affirmative relief. [Sec. 6, RA 7877]
Sanctions
Criminal: imprisonment of 1 month to mos. or
fine of P10k to P20k or both
Prescription of such action is in 3 years.
LABOR LAW
Employers, or other persons of authority,
influence or moral ascendancy have the
following duties:
a. Disseminate or post a copy of the Safe
Spaces Act to all persons in the workplace;
b. Provide measures to prevent GBSH in the
workplace;
c. Create an independent internal mechanism
or a committee on decorum and
investigation to investigate and address
complaints of GBSH;
d. Provide and disseminate, in consultation
with all persons in the workplace, a code of
conduct or workplace policy. [Sec. 17, RA
11313]
In addition to liabilities for committing acts of
GSBH, employers may also be held
responsible for:
a. Non-implementation of their duties under
Sec. 17 of this Act (see above), as provided
in the penal provisions; or
b. Not taking action on reported acts of GBSH
committed in the workplace.
Termination
As a managerial employee, petitioner is
bound by more exacting work ethics. When
such moral perversity is perpetuated against
his subordinate, he provides a justifiable
ground for his dismissal for lack of trust and
confidence. [Sec. 7, RA 7877; Libres v. NLRC,
G.R. No. 123737 (1999)]
Any person who violates (a) shall, upon
conviction, be penalized with a fine of not less
than P5,000, nor more than P10,000.
The gravamen of the offense in sexual
harassment is not the violation of the
employee's sexuality but the abuse of power by
the employer. Any employee, male or female,
may rightfully cry "foul" provided the claim is
well substantiated. Strictly speaking, there is
no time period within which he or she is
expected to complain through the proper
channels. [Phil. Aelous Automotive United
Corp. v. NLRC, G.R. No. 124617 (2000)]
Independent action for damages
Nothing shall preclude the victim of workrelated GBSH from instituting a separate and
independent action for damages and other
affirmative relief.
SAFE SPACES ACT
Anyone who commits any of the acts of GBSH
may be held liable. GBSH may even be
committed between peers, and by a
subordinate to a superior officer. [Sec. 18, IRR
of RA 11313]
Duties of employers
See also D. 1 & 2 above
Any person who violates (b) shall, upon
conviction, be penalized with a fine of not less
than P10,000 nor more than P15,000. [Sec. 19,
RA 11310]
3. Applicable Laws
a. Sexual Harassment Act
b. Safe Spaces Act
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E. WORKING CONDITIONS FOR
SPECIAL GROUPS OF EMPLOYEES
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1. Apprentices and Learners
[RA 7796 (Technical Education and Skills
Development Act of 1994 or TESDA Act of
1994)]
a. Apprentices
Definitions
a. Apprenticeship
training
within
employment with compulsory related
theoretical instruction involving a contract
between an apprentice and an employer on
an approved apprenticeable occupation.
[Sec 4(j), RA 7796]
b. Apprentice is a person undergoing
training for an approved apprenticeable
occupation during an apprenticeship
agreement. [Sec 4(k), RA 7796]
c. Apprenticeship Agreement is a contract
wherein a prospective employer binds
himself to train the apprentice, who in turn
accepts the terms of training for a
recognized apprenticeable occupation
emphasizing the rights, duties and
responsibilities of each party. [Sec 4(l), RA
7796]
d. Apprenticeable Occupation is an
occupation officially endorsed by a tripartite
body and approved for apprenticeship by
the Authority. [Sec 4(m), RA 7796]
Who may employ apprentices
Only employers in highly technical industries
may employ apprentices and only in
apprenticeable occupations approved by the
SOLE. [Art. 60, LC].
The act of filing the proposed apprenticeship
program with the DOLE is a preliminary step
towards its final approval, and does not
instantaneously give rise to an employerapprentice relationship. It must be duly
approved by the Minister of Labor and
Employment. [Nitto Enterprises v. NLRC, G.R.
No. 114337 (1995)]
Qualifications of apprentice
An apprentice must:
1. Be at least fifteen years of age; provided
those who are at least fifteen years of age
but less than eighteen may be eligible for
LABOR LAW
apprenticeship only in nonhazardous
occupations;
2. Be physically fit for the occupation in which
he desires to be trained;
3. Possess vocational aptitude and capacity
for the particular occupation as established
through appropriate tests; and
4. Possess the ability to comprehend and
follow oral and written instructions.
Trade and industry associations may
recommend to the SOLE appropriate
educational qualifications for apprentices
in certain occupations.
General Rule: Such qualifications, if
approved,
shall
be
the
educational
requirements for apprenticeship in such
occupations.
Exception: The educational qualifications may
be waived by an employer in favor of an
applicant who has demonstrated exceptional
ability. A certification explaining briefly the
ground for such waiver, and signed by the
person in charge of the program, shall be
attached to the apprenticeship agreement of
the applicant concerned. [Sec. 11, Rule VI,
Book II, IRR]
Period of Apprenticeship
The period of apprenticeship shall not exceed
six months.
Terms and conditions
Apprenticeship agreements, including the
wage rates of apprentices, shall conform to the
rules issued by the Secretary of Labor and
Employment.
Wage rate
Apprenticeship agreements providing for wage
rates below the legal minimum wage, which in
no case shall start below 75 percent of the
applicable minimum wage, may be entered
into only in accordance with apprenticeship
programs duly approved by the Secretary of
Labor and Employment. [Art. 61, as amended
by E.O. 111-1986]
Apprenticeship without compensation
The Secretary of Labor and Employment may
authorize the hiring of apprentices without
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compensation whose training on the job is
required by the school or training program
curriculum or as requisite for graduation or
board examination. [Art. 72]
The wages of apprentices and learners shall in
no case be less than seventy-five percent
(75%) of the applicable minimum wage rates.
[Sec. 7, Wage Order No. NCR-19]
Enforcement
Investigation of violation of apprenticeship
agreement
Upon complaint of any interested person or
upon its own initiative, the appropriate agency
of the DOLE or its authorized representative
shall investigate any violation of an
apprenticeship agreement pursuant to such
rules and regulations as may be prescribed by
the Secretary of Labor and Employment. [Art.
65]
Appeal to the Secretary of Labor and
Employment
The decision of the authorized agency of the
DOLE may be appealed by any aggrieved
person to the SOLE within five (5) days from
receipt of the decision. The decision of the
Secretary of Labor and Employment shall be
final and executory. [Art. 66]
Exhaustion of administrative remedies
No person shall institute any action for the
enforcement of any apprenticeship agreement
or damages for breach of any such agreement,
unless he has exhausted all available
administrative remedies. [Art. 67]
LABOR LAW
Summary of Rules:
1. The apprentice must be paid not less than
75% of the prescribed minimum salary [Art.
61]; HOWEVER, the employer MAY NOT
pay any wage if the apprenticeship training
is:
a. part of the school curriculum,
b. a requirement for graduation, or
c. a requirement for board examination
[Art. 72]
2. The apprenticeship agreement must be
approved by the DOLE Secretary (without
such one shall be deemed a regular
employee) [Nitto Enterprises v. NLRC,
G.R. No. 114337 (1995)];
3. The employer is not compelled to continue
one’s employment upon termination of
apprenticeship;
4. One-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices of
the training cost is deducted from the
employer’s income tax, but it shall not
exceed 10% of direct labor wage. [Art. 71]
Working scholars
There is no employer-employee relationship
between students on one hand, and schools,
colleges or universities on the other, where
there is written agreement between them under
which the former agree to work for the latter in
exchange for the privilege to study free of
charge, provided, the students are given real
opportunities, including such facilities as may
be reasonable and necessary to finish their
chosen courses under such agreement. [Sec.
14, Rule X, Book III, IRR]
Incentives for employers
An additional deduction from taxable income of
one-half (1/2) of the value of labor training
expenses incurred for developing the
productivity and efficiency of apprentices shall
be granted to the person or enterprise
organizing an apprenticeship program. [Art. 71]
Requisites of the deduction:
1. Apprenticeship program must be duly
approved by the DOLE;
2. Deduction shall NOT exceed 10% of direct
labor wage;
3. Employer must pay his apprentices the
minimum wage. [Art. 71]
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b. Learners
Definition
Learners are persons hired as trainees in semiskilled and other industrial occupations:
1. Which are non-apprenticeable;
2. Which may be learned through practical
training on the job in a relatively short
period of time, which shall not exceed
three (3) months. [Art. 73; Sec 4(n), RA
7796]
When may learners be hired
1. No experienced workers are available;
2. The employment of learners being
necessary to prevent the curtailment of
employment opportunities; and
3. The employment will neither create unfair
competition in terms of labor costs nor
impair working standards. [Art. 74]
Terms and conditions of employment
Any employer desiring to employ learners shall
enter into a learnership agreement with them,
which agreement shall include:
1. The duration of the learnership period,
which shall not exceed three (3) months;
2. The wages or salary rates of the learners
which shall begin at not less than seventyfive percent (75%) of the applicable
minimum wage; and
3. A commitment to employ the learners if
they so desire, as regular employees upon
completion of the learnership. All learners
who have been allowed or suffered to work
during the first two (2) months shall be
deemed regular employees if training is
terminated by the employer before the end
of the stipulated period through no fault of
the learners.
The learnership agreement shall be subject to
inspection by the Secretary of Labor and
Employment
or
his
duly
authorized
representative. [Art. 75]
Learners employed in piece or incentive-rate
jobs during the training period shall be paid in
full for the work done. [Art. 76]
LABOR LAW
Summary of Rules
1. The duration of learnership shall not
exceed 3 months [Art. 73];
2. If the learnership of 3 months is completed,
the employer may be compelled to
continue with the services of the learner as
a regular employee; There is a
commitment from the employer to employ
the learners if they so desire, as regular
employees upon completion of the
learnership;
3. If the learner is dismissed from service
without just and valid cause and without
due process after 2 months of service, he
will be deemed as regular employee; [Art.
75(d)] and
4. The wages or salary rates of the learners
which shall begin at not less than 75% of
the applicable minimum wage. [Art. 75(c)]
Distinctions between
Apprenticeship
Apprenticeship
Learnership
and
Learnership
Highly technical
industries
Semi-skilled
industrial
occupations
Practical training
supplemented by
related theoretical
instruction
Practical training
whether or not such
practical training is
supplemented by
theoretical
instructions
Apprenticeable
occupations
approved by the
SOLE
Non-apprenticeable
occupations
Written apprentice
agreement ratified
by the appropriate
committees
Learnership
agreement
More than 3 months,
shall not exceed 6
months
Shall not exceed 3
months
When apprentice
may be hired:
When learner may
be hired:
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1. The person is at 1. When no
least 15 years of
experienced
age, provided
workers are
those who are at
available;
least 15 years of 2. The employment
age but less
of learners is
than 18 may be
necessary to
eligible for
prevent
apprenticeship
curtailment of
only in nonemployment
hazardous
opportunities;
occupation;
and
2. The person is
3. The employment
physically fit for
does not create
the occupation in
unfair
which he desires
competition in
to be trained;
terms of labor
3. The person
costs or impair
possesses
or lower working
vocational
standards.
aptitude and
capacity for the
particular
occupation as
established
through
appropriate
tests; and
4. The person is
able to
comprehend and
follow oral and
written
instructions.
Wage rate shall
begin at not less
than 75% of the
minimum wage
Wage rate shall
begin at not less
than 75% of the
minimum wage
No compensation if
SOLE authorizes, as
OJT is required by
the school [Art. 72].
Learners in
piecework shall be
paid in full for the
work done
The employer is not
compelled to
continue one’s
employment upon
termination of
apprenticeship
Learnership
agreement must
contain a
commitment to
employ the learners
if they so desire, as
regular employees
LABOR LAW
upon completion of
the learnership
Deductibility of ½ of
training costs
incurred, provided:
Program is duly
recognized by
DOLE
Deduction shall
not exceed 10%
of direct labor
wage
Payment of
minimum wage
to apprentice
No additional
deduction from
taxable income for
undertaking a
learnership
agreement
2. Disabled Workers
[RA 7277 - Magna Carta for Disabled Persons,
as amended by RA 9442]
Definitions
a. Disabled persons 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. [Sec. 4(a), RA
7277]
b. Impairment is any loss, diminution or
aberration of psychological, physiological,
or anatomical structure or function. [Sec.
4(b), RA 7277]
c. Disability shall mean (1) a physical or
mental impairment that substantially limits
one or more psychological, physiological or
anatomical function of an individual or
activities of such individual; (2) a record of
such an impairment; (3) being regarded as
having such an impairment. [Sec. 4(c), RA
7277]
d. 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
of the individual. [Sec. 4(d), RA 7277]
Coverage
RA 7277 covers all disabled persons and, to
the extent herein provided, departments,
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offices and agencies of the National
Government or nongovernment organizations
involved in the attainment of the objectives of
this Act. [Sec. 3, RA 7227]
a. Equal opportunity
LABOR LAW
In the placement of disabled persons in
sheltered employment, it shall accord due
regard to the individual qualities, vocational
goals and inclinations to ensure a good
working atmosphere and efficient production.
[Sec 6, RA 7277]
4. Full minimum wage
Rights of disabled workers
1. Equal opportunity for employment
No disabled person shall be denied access to
opportunities for suitable employment. A
qualified disabled EE 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. [Sec. 5 (par. 1),
RA 7277]
Once they are regular employees, they are
entitled to the benefits granted by law which the
parties cannot stipulate away. [Bernardo v.
NLRC, 310 SCRA 186 (1999)]
2. Reserved contractual positions
5% of all casual, emergency and contractual
positions in the DSWD; DOH, DepEd; and
other government agencies, offices or
corporations engaged in social development
shall be reserved for disabled persons. [par. 2,
Sec. 5, RA 7277]
3. Sheltered employment
Definition
The provision of productive work for disabled
persons through workshop providing special
facilities, income producing projects or
homework schemes. [Sec 4(i), RA 7277]
Purpose
To give them the opportunity to earn a living
thus enabling them to acquire a working
capacity required in open industry. [Sec 4(i),
RA 7277]
All qualified handicapped workers shall
receive the full amount of the minimum wage
rate prescribed herein. [Sec 7, Wage Order No.
NCR-19]
A Qualified Individual with a Disability shall
mean an individual with a disability who, with or
without reasonable accommodations, can
perform the essential functions of the
employment position that such individual holds
or desires.
However, consideration shall be given to:
1. The employer’s judgement as to what
functions of a job are essential
2. The written description prepared by the
employer before advertising or interviewing
applicants for the job, which shall be
considered evidence of the essential
functions of the job. [Sec. 2(l), RA 7277
(Magna Cart for Persons with Disability, as
amended by RA 9442)]
A qualified disabled EE should be given the
same terms and conditions of employment as
a qualified able-bodied person. Since the
Magna Carta accords them the rights of
qualified able-bodied persons, they are thus
covered by Art. 280 of the Labor Code. In the
present case, the handicap of petitioners (deafmutes) is NOT a hindrance to their work. The
eloquent proof of this statement is the repeated
renewal of their employment contracts.
[Bernardo v. NLRC, G.R. No. 122917 (1999)]
If suitable employment for disabled persons
cannot be found through open employment,
the State shall endeavor to provide it by means
of sheltered employment.
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Apprenticeship Opportunities
Disabled persons shall be eligible as
apprentices or learners: Provided, that:
1. Their handicap is NOT as much as to
effectively impede the performance of job
operations in the particular occupation for
which they are hired;
2. After the lapse of the period of
apprenticeship, if found satisfactory in the
job performance, they shall be eligible for
employment. [Art. 81; Sec. 7, RA 7277;
Bernardo v. NLRC, supra.]
b. Discrimination on employment
No entity, whether public or private, shall
discriminate against a qualified disabled
person by reason of disability in regard to:
1. Job application procedures
2. The hiring, promotion, or discharge of
employees
3. Employee compensation
4. Job training
5. Other terms, conditions, and privileges of
employment.
Acts of Discrimination:
1. Limiting, segregating or classifying a
disabled job applicant in such a manner
that
adversely
affects
his
work
opportunities;
2. Using qualification standards, employment
tests or other selection criteria that screen
out or tend to screen out a disabled person
unless such standards, tests or other
selection criteria are shown to be jobrelated for the position in question and are
consistent with business necessity;
3. Utilizing standards, criteria, or methods of
administration that:
a. have the effect of discrimination on the
basis of disability; or
b. perpetuate the discrimination of others
who are subject to common
administrative control.
4. Providing less compensation, such as
salary, wage or other forms of
remuneration and fringe benefits, to a
qualified disabled employee, by reason of
his disability, than the amount to which a
non-disabled person performing the same
work is entitled;
LABOR LAW
5. Favoring a non-disabled employee over a
qualified disabled employee with respect to
promotion, training opportunities, study
and scholarship grants, solely on account
of the latter's disability;
6. Re-assigning or transferring a disabled
employee to a job or position he cannot
perform by reason of his disability;
7. Dismissing or terminating the services of a
disabled employee by reason of his
disability unless the employer can prove
that
he
impairs
the
satisfactory
performance of the work involved to the
prejudice of the business entity: Provided,
however, That the employer first sought to
provide reasonable accommodations for
disabled persons;
8. Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or
other factor of the disabled applicant or
employee that such tests purports to
measure, rather than the impaired sensory,
manual or speaking skills of such applicant
or employee, if any; and
9. Excluding
disabled
persons
from
membership in labor unions or similar
organizations. [Sec. 32, RA 7277]
Occasions when a Disabled Applicant may
be Subjected to Medical Examination
Upon an offer of employment, a disabled
applicant may be subjected to medical
examinations, on the following occasions:
1. All entering employees are subjected to
such an examination regardless of
disability;
2. Information obtained during the medical
condition or history of the applicant is
collected and maintained on separate
forms and in separate medical files and is
treated as a confidential medical record;
Provided, however, That:
a. Supervisors and managers may be
informed
regarding
necessary
restrictions on the work or duties of the
employees
and
necessary
accommodations;
b. First aid and safety personnel may be
informed, when appropriate, if the
disability may require emergency
treatment;
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c. Government officials investigating
compliance with this Act shall be
provided relevant information on
request; and
d. The results of such examination are
used only in accordance with this Act
[Sec. 33, RA 7277].
c. Incentives for employers
For employment of disabled persons additional deduction, from their gross income,
equivalent to 25% of the total amount paid as
salaries and wages to disabled persons:
a. Private entities that employ disabled
persons either as regular EEs, apprentice
or learner;
b. Provided such entities present proof as
certified by the DOLE and the DOH [Sec.
8[b], RA 7277]
For construction of disabled-friendly
facilities - additional deduction from their net
taxable income, equivalent to 50% of the direct
costs of the improvements or modifications:
a. Private entities that improve or modify their
physical facilities in order to provide
reasonable accommodation for disabled
persons;
b. Does NOT apply to improvements or
modifications or facilities required under
BP 344. [Sec. 8 (c), RA 7277]
For establishments giving discounts – may
claim such discounts as tax deductions based
on the net cost of the goods sold or services
rendered:
a. The cost of the discount shall be allowed
as deduction from gross income for the
same taxable year that the discount is
granted
b. The total amount of the claimed tax
deduction net of VAT if applicable, shall be
included in their gross sales receipts for tax
purposes and shall be subject to proper
documentation and to the provisions of the
National Internal Revenue Code, as
amended. [Sec. 32, RA 7277, as amended
by RA 9442]
3. Gender
LABOR LAW
Constitutional basis
The State recognizes the role of women in
nation-building, and shall:
a. Ensure the fundamental equality before the
law of women and men;
b. Protect working women by providing:
1. Safe and healthful working conditions,
taking into account their maternal
functions, and
2. Such facilities and opportunities that
will enhance their welfare and enable
them to realize their full potential in the
service of the nation. [Sec. 14, Art. II &
Sec. 14, Art. XIII, 1987 Constitution]
a. Discrimination
It shall be unlawful for any employer to
discriminate against any woman employee with
respect to terms and conditions of employment
solely on account of her sex.
The following are acts of discrimination:
a. Payment of a lesser compensation,
including wage, salary or other form of
remuneration and fringe benefits, to a
female employee as against a male
employee, for work of equal value; and
b. Favoring a male employee over a female
employee with respect to promotion,
training
opportunities,
study
and
scholarship grants solely on account of
their sexes. [Art. 133]
The Magna Carta of Women provides that the
State:
1. Condemns discrimination against women
in all its forms
2. Pursues by all appropriate means and
without delay the policy of eliminating
discrimination against women in keeping
with the Convention on the Elimination of
All Forms of Discrimination Against
Women (CEDAW) and other international
instruments consistent with Philippine law.
3. Shall accord women the rights, protection,
and opportunities available to every
member of society
4. Shall take steps to review and, when
necessary, amend and/or repeal existing
laws that are discriminatory to women
within three (3) years from the effectivity of
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this Act. [Sec. 2 & Sec. 12, Magna Carta of
Women]
b. Stipulation against marriage [Art. 134;
Sec. 13(e), Rule XII]
It shall be unlawful for an employer to:
1. require as a condition of employment or
continuation of employment that a woman
employee shall not get married, or
2. stipulate expressly or tacitly that upon
getting married a woman employee shall
be deemed resigned or separated or
3. actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee
merely by reason of her marriage. [Art. 134;
Duncan Assoc of Detailman – PTGWO v.
Glaxo Wellcome, G.R. No. 162994 (2004)]
The Magna Carta of Women protects women
against discrimination in all matters relating to
marriage and family relations, including the
right to choose freely a spouse and to enter
into marriage only with their free and full
consent.
Bona fide occupational qualification
exception
While a marriage or no-marriage qualification
may be justified as a "bona fide occupational
qualification," the employer must prove two
factors necessitating its imposition, viz:
1. that the employment qualification is
reasonably related to the essential
operation of the job involved; and
2. that there is a factual basis for believing
that all or substantially all persons meeting
the qualification would be unable to
properly perform the duties of the job.
[Capin-Cadiz v. Brent Hospital and
Colleges, Inc., G.R. No. 187417 (2016)].
When the employer can prove that the
reasonable demands of the business require a
distinction based on marital status, and there is
no better available or acceptable policy which
would better accomplish the business purpose,
an ER may discriminate against an EE based
on the identity of the EE’s spouse. [Star Paper
Corp. v. Simbol, G.R. No. 164774 2006]
LABOR LAW
A personal or marital relationship with an
employee of a competitor might compromise
the interests of the company. Thus an
employer policy prohibiting the same may be
held as valid [Duncan Association of Detailmen
v. Glaxo Wellcome, supra.]
c. Prohibited acts [Art. 135]
1. Discharge to prevent enjoyment of
benefits.
To deny any woman employee the benefits
provided for in this Chapter or to discharge
any woman employed by him for the
purpose of preventing her from enjoying
any of the benefits provided under this
Code. [Art. 135 (1), as amended by R.A.
6725]
2. Discharge on account of pregnancy.
To discharge such woman on account of
her pregnancy, while on leave or in
confinement due to her pregnancy. [Art.
135 (2)]
3. Discharge or refusal of the admission to
work
To discharge or refuse the admission of
such woman upon returning to her work for
fear that she may again be pregnant. [Art.
135 (3)]
4. Discharge on account of testimony
To discharge any woman or child or any
other employee for having filed a complaint
or having testified or being about to testify
under the Code [Sec. 13 (d), Rule XII, Book
III, IRR]
5. Expulsion of Women faculty/female
student due to pregnancy outside of
marriage
Expulsion and non-readmission of women
faculty due to pregnancy outside of
marriage shall be outlawed. No school
shall turn out or refuse admission to a
female student solely on the account of her
having contracted pregnancy outside of
marriage during her term in school. [Sec.
13(c), RA 9710]
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LABOR LAW
d. Facilities for women [Art. 130]
4. Minors
The Secretary of Labor shall establish
standards that will insure the safety and health
of women employees. In appropriate cases, he
shall by regulations, require employers to:
a. Provide seats proper for women and permit
them to use such seats when they are free
from work and during working hours,
provided they can perform their duties in
this position without detriment to efficiency;
b. To establish separate toilet rooms and
lavatories for men and women and provide
at least a dressing room for women;
c. To establish a nursery in a workplace for
the benefit of the woman employees
therein; and
d. To determine appropriate minimum age
and other standards for retirement or
termination in special occupations such as
those of flight attendants and the like. [Sec.
130]
Subject to the approval of the SOLE, the
Bureau of Women and Young Workers (The
BWYW merged into the Bureau of Workers
with Special Concerns in 2010), shall, within 30
days from the effective date of these Rules,
determine in an appropriate issuance:
1. The work situations for which the facilities
enumerated in Art. 130 of the Code shall be
provided;
2. The appropriate minimum age and
standards for retirement or termination of
employment in special occupation in which
women are employed. [Sec. 14, Rule XII,
Book III, IRR]
e. Women working in night clubs,
etc. [Art. 136]
Any woman who:
1. Is permitted or suffered to work, with or
without compensation;
2. In any night club, cocktail lounge, massage
clinic, bar or similar establishments;
3. Under the effective control or supervision
of the employer for a substantial period of
time as determined by the SOLE;
shall be considered as an employee of such
establishment for purposes of labor and social
legislation. [Art. 136]
Relevant Laws: RA 7610 (Special Protection
of Children Against Abuse, Exploitation and
Discrimination Act), RA 9231 (Special
Protection of Children Against Child Abuse,
Exploitation and Discrimination Act), Art.
137(a)
Constitutional basis
The State recognizes the vital role of the youth
in nation-building and shall promote and
protect their physical, moral, spiritual,
intellectual, and social well-being. It shall
inculcate in the youth patriotism and
nationalism, and encourage their involvement
in public and civic affairs. [Sec. 13, Art. II, 1987
Constitution]
General Rule: Children below 15 shall NOT be
employed.
Exception (Employment of Children)
Children below fifteen (15) years of age shall
not be employed except:
a. 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; or
a. 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 the 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:
Provided, further, That the following
requirements in all instances are strictly
complied with:
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1. The employer shall ensure the
protection, health, safety, morals and
normal development of the child;
2. The employer shall institute measures
to prevent the child's exploitation or
discrimination taking into account the
system and level of remuneration, and
the duration and arrangement of
working time; and
3. 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 DOLE which shall ensure
observance of the above requirements.
For purposes of this Article, the term "child"
shall apply to all persons under eighteen (18)
years of age. [Sec. 2, RA 9231]
Children - refers to any person under 18 years
of age or those over but are unable to fully take
care of themselves or protect themselves from
abuse, neglect, cruelty, exploitation or
discrimination because of a physical or mental
disability or condition. [Sec. 2, RA 7610]
Child labor - refers to any work or economic
activity performed by a child that subjects
him/her to any form of exploitation or is harmful
to his/her health and safety or physical, mental
or psychosocial development.
Working child - refers to any child engaged as
follows:
1. when the child is below eighteen (18) years
of age, in work or economic activity that is
not child labor as defined in the
immediately preceding subparagraph; and
2. when the child is below fifteen (15) years of
age, in work where he/she is directly under
the responsibility of his/her parents or legal
guardian and where only members of the
child‘s family are employed; or in public
entertainment or information. [Sec. 3, D.O.
No. 65-04]
LABOR LAW
Exceptions
a. Child works directly under the sole
responsibility of his parents or legal
guardian and where only members of the
employer’s family are employed, provided:
1. his employment does NOT endanger
his life, safety, health and morals,
2. nor impairs his normal development,
and
3. the parent or legal guardian shall
provide the said minor child with the
prescribed primary and/or secondary
education; [Sec. 12 of RA 7610, as
amended by RA 7658]
b. Child’s employment or participation in
public entertainment or information through
cinema, theater, radio or television is
essential, provided that [Sec. 12 of RA
7610, as amended by RA 7658]:
1. employment does NOT involve ads or
commercials
promoting
alcohol,
tobacco and its by-products or violence
[Sec. 14, RA 7610]
2. the employment contract is concluded
by the child’s parents or guardian, and
approved by DOLE
3. The ER shall ensure the protection,
health, safety and morals of the child
4. The ER shall institute measures to
prevent the child’s exploitation or
discrimination taking into account the
system and level of remuneration, and
the duration and arrangement of
working time
5. The ER shall formulate and implement,
subject to the approval and supervision
of competent authorities, a continuing
program for training and skills
acquisition of the child. [Sec. 12 of RA
7610, as amended by RA 7658]
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LABOR LAW
4. Involves the use of dangerous
machinery, equipment and tools such
as power-driven or explosive poweractuated tools; or
5. Exposes the child to physical danger
such as, but not limited to the
dangerous feats of balancing, physical
strength or contortion, or which
requires the manual transport of heavy
loads; or
6. Is performed in an unhealthy
environment exposing the child to
hazardous
working
conditions,
elements, substances, co-agents or
processes involving ionizing, radiation,
fire, flammable substances, noxious
components and the like, or to extreme
temperatures,
noise
levels,
or
vibrations; or
7. Is performed under particularly difficult
conditions; or
8. Exposes the child to biological agents
such as bacteria, fungi, viruses,
protozoans, nematodes and other
parasites; or
9. Involves the manufacture or handling
of explosives and other pyrotechnic
products [Sec. 12-D, RA 9231 as
amended].
Employment of Children from 15 to 18
Employment is allowed even without permit but
restricted to non-hazardous work.
Non-hazardous work shall mean any work or
activity in which the EE is not exposed to any
risk which constitutes an imminent danger to
his safety and health. [Sec. 3, Rule XII, Book
III, IRR]
The Secretary of Labor shall from time to time
publish a list of hazardous work and activities
in which persons 18 years of age and below
cannot be employed [Sec. 3, Rule XII, Book III,
IRR]
The
following
are
HAZARDOUS
workplaces:
See DO 149-16 as amended by DO 149-A-17,
Sec. 6
Worst Forms of Child Labor
a. All forms of slavery, as defined under the
"Anti-trafficking in Persons Act of 2003", or
practices similar to slavery such as sale
and trafficking of children, debt bondage
and serfdom and forced or compulsory
labor, including recruitment of children for
use in armed conflict; or
b. The use, procuring, offering or exposing of
a child for prostitution, for the production of
pornography
or
for
pornographic
performances; or
c. The use, procuring or offering of a child for
illegal or illicit activities, including the
production and trafficking of dangerous
drugs and volatile substances prohibited
under existing laws; or
d. Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the
health, safety or morals of children, such
that it:
1. Debases, degrades or demeans the
intrinsic worth and dignity of a child as
a human being; or
2. Exposes the child to physical,
emotional or sexual abuse, or is found
to be highly stressful psychologically or
may prejudice morals; or
3. Is performed underground, underwater
or at dangerous heights; or
Working Hours of a Child
Quantity
Age Bracket
Below 15 y/o
Daily Max
Weekly Max
4 hrs
20 hrs
15 to below 8hrs.
18
40 hrs
Night work prohibition
Age Bracket
Prohibited Hours
Below 15 y/o
8 pm to 6 am (10
hrs.)
15 to below 18
10 pm to 6 am (8
hrs.)
Discrimination
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No employer shall discriminate against any
person in respect to terms and conditions of
employment on account of his age. [Art. 138]
5. Kasambahays
Relevant Law: RA 10361 (Batas Kasambahay
or Domestic Worker’s Act
Note: RA 10361 has expressly repealed
Chapter III, “Employment of Househelpers”,
Title III, Book III of the Labor Code
Domestic work - This refers to work
performed in or for a household or households.
[Sec 4(c)., RA 10361]
Household - refers to the immediate members
of the family or the occupants of the house that
are directly provided services by the domestic
worker. [Sec 4(f), RA 10361]
Domestic worker or “Kasambahay” - Refers
to any person engaged in domestic work within
an employment relationship such as, but not
limited to, the following: general househelp,
nursemaid or “yaya”, cook, gardener, or
laundry person. [Sec 4(d), RA 10361]
The term domestic worker or “kasambahay”
excludes any person who performs domestic
work only occasionally or sporadically and not
on an occupational basis. [Sec.4(d), RA 10361]
Note: IRR, Sec. 2 does not include family
drivers. See previous discussion on domestic
workers. See also discussion under III. A. 1. A.
e. Domestic workers.
Minimum wage
The minimum wage of domestic
not be less than the following:
a. P2,500 a month for those
NCR
b. P2,000 a month for those
chartered
cities
and
municipalities
c. P1,500 a month for those
other municipalities
workers shall
employed in
employed in
first
class
employed in
Within one year from the effectivity of RA
10361, and periodically thereafter, the
Regional Board shall review, and if proper,
LABOR LAW
determine and adjust the minimum wage rates
of domestic workers. [Sec. 24, RA 10361]
Standard of Treatment
The employer or any member of the household
shall not subject a domestic worker or
“kasambahay” to any kind of abuse nor inflict
any form of physical violence or harassment or
any act tending to degrade the dignity of a
domestic worker. [Sec. 5, RA 10361]
Board, Lodging and Medical Attendance
The employer shall provide for the basic
necessities of the domestic worker to include:
1. At least three adequate meals a day
2. Humane sleeping arrangements that
ensure safety
3. Appropriate rest and assistance in case of
illnesses and injuries sustained during
service without loss of benefits. [Sec. 6, RA
10361]
Privacy
Respect for the privacy of the domestic worker
shall be guaranteed at all times and shall
extend to all forms of communication and
personal effects [Sec. 7, RA 10361]
Access to Outside Communication
The employer shall grant the domestic worker
access to outside communication during free
time: Provided, That in case of emergency,
access to communication shall be granted
even during work time. [Sec. 8, RA 10361]
Education and Training
The employer shall afford the domestic worker
the opportunity to finish basic education and
may allow access to alternative learning
systems and, as far as practicable, higher
education or technical and vocational training.
[Sec. 9, RA 10361]
Social and Other Benefits
A domestic worker who has rendered at least
one (1) month of service shall be covered by
the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the
pertinent provisions provided by law.
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Leave Benefits
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. [Sec. 29, RA 10361]
Rest Periods
Daily Rest Period: 8 hours
Weekly Rest Period: at least 24 consecutive
hours. The employer and employee may agree
to:
a. Offsetting a day of absence with a
particular rest day;
b. Waiving a particular rest day in return for
an equivalent daily rate of pay;
c. Accumulating rest days not exceeding five
(5) days; or
d. Other similar arrangements. [Sec. 20, 21,
RA 10361]
Pre-Employment Requirement
Prior to the execution of the employment
contract, the employer may require the
following from the domestic worker:
a. Medical certificate or a health certificate
issued by a local government health officer;
b. Barangay and police clearance;
c. National Bureau of Investigation (NBI)
clearance; and
d. Duly authenticated birth certificate or if not
available, any other document showing the
age of the domestic worker such as voter’s
identification card, baptismal record or
passport.
However, Sec. 12(a), (b), (c) and (d) shall be
standard requirements when the employment
of the domestic worker is facilitated through the
PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case
may be. [Sec. 12, RA 10361]
LABOR LAW
Pre-Employment Prohibition
The ff. shall be unlawful:
1. Charging any share in the recruitment or
finder’s fees against the domestic worker
by a private employment agency or third
party. [Sec. 13, RA 10361]
2. Requiring a domestic worker to make
deposits from which deductions shall be
made for the reimbursement of loss or
damage to tools, materials, furniture and
equipment in the household. [Sec. 14, RA
10361]
3. Placing the domestic worker under debt by
the employer or any person acting on
behalf of the employer to [Sec. 15, RA
10361]
Time and Manner of Payment
Payment of wages shall be made:
1. Directly to the domestic worker in cash
2. At least once a month
3. With no deductions from the wages other
than that which is mandated by law, unless
allowed by the domestic worker through a
written consent
No employer shall pay the wages of a domestic
worker by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or
any object other than the cash wage as
provided for under this Act. [Sec. 25, RA
10361]
Payslip
The employer shall at all times provide the
domestic worker with a copy of 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 the
employer for a period of three (3) years. [Sec.
26, RA 10361]
Wage Prohibitions
It shall be unlawful for the original employer to
charge any amount from the said household
where the service of the domestic worker was
temporarily performed. [Sec. 23, RA 10361]
Other Prohibited Acts
a. Interference in employee’s wage disposal
[Sec. 27, RA 10361]
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b. Direct or indirect withholding of wages by
the employer [Sec. 28, RA 10361]
c. Payment in forms other than cash [Sec. 25,
RA 10361]
Right against assignment to nonhousehold work at a wage rate lower than
that mandated for agricultural or nonagricultural enterprises depending on the case.
[Sec. 22, RA 10361]
Employment Age of Domestic Workers:
Unlawful to employ any person below fifteen
(15) years of age as a domestic worker [Sec.
16, RA 10361]
Persons between 15-18 years old should only
be employed in non-hazardous work. [D.O. No.
4-99 Sec. 4]
Daily Rest Period: Aggregate of eight (8)
hours per day. [Sec. 20, RA 10361]
Employment Certification: ER shall give the
househelper a written statement of the nature
and duration of the service and his or her work
performance as househelper upon severance.
[Sec. 35, RA 10361]
Termination
Initiated by the domestic worker
The domestic worker may terminate the
employment relationship at any time before the
expiration of the employment contract for any
of the following causes:
1. Verbal or emotional abuse of the domestic
worker by the employer or any member of
the household;
2. Inhuman treatment including physical
abuse of the domestic worker by the
employer or any member of the household;
3. Commission of a crime or offense against
the domestic worker by the employer or
any member of the household;
4. Violation by the employer of the terms and
conditions of the employment contract and
other standards set forth under this law;
5. Any disease prejudicial to the health of the
domestic worker, the employer, or
member/s of the household; and
6. Other causes analogous to the foregoing.
[Sec. 33, RA 10361]
LABOR LAW
Initiated by the employer
An employer may terminate the services of the
domestic worker at any time before the
expiration of the contract, for any of the
following causes:
1. Misconduct or willful disobedience by the
domestic worker of the lawful order of the
employer in connection with the former’s
work;
2. Gross or habitual neglect or inefficiency by
the domestic worker in the performance of
duties;
3. Fraud or willful breach of the trust reposed
by the employer on the domestic worker;
4. Commission of a crime or offense by the
domestic worker against the person of the
employer or any immediate member of the
employer’s family;
5. Violation by the domestic worker of the
terms and conditions of the employment
contract and other standards set forth
under this law;
6. Any disease prejudicial to the health of the
domestic worker, the employer, or
member/s of the household; and
7. Other causes analogous to the foregoing.
[Sec. 34, RA 10361]
Employment Certification
Upon the severance of the employment
relationship, the employer shall issue the
domestic worker within five (5) days from
request a certificate of employment indicating
the nature, duration of the service and work
performance [Sec. 35, RA 10361].
Unjust dismissal
Neither the domestic worker nor the employer
may terminate the contract before the
expiration of the term except for grounds
provided in Secs. 33 and 34 of RA 10361.
If the domestic worker is unjustly dismissed,
the domestic worker shall be paid the
compensation already earned plus the
equivalent of 15 days work by way of indemnity
[Sec. 32, RA 10361].
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Leaving without justifiable reason by the
domestic worker
a. Any unpaid salary due not exceeding the
equivalent 15 days work shall be forfeited
AND
b. The employer may recover from the
domestic worker the costs incurred related
to the deployment expenses, if any:
Provided, that the service has been
terminated within 6 months from the
domestic worker’s employment [Sec. 32,
RA 10361].
Notice to end the working relationship
If the duration of the domestic service is not
determined either in stipulation or by the nature
of the service, the employer or the domestic
worker may give notice to end the working
relationship five (5) days before the intended
termination of the service.
The domestic worker and the employer may
mutually agree upon written notice to preterminate the contract of employment to end
the employment relationship. [Sec. 32, RA
10361]
6. Homeworkers
Note: D.O. No. 5, DOLE (February 4, 1992), is
now Rule XIV, Book III of the IRR.
Industrial homework
a. Is 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.
b. Decentralized form of production, where
there is ordinarily very little supervision or
regulation of methods of work. [Sec. 2(a),
Rule XIV, Book III, IRR]
Industrial Homeworker - a worker who is
engaged in industrial homework.
Employer means any natural or artificial
person who:
a. Acts as a contractor or subcontractor –
delivers or causes to be delivered any
goods, articles, or materials to be
processed or fabricated in or about a home
LABOR LAW
and thereafter to be returned or to be
disposed of or distributed in accordance
with employer’s direction; OR
b. Sells any goods, articles, or materials to be
processed or fabricated in or about a home
and then rebuys them after. [Art. 153]
Note: Sec. 2(d), Rule XIV, Book III is
substantially similar to the above.
Rights
and
benefits
accorded
homeworkers
a. Right to form, join or assist organizations
[Sec. 3, Rule XIV, Book III, IRR]
b. Right to acquire legal personality and the
rights and privileges granted by law to
legitimate labor organizations upon
issuance of the certification of registration
[Sec. 4, Rule XIV, Book III, IRR]
c. Immediate payment upon employer’s
receipt of finished goods or articles [Sec. 6,
Rule XIV, Book III, IRR]
d. SSS, MEDICARE and ECC premium
contributions shall be deducted from their
pay
and
shall
be
remitted
by
ER/contractor/subcontractor to the SSS
[Sec. 6, Rule XIV, Book III, IRR]
Liability of Employer
a. Employer may require homeworker to redo
work
improperly
executed
without
additional pay [Sec. 9(a), Rule XIV, Book
III, IRR]
b. Employer need not pay homeworker for
any work done on goods or articles not
returned due to homeworker’s fault [Sec.
9(b), Rule XIV, Book III, IRR]
c. If subcontractor/contractor fails to pay
homeworker, employer is jointly and
severally liable with the former to the
homeworker for his/her wage [Sec. 11,
Rule XIV, Book III, IRR]
d. Employer shall assist the homeworkers in
the maintenance of basic safe and
healthful working conditions at the
homeworkers’ place of work. [Sec. 11, Rule
XIV, Book III, IRR]
Regional Office shall provide technical
assistance to registered homeworkers’
organizations [Sec. 14, Rule XIV, Book III, IRR]
Prohibited Homework
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a. explosives, fireworks and articles of like
character;
b. drugs and poisons; and
c. other articles, the processing of which
requires exposure to toxic substances.
[Sec. 13, Rule XIV, Book III, IRR]
Deductions
No deduction from the homeworker’s earnings
for the value of materials lost, destroyed or
damaged unless:
a. Homeworker is clearly shown to be
responsible for loss or damage
b. Reasonable opportunity to be heard
c. Amount of deduction is fair and
reasonable, and does not exceed actual
loss or damage
d. Deduction does not exceed 20% of
homeworker’s weekly earnings [Sec. 8,
Rule XIV, Book III, IRR]
7. Solo Parents
See III. C. 2. A. for discussion on definition of
solo parents and solo parent leave*
See VII. E. for discussion on non-work related
support for solo parents*
Flexible work schedule for solo parents
“Flexible work schedule” is the right granted to
a solo parent to vary his/her arrival and
departure time without affecting core work
hours as defined by the employer. [Sec. 3(e),
RA 8972]
The employer shall provide a flexible work
schedule for solo parents: Provided,
1. That the same shall not affect individual
and company productivity:
2. That any employer may request exemption
from the above requirements from the
DOLE on certain meritorious grounds.
[Sec. 6, RA 8972]
Work discrimination illegal
No employer shall discriminate against any
solo parent employee with respect to terms and
conditions of employment on account of his/her
status. [Sec. 7, RA 8972]
8. Night Workers
LABOR LAW
Night worker
Any employed person whose work requires
performance of a substantial number of
hours of night work which exceed a
specified limit. This limit shall be fixed by the
Sec of Labor after consulting the workers’
representatives/labor
organizations
and
employers. [Art. 154, as amended by RA
10151]
Any employed person whose work covers the
period from 10:00 pm to 6:00 am the following
morning, provided that the worker performs no
less than 7 consecutive hours of work. [Sec. 2,
Rule XV, Book III, Rule XV, Sec. 2, IRR,
through D.O. No. 119-12]
Health Assessment
At the worker’s request, they 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. Before taking up an assignment as a night
worker
b. At regular intervals during such an
assignment
c. If they experience health problems during
such an assignment
With the exception of a finding of unfitness for
night work, the findings of such assessments
shall be confidential and shall NOT be used to
their detriment, subject, however, to applicable
company policies. [Art. 155, as amended by
RA 10151; Sec. 3, Rule XV, Book III, IRR,
through D.O. No. 119-12]
Mandatory Facilities
Mandatory facilities shall be made available for
workers performing night work, which include
the following:
a. Suitable first-aid and emergency facilities;
b. Lactation station in required companies
pursuant to RA 10028;
c. Separate toilet facilities for men & women
d. Facility for eating w/ potable drinking water;
AND
e. Facilities for transportation and/or properly
ventilated temporary sleeping or resting
quarters, separate for male and female
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LABOR LAW
workers, shall be provided except where
any of the ff. circumstances is present:
1. There is an existing company
guideline, practice or policy, CBA, or
any similar agreement providing for an
equivalent or superior benefit; or
2. Start or end of the night work does NOT
fall within 12 mn - 5 am; or
3. Workplace is located in an area that is
accessible 24 hours to public
transportation; or
4. Number of employees does NOT
exceed a specified number as may be
provided for by the SOLE in
subsequent issuances [Art. 156, as
amended by RA 10151; Sec. 4, Rule
XV, Book III, IRR, through D.O. No.
119-12]
Transfer
If night worker is unfit for night work due to
health reasons as certified by competent
physician, s/he shall be:
a. Transferred in good faith to a job for which
they are fit to work whenever practicable,
which must be similar and equivalent
position;
b. If transfer is not practicable, or workers are
unable to render night work for a
continuous period of not less than 6
months upon certification of a competent
public health authority, they shall be
granted the same benefits as other workers
who are unable to work due to illness.
c. If workers are certified as temporarily unfit
to render night work for a period of less
than 6 months, they shall be given the
same protection against dismissal or notice
of dismissal as other workers who are
prevented from working for health reasons.
[Art. 157, as amended by RA 10151; Sec.
5, Rule XV, Book III, IRR, through D.O. No.
119-12]
Women Night Workers
Employers shall ensure that measures shall be
taken to ensure that an alternative to night work
for pregnant and nursing employees who
would otherwise be called upon to perform
such work. Such measures may include:
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 of at
least sixteen (16) weeks, which shall be
divided between the time before and after
childbirth;
Medical certificate issued by competent
physician (OB/Gyne/Pedia) is necessary
for the grant of:
1. additional periods of assignment to day
work during pregnancy or after
childbirth, provided that such shall not
be more than 4 weeks or for a longer
period as may be agreed upon by
employer and worker;
2. extension of maternity leave; and
3. clearance to render night work.
b. Provision of social security benefits - in
accordance with provisions of Act No 8282
(Social Security Act of 1997) and other
existing company policy or collective
bargaining agreement.
c. Extension of maternity leave – where
transfer to day work is not possible, but
requires recommendation by competent
physician; without pay or using earned
leave credits, if any. [Art. 158, , as
amended by RA 10151; Sec. 6, Rule XV,
Book III, IRR, through D.O. No. 119-12]
Protection against dismissal and loss of
benefits attached to employment status,
seniority, and access to 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 as defined under this
Rule. She shall NOT lose the benefits
regarding her employment status, seniority,
and access to promotion which may attach to
her regular night work position. [Sec. 8, Rule
XV, Book III, IRR, through D.O. No. 119-12]
See also Night Shift Differential above.
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9. Migrant Workers
See II. A. Policy of Selective Deployment
above.
Overseas Filipino Worker/Migrant Worker –
A person who is to be engaged, is engaged or
has been engaged in a remunerated activity:
1. In a state of which he or she is not a citizen
or
2. On board a vessel navigating the foreign
seas other than a government ship used for
military or non-commercial purposes or
3. On an installation located offshore or on
the high seas. [Sec. 2 (a), RA 8042, as
amended]
Principals and agencies have primary
responsibility for repatriation
The repatriation of the worker or his/her
remains, and the transport of his/her personal
effects shall be the primary responsibility of the
principal, employer or agency that recruited or
deployed him/her abroad. All costs attendant
thereto shall be borne by the principal,
employer or the agency concerned. [Sec. 1,
Rule XIII, IRR of RA 8042, as amended by RA
10022]
Principals and agencies to advance
repatriation costs
Principals and agencies have the obligation to
advance the costs of repatriation, and to
immediately repatriate the migrant worker
without a prior determination of 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 of employment was solely due to
the worker’s fault. [Sec. 2, Rule XIII, IRR of RA
8042, as amended by RA 10022]
LABOR LAW
Emergency repatriation
The OWWA, in coordination with DFA, and in
appropriate situations, with international
agencies, shall undertake the repatriation of
workers in cases of war, epidemic, disasters or
calamities, natural or man-made, and other
similar
events,
without
prejudice
to
reimbursement by the responsible principal or
agency within sixty (60) days from notice. [Sec.
5, Rule XIII, IRR of RA 8042, as amended by
RA 10022].
Underage migrant workers; repatriation is
mandatory
Upon discovery or upon being informed of the
presence of migrant workers whose actual
ages fall below the minimum age requirement
for overseas deployment, the responsible
officers in the Foreign Service shall without
delay repatriate said workers and advise the
DFA through the fastest means of
communication available of such discovery and
other relevant information. [Sec. 6, Rule XIII,
IRR of RA 8042, as amended by RA 10022]
Prohibition on bonds and deposits
In no case shall a private recruitment/manning
agency require any bond or cash deposit from
the worker to guarantee performance under the
contract for his/her repatriation [Sec. 9, Rule
XIII, IRR of RA 8042, as amended by RA
10022]
Compulsory insurance coverage for all
migrant workers
Each migrant worker shall be covered by a
compulsory insurance policy which shall be
secured at no cost to said worker. Such
insurance policy shall be effective for the
duration of the migrant worker’s employment.
[Sec. 37-A, RA 8042, as amended by RA
10022]
The insurance policy shall cover:
a. Accidental death;
b. Natural death;
c. Permanent total disablement;
d. Repatriation cost of the worker when
his/her employment is terminated by the
employer without any valid cause, or by the
employee with just cause, including the
transport of his/her personal belongings;
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e. Subsistence allowance benefit for a
migrant worker who is involved in a case
for litigation for the protection of his/her
rights in the receiving country;
f. Money claims arising from employer’s
liability which may be awarded or given to
the worker in a judgment or settlement of
his/her case in the NLRC;
g. Compassionate visit. When a migrant
worker is hospitalized and has been
confined for at least seven (7) consecutive
days, he shall be entitled to a
compassionate visit by one (1) family
member or a requested individual;
h. Medical evacuation. When an adequate
medical facility is not available proximate to
the migrant worker, as determined by the
insurance company's physician and/or a
consulting physician, the insurance
provider shall provide for the worker’s
evacuation; and
i. Medical repatriation. When medically
necessary as determined by the attending
physician, repatriation under medical
supervision to the migrant worker's
residence shall be undertaken by the
insurance provider at such time that the
migrant worker is medically cleared for
travel by commercial carrier. [Sec. 2, Rule
XVI, IRR of RA 8042, as amended by RA
10022]
10. Security Guards
[Relevant issuance: DO 150-16, Revised
Guidelines Governing the Employment and
Working Conditions of Security Guards and
Private Security Personnel in the Private
Sector Industry]
Rights of security guards and other private
security personnel
All security guards and other private security
personnel, whether deployed or assigned as
reliever, seasonal, week-ender, or temporary,
shall be entitled to all the rights and privileges
as provided for in the Labor Code, which shall
include:
a. Safe and healthful working conditions;
b. Labor standards as may be provided in the
Service Agreement or under the Labor
Code;
LABOR LAW
c. Retirement benefits under RA 7641, RA
1161, as amended by RA 8282, and
retirement plans of the security service
contractor, if any;
d. Social security and welfare benefits;
e. Right to self-organization and collective
bargaining, subject to the provisions of
existing laws; and
f. Security of tenure. [Sec. 6, DO 150-16]
PNP Examination required for employment
The security guards and other private security
personnel in the employ of any security service
contractor (SSC)/private security agency
(PSA) should be duly licensed and must have
passed the physical and neuro-psychiatric
examination and drug test required by the PNP
for pre-employment and for continued
employment. Expenses for these examinations
and test shall be shouldered by the security
guards.
Any additional test may be required at the
expense of the requesting party. [Sec. 7.1, DO
150-16]
Minimum wage
Unless a higher minimum wage is agreed upon
by the parties, the security guards and other
private security personnel shall be entitled to
receive a salary of not less than the minimum
wage rate prescribed for non-agricultural
sector or industry in the region where he/she is
assigned, regardless of the nature of business
of the principal. [Sec. 7.3, DO 150-16]
In case of transfer, the wage rate most
favorable to the security guards and other
private security personnel shall apply. [Sec.
7.4, DO 150-16]
Deductions from salary
No deduction shall be made from the salary of
the security guards and other private security
personnel, except for:
1. SSS contribution;
2. Pag-IBIG contribution;
3. PhilHealth contribution;
4. Withholding tax from income, provided a
proper withholding tax receipt is issued to
the employee before the filing of income
tax return every year;
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5. Union dues, if authorized in writing;
6. Agency fees which may be collected from
employees who are not members of the
bargaining agent but accept benefits under
the collective bargaining agreement (CBA);
and
7. Other deduction as may be authorized in
writing by the security guard and other
private security personnel for payment 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.
In case an SSC/PSA requires its security guard
and other private security personnel to post a
bond for use of firearms and other
paraphernalia, such may only be imposed
once.
The amount of the bond should not be more
than 5% of the amount of the firearm issued to
the security guard and other private security
personnel. The said cash bond, less the cost of
damage or loss of firearms or paraphernalia
due to the fault of the security guard, shall be
refunded to the security guards and other
private security personnel within 15 calendar
days from severance of employment.
See III. B. 4. b. Prohibition against wage
deductions for deduction from deposits.
In the event that a SSC/PSA requires a cash
deposit from its employees, the maximum
amount shall not exceed the employee’s 1
month basic salary. The said cash deposit may
be deducted from the employee’s wages in an
amount which shall not exceed 20% of the
employee’s wages in a week. The full amount
of cash deposit deducted shall be returned to
the employee within 10 days from his/her
separation from the service. [Sec. 8, DO 15016]
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IV. POST-EMPLOYMENT
A. EMPLOYER-EMPLOYEE
RELATIONSHIP
Definitions
1. Employer
Any person acting directly or indirectly in
the interest of an employer in relation to an
employee. [Art. 97(b); Art. 219(f)]
Any person, natural or juridical, employing
the services of the employee. [Art. 173(f)]
Includes:
o The government
o All its branches, subdivisions and
instrumentalities
o All government-owned or controlled
corporations and institutions
o All nonprofit private institutions, or
organizations. [Art. 97(b)]
Does not include any labor organization or
any of its officers or agents except when
acting as employer. [Art. 219(f)]
2. Employee
Any individual employed by an employer.
[Art. 97(c); Art. 219(g)]
Any person compulsorily covered by the
GSIS under C.A. No. 168, as amended.
[Art. 173(g)]
Includes:
o The members of the AFP,
o Any person employed as casual,
emergency, temporary, substitute or
contractual,
o Any person compulsorily covered by
the SSS under R.A. No. 1161, as
amended. [Art. 173(g)]
o Any individual whose work has ceased
as a result of or in connection with any
current labor dispute or because of any
unfair labor practice if he has not
obtained any other substantially
equivalent and regular employment.
[Art. 219(g)]
The term shall not be limited to the
employees of a particular employer, unless
the Code so explicitly states. [Art. 219(g)]
3. Person
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An individual, partnership, association,
corporation,
business
trust,
legal
representatives, or any organized group of
persons. [Art. 97(a); Art. 173(h)]
Both a question of law and of fact
The existence or absence of EER is a question
of law and of fact, each in its defined sense.
Ultimately, it is a question of fact because
whether one exists or not is dependent upon
the facts of each case. [SSS v. CA and Ayalde,
G.R. No. 100388, (2000)]. However, it is a
question of law because it cannot be made the
subject of agreement [Tabas et.al. v. California
Manufacturing Co., et. al., G.R. No. 80680,
(1989)]. Hence, the characterization of the law
prevails over that in the contract.
1. Tests to Determine Existence
a. Four-Fold Test
Elements of an EER
1. Selection and engagement of the
employee;
2. Payment of wages;
3. Power of dismissal; and
4. Employer’s power to control the
employee’s conduct with respect to the
means and methods by which the work is
to be accomplished [Brotherhood Labor
Unity Movement of the PH v. Zamora, G.R.
No. 48645, (1987)]
Payment of wages
The following are not conclusive of the
absence of an EER:
That a worker was not reported as an
employee to SSS;
That a worker’s name does not appear in
the payrolls and pay envelope records
submitted by the employer.
Note: For a payroll to be utilized to disprove the
EER, it must contain a true and complete list of
employees. [Southeast East International
Rattan v Coming, G.R. No. 186621 (2014)]
LABOR LAW
Power to control
This is the most important element when
determining the existence of an EER. It
pertains not only to results, but also to the
means and methods to attain those results.
[Lirio v. Genovia, G.R. No. 169757 (2011)].
The “existence” of the right to control is
sufficient for the element to be present. There
need not be “actual exercise” of the right.
[Zanotte Shoes v. NLRC, G.R. No. 100665,
(1995)]
Not every form of control will create an EER.
No EER exists when control is in the form of
rules that merely serve as guidelines towards
the achievement of results without dictating the
means or methods to attain them. EER exists
when control is in the form of rules that fix the
methodology to attain a specified result and
bind the worker to use such. [Insular Life
Assurance Co, LTD v. NLRC, G.R. No. 84484
(1989)].
b. Economic Dependence Test
Two-tiered approach
1. Control Test (refer to the Four-Fold Test)
2. Underlying economic realities within the
activity or relationship [Sevilla v. CA, G.R.
Nos. L-41182-3 (1988)]
Underlying economic realities
In determining the existence of an EER, these
realities must be examined, taking into
consideration the totality of circumstances
surrounding the true nature of the parties’
relationship. The benchmark “reality” for the
existence of an EER is economic dependence
of the worker on his employer. “Economic
dependence” is whether the worker is
dependent on the employer for his continued
employment. [Orozco v. CA, G.R. No. 155207
(2008)]
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Competent and relevant evidence needed
to prove EER
No particular form of evidence is required to
prove the EER. Any competent and relevant
evidence to prove the relationship may be
admitted. For, if only documentary evidence
would be required to show that relationship, no
scheming employer would ever be brought
before the bar of justice, as no employer would
wish to come out with any trace of the illegality
he has authored considering that it should take
much weightier proof to invalidate a written
instrument. [Tenazas, et al., v. R. Villegas Taxi
Transport, G.R. No. 192998 (2014)]
Burden of proof on alleged employee
The onus probandi rests on the employer to
prove that its dismissal was for a valid cause.
However, before a case for illegal dismissal
can prosper, an EER must first be established.
It is incumbent upon the employee to prove the
EER by substantial evidence. [Javier v. Fly Ace
Corporation, G.R. No. 192558 (2012)]
Doctrine of piercing the corporate veil
When this doctrine is applied, an employee can
be said to have an EER with the corporation
that another corporation (who the employee
“works” for) is merely an alter ego of. It applies
in these 3 basic scenarios:
1. Defeat of public convenience as when
corporate fiction is used as a vehicle to
evade existing obligations;
2. Fraud cases as when the corporate entity
is used to justify a wrong, protect fraud, or
defend a crime;
3. Alter ego cases, where a corporation is a
farce, as it is a mere alter ego or business
conduit of a person, or where the
corporation is so organized and controlled
and its affairs are so conducted as to make
it merely an instrumentality, agency,
conduit or adjunct of another corporation.
[Maricalum Mining Corp. v. Florentino,
G.R. No. 221813 (2018)]
Note: The corporate character is not fully
abrogated. It continues for other legitimate
objectives. However, in certain circumstances,
it may be pierced in order to promote
substantial justice. Such fiction of law cannot
be invoked to further ends subversive of
LABOR LAW
justice. [Pamplona Plantation Co v Tinghil
[G.R. No. 159121 (2005)]
Doctrine illustrated in jurisprudence
In Sarona v. NLRC [G.R. No. 185280 (2012)],
the doctrine was applied. It involved the illegal
dismissal of Sarona, a security guard who first
worked at Sceptre but was subsequently
assigned to Royale, where he was illegally
dismissed. In the computation of his separation
pay, Sarona prayed that the corporate veil of
Royale be pierced as it was a mere
continuation of Sceptre; hence, his separation
pay should be computed from the time he was
hired by Sceptre. This was granted.
Circumstances indicated that Spectre and
Royale were one and the same (same office,
same officers, same person exercising control
and supervision over employees of both
companies), and that Sarona’s transfer to
Royale was done in bad faith. As such, Sarona
could be said to have an EER with Sceptre.
Thus, his separation pay was to be computed
from the time he was hired by Sceptre.
2. Legitimate Subcontracting as
distinguished from Labor-Only
Contracting
Contracting or Subcontracting
Definition of Contracting/Subcontracting
Contracting or subcontracting refers to an
arrangement whereby a principal agrees to
farm out to a contractor the performance or
completion of a specific job or work –
a. Within a definite or predetermined period,
b. Regardless of whether such job or work is
to be performed or completed within or
outside the premises of the principal. [Sec.
3(c), D.O. No. 174-17]
Contracting/Subcontracting
as
distinguished from Labor-Only Contracting
There is "labor-only" contracting where:
1. The person supplying workers to an
employer does not have substantial capital
or investment in the form of tools,
equipment, machineries, work premises,
among others, and
2. The workers recruited and placed by such
person are performing activities which are
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directly related to the principal business of
such employer.
In such cases, the person or intermediary shall
be considered merely as an agent of the
employer who shall be responsible to the
workers in the same manner and extent as if
the latter were directly employed by him. [Art.
106, par. 4]
Rules for Contracting/Subcontracting
1. Whenever an employer enters into a
contract with another person for the
performance of the former’s work, the
employees of the contractor and of the
latter’s subcontractor, if any, shall be paid
in accordance with the provisions of this
Code. [Art. 106, par. 1]
2. In the event that the contractor or
subcontractor fails to pay the wages of his
employees in accordance with this Code,
the employer shall be jointly and severally
liable with his contractor or subcontractor
to such employees:
a. To the extent of the work performed
under the contract
b. In the same manner and extent that he
is liable to employees directly
employed by him. [Art. 106, par. 2]
3. The
SOLE
may,
by
appropriate
regulations, restrict or prohibit the
contracting-out of labor to protect the rights
of workers established under this Code.
[Art. 106, par. 3]
a. He may make appropriate distinctions
between labor-only contracting and job
contracting as well as differentiations
within these types of contracting.
b. He may determine who among the
parties involved shall be considered
the employer for purposes of this Code.
4. An employer or indirect employer may
require the contractor or subcontractor to
furnish a bond equal to the cost of labor
under contract, on condition that the bond
will answer for the wages due the
employees should the contractor or
subcontractor, as the case may be, fail to
pay the same. [Art. 108]
5. Contractors and subcontractors referred to
in these rules are prohibited from engaging
in recruitment and placement activities as
defined in Art. 13(b), whether for local or
overseas employment. [Sec. 2. D.O. No.
174-17: Rules Implementing Articles 106 to
109 of the Labor Code, as amended]
Applicability of Rules to Indirect Employers
The provisions of Art. 106 shall likewise apply
to any person, partnership, association or
corporation which, not being an employer,
contracts with an independent contractor for
the performance of any work, task, job or
project. [Art. 107]
Service Agreement
Service agreement refers to the contract
between the principal and contractor
containing the terms and conditions governing
the performance or completion of a specific job
or work being farmed out for a definite or
predetermined period. [Sec. 3(j), D.O. No. 17417]
a. Elements
To be considered legitimate contracting or
subcontracting, the following elements must
concur:
1. Distinct and independent business:
Contractor or subcontractor is engaged in
a distinct and independent business and
undertakes to perform the job on its own
responsibility, according to its own manner
and method;
2. Substantial capital or investment:
Contractor or subcontractor has substantial
capital to carry out the job farmed out by
the principal on his account, manner and
method, investment in the form of tools,
equipment, machinery and supervision;
3. Free from control/direction of the
principal: In performing the work,
contractor or subcontractor is free from the
control/direction of the principal in all
matters regarding performance of the work
except the result;
4. Compliance with labor laws: Service
Agreement ensures that employees of the
contractor/subcontractor are given all the
benefits and rights they are entitled to
under labor laws. [Sec. 8, D.O. No. 174-17]
Substantial capital (#2)
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Refers to paid-up capital stocks/shares of at
least P5,000,000 in the case of corporations,
partnerships and cooperatives; in case of
single proprietorship, a net worth of at least
P5,000,000. [Sec. 3(l), D.O. No. 174-17]
b. Trilateral relationship
When the above-elements are present, a
trilateral relationship arises. It consists of the
following parties:
1. Principal - Any natural or juridical entity,
whether an employer or not, who puts out
or farms out a job or work to a contractor.
2. Contractor - Any person or entity engaged
in
a
legitimate
contracting
or
subcontracting arrangement providing
services for a specific job or undertaking
farmed out by a principal under a Service
Agreement.
3. Contractor’s employee - Employee of the
contractor hired to perform or complete a
job or work farmed out by the principal.
[Sec. 3, D.O. No. 174-17]
Note: Contractor may also be a subcontractor.
Relationships
within
the
trilateral
relationship
1. EER between the contractor and the
employees it engaged to perform the
specific job, work or service being
contracted; and
2. Contractual relationship between the
principal and the contractor as governed
by the provisions of the NCC. [Sec. 5, par.
1, D.O. No. 18-A-11]
Required contracts
1. Employment
contract
between
the
contractor
and
its
employees
Notwithstanding any oral or written
stipulations to the contrary, such contract
shall be governed by LC 294 and 295, and
provisions on general labor standards. It
shall include the following:
a. Specific description of the job or work
to be performed by the employee; and
b. Place of work and terms and conditions
of employment, including a statement
of the wage rate applicable to the
individual employee.
LABOR LAW
2. Service Agreement between the principal
and the contractor - It shall include the
following:
a. Specific description of the job or work
being subcontracted, including its term
or duration;
b. Place of work and terms and conditions
governing
the
contracting
arrangement, including the agreed
amount of the contracted job or work,
the standard administrative fee of not
less than 10% of the total contract cost;
c. Provision on the issuance of the bond/s
renewable every year. [Sec. 11, D.O.
No. 174-17]
Rights of contractor’s employees
1. Security of tenure
2. Safe and healthful working conditions;
3. Labor standards such as but not limited to
service incentive leave, rest days, overtime
pay, holiday pay, 13th month pay, and
separation pay
4. Retirement benefits under the SSS or
retirement
plans
of
the
contractor/subcontractor;
5. Social security and welfare benefits; and
6. Self-organization, collective bargaining
and peaceful concerted activities including
the right to strike. [Sec. 10, D.O. No. 17417]
Termination of employment [Sec. 13, D.O.
No. 174-17]
Cause
Effect
Prior to
expiration of
Service
Agreement
Governed by Art. 297 –
299
Pretermination of
Service
Agreement
and not due to
authorized
causes
The right of the
contractor’s employee to
unpaid wages and other
unpaid benefits including
unremitted legal mandatory
contributions, (e.g., SSS,
PhilHealth, Pag-ibig, ECC),
shall be borne by the party
at fault, without prejudice
to the solidary liability of
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the parties to the Service
Agreement.
Due to
expiration of
Service
Agreement, or
from
completion of
the phase of
the job, work
or service for
which
employee is
engaged
Employee may opt to wait
for re-employment within 3
months to resign and
transfer to another
contractor-employer.
Failure of the contractor to
provide new employment
shall entitle the employee
to payment of separation
benefits as may be
provided by law or the
Service Agreement,
whichever is higher,
without prejudice to his/her
entitlement to completion
bonuses or other
emoluments, including
retirement benefits
whenever applicable.
The mere expiration of the
Service Agreement shall
not be deemed as a
termination of employment
of the contractor’s
employees who are
deemed regular employees
of the contractor.
c. Liabilities
Solidary liability of principal and contractor
Every employer or indirect employer shall be
held responsible with his contractor for any
violations of labor laws. For purposes of
determining the extent of their civil liability, they
shall be considered as direct employers. [Art.
109]
LABOR LAW
Labor-only contracting
This is one of the violations that may be
committed by the principal and contractor,
which may make them solidarily liable. There
are two kinds:
1. Provided for by Article 206, Labor Code:
a. (i) The contractor does not have
substantial capital; or
(ii) the contractor does not have
investments in the form of tools,
equipment, machineries, supervision,
work premises, among others;
b. The contractor’s employees are
performing activities that are directly
related to the main business operation
of the principal.
2. The contractor does not exercise the right
to control the performance of the work of
the employee. [Sec. 5., D.O. No. 174-17]
Substantial capital under 1st kind
Having substantial capitalization is not enough
to declare one a legitimate contractor. If any of
the other elements of labor-only contracting is
present, they are labor-only contractors.
[Quintanar v. Coca-Cola Bottlers, 794 SCRA
654 (2016)]
Presumption of labor-only contracting
A contractor is presumed to be a labor-only
contractor and has the burden of proving the
contrary. [Polyfoam-RGC Int’l Corp. v.
Concepcion, 672 SCRA 148 (2012)]
Effect of labor-only contracting: employees
become regular employees
Where an entity is declared to be a labor-only
contractor, the employees supplied by said
contractor to the principal become regular
employees of the latter. Having gained regular
status, the employees are entitled to security of
tenure and can only be dismissed for just or
authorized causes and after they had been
afforded due process. [Norkis Trading v.
Buenavista, G.R. No. 182018 (2012)]
Other prohibitions
1. When the principal farms out work to a
“Cabo” [See definition under Sec. 3(a).,
D.O. No. 174-17];
2. Contracting out of job or work through an
in-house agency;
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3. Contracting out of job or work through an
in-house cooperative which merely
supplies workers to the principal;
4. Contracting out of a job or work by reason
of a strike or lockout whether actual or
imminent;
5. Contracting out of a job or work being
performed by union members and such will
interfere with, restrain or coerce employees
in the exercise of their rights to selforganization as provided in Art. 259;
6. Requiring the contractor’s employees to
perform functions which are currently being
performed by the regular employees of the
principal;
7. Requiring the contractor’s employees to
sign, as a precondition to employment or
continued employment, an antedated
resignation letter; a blank payroll; a waiver
of labor standards including minimum
wages and social or welfare benefits; or a
quitclaim releasing the principal or
contractor from liability as to payment of
future claims; or require the employee to
become member of a cooperative;
8. Repeated hiring by the contractor of
employees under an employment contract
of short duration;
9. Requiring employees under a contracting
arrangement to sign a contract fixing the
period of employment to a term shorter
than the term of the Service Agreement,
unless the contract is divisible into phases
for which substantially different skills are
required and this is made known to the
employee at the time of engagement;
10. Such other practices, schemes or
employment arrangements designed to
circumvent the right of workers to security
of tenure. [Sec. 6, D.O. No. 174-17]
Mandatory registration
It shall be mandatory for all persons or entities,
including cooperative, acting as contractors, to
register with the Regional Office of the DOLE
where it principally operates. Failure to register
shall give rise to the presumption that the
contractor is engaged in labor-only contracting.
[Sec. 14, D.O. No. 174-17]
Applicability
D.O. No. 174-17 applies only to trilateral
relationships that can be characterized as
LABOR LAW
contracting or subcontracting arrangements. It
does not apply to:
1. Information technology-enabled services,
such as:
a. Business process outsourcing
b. Knowledge process outsourcing
c. Legal process outsourcing
d. IT infrastructure outsourcing
e. Application development
f. Hardware and/or software support
g. Medical transcription
h. Animation services
i. Back office operations/support
2. Construction industry under the licensing
coverage of the Philippine Contractors
Accreditation Board, which shall be
governed by D.O. No. 19-93; D.O. No. 1398; and DOLEDPWH-DILG-DTI and PCAB
Memo of Agreement-Joint Admin Order 12011.
3. Contracting
or
subcontracting
arrangements in the private security
industry, which are governed by D.O. No.
150-16.
4. Contracts of sale, purchase, lease,
carriage,
growing
agreement,
toll
manufacturing, contract of management,
operation and maintenance and other such
contracts governed by the NCC and other
special laws. [DOLE Dept. Circular No. 0117]
3. Kinds of Employment
a. Regular
An employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of
the employer, except where:
a. The employment has been fixed for a
specific project or undertaking, the
completion or termination of which has
been determined at the time of the
engagement of the employee; or
b. The work or service to be performed is
seasonal in nature and the employment is
for the duration of the season. [Art. 295]
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An employee who is allowed to work after a
probationary period shall be considered a
regular employee. [Art. 296]
Regular employee defined
One who is engaged to perform activities that
are necessary and desirable in the usual
business or trade of the employer as against
those which are undertaken for a specific
project or are seasonal.
It is not synonymous with permanent
employee, because there is no such thing as a
permanent employment. Any employee may
be terminated for just cause.
Two kinds of regular employee
1. Those engaged to perform activities which
are necessary or desirable in the usual
business or trade of the employer; and
2. Casual employees who have rendered at
least 1 year of service, whether continuous
or broken, with respect to the activity in
which they are employed. [Romares v.
NLRC, G.R. No. 122327 (1998)]
Reasonable connection rule
The primary standard to determine regular
employment is the reasonable connection
between the activity performed by the
employee to the business or trade of the
employer.
Test: W/N the employee is usually necessary
or desirable in the usual business or trade of
the employer.
If the employee has been performing the job for
at least one year, even if not continuous or
merely intermittent, the repeated and
continuing need for performance is sufficient
evidence of necessity, if not indispensability of
that activity to the business of the employer.
Hence, the employment is also considered
regular, but only with respect to such activity
and while such activity exists. [Forever Richons
Trading Corp. v. Molina, G.R. No. 206061
(2013)]
LABOR LAW
determining the existence of an EER, as it
merely distinguishes between two kinds of
employees, i.e., regular and casual, for
purposes of determining the right of an
employee to certain benefits, to join or form a
union, or to security of tenure. [Atok Big Wedge
Co., Inc. v. Gison, G.R. No. 169510 (2011)]
Hiring for an extended period
Where the employment of project employees is
extended long after the supposed project has
been finished, the employees are removed
from the scope of project employees and
considered regular employees. [Audion
Electric Co., Inc. v. NLRC, G.R. No. 106648
(1999)]
While length of time is not a controlling test for
project employment, it can be a strong factor in
determining whether the employee was hired
for a specific undertaking or in fact tasked to
perform functions which are vital, necessary
and indispensable to the usual business or
trade of the employer. [Tomas Lao Const. v.
NLRC, G.R. No. 116781 (1997)]
Repeated renewal of contract
While contractual stipulations as to the duration
of employment are valid, they cannot apply
where the contract-to-contract arrangement
was but an artifice to prevent the acquisition of
security of tenure and to frustrate constitutional
decrees. [Beta Electric Corp. v. NLRC, G.R.
No. 86408 (1990)]
Length of time not controlling
Length of time is merely a badge of regular
employment. [Maraguinot v. NLRC, G.R. No.
120969 (1998)]
When Art. 295 not applicable
It does not apply where the existence of an
EER is in dispute. It is not the yardstick for
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b. Casual
An employment shall be deemed to be casual
where:
a. An employee is engaged to perform a job,
work or service which is merely incidental
to the business of the employer, and such
job, work or service is for a definite period
made known to the employee at the time of
engagement. [Sec. 5(b), Rule I, Book VI,
IRR]
b. The employment has been fixed for a
specific project or undertaking, the
completion or termination of which has
been determined at the time of the
engagement of the employee; or
c. The work or service to be performed is
seasonal in nature and the employment is
for the duration of the season. [Art. 295]
Provided, That any employee who has
rendered at least one year of service, whether
such service is continuous or broken, shall be
considered a regular employee with respect to
the activity in which he is employed and his
employment shall continue while such activity
exists. [Art. 295]
Casual employee defined
One engaged to perform a job, work or service
that is merely incidental to the business of the
employer, and such job, work or service is for
a definite period made known to the employee
at the time of engagement.
It is also someone who is not a regular, project
or seasonal employee.
Requirements to become regular employee
1. One (1) year service, continuous or broken
with respect to activity employed, unless he
has been contracted for a specific project.
[Tabas v. California Marketing Co., Inc.,
G.R. No. L-80680 (1989)]
2. Employment shall continue while such
activity exists.
LABOR LAW
desirable to the main business of the employer,
then employment is regular. [A. M. Oreta and
Co., Inc. v. NLRC, G.R. No. 74004 (1989)]
c. Contractual
See Discussion on Fixed-Term Employees
Contractual employees defined
Those who employment is governed by the
contracts they sign every time they are hired.
Their employment is terminated when the
contract expires, which is usually fixed for a
certain period of time (e.g., seafarers). [Unica
v. Anscor Swire Ship Management Corp., G.R.
No. 184318 (2014)]
No implied renewal upon expiration
Absent a mutually-agreed upon agreement,
there is no renewal or extension of an expired
contract.
Termination of contract
The existence of a contract does not mean
there can be no illegal dismissal. Due process
(substantial and procedural) must still be
observed in termination and pre-termination of
the contract. [Fuji Television Network Inc v.
Espiritu, G.R. No. 204944-45 (2014)]
d. Project
Employment is not deemed regular where the
employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
the time of the engagement of the employee.
[Art. 295]
Project employee defined
One who is hired for carrying out a separate
job, distinct from the other undertakings of the
company, the scope and duration of which has
been determined and made known to the
employees at the time of employment. [Hanjin
Heavy Industries & Const. Co. v. Ibañez, G.R.
No. 170181 (2008)]
Nature of work determines kind of
employment
What determines regularity or casualness is
not the employment contract but the nature of
the job. If the job is usually necessary or
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Rationale for project employment
If a project has already been completed, it
would be unjust to require the employer to
maintain them in the payroll while they are
doing absolutely nothing~ except waiting until
another project is begun. In effect, these standby workers would be enjoying the status of
privileged retainers, collecting payment for
work not done, to be disbursed by the employer
from profits not earned. [De Ocampo, Jr. v.
NLRC, G.R. No. 81077 (1990)]
Two kinds of project employee
1. For a particular job or undertaking that is
WITHIN the regular or usual business of
the employer company, but which is
distinct and separate, and identifiable as
such, from the other undertakings of the
company (e.g., construction)
2. For a particular job or undertaking that is
NOT within the regular business of the
corporation. Such a job or undertaking
must also be identifiably separate and
distinct from the ordinary or regular
business operations of the employer. [Villa
v. NLRC, G.R. No. 117043 (1988)]
Test of project employment
W/N employment has been fixed for a specific
project or undertaking the completion or
termination of which has been determined at
the time of the engagement of the employee.
[D.M. Consunji v. NLRC, G.R. No. 116572
(2000)]
Note: When the employment contract does not
state a particular date, but it does specify that
termination of employment is to be on a “day
certain” -- the day when the specified phase of
work would be completed --, the employee
cannot be considered regular. He is a project
employee. [Filipinas Pre-Fabricated Building
Systems, Inc. v. Puente, G.R. No. 153832
(2005)]
Indicators of project employment
1. The duration of the specific/identified
undertaking for which the worker is
engaged is reasonably determinable;
2. Such duration, as well as the specific
work/service to be performed, is defined in
an employment contract;
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3. Agreement and is made clear to the
employee at the time of the hiring;
4. The work/service to be performed by the
employee is in connection with the
particular project/undertaking for which he
is engaged;
5. The employee, while not employed and
awaiting engagement, is free to offer his
services to any other employer;
6. The termination of his employment in the
particular project/undertaking is reported to
the DOLE Regional Office having
jurisdiction over the workplace following
the date of his separation from work, using
the prescribed form on employees’
terminations /dismissals/suspensions;
7. An undertaking in the employment contract
by the employer to pay completion bonus
to the project employee as practiced by
most construction companies. [D.O. No.
19, Sec. 2.2; Samson v. NLRC, G.R. No.
11366 (1996)].
Repeated hiring, length of service not
determinative
The repeated and successive rehiring of
project employees do not qualify them as
regular employees. What is determinative is
whether the employment has been fixed for a
specific project or undertaking, its
completion has been determined at the time of
the engagement of the employee. [Leyte
Geothermal Power Progressive Employees
Union v. Philippine National Oil Company, G.R.
No. 170351 (2011)]
The fact that employment as project
employees has gone beyond 1 year does not
legally dissolve their status as project
employees. LC 280(2) providing that an
employee who has served at least 1 year
shall be considered a regular employee,
relates to casual employees, not to project
employees. [Raycor Aircontrol Systems v.
NLRC, G.R. No. 114290 (1996)]
Generally, length of service provides a fair
yardstick for determining when an employee
initially hired on a temporary basis becomes a
permanent one, entitled to the security and
benefits of regularization. But this standard
will not be fair, if applied to the construction
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industry, simply because construction firms
cannot guarantee work and funding for its
payrolls beyond the life of each project.
[William Uy Construction Corp. v. Trinidad,
G.R. No. 183250 (2010)]
Work pool employee
Project employees may or may not be
members of a work pool. Those who are
members of a work pool may either be project
or regular employees. [Raycor Aircontrol
Systems, Inc. vs. NLRC, G.R. 114290, (1996)]
A work pool may exist although the workers in
the pool do not receive salaries and are free to
seek other employment during temporary
breaks in the business, provided, that the
worker shall be available when called to report
for a project. Although primarily applicable to
regular seasonal workers, this set-up can
likewise be applied to project workers insofar
as the effect of temporary cessation of work is
concerned. [Maraguinot v. NLRC, G.R. No.
120969. (1998)]
Work pools in construction companies
Members of a work pool from which a
construction company draws its project
employees, if considered employees of the
construction company while in the work pool,
are non-project employees or employees for an
indefinite period. If they are employed in a
particular project, the completion of the project
or any phase thereof will not mean severance
of the EER. [Policy Instruction No. 20; J. & DO
Aguilar Corp. v. NLRC, G.R. No. 116352
(1997)]
When a project employee or a member of a
work pool acquires the status of regular
employment
1. Continuous rehiring of project employees
even after cessation of a project;
2. Task performed by the alleged “project
employees” are vital, necessary and
indispensable to the usual business or
trade of the employer. [Maraguinot v.
NLRC, G.R. No. 120969. (1998)]
Termination requirements
A report of termination to the nearest public
employment
office
every
time
their
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employment was terminated due to completion
of each construction project. Failure of the
employer to file termination reports after every
project completion proves that the employees
are not project employees. [Pasos v. Philippine
National Construction Corp., G.R. No. 192394
(2013)]
e. Seasonal
Employment is not deemed regular where the
work or service to be performed is seasonal in
nature and the employment is for the duration
of the season. [Art. 295]
Seasonal employees defined
Those whose work or services to be performed
are seasonal in nature, as there is no
continuing need for the worker. Their
employment is for the duration of the season.
“Regular seasonal” employees after one
season
Seasonal workers who are constantly rehired
and are only temporarily laid off during offseason are not separated from service in said
period, but are merely considered on leave
until work resumes. They are considered
regular and permanent employees. The nature
of their relationship is such that during offseason they are temporarily laid off but during
summer season they are re-employed, or when
their services may be needed. They are not
strictly speaking separated from the service but
are merely considered as on leave of absence
without pay until they are re-employed.
[Philippine Tobacco Flue-Curing & Redrying
Corp. v. NLRC, G.R. No. 127395, (1998)]
Must only be hired for the duration of one
season
To be considered seasonal employees, it is not
enough that work or services performed are
seasonal in nature. The employees must have
been employed only for the duration of one
season. [Hacienda Fatima v. National
Federatiom of Sugarcane Workers, G.R. No.
149440 (2003)]
Exception to one season rule (illustrative
case)
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Although respondent constantly availed herself
of the petitioners’ services from year to year, it
was clear from the facts therein that they were
not in her regular employ. Petitioners therein
performed different phases of agricultural work
in a given year. However, during that period,
they were free to work for other farm owners,
and in fact they did. In other words, they
worked for respondent, but were nevertheless
free to contract their services with other farm
owners. The Court was thus emphatic when it
ruled that petitioners were mere project
employees, who could be hired by other farm
owners. [Mercado, Sr. v. NLRC, G.R. No.
79869 (1991)]
f.
Fixed-term
Brent doctrine
When the following indicators are present,
fixed-term employment is valid:
1. Fixed period of employment was knowingly
and voluntarily agreed upon by the parties
absent any circumstance vitiating consent
2. It satisfactorily appears that the employer
and employee dealt each other on more or
less equal footing with no moral dominance
exercised by one over the other.
Reason for equal footing indicator
When a prospective employee, on account of
special skills or market forces, is in a position
to make demands upon the prospective
employer, such prospective employee needs
less protection than the ordinary worker. The
level of protection to labor must be determined
on the basis of the nature of the work,
qualifications of the employee, and other
relevant circumstances. [Fuji Television
Network Inc v. Espiritu, G.R. No. 204944-45
(2014)].
Distinguished from project employees
Fixed-term employees are different from
project employees, as the former negotiates
their employment contract on more equal
footing with the employer than the latter.
Furthermore, both kinds of employment
happen within a period. For project employees,
the determining factor is the activity (w/n
project) to be performed. For fixed-term
employees, the determining factor is the day
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certain agreed upon (i.e., the commencement
and termination of the EER). [GMA Network v.
Pabriga, G.R. No. 176419 (2013)]
Distinguished
from
independent
contractors
No EER exists between independent
contractors and their principals; their contracts
are governed by the law on contracts and other
applicable law. Employees under fixed-term
contracts cannot be independent contractors
because in fixed-term contracts, an EER
exists. [Fuji Television Network, Inc. v.
Espiritu, G.R. No. 204944-45 (2014)]
Regular fixed-term employee
Where an employee’s contract had been
continuously extended or renewed to the same
position, with the same duties and remained in
the employ without any interruption, then such
employee is a regular employee. The
employee’s contract indicating a fixed-term did
not automatically mean that he/she could never
be a regular employee.
An employee can be a regular employee with a
fixed-term contract. The law does not preclude
the possibility that a regular employee may opt
to have a fixed-term contract for valid reasons.
For as long as it was the employee who
requested, or bargained, that the contract have
a “definite date of termination,” or that the fixedterm contract be freely entered into by the
employer and the employee, then the validity of
the fixed-term contract will be upheld. [Fuji
Television Network Inc v. Espiritu, G.R. No.
204944-45 (2014)].
No implied renewal upon termination
When the day certain for the termination of
employment comes, there is no implied
renewal or extension of employment This must
be expressly and mutually-agreed upon. [Unica
v. Anscor Swire Ship Management Corp., G.R.
No. 184318 (2014)]
In case of pre-termination
Due process must be observed in the pretermination of fixed-term contracts in order for
the employer to not be liable for illegal
dismissal. [Fuji Television Network Inc v.
Espiritu, G.R. No. 204944-45 (2014)]
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g. Probationary; Private School
Teachers
Probationary employee defined
One who is made to go on a trial period by an
employer during which the employer
determines whether he is qualified for
permanent employment, based on reasonable
standards made known to him at the time of
engagement. [Robinson’s Galleria et al. v.
Ranchez, G.R. No. 177937 (2011)]
Rules for probationary employment
1. Shall not exceed 6 months from the date
the employee started working, unless it is
covered by an apprenticeship agreement
stipulating a longer period. [Art. 296]
2. The services of an employee who has been
engaged on a probationary basis may be
terminated for a just cause or when he
fails to qualify as a regular employee in
accordance with reasonable standards
made known by the employer to the
employee at the time of his engagement.
[Art. 296]
a. The employer shall make known to the
employee the standards under which
he will qualify as regular employee at
the time of his engagement.
b. Where no standards are made known
to the employee at the time of
engagement, he shall be deemed a
regular employee. [Sec. 6(d), Rule I,
Book VI, IRR]
3. An employee who is allowed to work after
a probationary period shall be considered
a regular employee. [Art. 296]
Duration
General Rule: Shall not exceed 6 months from
the date of the commencement of employment
Exceptions:
1. When it is covered by an apprenticeship
agreement stipulating a longer period. [Art.
296]
2. When the parties to the employment
contract agree otherwise, such as when
established by company policy or required
by the nature of the work performed by the
employee. [Buiser v. Leogardo, G.R. No. L63316, (1984)]
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3. When it involves the 3-year probationary
period of teachers. [Mercado v. AMA
Computer College, G.R. No. 183572,
(2010)]
4. When it involves an act of liberality on the
part of his employer affording him a second
chance to make good after having initially
failed to prove his worth as an employee.
[Mariwasa v. Leogardo, G.R. No. 74246
(1989)]
Purpose of probationary employment
1. Observation Period – for the employee to
demonstrate his skills to the employer who
determines whether the former is qualified.
2. Restrictive - As long as termination was
made before the expiration of the 6-month
probationary period, the employer has a
right to sever the EER.
The employer has the right to choose who will
be hired. It is within the exercise of this right
that the employer may fix a probationary period
within which he may test and observe the
conduct of the employee before permanent
hiring. [Grand Motor Parts Corp. v. MOLE, G.R.
No. L-58958 (1984)]
Requirements for validity of qualification
standards
In order for the standards set by the employer
to be validly used in determining whether the
employee qualifies for permanent employee:
1. The employer must communicate such
standards to the probationary employee;
and
2. Such communication must be made at the
time of the probationary employee’s
engagement.
An employer is deemed to have made known
the standards when it has exerted reasonable
efforts to apprise the employee of what he is
expected to do or accomplish during the trial
period of probation. This employee must be
sufficiently made aware of his probationary
status as well as the length of time of the
probation. The exception to the foregoing is
when the job is self-descriptive in nature.
[Abbott Laboratories Phil. et al. v. Alcaraz, G.R.
No. 192571 (2013)]
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Effect of failure to comply
If the employer fails to comply with the aboverequirements, the employee is deemed as a
regular and not probationary employee. [Alcira
v. NLRC, G.R. No. 149859, (2004)]
Burden of proof of compliance with
employer
The employer has the burden of proving that
they have informed the probationary employee
of the standards, that those standards have
been applied to the employee, and that the
employee fell short of such standards.
Prohibition on extended/double probation
When the employer renews the employment
contract after the lapse of the 6-month
probationary period, the employees thereby
became regular employees. No employer is
allowed to indefinitely determine the fitness of
its employees. [Bernardo v. NLRC, supra.]
Furthermore, an employee who is merely
transferred to his employer’s sister company
cannot be subjected to new probationary
employment when he had already attained
regular employment under his original
employer. [A Prime Security Services, Inc. v.
NLRC, G.R. No. 107023, (2000)]
Termination of probationary employee
A probationary employee enjoys only a
temporary employment status. He is
terminable at any time, permanent employment
not having been attained in the meantime. The
employer could decide he no longer needed
the probationary employee’s services or his
performance fell short of expectations. As long
as termination was made before the
termination of the 6-month probationary period,
the employer was within his rights to sever the
EER. A contrary interpretation would defect the
clear meaning of the term “probationary.” [De
la Cruz, Jr. v. NLRC, G.R. No. 145417 (2003)]
Termination can only be for:
1. Just causes;
2. Authorized causes; or
3. Failure to qualify as a regular employee in
accordance with reasonable standards
made known by the employer to the
employee at the time of engagement.
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[Robinson’s Galleria et al. v Ranchez, G.R.
No. 177937, Jan. 19, (2011)]
Nonetheless, procedural and substantial due
process must be observed during termination
of the probationary employee.
Note: In order to invoke “failure to meet the
probationary standards” as a justification for
dismissal, the employer must show how these
standards have been applied to the subject
employee. [Univac Development, Inc. v.
Soriano, G.R. No. 182072 (2013)]
Limits to termination
1. It must be exercised in accordance with the
specific requirements of the contract
2. If a particular time is prescribed, the
termination must be within such time and if
formal notice is required, then that form
must be used
3. Employer’s dissatisfaction must be real
and in good faith, not feigned so as to
circumvent the contract or the law
4. There must be no unlawful discrimination in
the dismissal [Manila Hotel Corporation v.
NLRC, G.R. No. 53453 (1986)]
Private school teachers
A private school teacher’s entitlement to
security of tenure is governed by the Manual of
Regulations for Private Schools and not the
Labor Code. Thus, for a private school teacher
to acquire permanent employment (security of
tenure), these must be present:
1. Must be a full-time teacher
2. Must have rendered 3 consecutive years of
service
3. Service must have been satisfactory. [La
Salette of Santiago v. NLRC, G.R. No.
82918 (1991)]
Mere completion of the 3-year probation, even
with an above-average performance, does not
guarantee that the employee will automatically
acquire a permanent employment status. The
probationer can only qualify upon fulfillment of
the reasonable standards set for permanent
employment as a member of the teaching
personnel.
[Herrera-Manaois
v.
St.
Scholastica’s College, G.R. No. 18891 (2013)]
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These standards should be made known to the
teachers on probationary status at the start of
their probationary period, or at the very least
under the circumstances of the present case,
at the start of the semester or the trimester
during which the probationary standards are to
be applied. Of critical importance in invoking a
failure to meet the probationary standards, is
that the school should show – as a matter of
due process – how these standards have been
applied. [Colegio del Santisimo Rosario v.
Rojo, G.R. No. 170388 (2013)]
B. TERMINATION BY
EMPLOYER
Coverage
All establishments or undertakings, whether for
profit or not. [Art. 293]
Exception
Government and its political subdivisions
including GOCCs without original charter. [Sec.
1, Rule 1, Book VI, IRR]
Security of Tenure [Art. 294]
In case of regular employment, the employer
shall not terminate the services of an employee
except for a just cause or when authorized
by this Title.
An employee who is unjustly dismissed from
work shall be entitled to:
1. Reinstatement without loss of seniority
rights, and other privileges,
2. Full backwages inclusive of allowance, and
3. Other benefits or their monetary equivalent
Reckoning period of computation: from the
time his compensation was withheld up to his
actual reinstatement.
Rationale
It is a constitutionally protected right under Sec.
3, Art. XIII, 1987 Constitution.
Termination of employment is not anymore a
mere cessation or severance of a contractual
relationship, but an economic phenomenon
affecting members of the family. Under the
principle of social justice, dismissal of
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employees is adequately protected by the
laws. [Albambra Industries v. NLRC, GR No.
106771 (1994)]
Management Prerogative
An employer cannot be compelled to continue
in its employ a person whose continuance in
the service would patently be inimical to its
interests. [Baguio Central University v.
Gallente, GR No, 188267 (2013)]
Requisites for the valid invocation of
management prerogative affecting security of
tenure:
1. Exercised in good faith for the
advancement of employer’s interest, and
2. Not for the purpose of defeating or
circumventing the rights of the employees
under special laws or valid agreements.
[San Miguel Brewery Sales Force Union v.
Ople, GR No. 52515 (1989)]
Disposition of labor disputes
Bare and vague allegations as to the manner
of service and the circumstances surrounding
the same would not suffice.
Example: a mere copy of the notice of
termination allegedly sent by the employer to
the employee, without proof of receipt or at the
very least, actual service is not substantial
evidence. [Mansion Printing Center v. Bitara
Jr., GR No. 168120 (2012)]
Substantive issues must be addressed more
than anything else, and so, the Court may
forego the matter of procedural infirmities in
labor cases. [Ang v. San Joaquin, Jr., GR No.
182249 (2013)]
Burden of Proof
In order:
1. Existence of ER-EE Relationship - borne
by employee
2. Fact of dismissal - borne by employee
3. Legality of dismissal - borne by employer
Employee must first establish fact of
dismissal
Before the employer must bear the burden of
proving that the dismissal was legal, the
employee must prove by substantial evidence
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the fact of his dismissal from service for the
question of the legality or illegality of the
dismissal to arise. [MZR Industries v.
Colambot, GR No. 179001 (2013)]
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The dismissal must be for any of the causes
provided for in Art. 297-299.
i. Just causes
Employer’s burden of proving legality of
dismissal
The burden of proving the termination was for
a valid or authorized cause shall rest on the
employer. (Art. 292 (b))
Unsubstantiated accusations or baseless
conclusions of the employer are insufficient
legal justifications to dismiss and employee.
[Garza v. Coca-Cola Bottlers Inc, GR No.
180972 (2014)]
The employer’s case succeeds or fails on the
strength of its evidence, and not the weakness
of that adduced by the employee in keeping
with the principle that the scales of justice
should be titled in favor of the latter in case of
doubt in the evidence presented. [Functional
Inc. v Garafil, GR No, 176377 (2011)]
Measure of Penalty
Not every case of insubordination or willful
disobedience by an employee reasonably
deserves the penalty of dismissal. The penalty
must be commensurate with the gravity of
the offense. [Joel Montallana v. La
Consolacion College Manila, GR No. 208890
(2014)]
a. Serious
Misconduct
or
Willful
Disobedience (Insubordination)
b. Gross & Habitual Neglect of Duties
c. Fraud/Willful Breach of Trust
d. Commission of A Crime
e. Analogous cases
An employer may terminate an employment for
any of the following causes:
a. Serious misconduct or willful disobedience
by the employee of the lawful orders of his
employer or representatives in connection
with his work;
b. Gross and habitual neglect by the
employee of his duties;
c. Fraud or willful breach by the employee of
the trust reposed in him by his employer or
duly authorized representative;
d. Commission of a crime or offense by the
employee against the person of his
employer or any immediate member of his
family
or
his
duly
authorized
representatives; and
e. Other causes analogous to the foregoing.
[Art. 297]
While an employer enjoys a wild latitude of
discretion in the promulgation of policies, rules
and regulations on work-related activities, such
must be fair and reasonable, and the
corresponding penalties, when prescribed
must be commensurate to the offense
involved and to the degree of infraction.
[Moreno v. San Sebastian College-Recoletos,
GR No. 175283 (2008)]
1. Requisites for Validity
a. Substantive due process
Substantive Due Process - whether the
termination was based on the provisions of the
Labor Code or in accordance with
jurisprudence.
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Basis
As a measure of self-protection against acts
inimical to the employer’s interest. An employer
cannot be compelled to continue employing an
employee guilty of acts inimical to the
employer’s interest, justifying loss of
confidence in him. [Yabut v. Meralco, GR No.
190436 (2012)]
well-intentioned reasons to protect the
company from liability under the Bouncing
Checks Law. It was not wrongful nor willful.
Neither can it be considered an obstinate
defiance of company authority. [Lores Realty
Enterprises v. Paria, GR No. 171189 (2011)]
(a) Serious
Misconduct
Disobedience
Requisites
1. There must be a neglect of duty
2. The neglect must be both gross and
habitual in character.
or
Willful
Requisites of Serious Misconduct
1. There must be misconduct
2. The misconduct is of such grave and
aggravated character
3. It must relate to the performance of the
employee’s duties
4. A showing that the employee becomes
unfit to continue working for the
employer. [Sec. 5.2(a), D.O. No. 147-15]
Misconduct refers to the improper or wrong
conduct that transgresses some established
and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and
implies wrongful intent and not mere error in
judgment. [Northwest Airlines Inc v. Del
Rosario, GR No. 157633 (2014)]
Example: Accusatory and inflammatory
language used by an employee to the
employer or superior. [Nissan Motors Phils v.
Angelo, GR No. 164181 (2011)]
Requisites of Willful Disobedience
1. There must be disobedience or
insubordination;
2. The disobedience or insubordination must
be willful or intentional characterized by
a wrongful and perverse attitude;
3. The order violated must be reasonable,
lawful and made known to the employee
[Mirant Philippines Corp v. Sario, GR No.
197598 (2012)]; and
4. The order must pertain to the duties which
he has been engaged to discharge. [Sec.
5.2(b), D.O. No. 147-15]
(b) Gross and Habitual Neglect of Duties
Gross negligence has been defined as the
want or absence of or failure to exercise slight
care or diligence, or the entire absence of care.
It evinces a thoughtless disregard of
consequences without exerting any effort to
avoid them. In order to constitute just cause for
an employee’s dismissal due to negligence, it
must be both gross and habitual. A single or an
isolated act cannot be categorized as habitual.
[National Bookstore v. CA, GR No. 146741
(2002)]
Gross negligence - want of care in the
performance of one’s duties
Habitual neglect - repeated failure to perform
one’s duties for a period of time.
Estoppel by toleration of management
Breach of rules and regulations which are
tolerated by management cannot serve as a
basis for termination. The rule only applies
when the violation is not tantamount to fraud or
commission of illegal activities. One cannot
evade liability based on obedience to the
corporate chain of command. [PNB V. Padao,
GR No. 180849, 187143 (2011)]
Gross
negligence
includes
gross
inefficiency
Gross and habitual neglect of duty includes
gross
inefficiency,
negligence
and
carelessness. [Century Iron Works, Inv. c.
Banas, GR No. 184116 (2013)]
The employee’s initial reluctance to prepare
the checks which was seemingly an act of
disrespect and defiance, was for honest and
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(c) Fraud/Willful Breach of Trust
Requisites of fraud or willful breach of
trust:
1. There must be an act, omission or
concealment;
2. The act, omission or concealment involves
a breach of legal duty, trust, or
confidence justly reposed;
3. It must be committed against the
employer or his/her representative; and
4. It must be in connection with employee’s
work. [Sec. 5.2 (d), DO No. 147-15]
When dismissal is proper for fraud/willful
breach of trust
Such breach is willful if it is done intentionally,
knowingly, and purposely, without justifiable
excuse as distinguished from an act done
carelessly, thoughtlessly, heedlessly or
inadvertently. The act complained of must be
work-related and shows that the employee is
unfit to continue working. In addition, it must be
premised on the fact that the employee
concerned holds a position of responsibility,
trust and confidence or is entrusted with
confidence with respect to delicate matters
such as handling or case and protection of the
property and assets of the employer.
[Villanueva, Jr. v. NLRC, GR No. 176893
(2012)]
Requisites of loss of confidence
1. There must be an act, omission or
concealment;
2. The act, omission or concealment justifies
the loss of trust and confidence of the
employer to the employee;
3. The employee concerned must be holding
a position of trust and confidence;
4. The loss of trust and confidence should
not be simulated;
5. It should not be used as a subterfuge for
causes which are improper, illegal or
unqualified; and
6. It must be genuine and not a mere
afterthought to justify an earlier action
taken in bad faith. [Sec. 5.2(e), DO No.
147-15]
When dismissal is proper for loss of
trust/confidence
LABOR LAW
The employee is one holding a position of trust
and confidence (e.g. managerial or fiduciary
employees). There must be an act that justifies
the loss of trust and confidence based on a
willful breach of trust and founded on clearly
established facts. [Wesleyan University Philippines v. Reyes, GR No. 208321 (2014)]
Moreover, the act complained must be related
to the performance of the duties of the
employee such as would show him to be
thereby unfit to continue working for the
employer. [Equitable Banking Corp. v. NLRC,
GR No. 102467 (1997)]
Note: DO 174-15 distinguishes fraud or willful
breach of trust from loss of confidence, but, as
seen in cases, jurisprudence seems to make
no such distinction.
Positions of trust and confidence
1. Managerial employees - vested with
powers or prerogatives to lay down
management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign
or discipline employees or effectively
recommend such managerial actions.
2. Fiduciary Rank and File - those who in the
normal and routine exercise of their
functions, regularly handle significant
amounts of money or property. Ex.
cashiers, auditors, property custodians.
[Prudential Guarantee and Assurance
Employee Labor Union v. NLRC, GR No.
185335 (2012)].
Managerial
Fiduciary Rankand-File
Mere existence of a
basis for the belief
of employee’s guilt.
[Grand Asian
Shipping Lines
Inc.v. Galvez, GR
No. 178184 (2014)
Proof of involvement
in the alleged events
in question required;
mere uncorroborated
assertions and
accusations are not
enough. [Etcuban,
Jr. v. Sulpico Lines
Inc, GR No. 148410
(2005)]
Employment for a
long time is counted
AGAINST the
employee. [Salvador
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representative. [Sec. 5.2(f), D.O. No. 14715]
v. Philippine Mining
Service, GR No.
148766]
Reason for Rule on Managerial Employees
While plain accusations are not sufficient to
justify the dismissal of rank and file employees,
the mere existence of a basis for believing that
managerial employees have breached the trust
reposed on them by their employer would
suffice to justify their dismissal. [Grand Asian
Shipping Lines Inc.v. Galvez, GR No. 178184
(2014)]
The employer may validly dismiss for loss of
trust and confidence an employee who
commits an act of fraud prejudicial to the
interest of the employer. Neither a criminal
prosecution nor a conviction beyond
reasonable doubt for the crime is a requisite for
the validity of the dismissal. [Concepcion v.
Mimex Import Corporation, GR No. 153569
(2012)]
(e) Analogous causes
Acquittal in Criminal Case arising from
Misconduct
Notwithstanding acquittal in the criminal case
for qualified theft, the company had adequately
established the basis for the company’s loss of
confidence as a just cause to terminate. As
opposed to the “proof beyond reasonable
doubt” standard of evidence in criminal cases,
labor suits require only substantial evidence to
prove the validity of the dismissal. [Paulino v.
NLRC, GR No. 176184 (2012)]
Requisites
1. There must be an act or omission similar
to those specified just causes; and
2. The act or omission must be voluntary
and/or willful on the part of the
employees.
Betrayal by a long-time employee
Length of service is not a bargaining chip that
can simply be stacked against the employer.
After all, an employer-employee relationship is
symbiotic where both parties benefit from
mutual loyalty and dedicated service, If an
employer had treated his employees well, has
accorded him fairness and adequate
compensation as determined by law, it is only
fair to expect a long-time employee to return
such fairness with at least some respect and
honesty. Thus, it may be said that betrayal by
a long-time employee is more insulting and
odious for a fair employer. [Moya v. First Solid
Rubber Industries, GR No. 184011 (2013)].
Analogous means susceptible of comparison
with another either in general or in some
specific detail; or has a close relationship with
the latter.
(d) Commission of a Crime
No act or omission shall be considered as
analogous cause unless expressly specified in
the company rules and regulations or policies.
[Sec 5.2. (g), D.O. No. 147-15]
Other causes
1. Abandonment
2. Courtesy resignation
3. Change of ownership
4. Habitual absenteeism/tardiness
5. Poor performance
6. Past offenses
7. Habitual infractions
8. Immorality
9. Totality of infractions
10. Pregnancy out of wedlock
11. Conviction/commission of a crime
12. Temporary “off-detail” or “floating status”
Requisites:
1. There must be an act or omission
punishable or prohibited by law; and
2. The act or omission was committed by the
employee against the person of the
employer,
his
immediate
family
member, or his duly authorized
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Abandonment
It is the deliberate and unjustified refusal of an
employee to resume his employment. It is a
form of neglect of duty.
Requisites
1. Failure to report for work or absence
without valid or justifiable reason, and
2. Clear intention to sever the employeremployee relationship (more determinative
factor and manifested in overt acts).
The burden to prove whether the employee
abandoned his work rests on the employer.
[Protective Maximum Security Inc. v. Celso E.
Fuentes, GR No. 169303 (2015)]
Absence must be accompanied by overt acts
unerringly pointing to the fact that the
employee simply does not want to work
anymore. The employer has the burden of
proof to show a deliberate and unjustified
refusal of the employee to resume employment
without any intention of returning. [Tan
Brothers Corp v. Escudero, GR No. 188711
(2013)]
Courtesy resignation
Resignation per se means voluntary
relinquishment of a position or office. Adding
the word ‘courtesy’ did not change the essence
of the resignation. [Batongbacal v. Associated
Bank, GR No. 184517 (2013)]
Change of ownership
A mere change in the equity composition of a
corporation is neither just nor an authorized
cause that would legally permit the dismissal of
the corporation’s employees en masse. [SME
Bank Inc. v. De Guzman, GR No. 184517,
186641 (2013)]
Habitual absenteeism/tardiness
It is a form of neglect of duty. Lack of initiative,
diligence and discipline to come to work on
time everyday exhibit the employee’s
deportment towards work. It is inimical to the
general productivity and business of the
employer. This is especially true when the
tardiness and/or absenteeism occur frequently
and repeatedly within an extensive period of
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time. [RB Michael Press v. Galit, GR NO.
153510 (2008)]
However, there are instances when
absenteeism is not sufficient to justify
termination. In the case of Cavite Apparel v.
Michelle Marquez, GR No. 172044 (2013), the
SC ruled that though Michelle was guilty of
violating company rules on leaves of absences
and discipline, the dismissal imposed on her
was unjustified under the circumstances.
Michelle had been employed with the employer
for 6 years, with no derogatory record other
than the four absences without official leave,
not to mention she had already been penalized
for the first three absences, the most serious
being a six-day suspension.
Poor performance
It is tantamount to inefficiency and
incompetence in the performance of official
duties. An unsatisfactory rating can be a just
cause for dismissal only if it amounts to gross
and habitual neglect of duties. Poor or
unsatisfactory performance of an employee
does not necessarily mean he is guilty of gross
and habitual neglect of duty. [Shipmanagement
Inc. v. Campo-Redondo, GR No. 199931
(2015)]
Past offenses
Previous offenses may be used as a valid
justification for dismissal only if the infractions
are related to the subsequent offense upon
which the basis of termination is decreed.
[Century Canning Corporation v. Ramil, GR
No. 171630 (2010)
Habitual infractions
A series of irregularities when put together may
constitute serious misconduct, under which Art.
297 of the Labor Code is a just cause for
dismissal. [Gustilo v. Wyeth Phil Inc., GR No.
149629 (2004)]
Immorality
DECS Order No. 92 provides that disgraceful
or immoral conduct can be used as a basis for
termination of employment. [Santos, Jr. v.
NLRC, GR No. 116795 (1998)]
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The act of engaging in extramarital affairs was
specifically provided for by the cooperative’s
Personnel Policy as one of the grounds for
termination of employment. The Board
received complaints and petitions from the
cooperative members for the removal of
Bandiola because of his immoral conduct,
hence immorality (extramarital affair) justified
the termination of his employment. [Alilem
Credit Cooperative v. Bandila, Jr. GR No.
173489 (2013)
Standard of morality
It is public and secular, not religious. Whether
a conduct is considered disgraceful or immoral
should be made in accordance with the
prevailing norms of conduct, which as stated in
Leus, refer to those conducts which are
proscribed because they are detrimental to
conditions upon which depend the existence of
and progress of human society.
The fact that a particular act does not conform
to the traditional moral views of a certain
sectarian institution is insufficient to qualify the
act as immoral unless it likewise does not
conform to the public and secular standards.
More importantly, there must be substantial
evidence to establish premarital sexual
relations and pregnancy out of wedlock is
considered disgraceful or immoral. [CapinCadiz v. Brent Hospital, GR No. 187417
(2016)]
Totality of infractions
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in determining
the penalty to be imposed upon an erring
employee. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and
ability separate and independent of each other.
While it may be true that the petitioner was
penalized for his previous infractions, this does
not and should not mean that his employment
record would be wiped clean. After all, the
record of an employee is a relevant
consideration in determining the penalty that
should be meted out since an employee’s past
misconduct and present behavior must be
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taken together in determining the proper
imposable penalty. [Merin v. NLRC, GR No.
171790 (2008)]
Pregnancy out of wedlock
When the law speaks of immoral or
necessarily, disgraceful conduct, it pertains to
public and secular morality.
Pre-marital sexual relations between two
consenting adults, who have no impediment to
marry each other, and consequently,
conceiving a child out of wedlock, gauged from
a purely public and secular view of morality
does NOT amount to an immoral conduct.
[Cheryl Leus v. St. Scholastica College
Westgrove, GR No. 187226 (2015)]
Conviction/commission of a crime
The charge of drug abuse within the company’s
premises and during work hours constitutes
serious misconduct which is a just cause for
termination. [Bughaw Jr. v. Treasure Island
Industrial, GR No. 173151 (2008)]
Temporary “off-detail” or “floating status”
This is the period of time when security guards
are in between assignments or when they are
made to wait after being relieved from a
previous post until they are transferred to a new
one.
When this occurs
1. Security agency’s clients decide not to
renew their contracts with the agency,
resulting in a situation where the available
posts under its existing contracts are less
than the number of guards in its roster,
2. Contracts stipulate that the client may
request the agency for replacement of
guards assigned to it even for want of
cause.
During such time, the security guard does not
receive any salary or financial assistance
provided by law. It does not constitute a
dismissal, as the assignments primarily
depend on contracts entered into between
security agencies and third parties, so as long
as such status does not continue beyond a
reasonable time. When such status lasts for
more than 6 months, the employee may be
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considered
constructively
dismissed.
[Salvaloza v. NLRC, GR No. 182086 (2010)]
Transfer/Reassignment of work
Jurisprudential guidelines
1. A transfer is a movement from one position
to another of equivalent rank, level or
salary without break in the service or a
lateral movement from one position to
another of equivalent rank or salary;
2. The employer has the inherent right to
transfer or reassign an employee for
legitimate business purposes;
3. A transfer becomes unlawful where it is
motivated by discrimination or bad faith or
is effected as a form of punishment or is a
demotion without sufficient cause;
4. The employer must be able to show that
the transfer is not unreasonable,
inconvenient or prejudicial to the
employee. [Rural Bank of Cantilan Inc v.
Julve, GR No. 169750 (2007)]
ii. Authorized causes
Also known as “Business-related Causes”
The employer may also terminate the
employment of any employee due to:
a. The installation of labor-saving devices,
b. Redundancy,
c. Retrenchment to prevent losses or
d. The closing or cessation of operation of the
establishment or undertaking not due to
serious loss [Art. 298]
Other causes
a. Disease incurable in 6 months [Art. 299]
b. Enforcement of union security clause in the
CBA
c. Dismissal of union officers for the conduct
of an illegal strike; Dismissal of union
members for participating in the
commission of illegal acts in a strike [Art.
279 (a)]
d. Termination in conformity with existing
statute/qualification requirements.
LABOR LAW
Payment of Separation Pay
Authorized Cause
Labor-saving
devices
Redundancy
Retrenchment,
closure, or
suspension of
operations
Separation Pay
1 month pay or at
least 1 month pay
for every year of
service, whichever is
higher [Art. 298]
1 month pay or at
least ½ month pay
for every year of
service, whichever is
higher. [Art. 298]
Note: A fraction of at least 6 months shall be
considered 1 whole year. [Art. 298]
Basis
Employment is the lifeblood upon which the
worker and his family owe their survival. [Flight
Attendants and Stewards Ass’n of the
Philippines v. PAL, GR. No. 178083 (2009)]
Written notice
For all authorized causes, a written notice
served on both the employees and the DOLE
at least one month prior to the intended date of
termination is required.
(a) Installation of labor-saving devices
This refers to the installation of machinery to
effect efficiency and economy in the
employer’s method of production. [Edge
Apparel Inc v. NLRC, GR No. 121314 (1998)]
Requisites
1. There
must
be
introduction
of
machinery,
equipment,
or
other
devices;
2. The introduction must be done in good
faith;
3. The purpose for such introduction must
be valid such as to save on cost, enhance
efficiency and other justifiable economic
reasons;
4. There is no other option available to
employer than the introduction of
machinery, equipment or device and the
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consequent termination of employment of
those affected thereby; and
5. There must be fair and reasonable
criteria in selecting employees to be
terminated.
General Rule: In cases of installation of laborsaving devices, redundancy and retrenchment,
the Last-In, First-Out Rule shall apply.
Exception: Employee volunteers to be
separated from employment. [Sec. 5.2(a), D.O.
No. 147-15]
(b) Redundancy
Redundancy exists when the service capability
of the workforce is in excess of what is
reasonably needed to meet the demands of the
business enterprise.
A position is redundant when it is superfluous
and superfluity of a position or positions could
be the result of a number of factors such the
overhiring of workers, a decrease in the volume
of business or dropping of a particular line or
service previously manufactured or undertaken
by the enterprise. [Morales v. Metrobank, GR
No. 182475 (2012)]
Requisites
1. There must be superfluous positions or
services of employees;
2. The positions or services are in excess of
what is reasonably demanded by the
actual requirements of the enterprise to
operate in an efficient and economical
manner;
3. There must be good faith in abolishing
redundant positions;
4. There must be fair and reasonable
criteria in selecting the employees to be
terminated; and
5. There must be adequate proof of
redundancy such as but not limited to the
new
staffing
pattern,
feasibility
studies/proposal, on the viability of newly
created positions, job description and the
approval by the management of the
restructuring. [Sec. 5.4(b), D.O. No. 14715]
LABOR LAW
In implementing a redundancy program, the
employer is required to adopt fair and
reasonable criteria taking into consideration
factors such as (a) preferred status, (b)
efficiency, and (c) seniority among others.
[Morales v. Metrobank, GR No. 182475 (2012)]
(c) Retrenchment to prevent serious loss
Requisites
1. The
retrenchment
is
reasonably
necessary and likely to prevent business
losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial,
serious, actual and real, or if only
expected are reasonably imminent as
perceived objectively and in good faith by
the employer;
3. The expected or actual losses must be
proved by sufficient and convincing
evidence;
4. The retrenchment must be in good faith for
the advancement of its interest and not to
defeat or circumvent the employees’ right
to security of tenure; and
5. There must be fair and reasonable
criteria in ascertaining who would be
dismissed and would be retained among
the employees such as status, efficiency,
seniority, physical fitness, age and financial
hardship for certain workers. [Sec. 5.4(c),
D.O. No. 147-15]
The employer bears the burden of proving the
existence of the imminence of substantial
losses with clear and satisfactory evidence that
there are legitimate business reasons justifying
a retrenchment. [Mount Carmel College
Employees Union v. Mount Carmel College,
GR No. 187621 (2014)]
Two
kinds
of
losses
justifying
retrenchment
1. Incurred losses - substantial, serious actual
and real
2. Expected losses - reasonably imminent
[Sanoh Fulton Phils v. Bernardo Tagohoy, GR
No. 187214 (2013)]
(d) Closing or cessation of business not
due to serious loss
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Requisites
1. There must be a decision to close or cease
operation of the enterprise by the
management;
2. The decision was made in good faith; and
3. There is no other option available to the
employer except to close or cease
operations. [Sec 5.4(d), DO No. 147-15]
Unless the closing is for the purpose of
circumventing the provisions of this Title [Art.
298]
By serving a written notice on the workers and
the Ministry of Labor and Employment at least
1 month before the intended date thereof. [Art.
298]
Guidelines
1. Closure or cessation of operations of
establishment or undertaking may either be
partial or total.
2. Closure or cessation of operations of
establishment or undertaking may or may
not be due to serious business losses or
financial reverses. In both instances, proof
must be shown that:
a. It was done in good faith to advance the
employer's interest and not for the
purpose of defeating or circumventing
the rights of employees under the law
or a valid agreement; and
b. A written notice on the affected
employees and the DOLE is served at
least 1 month before the intended date
of termination of employment.
3. The employer can lawfully close shop even
if not due to serious business losses or
financial reverses but separation pay,
which is equivalent to at least one month
pay as provided for by Article 283 of the
Labor Code, as amended, must be given to
all the affected employees.
4. If the closure or cessation of operations of
establishment or undertaking is due to
serious business losses or financial
reverses, the employer must prove such
allegation in order to avoid the payment of
separation pay. Otherwise, the affected
employees are entitled to separation pay.
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5. The burden of proving compliance with all
the above-stated falls upon the employer.
[Manila Polo Club Employees’ Union v.
Manila Polo Club, GR No. 172846 (2013)]
Closure of Department
The closure of a department or division of a
company constitutes retrenchment by, and not
closure of, the company itself. [Waterfront
Cebu City Hotel v. Jimenez, GR No. 174214
(2012)]
Corporate Acquisitions
Asset Sales
Stock Sales
Sale
Corporate entity
sells all or
substantially all of its
assets to another
entity.
The individual or
corporate
shareholders sell a
controlling lock of
stock to new or
existing
shareholders.
Obligations of Seller
Seller in good faith is
authorized to
dismiss the affected
employees, but is
liable for the
payment of
separation pay.
A shift in the
composition of its
shareholders will not
affect its existence
and continuity.
Notwithstanding the
stock sale, the
corporation
continues to be the
employer of its
people and
continues to be
liable for the
payment of their
wages.
Obligation of Buyer
The buyer in good
faith is not obliged to
absorb the
employees affected
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The corporation or
its new majority
shareholders are not
entitled to lawfully
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Asset Sales
by the sale, nor is it
liable for the
payment of their
claims. The most
that it may do, for
reasons of public
policy and social
justice, is to give
preference to the
qualified separated
personnel of the
selling firm.
LABOR LAW
Stock Sales
dismiss corporate
employees absent a
just or authorized
cause. [SME Bank v.
De Guzman, GR
No.184517 (2013)]
Criteria in selecting employees for
dismissal
1. Preferred status (e.g. temporary, casual or
regular employees)
2. Efficiency
3. Physical fitness
4. Age
5. Financial hardship
6. Seniority [Asian Alcohol Corp v. NLRC, GR
No. 131108 (1999)]
Summary
Retrenchment
Redundancy
Closure
Reduction of personnel usually
due to poor financial returns so
as to cut down on costs of
operations in terms of wages
and salaries
Service of employee is in
excess of what is required by
an enterprise
The reversal of the fortune of
the employer whereby there is
a complete cessation of
business operations and/or
actual locking-up of the doors
of the establishment, usually
due to financial losses.
To avoid or minimize business
losses.
To save production costs.
To prevent further financial
drain upon the employer.
1 month or ½ month pay per
year of service separation pay
(whichever is higher)
1 month or 1 month pay per
year of service separation pay
(whichever is higher)
Closure not due to serious
business losses, 1 month or ½
month pay per year of service
separation pay (whichever is
higher).
Closure due to serious
business losses, no separation
pay. [Manila Polo Club
Employees union v. Manila
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Redundancy
Closure
Polo Club, GR No. 172846
(2013)]
(e) Disease
An employer may terminate the services of an
employee:
1. Who has been found to be suffering from
any disease; and
2. Whose continued employment is prohibited
by law or is prejudicial to his health as well
as the health of his co-employees. [Art.
299]
Separation Pay
An employee terminated on the ground of
disease shall be paid separation pay
equivalent to at least 1 month salary or to ½
month salary for every year of service,
whichever is greater. [Art. 299]
Note: A fraction of at least six (6) months being
considered as one (1) whole year.
Requisites
1. The employee must be suffering from a
disease which cannot be cured within 6
month, even with proper medical
treatment;
2. Continued employment is either:
a. Prohibited by law or
b. Prejudicial to his health or
c. Prejudicial to the health of his coemployees; and
3. A certification to that effect issued by a
competent public health authority, which
must state that the disease is of such
nature or at such a stage that it cannot be
cured within a period of six (6) months even
with proper medical treatment [Sec. 8, Rule
I, Book VI; Crayons Processing v. Pula, GR
No. 167727 (2007), Sec. 5.2(f), D.O. 14715]
Burden of proof with employer
The burden of proof falls upon the employer to
establish the requisites. In the absence of such
certification, the dismissal must be necessarily
declared illegal.
Prior certification required
It is only where there is a prior certification from
a competent public authority that the disease
afflicting the employee sought to be dismissed
is of such nature or at such stage that it cannot
be cured within 6 months even with proper
medical treatment that the latter could be
validly terminated from his job. [Crayons
Processing v. Pula, GR No. 167727 (2007)]
Note: If the disease or ailment can be cured
within the period of 6 months, the employer
shall not terminate the employee but shall ask
the employee to take a leave of absence. The
employer shall reinstate such employee to his
former position immediately upon the
restoration of his health. [Sec. 8, Rule I, Book
VI]
(f) Enforcement of Union Security Clause
in CBA
The law authorizes the enforcement of union
security clauses, provided it is not
characterized by arbitrariness and always with
due process.
In terminating the employment of an employee
by enforcing the Union Security Clause, the
employer needs only to determine and prove
that:
1. The union security clause is applicable
2. The union is requesting for the
enforcement of the union security provision
in the CBA
3. There is sufficient evidence to support the
union’s decision to expel the employee
from the union or company.
(g) Dismissal of Union Officers for the
conduct of an illegal strike; Dismissal of
union members for participating in the
commission of illegal acts in a strike
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Any union officer who knowingly participates in
an illegal strike, and any worker or union officer
who knowingly participates in the commission
of illegal acts during a strike may be declared
to have lost employment status. [Art. 279 (a)]
(h) Termination in Conformity with Existing
Statute/ Qualification Requirements
While the right of workers to security of tenure
is guaranteed by the Constitution, its exercise
may be reasonably regulated pursuant to the
police powers of the State to safeguard health,
morals, peace, education, order, safety, and
the general welfare of the people.
Consequently, persons who desire to engage
in the learned professions requiring scientific or
technical knowledge may be required to take
an examination as a prerequisite to engaging
in their chosen careers. [St. Luke's Medical
Center Employees Assn v. NLRC, GR No.
162053 (2007)]
b. Procedural due process
The employer shall:
1. Furnish the worker, whose employment is
sought to be terminated, a written notice
containing a statement of the causes for
termination; and
2. Afford the latter ample opportunity to be
heard and to defend himself, with the
assistance of his representative if he so
desires, in accordance with company rules
and regulations promulgated pursuant to
guidelines set by the DOLE. [Art. 292 (b)]
Any decision taken by the employer shall be
without prejudice to the right of the worker to
contest the validity or legality of his dismissal
by filing a complaint with the regional branch of
the National Labor Relations Commission.
[Art. 292 (b)]
Procedural Due Process - manner in which
the dismissal was effected.
1. The first written notice to be served on the
employees should contain the specific
causes or grounds for termination against
them, and a directive that the employees
are given the opportunity to submit their
LABOR LAW
written explanation within a reasonable
period.
2. The requirement of a hearing is complied
with as long as there was an opportunity to
be heard, and not necessarily an actual
hearing was conducted.
3. After determining that termination of
employment is justified, the employers
shall serve the employees a written notice
of termination indicating that:
a. All circumstances involving the charge
against the employee have been
considered, and
b. The grounds have been established to
justify
the
severance
of
the
employment. [Inguillo v. First Phil
Scales, GR No. 165407 (2019)]
The employee must be afforded an opportunity
to be heard and defend himself. [Fujitsu
Computer Products Corporation of the Phil v.
CA, GR No. 158232 (2005)]
The employer may not substitute the required
prior notice and opportunity to be heard with
the mere payment of 30 day’s salary. [PNB V.
Cabansag, GR No. 157010 (2005)]
Right to Counsel
The right to counsel, a very basic requirement
of substantive due process, has to be
observed. Indeed the rights to counsel and to
due process of law are two of the fundamental
rights guaranteed by the 1987 Constitution to
any person under investigation, be the
proceeding administrative, civil or criminal.
[Salaw v. NLRC, GR No. 90786 (1991)]
The procedure can be summarized as follows:
1. Employer must furnish the employee with a
written notice containing the cause for
termination.
2. The employer must give the employee an
opportunity to be heard. This can be done
either through:
a. Position paper or
b. Clarificatory hearing.
3. The employee MAY also be assisted by a
representative or counsel.
4. The employer must give another written
notice apprising the employee of its
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findings and the penalty to be imposed
against the employee, if any.
In labor cases, these requisites meet the
constitutional requirement of procedural due
process, which contemplates, “notice and
opportunity to be heard before judgment is
rendered affecting one’s person or property”.
[Montinola v. PAL, GR No. 198656 (2014)]
i.
Twin Notice Requirement
The employer has the burden of proving that a
dismissed worker has been served two notices:
1. First written notice: specifying the
ground(s) for termination and giving the
employee the reasonable opportunity
within which to explain his side.
2. Second written notice: indicating that upon
due consideration of all circumstances,
grounds have been established to justify
his termination
Reasonable opportunity for the first written
notice should be construed at least 5 calendar
days from receipt of the notice.
Ratio: to give the employee an opportunity to
study the accusation against him, consult a
union official or lawyer, gather data and
evidence, and decide on his defenses. [King of
Kings Transport v. Mamac, GR No. 166208
(2007); Puncia v. Toyota Shaw/Pasig, GR No.
214399 (2016)]
LABOR LAW
4. The company rules, if any, violated and/or
the grounds under Art. 288 being charged
against the employee. [United Tourist
Promotions v. Kemplin, GR No. 205453
(2014)]
CONTENTS OF SECOND NOTICE
1. All circumstances involving the charge
against the employee considered
2. Grounds established to justify the
severance of employment. [United Tourist
Promotions v. Kemplin, GR No. 205453
(2014)]
PRE-DISMISSAL NOTICE GROUNDS
An employee may be dismissed only if the
grounds mentioned in the pre-dismissal notice
were the ones cited for termination of
employment. [Erector Advertising Sign Groups
v. Cloma, GR No. 167218 (2010)]
ii. Hearing
In employee dismissal cases, the essence of
due process is simply the opportunity to be
heard, it is the denial of this that constitutes a
violation of due process of law. [Technol Eight
Philippines Corporation v. NLRC, GR No.
187605 (2010)]
While a formal hearing or conference is ideal, it
is not an absolute, mandatory or exclusive
avenue of due process. [Perez v. PT&T, GR
No. 152048 (2009)]
CONTENTS OF FIRST NOTICE
1. Specific causes or grounds for termination
against the employee
2. Directive that the employee is given the
opportunity to submit his written
explanation within a “reasonable period” or
every kind of assistance that management
must accord to enable him to prepare
adequately for his defense. This should be
construed as a period of at least 5 calendar
days from receipt of notice.
3. Detailed narration of the facts and
circumstances that will serve as basis for
the charge against the employees. A
general description of the charge will not
suffice. [Unilever v. Rivera, GR No. 201701
(2013)]
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Guidelines in hearing requirements
1. “Ample opportunity to be heard” means any
meaningful opportunity (verbal or written)
given to the employee to:
a. Answer the charges against him and
b. Submit evidence in support of his
defense, whether in a hearing,
conference or some other fair, just and
reasonable way.
2. A formal hearing or conference becomes
mandatory when:
a. Requested by the employee in writing,
b. Substantial evidentiary disputes exist
c. A company rule or practice requires it,
or
d. When similar circumstances warrant.
3. The “ample opportunity to be heard”
standard in the Labor Code prevails over
the “hearing or conference” requirement in
the implementing rules and regulations.
[Perez v. PT&T, supra]
LABOR LAW
Just/
Authorized
cause
PDP
Dismissa
l
YES
YES
VALID
No liability.
Separation
pay only in
authorized
causes.
NO
YES
INVALID
Reinstatement
or separation
pay (if
reinstatement
is not
possible) + full
backwages
NO
NO
INVALID
Reinstatement
or separation
pay (if
reinstatement
is not
possible) + full
backwages
YES
NO
VALID
Liable for
damages due
to procedural
infirmity
(nominal
damages).
Separation
pay if for
authorized
cause.
PROCEDURE FOR TERMINATION CASES
Just Cause
1. First notice
specifying
grounds of
dismissal
2. Hearing or
opportunity to
be heard
3. Second notice
of decision to
dismiss
Authorized Cause
Notice to:
1. Employee and
2. DOLE
At least 1 month prior
to the date of
termination of
employment.
Guidelines
1. Notice is NOT NEEDED when employee
consented to the retrenchment or
voluntarily applied for one. [International
Hardware Inc v. NLRC, GR No. 80770
(1989)]
2. Notice must be individual, not collective.
[Shoppers Gain Supermart v. NLRC, GR
No. 110731 (1996)]
3. Voluntary arbitration satisfies notice
requirement for authorized causes.
[Revidad v. NLRC, GR No. 11105 (1995)]
Consequences for non-compliance
Procedural Due Process (PDP)
of
Employer’s
liability
2. Preventive Suspension
Definition
Preventive suspension is a disciplinary
measure for the protection of the company’s
property pending investigation of any alleged
malfeasance or misfeasance committed by the
employee. [Gatbonton v. NLRC, G.R. No.
146779 (2006)]
It is important to note that preventive
suspension is not a penalty, but a part of a
process to investigate a questioned action of
an employee. Preventive suspension does not
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in itself prove that the employer already finds
the employee guilty of the charges he is asked
to answer and explain [Soriano v. NLRC et. al.,
G.R. No. 75510, (1987)].
When imposed
Preventive suspension may be legally imposed
on employee whose alleged violation is the
subject of an investigation.
The employer may place the worker concerned
under preventive suspension if his continued
employment poses a serious and imminent
threat to the life or property of the employer or
of his co-workers. When, however, it is
determined that there is no sufficient basis to
justify an employee’s preventive suspension,
the latter is entitled to the payment of salaries
during the time of preventive suspension.”
[Gatbonton v. NLRC, G.R. No. 146779 (2006)]
Purpose
The purpose of his suspension is to prevent
him from causing harm or injury to the company
as well as to his fellow employees. [Sec. 8,
Rule XXIII, IRR].
Period of suspension
No preventive suspension shall last longer than
thirty (30) days.
Upon the expiry of such period, the employer
shall thereafter:
1. Reinstate the worker in his former or in a
substantially equivalent position; or
2. The employer may extend the period of
suspension provided that:
a. During the period of extension, he pays
the wages and other benefits due to the
worker
b. The worker shall not be bound to
reimburse the amount paid to him
during the extension if the employer
decides, after completion of the
hearing, to dismiss the worker. [Sec. 9,
Rule XXIII, Book V, IRR]
Note: The portion on preventive suspension
under the cited Book V, Rule XXIII, Secs. 8-9
are no longer in existence. The current IRR of
the Labor Code (as of 2020) has replaced Rule
LABOR LAW
XXIII with “Rule XXIII Contempt” and does not
contain provisions on preventive suspension.
It is curious to note, however, that in a 2018
case [Consolidated Building Maintenance, Inc.
v. Asprec, Jr., G.R. No. 217301, (June 6,
2018)], the Court stated that “preventive
suspension shall not last for more than 30
days” HOWEVER, in stating so, the Court cited
an OLD provision of the IRR of the Labor Code.
In fact, it is a recurring theme in a number of
more recent cases that the Court would cite old
provisions of the IRR of the labor code which
have long been amended or repealed.
When preventive suspension is deemed
dismissal
When preventive suspension exceeds the
maximum period allowed without reinstating
the employee either by actual or payroll
reinstatement or when preventive suspension
is for an indefinite period, only then will
constructive dismissal set in.
Not entitled to pay
Employee placed under preventive suspension
is not entitled to the payment of wages.
However, if the basis for suspension is later
proven to be unfounded or invalid, the said
employee is entitled to his salary during the
whole period of his suspension. [Gatbonton v.
NLRC, G.R. No. 146779 (2006)]
3. Illegal Dismissal
a. Kinds
i. No just or authorized cause
For the dismissal of an employee to be valid,
the dismissal must be for any of the causes
provided for in Art. 297-299.
An employer who dismisses an employee
without just or authorized cause is liable for:
1. Reinstatement or separation pay if
reinstatement is not possible; and
2. Full backwages.
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ii. Constructive dismissal
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Constructive dismissal is cessation of work
because continued employment is either:
1. rendered impossible, unreasonable or
unlikely;
2. when there is a demotion in rank or
diminution in pay or both; or
3. when a clear discrimination, insensibility, or
disdain by an employer becomes
unbearable to the employee. [Dusit Hotel
Nikko v. NUHWRAIN-Dusit Hotel Chapter,
G.R. No. 160391 (2005)]
The Test of Constructive Dismissal
Whether a reasonable person in the
employee’s position would have felt compelled
to give up his position under the
circumstances. [Tuazon v. Bank of Commerce,
G.R. No. 192076 (2012)]
It is an act amounting to dismissal but made to
appear as if it were not. Constructive dismissal
is, therefore, a dismissal in disguise. As such,
the law recognizes and resolves this situation
in favor of employees in order to protect their
rights and interests from the coercive acts of
the employer. In fact, the employee who is
constructively dismissed may be allowed to
keep on coming to work. [McMer Corp., Inc. v.
NLRC, G.R. No. 193421 (2014)]
Unlawful withholding of wages for a long time
could be tantamount to an illegal constructive
dismissal. [Gilles v. CA, G.R. No. 149273
(2009)]
A bona fide suspension of work is allowed for
as long as it does not exceed 6 months.
Failure of the employer to recall the suspended
employees in the 6-month period amounts to
constructive dismissal. [SKM Art. Craft Corp. v.
Bauca, G.R. No. 171282 (2013)]
For a transfer to be a valid exercise of
management prerogative:
(1) There is no demotion in rank;
(2) There is no diminution of salary, benefits,
and other privileges;
(3) The action is not motivated by
discrimination, made in bad faith, or
effected as a form of punishment or
demotion without sufficient cause.
LABOR LAW
Otherwise, the transfer could be considered as
constructive dismissal. [The Philippine
American Life and General Insurance Co. v.
Angelita S. Gramaje, G.R. No. 156963 (2004)]
Forced
resignation
is
constructive
dismissal
Mere allegations of threat or force do not
constitute evidence to support a finding of
forced resignation.
In order for intimidation to vitiate consent, the
following requisites must concur:
1. that the intimidation caused the consent to
be given;
2. that the threatened act be unjust or
unlawful;
3. that the threat be real or serious, there
being evident disproportion between the
evil and the resistance which all men can
offer, leading to the choice of doing the act
which is forced on the person to do as the
lesser evil; AND
4. that it produces a well-grounded fear from
the fact that the person from whom it
comes has the necessary means or ability
to inflict the threatened injury to his person
or property. [Mandapat v. Add Force
Personnel, G.R. No. 180285 (2010)]
(a) Burden of proof
The burden of proving that the termination was
for a valid or authorized cause shall rest on the
employer. [Art. 292 (b)]
In illegal dismissal cases, the onus of proving
that the employee was not dismissed or, if
dismissed, that the dismissal was not illegal,
rests on the employer, failure to discharge
which would mean that the dismissal is not
justified and, therefore, illegal. [Macasero v.
Southern Industrial Gases Philippines, GR No.
198656 (2014)]
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Degree of Proof
In labor cases, as in other administrative
proceedings, substantial evidence is required
and it is such relevant evidence as a
reasonable mind might accept as adequate to
support a conclusion. [Andrada v. Agemar
Manning Agency, GR No. 194758 (2012)]
Substantial evidence is necessary for an
employer to effectuate any dismissal.
Uncorroborated assertions and accusations by
the employer do not suffice; otherwise the
constitutional guarantee of security of tenure of
the employee would be jeopardized. [Kulas
Ideas & Creations et. al. v. Alcoseba & Arao
Arao, GR No. 180123 (2010)]
(b) Liability~of officers
Art. 219(e) defines “employer” as including any
person acting in the interest of an employer,
directly or indirectly.
Note that the provision does not expressly
make a corporate officer personally liable for
the liabilities of a corporation. However, in
Lozada vs Mendoza [GR No. 196134, 12
October 2016], the Court ruled that, as a
general rule, officers are not personally liable
for corporate obligation, with the exception that
in order to hold a director or officer personally
liable occurs when the following requisites are
present:
1. the complaint must allege that the director
or officer assented to the patently unlawful
acts of the corporation, or that the director
or officer was guilty of gross negligence or
bad faith; and
2. there must be proof that the director or
officer acted in bad faith.
(c) Reliefs from illegal
dismissal
The following reliefs are cumulative and not
alternative:
1. Reinstatement
2. Options Given to Employers
a. Actually reinstate the dismissed
employees or,
b. Constructively reinstate them in the
payroll.
LABOR LAW
3. Backwages
4. Damages and Attorney’s Fees
5. Separation Pay
(1) Reinstatement
Reinstatement means restoration to a state or
condition from which one had been removed or
separated. The person reinstated assumes the
position he had occupied prior to his dismissal.
[Asian Terminals, Inc. v. Villanueva, G.R. No.
143219 (2006)]
General Rule: Reinstatement and backwages
Exceptions:
a. Separation pay
b. Closure of business [Retuya v. Hon.
Dumarpa, G.R. No. 148848 (2003)]
c. Economic business conditions [Union of
Supervisors v. Secretary of Labor, G.R.
No. L-39889 (1981)]
d. Employee’s unsuitability [Divine Word High
School v. NLRC, G.R. No. 72207 (1986)]
e. Employee’s retirement/ overage [New
Philippine Skylanders, Inc. v. Dakila, G.R.
No. 199547 (2012)]
f. Antipathy and antagonism [Wensha Spa
Center v. Yung, G.R. No. 185122 (2010)]
g. Job with a totally different nature [DUP
Sound Phils. v. CA, G.R. No. 168317
(2011)]
h. Long passage of time
i. Inimical to the employer's interest
j. When supervening facts have transpired
which make execution on that score unjust
or inequitable or, to an increasing extent
[Emeritus
Security
&
Maintenance
Systems, Inc. v. Dailig, G.R. No. 204761
(2014)]
Prescription Period
An action for reinstatement by reason of illegal
dismissal is one based on an injury, which may
be brought within 4 years from the time of
dismissal. [Art. 1146, CC]
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory,
pending appeal. The employee shall either be
admitted back to work under the same terms
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and conditions prevailing prior to his dismissal
or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the
execution for reinstatement provided herein.
[Art. 229]
(2) Options Given to Employers
a. Actually reinstate the dismissed
employees or,
b. Constructively reinstate them in the
payroll.
Either way, this must be done immediately
upon the filing of their appeal, without need of
any executory writ.
If the order of reinstatement of the Labor Arbiter
is reversed on appeal, it is obligatory on the
part of the employer to reinstate and pay the
wages of the dismissed employee during the
period of appeal until reversal by the higher
court.
The Labor Arbiter's order of reinstatement is
immediately executory and the employer has to
either re-admit them to work under the same
terms and conditions prevailing prior to their
dismissal, or to reinstate them in the payroll,
and that failing to exercise the options in the
alternative, employer must pay the employee's
salaries [Magana v. Medicard Philippines, Inc.,
G.R. No. 174833 (2010)]
No refund doctrine
An employee cannot be compelled to
reimburse the salaries and wages he received
during the pendency of his appeal,
notwithstanding the reversal by the NLRC of
the LA's order of reinstatement. [College of the
Immaculate Conception v. NLRC, G.R. No.
167563 (2010)]
Note: However, Rule XI, Sec. 14 of the 2011
NLRC Rules of Procedure provide for
restitution of amounts paid pursuant to
execution of awards during pendency of the
appeal. However, it expressly disallows
restitution of wages paid due to reinstatement
pending appeal.
LABOR LAW
SEPARATION
PAY
REINSTATEMENT
IN
LIEU
OF
Kinds of separation pay (SP)
1. SP as a statutory requirement for
authorized causes
2. SP as financial assistance found in the next
section
3. SP in lieu of reinstatement where
reinstatement is not feasible; and
4. SP as a benefit in the CBA or company
policy
Instances when the award of separation pay, in
lieu of reinstatement to an illegally dismissed
employee, is proper:
a. When reinstatement is no longer possible,
in cases where the dismissed employee's
position is no longer available;
b. The continued relationship between the
employer and the employee is no longer
viable due to the strained relations
between them; and
c. When the dismissed employee opted not to
be reinstated, or the payment of separation
benefits would be for the best interest of the
parties involved. [Sec. 4(b), Rule I, Book VI,
IRR]
Separation
Pay and
Reinstatement,
Exclusive Remedies
The payment of separation pay and
reinstatement are exclusive remedies. The
payment of separation pay replaces the legal
consequences of reinstatement to an
employee who was illegally dismissed. [Bani
Rural Bank, Inc. v. De Guzman, G.R. No.
170904 (2013)]
Doctrine of Strained Relations
Where reinstatement is not feasible, expedient
or practical, as where reinstatement would only
exacerbate the tension and strained relations
between the parties or where the relationship
between the employer and employee has been
unduly strained by reason of their irreconcilable
differences, particularly where the illegally
dismissed employee held a managerial or key
position in the company, it would be more
prudent to order payment of separation pay
instead of reinstatement. [Quijano v. Mercury
Drug Corp., G.R. No. 126561 (1998)]
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Computation
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
[Planters Products, Inc. v. NLRC, G.R. No.
78524, 78739 (1989)]; allowances include
transportation
and
emergency
living
allowances [Santos v. NLRC, G.R. No. 76721
(1987)]
In an illegal dismissal case involving
salespersons, the Court took judicial notice of
the fact that the nature of the work of a
salesperson and the reason for such type of
remuneration
for
services
rendered,
demonstrate clearly that commissions are part
of salespersons' wage or salary. If the Court
adopted the opposite view that commissions
do not form part of wage or salary, then, in
effect, the Court will be saying that
salespersons do not receive any salary and
therefore, not entitled to separation pay in the
event of discharge from employment. This
narrow interpretation is not in accord with the
liberal spirit of our labor laws and considering
the purpose of separation pay which is, to
alleviate the difficulties which confront a
dismissed employee thrown to the streets to
face the harsh necessities of life. [Songco v.
NLRC, G.R. Nos. 50999-51000 (1990)]
A dismissed employee who has accepted
separation pay is not necessarily estopped
from challenging the validity of his or her
dismissal. Neither does it relieve the employer
of legal obligations. [Anino v. NLRC, G.R. No.
123226 (1998)]
(3) Backwages
Definition
Backwages are:
1. Earnings lost by a worker due to his illegal
dismissal;
2. A form of relief that restores the income lost
by reason of such unlawful dismissal;
3. In the nature of a command to the employer
to make a public reparation for illegally
dismissing an employee.
a. It is not private compensation or
damages;
LABOR LAW
b. Nor is it a redress of a private right. [St.
Theresa's School of Novaliches
Foundation v. NLRC, G.R. No. 122955
(1998)]
Backwages and reinstatement are two reliefs
that should be given to an illegally dismissed
employee. They are separate and distinct from
each other.
An illegally dismissed employee is entitled to
(1) either reinstatement, if viable, or separation
pay if reinstatement is no longer viable, and (2)
backwages. [Aurora Land Projects Corp. v.
NLRC, G.R. No. 114733 (1997)]
Effect of failure to order backwages
A “plain error” which may be rectified, even if
employee did not bring an appeal regarding the
matter. [Aurora Land Projects Corp. v. NLRC,
supra.]
Extent of Entitlement
General rule: An illegally dismissed employee
is entitled to full backwages.
Exceptions
a. The Court awarded limited backwages
where the employee was illegally
dismissed but the employer was found to
be in good faith. [San Miguel Corporation v.
Javate, Jr., G.R. No. L-54244 (1992)]
b. Delay of the EE in filing the case for illegal
dismissal [Mercury Drug Co., Inc. v. CIR,
supra]
COMPUTATION OF BACKWAGES
Full
backwages
means
exactly
that, i.e., without deducting from backwages
the earnings derived elsewhere by the
concerned employee during the period of his
illegal dismissal. [Bustamante v. NLRC, G.R.
No. 111651 (1996)]
The formula of awarding reasonable net
backwages without
deduction
or
qualification relieves the employees from
proving or disproving their earnings during their
lay-off and the employers from submitting
counterproofs, and obviates the twin evils of:
1. Idleness on the part of the employee who
would "with folded arms, remain inactive in
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the expectation that a windfall would come
to him" [Itogon Suyoc Mines, Inc. v.
Sangilo-Itogon Workers Union, G.R. No. L24189 (1968), as cited in Diwa ng
Pagkakaisa v. Filtex International Corp.,
G.R. No. 23960-61 (1972)]; and
2. Attrition and protracted delay in satisfying
such award on the part of unscrupulous
employers who have seized upon the
further proceedings to determine the actual
earnings of the wrongfully dismissed or
laid-off employees [See La Campana Food
Products, Inc. v. CIR, G.R. No. L-27907
(1969);
and
Kaisahan
ng
Mga
Manggagawa v. La Campana Food
Products, Inc., G.R. No. L-30798 (1970)].
The salary base properly used should be the
basic salary rate at the time of dismissal plus
the regular allowances; allowances include:
a. Emergency cost of living allowances
(ECOLA), transportation allowances, 13th
month pay. [Paramount Vinyl Product
Corp. v. NLRC, G.R. No. 81200 (1990)]
b. Also included are vacation leaves, service
incentive leaves, and sick leaves.
The effects of extraordinary inflation are not to
be applied without an official declaration
thereof by competent authorities. [Lantion v.
NLRC, G.R. No. 82028 (1990)]
Note that according to Nacar v. Gallery
Frames, when the judgment of the court
awarding a sum of money becomes final and
executory, the rate of legal interest …. shall be
6% per annum from such finality until its
satisfaction, this interim period being deemed
to be by then an equivalent to a forbearance of
credit. [Nacar v. Gallery Frames, G.R. No.
189871, (2013)]
LABOR LAW
Indemnity of Employer
Validity
Docof
Period trine in
dismiseffect
sal
Prior
1989
PreWenphil
Illegal
Feb.
19891999
Wenphil
Valid
Jan.
2000 –
Oct.
2004
Serrano
Ineffectual
Nov.
2004 –
present
Agabon
Valid
Liability
of ER
Reinstatement +
Backwages
Dismiss
now,
indemnity
pay later
Full backwages up
to
reinstatement
finality of
decision
Nominal
damages
(4) Damages and Attorney’s Fees
In cases of unlawful withholding of wages: the
culpable party may be assessed attorney’s
fees
Amount: equivalent to 10% of the amount of
wages recovered.
It shall be unlawful for any person to demand
or accept, in any judicial or administrative
proceedings for the recovery of wages,
attorney’s fees which exceed 10% percent of
the amount of wages recovered. [Art. 111, CC]
General Rule: attorney's fees and expenses of
litigation, other than judicial costs, cannot be
recovered
Exception: stipulation to the contrary xxx in
actions for the recovery of wages of household
helpers, laborers and skilled workers [Art.
2208(7), CC]
The employee is entitled to moral damages
when the employer acted
a. in bad faith or fraud;
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b. in a manner oppressive to labor; or in a
manner contrary to morals, good customs,
or public policy [Montinola v. PAL, G.R. No.
198656 (2014).
In labor cases, the court may award exemplary
damages "if the dismissal was effected in a
wanton, oppressive or malevolent manner."
[Garcia v. NLRC, GR. No. 110518 (1994)]
(5) Separation Pay
[Arts. 289 & 290; DOLE Handbook on Worker’s
Statutory Monetary Benefits (2018)]
Separation pay is defined as the amount that
an employee receives at the time of his
severance from the service and is designed to
provide the employee with the wherewithal
during the period that he is looking for another
employment. [A’ Prime Security Services v.
NLRC, G.R. No. 107320 (1993)]
COVERAGE
General Rule:
Cause for
Termination
Art. 288: Termination
by Employer
a. Serious
misconduct or
willful
disobedience of
lawful orders
b. Gross and
habitual neglect
of duties
c. Fraud or willful
breach of trust
d. Commission of a
crime against
employer or
immediate
member of his
family or
representative
e. Analogous
causes
Art. 289: Installation
of labor-saving
devices or
redundancy
Entitlement
LABOR LAW
year of service,
whichever is higher
Art. 289:
Retrenchment to
prevent losses or
Equivalent to at least
closure or cessations
1 month pay or ½
of operations of
month pay for every
establishments or
year of service*,
undertaking not due
whichever is higher
to serious business
losses or financial
reverses
Art. 290: Disease
when continued
Equivalent to at least
employment is
1 month pay or ½
prohibited by law or
month pay for every
is prejudicial to his
year of service*,
health or health of
whichever is higher
co-employees
Art. 291: Termination
by employee whether
None
with or without just
cause
*A fraction of at least 6 months shall be
considered 1 whole year
Exceptions: Considerations of equity as in
the cases of Filipro, Inc. v. NLRC [G.R. No.
70546 (1986)]; Metro Drug Corp. v. NLRC
[G.R. No. 72248 (1986)]; Engineering
Equipment, Inc. v. NLRC [G.R. No. L-59221
(1984)]; and San Miguel Corp v. NLRC [G.R.
No. 80774 (1988)] [PLDT v. NLRC, G.R. No.
80609 (1988)].
An employee who voluntarily resigns is not
entitled to separation pay unless stipulated in
the employment contract, or the collective
bargaining agreement, or is sanctioned by
established practice or policy of the employer.
[Phimco Industries v. NLRC, G.R. No. 118041
(1997); Hinatuan Mining Corp v. NLRC, G.R.
No. 117394 (1997) cited in JPL Marketing
Promotions v. CA, G.R. No. 151966 (2005)]
None
Equivalent to at least
1 month pay or 1
month pay for every
AMOUNT
One-Half (½) Month Pay per Year of Service
An employee is entitled to receive separation
pay equivalent to ½ month pay for every year
of service, a fraction of at least six (6) months
being considered as one whole year, if his/her
separation from the service is due to any of the
following authorized causes:
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a. Retrenchment to prevent losses (i.e.
reduction of personnel effected by
management to prevent losses) [Art. 298];
b. Closure or cessation of operation of an
establishment not due to serious losses or
financial reverses [Art. 298];
c. When the EE is suffering from a disease
not curable within a period of six (6) months
and his/her continued employment is
prejudicial to his/her health or to the health
of his/her co-employees [Art. 299]; and,
d. Lack of service assignment of security
guard for a continuous period of six (6)
months [D.O. 150, s. 2016]
In no case will an employee get less than one
(1) month separation pay if the separation is
due to the above stated causes. [DOLE
Handbook on Workers’ Statutory Monetary
Benefits, 2018 ed.]
One-Month Pay per Year of Service
An employee is entitled to separation pay
equivalent to his/her one-month pay for every
year of service, a fraction of at least 6 months
being considered as one whole year, if his/her
separation from service is due to any of the
following:
a. Installation by employer of labor-saving
devices;
b. Redundancy, as when the position of the
employee has been found to be excessive
or unnecessary in the operation of the
enterprise;
c. Impossible reinstatement of the employee
to his/her former position or to a
substantially equivalent position for
reasons not attributable to the fault of the
employer [Gaco v. NLRC, G.R. No. 104690
(1994)]
d. Lack of service assignment of security
guard by reason of age. [D.O. 150, s. 2016;
DOLE Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.]
Notice of Termination
The employer may terminate the employment
of any employee due to the above-mentioned
authorized causes by serving a written notice
on the employee and the DOLE through its
regional office having jurisdiction over the
place of business at least 1 month before the
LABOR LAW
intended date thereof. [DOLE Handbook on
Workers’ Statutory Monetary Benefits, 2018
ed.]
Basis of Separation Pay
The computation of separation pay of an
employee shall be based on his/her latest
salary rate. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.]
Inclusion of Regular Allowance in the
Computation
In the computation of separation pay, it would
be error not to integrate the allowance with the
basic salary. The salary base properly used in
computing the separation pay should include
not just the basic salary but also the regular
allowances that an employee has been
receiving. [Planters’ Products, Inc. v. NLRC,
G.R. No. 78524 (1989); DOLE Handbook on
Workers’ Statutory Monetary Benefits, 2018
ed.]
Non-taxable
In case of separation of an official or employee
from the service of the employer due to death,
sickness or other physical disability or for any
cause beyond the control of the said official or
employee, any amount received by him or by
his heirs from the employer as a consequence
of such separation shall likewise be exempt
from tax. [Last proviso of par. 1, Sec. 1, RA
4917]
4. Money Claims arising from
Employer-Employee Relationship
Money claims must have arisen from
employment
Money claims of workers which do not arise out
of or in connection with their employeremployee relationship fall within the general
jurisdiction of regular courts of justice. [San
Jose vs. NLRC and Ocean Terminal Services,
Inc., G.R. No. 121227 (1998)]
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Illustrative cases
In Pepsi-Cola Bottling Co. v. Martinez [G.R.
No. L-5887 (1982)], where an employee won
an award for his performance as top salesman
of the year, the Court held that the claim for
said prize unquestionably arose from an
employer-employee
relationship
and,
therefore, falls within the coverage of Art. 217
(now 224), which speaks of "all claims arising
from employer-employee relations." Indeed,
the employee would not have qualified for the
contest, much less won the prize, if he was not
an employee of the company at the time of the
holding of the contest.
But, in San Miguel Corp. vs. NLRC [G.R. No.
80774 (1988)], where SMC sponsored an
innovation program granting cash awards to
employees who would submit ideas and
suggestions beneficial to the corporation, the
Court ruled that such undertaking, though
unilateral in origin, could nonetheless ripen into
an enforceable contractual obligation on the
part of SMC under certain circumstances.
Thus, whether or not an enforceable contract
had arisen, and if so, whether or not it had been
reached, are preeminently legal questions on
contracts, questions not to be resolved by
referring to labor legislation.
Money claims cognizable by the Labor
Arbiter
The Labor Arbiter shall have original and
exclusive jurisdiction to hear and decide, the
following cases involving all workers:
1. Those cases that workers may file
involving wages, rates of pay, hours of
work and other terms and conditions of
employment, if accompanied with a claim
for reinstatement
2. All other claims arising from employeremployee relations, including those of
persons in domestic or household service,
involving an amount exceeding P5,000.00
regardless of whether accompanied with a
claim for reinstatement.
a. Except
claims
for
Employees
Compensation,
Social
Security,
Medicare and maternity benefits [Art.
224(a)(3)(6)]
LABOR LAW
A money claim arising from employeremployee
relations,
excepting
SSS/
ECC/Medicare claims, is within the jurisdiction
of a Labor Arbiter —
a. if the claim, regardless of amount, is
accompanied
with
a
claim
for
reinstatement; or
b. if the claim, whether or not accompanied
with a claim for reinstatement, exceeds five
thousand pesos (P5,000) per claimant.
Money claims cognizable by the Secretary
of Labor or its
duly authorized
representative
The Secretary of Labor and Employment or his
duly authorized representatives shall have the
power to:
1. issue compliance orders to give effect to
the labor standards provisions of this Code
and other labor legislation
2. Issue writs of execution to the appropriate
authority for the enforcement of their
orders, except in cases where the
employer contests the findings of the labor
employment and enforcement officer and
raises issues supported by documentary
proofs which were not considered in the
course of inspection. [Art. 128]
The visitorial and enforcement powers of the
DOLE Regional Director to order and enforce
compliance with labor standard laws can be
exercised even where the individual claim
exceeds P5,000.00. [Cireneo Bowling Plaza
Inc. v. Sensing, G.R. 146572 (2005)]
See discussion on Part VIII. G. 1. Visitorial
powers of the SOLE.
Money claims cognizable by the Regional
Director
The Regional Director or any of the duly
authorized hearing officers is empowered to
hear and decide any matter involving the
recovery of:
1. Wages and other monetary claims and
benefits arising from employer-employee
relations
2. Including legal interest
Owing to an employee or person employed in
domestic or household service or househelper
under this Code
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Provided, That:
1. Such complaint does not include a claim
for reinstatement;
2. The aggregate money claims of each
employee or househelper does not
exceed [Art. 129]
SUMMARY OF RULES ON MONEY CLAIMS
Art. 224 Art. 128 Art. 129 - RD
LA
SOLE
Past or
Past or
Existing ERpresent ERpresent EREE relationEE relationEE relationship
ship
ship
Monetary
The power
Monetary
claims
of the SOLE claims below
to order and 5k without a
below 5k
arising from
enforce
claim for
compliance
terms and
reinstateconditions of with labor
ment
employment, standard
if it is with a laws can be
exercised
claim for
even where
reinstatethe
ment
individual
Monetary
claim
claims
exceeds
exceeding
P5,000.00
[Cireneo
5k, whether
Bowling
or not it is
Plaza, Inc.
with a claim
for reinstate- v. Sensing]
ment,
except
those
involving
SSS,
Medicare
and
maternity
benefits
5. When Not Deemed Dismissed;
Employee on Floating Status
The bona fide suspension of the operation of a
business or undertaking for a period not
exceeding six (6) months, or the fulfillment by
the employee of a military or civic duty shall
not terminate employment. [Art. 301]
LABOR LAW
During this time, employees are considered on
"floating status". [Art. 301; International
Hardware, Inc. vs. NLRC, G.R. No. 80770
(1989)]
Floating Status in Security Agencies
Temporary “off-detail” or “floating status” is the
period of time when security guards are in
between assignments or when they are made
to wait after being relieved from a previous post
until they are transferred to a new one.
Dire exigency of the employer’s bona fide
suspension of operation, business or
undertaking takes place when:
a. The security agency’s clients decide not to
renew their contracts with the agency; and
b. Contracts for security services stipulate
that the client may request the agency for
the replacement of the guards assigned to
it
The employer should prove that there are no
posts available to which the employee
temporarily out of work can be assigned. [Peak
Ventures Corp v. Nestor Villareal, G.R. No.
184618 (2014)]
Requirement to be Reinstated
The employee on floating status must indicate
his desire to resume his work not later than one
(1) month from the resumption of operations of
his employer or from his relief from the military
or civic duty.
Thereafter, the employer shall reinstate the
employee to his former position without loss of
seniority rights. [Art. 301]
When deemed constructive dismissal
When that "floating status" of an employee
lasts for more than six months, he may be
considered to have been illegally dismissed
from the service. Thus, he is entitled to the
corresponding benefits for his separation, and
this will apply to the two types of work
suspension, that is, either of the entire
business or of a specific component thereof.
[Valdez v. NLRC, G.R. No. 125028 (1998)]
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C. TERMINATION BY
EMPLOYEE
1. With notice to the employer
An employee may terminate without just cause
the employer-employee relationship
a. By serving a written notice on the employer
at least one (1) month in advance
b. The employer upon whom no such notice
was served may hold the employee liable
for damages [Art. 300]
Notice is required when termination is without
just cause. Written notice to resign must be
submitted one (1) month in advance. [Art. 300]
2. Without notice to the employer
An employee may put an end to the
relationship without serving any notice on the
employer for any of the following requirements:
1. Serious insult by the employer or his
representative on the honor and person of
the employee;
2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing. [Art. 300]
Notice is NOT required when termination is
with just cause. [Art. 300]
3. Distinguish voluntary resignation
and constructive dismissal
Definition of Resignation
Resignation is the voluntary act of an employee
who finds himself in a situation where he
believes that personal reasons cannot be
sacrificed in favor of the exigency of the
service, such that he has no other choice but to
disassociate himself from his employment.
[Cervantes v. PAL Maritime Corp., G.R. No.
175209 (2013)]
LABOR LAW
To constitute a resignation:
1. It must be unconditional and with the intent
to operate as such;
2. There must be an intention to relinquish a
portion of the term of office accompanied
by an act of relinquishment.
The fact that the employee signified his desire
to resume his work when he went back to
AZCOR after recuperating from his illness, and
actively pursued his case for illegal dismissal
before the labor courts when he was refused
admission by his employer, negated any
intention on his part to relinquish his job at
AZCOR. [Azcor Manufacturing Inc. v. NLRC,
G.R. No. 117963 (1999)]
Well-entrenched is the rule that resignation is
inconsistent with the filing of a complaint for
illegal dismissal. [Blue Angel Manpower and
Security Services Inc. v Court of Appeals, G.R.
No. 161196 (2008)]
The rule requiring an employee to stay or
complete the 30-day period prior to the
effectivity of his resignation becomes
discretionary on the part of management, as an
employee who intends to resign may be
allowed a shorter period before his resignation
becomes effective. [Hechanova Bugay Vilchez
Lawyers v. Matorre, G.R. No. 198261 (2013)]
Requisites of a valid resignation
1. Voluntary, unconditional, and intentionally
to relinquish a portion of a term of
employment;
2. Accompanied by an act of relinquishment.
Intent to Relinquish
As the intent to relinquish must concur with the
overt act of relinquishment, the acts of the
employee before and after the alleged
resignation must be considered in determining
whether he or she, in fact, intended to sever his
or her employment. [Saudi Arabian Airlines v.
Rebesencio, G.R. No. 198587 (2015)]
Resignation is voluntary when the act of
resignation and the intention to resign concur.
If the resignation was done because of
oppressive conditions set by the employer,
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such is tantamount to constructive dismissal.
[Saudi Arabian Airlines v. Rebesencio, G.R.
No. 198587 (2015)]
Resignation
Voluntary act of an
employee who is in
a situation where
one believes that
personal reasons
cannot be sacrificed
in favor of the
exigency of the
service. It is a formal
pronouncement or
relinquishment of an
office, with the
intention of
relinquishing the
office accompanied
by the act of
relinquishment. [Gan
v. Galderma
Philippines, Inc.]
Valid termination of
employment by the
employee.
Constructive
Dismissal
Involuntary or forced
resignation due to
the harsh, hostile,
and unfavorable
conditions set by the
employer. It is
essentially quitting
or cessation of work
because continued
employment is
rendered impossible,
unreasonable or
unlikely; when there
is a demotion in rank
or a diminution of
pay and other
benefits. It exists if
an act of clear
discrimination,
insensibility, or
disdain by an
employer becomes
so unbearable on
the part of the
employee that it
could foreclose any
choice by him
except to forego his
continued
employment. [Gan v.
Galderma
Philippines, Inc.]
Illegal dismissal
D. RETIREMENT
[Art 302, LC; RA 7641 (The Retirement Pay
Law)]
LABOR LAW
What is Retirement
It is the result of a bilateral act of the parties, a
voluntary agreement between the employer
and the employee whereby the latter, after
reaching a certain age agrees to sever his or
her employment with the former.
Three kinds of retirement schemes
1. Mandated by law: Compulsory and
contributory in character
2. CBA and other agreements: Agreement
between the employer and the employees
3. Voluntarily given by the employer:
expressly as in an announced company
policy or impliedly as in a failure to contest
the employee's claim for retirement
benefits. [Gerlach v. Reuters Limited, PH,
G.R. No. 148542 (2005)]
Requisites for Retroactive Application
1. The claimant for retirement benefits was
still in the employ of the employer at the
time the statute took effect; and
2. The claimant had complied with the
requirements for eligibility for such
retirement benefits under the statute.
[Universal Robina Sugar Milling Corp. v.
Caballeda, G.R. No. 156644 (2008)]
1. Eligibility and Coverage
Who are covered
All employees in the private sector, regardless
of their position, designation, or status, and
irrespective of the method by which their
wages are paid [Sec. 1, IRR, RA 7641]
Exceptions:
1. Employees covered by the Civil Service
Law;
2. Employees in retail, service and
agricultural establishments or operations
regularly employing not more than ten
employees [Sec. 2, IRR, RA 7641]
Note: Domestic helpers and those in the
personal service of others used to be
exempted but such was deleted by D.O. 20
(1994).
When the provisions of RA 7641 apply
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RA 7641 only applies in a situation where there
is:
a. No CBA or other applicable employment
contract providing for retirement benefits;
OR
b. Retirement benefits provided by CBA or
other employment contract fall below the
requirements set by law. [Oxales v. Unilab,
G.R. No. 152991 (2008)]
Age of retirement
In the absence of a retirement plan or
agreement:
a. Compulsory retirement: 65 years old [Sec.
4, IRR, RA 7641]
b. Optional retirement: 60 years or more (but
below 65) and having served the
establishment for at least 5 years. [Sec. 1,
IRR, RA 7641]
An employer is free to impose a retirement age
less than 65 for as long as it has the
employees’ consent. [Jaculbe v. Silliman
University, G.R. No. 156934 (2007)]
For surface mine workers:
a. Compulsory retirement age: 60 years old
b. Optional retirement age is 50 and having
served the establishment for at least 5
years. [Sec. 2, RA 10757]
Forfeiture of Benefits
Employees dismissed for just cause are not
entitled to retirement benefits and other
privileges
including
reinstatement
and
backwages. To rule otherwise would be to
reward acts of willful bread of trust by
employees. [Sy v. Metropolitan Bank, G.R. No
160618 (2006)]
LABOR LAW
Employee may still work after retirement
Upon retirement of an employee, whether
optional or compulsory, his services may be
continued or extended on a case to case basis
upon the agreement of the employer and
employee. [Sec. 4, IRR, RA 7641]
2. Amount of Retirement Pay
Minimum Retirement Pay [Sec. 5, IRR, RA
7641]
Minimum
Components
½ month salary for
every year of service
“One-half month
salary” shall include
all of the following:
Fifteen (15) days
salary based on the
latest salary rate;
NOTE: a fraction of
at least 6 months
shall be considered
a year
“one-half month
salary” is equivalent
to 22.5 days.
[Capitol Wireless,
Inc. v. Sec.
Confessor, G.R. No.
117174 (1996);
Reyes v. NLRC,
G.R. No. 160233
(2007)]
Cash equivalent of
five (5) days of
service incentive
leave;
One-twelfth (1/12) of
the 13th month pay.
(1/12 x 365/12 =
.083 x 30.41 = 2.52)
All other benefits
that the employer
and employee may
agree upon
Retirement pay under RA 7641 vis-à-vis
retirement benefits under SSS and GSIS
laws
The benefits under RA 7641 are other than
those granted by the SSS or the GSIS. [Secs.
1 & 2, RA 7641]
Retirement Benefits under a CBA or
Applicable Contract
Any EE may retire or be retired by his/her ER
upon reaching the age established in the CBA
or other applicable agreement/contract and
shall receive the retirement benefits granted
therein; provided, however, that such
retirement benefits shall not be less than the
retirement pay required under RA 7641, and
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provided further that if such retirement benefits
under the agreement are less, the ER shall pay
the difference. [Art. 302; Sec. 3.2, IRR]
Where both the ER and the EE contribute to a
retirement fund pursuant to the applicable
agreement, the ER’s total contributions and the
accrued interest thereof should not be less
than the total retirement benefits to which the
EE would have been entitled had there been no
such retirement benefits’ fund. If such total
portion from the ER is less, the ER shall pay
the deficiency. [Sec. 3.3, IRR, RA 7641]
3. Retirement Benefits for Workers
Paid by Results
Basis for computation of salary for 15 days
Average Daily Salary (ADS): The ADS is
derived by dividing the total salary for the last
12 months reckoned from the date of
retirement by the number of actual working
days in that particular period, provided that the
determination of rates of payment by results
are in accordance with established regulations.
[Sec. 5.3, IRR, RA 7641]
4. Retirement Benefit of Part-Time
Workers
Requisites
Part-time workers are also entitled to
retirement pay of “one-half month salary” for
every year of service under RA 7641 after
satisfying the following conditions precedent
for optional retirement:
a. There’s no retirement plan between the ER
and the EE; and,
b. The EE should have reached the age of 60
years, and should have rendered at least 5
years of service with the ER.
Applying the foregoing principle, the
components of retirement benefit of part-time
workers may likewise be computed at least in
proportion to the salary and related benefits
due them. [DOLE Handbook on Workers’
Statutory Monetary Benefits, 2018 ed.]
5. Non-Taxable
LABOR LAW
General Rule: Exempt from all taxes, not liable
to attachment
The retirement benefits received by officials
and employees of private firms in accordance
with a reasonable private benefit plan
maintained by the employer:
a. shall be exempt from all taxes and
b. shall not be liable to attachment,
garnishment, levy or seizure by or under
any legal or equitable process whatsoever.
[Sec. 1, RA 4917]
Exception: payment of debts
The benefits may be subject of attachment,
garnishment, levy or seizure to cover a debt of
the official or employee concerned to the
private benefit plan or that arising from liability
imposed in a criminal action. [Sec. 1, RA 4917]
Requirements to Avail of Exemption
1. That the retiring official or employee has
been in the service of the same employer
for at least 10 years
2. He is not less than fifty years of age at the
time of his retirement;
3. That the retirement benefits shall be
availed of by an official or employee only
once [Sec. 1, RA 4917]
4. The benefit plan must be approved by the
BIR [Sec. 6, IRR, RA 7641]
Coverage of Exemption from Income Tax
Exempted from taxation are:
a. The retirement benefits received under RA
7641;
b. Those received by officials and employees
of private firms, whether individual or
corporate, in accordance with a reasonable
private benefit plan maintained by the
employer [Handbook on Workers’ Statutory
Monetary Benefits, 2018 ed.];
c. Amount received by the official/employee
or his heirs as a consequence of
separation due to death, sickness, or other
physical disability or for any cause beyond
the control of the said official or employee.
[Sec. 1, RA 4917]
Reasonable Private Benefit Plan Defined
It refers to a pension, gratuity, stock bonus or
profit-sharing plan:
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a. Maintained by an employer for the
benefit of some or all of his officials and
employees,
b. Wherein contributions are made by such
employer or officials and employees, or
both, for the purpose of distributing to such
officials and employees the earnings and
principal of the fund thus accumulated, and
c. Wherein it is provided in said plan that at
no time shall any part of the corpus or
income of the fund be used for, or be
diverted to, any purpose other than for the
exclusive benefit of the said officials and
employees. [Sec. 1, RA 4917; Handbook
on Workers’ Statutory Monetary Benefits,
2018 ed.
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6. Recognition of the tenets of the sect should
not infringe on the basic right of selforganization granted by the [C]onstitution
to workers, regardless of religious
affiliation. [Kapatiran sa Meat and Canning
Division v. Calleja, G.R. No. 82914 (1988)]
LABOR RELATIONS
A. RIGHT TO SELFORGANIZATION
Right to Self-Organization: A Fundamental
Right
Self-organization is a fundamental right
guaranteed by the Philippine Constitution and
the Labor Code. Employees have the right to
form, join or assist labor organizations for the
purpose of collective bargaining or for their
mutual aid and protection. [UST Faculty Union
v. Bitonio, G.R. No. 131235 (1999)]
Infringement of the right to selforganization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise
of the right to self-organization [Art. 257]
Scope of right to self-organization
1. Right to form, join or assist labor
organizations of their own choosing for the
purpose of collective bargaining through
representatives of their own choosing [Art.
257];
2. Right to engage in lawful concerted
activities for the same purpose (collective
bargaining) or for their mutual aid and
protection [Art. 257]
3. The right of any person to join an
organization also includes the right to leave
that organization and join another one.
[Heritage Hotel Manila v. PIGLASHeritage, G.R. No. 177024 (2009)]
4. The right to form or join a labor organization
necessarily includes the right to refuse or
refrain from exercising said right. [Reyes v.
Trajano, G.R. No. 84433 (1992)]
5. The freedom to form organizations would
be rendered nugatory if they could not
choose their own leaders to speak on their
behalf and to bargain for them. [PanAmerican World Airways, Inc v. PanAmerican Employees Association, G.R.
No. L-25094 (1969)]
1. Who May or May Not Exercise the
Right
a. All employees
b. Government employees of corporations
created under the Corporation Code
c. Supervisory Employees
d. Aliens with valid working permits
e. Security personnel
(a) All Employees
All persons employed in commercial, industrial
and agricultural enterprises and in religious,
charitable, medical or educational institutions,
whether operating for profit or not, shall have
the right to self-organization and to form, join or
assist labor organizations of their own
choosing for purposes of collective bargaining.
(Presumes
an
employer-employee
relationship)
Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and those
without any definite employers may form labor
organizations for their mutual aid and
protection. [Art. 253]
Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered an employee for
purposes of membership in any labor union.
[Art. 292(c)]
Employee […] shall include any individual
whose work has ceased as a result of or in
connection with any current labor dispute or
because of any unfair labor practice if he has
not obtained any other substantially equivalent
and regular employment. [Art. 219(f)]
Employees of non-profit organizations are now
permitted to form, organize or join labor unions
of their choice for purposes of collective
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bargaining [FEU-Dr. Nicanor Reyes Medical
Foundation Inc. v. Trajano, G.R. No. 76273
(1987)]
(b) Government
employees
corporations
created
under
Corporation Code
of
the
The right to self-organization shall not be
denied to government employees. [Sec. 2(5),
Art. IX-B, Constitution]
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers
All other employees in the civil service shall
have the right to form associations for
purposes not contrary to law. [Art. 254]
All government employees can form, join or
assist employees’ organizations of their own
choosing for the furtherance and protection of
their interests.
They can also form, in
conjunction with appropriate government
authorities, labor-management committees,
work councils and other forms of workers’
participation schemes to achieve the same
objectives. [E.O. 180, Sec. 2 (1987)]
(c) Supervisory Employees
Supervisory employees are those who, in the
interest
of
the
employer,
effectively
recommend such managerial actions if the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment. [Art. 219(m)]
What is essential is the nature of the
employee’s function and not the nomenclature
or title given to the job which determines
whether the employee has rank-and-file or
managerial status or whether he is a
supervisory employee. [Tagaytay Highlands
International Golf Club, Inc. v. Tagaytay
Highlands Employees Union-PTGWO, G.R.
142000 (2003)]
(d) Aliens with valid working permits
LABOR LAW
General Rule: All aliens, natural or juridical,
[…] are strictly prohibited from engaging
directly or indirectly in all forms of trade union
activities. [Art. 284]
Exception: Aliens may exercise the right to
self-organization and join or assist labor unions
for purposes of collective bargaining, provided
the following requisites are fulfilled:
1. With valid working permits issued by the
DOLE; and
2. They are nationals of a country which
grants the same or similar rights to Filipino
workers [Art. 284]
a. As certified by DFA; OR
b. Has ratified either ILO Conventions No.
87 and 98 [Sec. 2, Rule II, Book V, IRR]
(e) Security personnel
The security guards and other personnel
employed by the security service contractor
shall have the right:
1. To form, join, or assist in the formation of a
labor organization of their own choosing for
purposes of collective bargaining and
2. To engage in concerted activities which are
not contrary to law including the right to
strike. [D.O. No. 14 Series of 2001
(Guidelines Governing the Employment
and Working Conditions of Security Guards
and Similar Personnel in the Private
Security Industry)]
On Dec. 24, 1986, President C. Aquino issued
EO No. 111 which eliminated the provision
which made security guards ineligible to join
any labor organization. In 1989, Congress
passed RA 6715 which also did not impose
limitations on the ability of security guards to
join labor organizations. Thus, security guards
“may now freely join a labor organization of the
rank-and-file or that of the supervisory union,
depending on their rank.” [Manila Electric Co.
v. SOLE, G.R. No. 91902 (1991)]
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Ineligibility of Managerial Employees;
Rights of Supervisory Employees
Managerial employees are not eligible to join,
assist or form any labor organization. [Art. 255]
Supervisory employees shall not be eligible for
membership in the collective bargaining unit of
the rank-and-file employees but may join,
assist or form separate collective bargaining
units and/or legitimate labor organizations of
their own. The rank and file union and the
supervisors' union operating within the same
establishment may join the same federation or
national union.
Rationale: Supervisory employees, while in
the performance of supervisory functions,
become the alter ego of the management in the
making and the implementing of key decisions
at the sub-managerial level. Certainly, it would
be difficult to find unity or mutuality of interests
in a bargaining unit consisting of a mixture of
rank-and-file and supervisory employees.
[Toyota Motor Phil. Corp. v. Toyota Motor Phil.
Corp. Labor Union, G.R. No. 121084 (1997)]
Supervisor and Rank and File Union
Affiliation
The rank and file union and the supervisors’
union operating within the same establishment
may join the same federation or national union.
[Art. 255]
Note also: Prior to the enactment of RA 9481,
which inserted a new provision [Art. 245-A,
now Art. 256], the Court held in De La Salle
University v. Laguesma that a local
supervisors’ union is not allowed to affiliate with
a national federation of unions of rank and file
employees only where two conditions concur:
1. The rank-and-file employees are directly
under the authority of supervisory
employees
2. The national federation is actively involved
in union activities in the company. [De La
Salle University Medical Center and
College of Medicine v. Laguesma, G.R. No.
102084 (1998)]
LABOR LAW
a. Doctrine of Necessary
Implication
While Art. 245 [now 255] of the Labor Code
singles out managerial employees as ineligible
to join, assist or form any labor organization,
under the doctrine of necessary implication,
confidential
employees
are
similarly
disqualified. This doctrine states that what is
implied in a statute is as much a part thereof as
that which is expressed. [Metrolab Industries
Inc. v. Roldan-Confessor, G.R. No. 108855
(1996)]
Nature of Access Test
Confidential employees, by the nature of their
functions, assist and act in a confidential
capacity to, or have access to confidential
matters of, persons who exercise managerial
functions in the field of labor relations.
Requisites
1. The confidential relationship must exist
between the employees and his
supervisor, and
2. The supervisor must handle the prescribed
responsibilities relating to labor relations.
[San Miguel Supervisors and Exempt
Union v. Laguesma, G.R. No. 110399
(1997)]
Function Test: Nomenclature is not
controlling
The mere fact that an employee is designated
“manager” does not ipso facto make him one.
Designation should be reconciled with the
actual job description of the employee. [Paper
Industries Corp. of the Philippines. v.
Laguesma, G. R. No.101738 (2000)]
Confidential information: Must relate to
labor relations and not from a business
standpoint
An employee must assist or act in a confidential
capacity and obtain confidential information
relating to labor relations policies. Exposure to
internal business operations of the company is
not per se a ground for the exclusion in the
bargaining unit. [Coca-Cola Bottlers v. IPTEU,
G.R. No. 193798 (2015)]
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Rationale of Exclusion of Confidential
Employees
If confidential employees could unionize in
order to bargain for advantages for
themselves, then they could be governed by
their own motives rather than the interest of the
employers.
Irrespective of the degree of their participation
in the actual management of the cooperative,
all members thereof cannot form, assist or join
a labor organization for the purpose of
collective bargaining. [Benguet Electric
Cooperative v. Ferrer-Calleja, G.R. No. 79025
(1989)]
Moreover,
unionization
of
confidential
employees for the purpose of collective
bargaining would mean the extension of the
law to persons or individuals who are supposed
to act in the interest of the employers. It is not
far-fetched that in the course of collective
bargaining, they might jeopardize that interest
which they are duty bound to protect. [Metrolab
Industries Inc. v. Roldan-Confessor, G.R. No.
108855 (1996)]
Exception: Employees who withdrew their
membership from the cooperative are entitled
to form or join a labor union for the negotiations
of a Collective Bargaining Agreement. [Central
Negros Electric Cooperative, Inc. v. DOLE,
G.R. No. 94045 (1991)]
Other People Who Cannot Form, Join or
Assist Labor Organizations
(a) New Employees
[Persons who] are not employees of [a
company] are not entitled to the constitutional
right to join or form a labor organization for
purposes of collective bargaining. […] The
question of whether employer-employee
relationship exists is a primordial consideration
before extending labor benefits under the
workmen's compensation, social security,
Medicare, termination pay and labor relations
law. [Singer Sewing Machine Co. v. Drilon,
G.R. No. 91307, 1991]
But employees of the contractor can still form a
labor union; the labor union can be established
to bargain with the contractor but not with the
principal employer. [Prof. Battad]
(b) Employee-member of a Cooperative
General Rule: An employee of a cooperative
who is a member and co-owner thereof cannot
invoke the right to collective bargaining for
certainly an owner cannot bargain with himself
or his co-owners. [Batangas-I Electric
Cooperative Labor Union v. Romeo A. Young,
G.R. No. 62386 (1988)]
(c) Employees
Organizations
of
International
International organizations are endowed with
some degree of international legal personality.
They are granted jurisdictional immunity, as
provided in their organization’s constitutions, to
safeguard them from the disruption of their
functions.
Immunity […] is granted to avoid interference
by the host country in their internal workings.
The determination [by the executive branch]
has been held to be a political question
conclusive upon the Courts in order not to
embarrass a political
department
of
Government. [Hence], a certification election
cannot be conducted in an international
organization to which the Philippine
Government has granted immunity from local
jurisdiction. [International Catholic Migration
Commission v. Calleja, G.R. No. 85750 (1990)]
(d) Members of the AFP, Policemen, Police
Officers, Firemen, and Jail Guards
Members of the AFP, Policemen, Police
Officers, Firemen and Jail Guards are
expressly excluded by EO 180, Sec. 4 from the
coverage of the EO 180 which provides
guidelines for the exercise of the right to
organize of government employees.
SUMMARY - Who Cannot Form, Join or
Assist Labor Organizations
a. Managerial employees
b. Confidential employees
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c.
d.
e.
f.
g.
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Non-employees
Member-employee of a cooperative
Employees of international organizations
High-level government employees
Members of the AFP, police officers,
policemen, firemen and jail guards
2. Commingling or Mixture of
Membership
Effect of Inclusion of Employees Outside
the Bargaining Unit or Commingling
General Rule: It shall not be a ground for the
cancellation of the registration of the union.
Said employees are automatically deemed
removed from the list of membership of said
union. [Art. 256]
Exception: Unless such mingling was brought
about by misrepresentation, false statement or
fraud under Art. 247 (Grounds for cancellation
of Union Registration) of the Labor Code.
[SMCC-Super v. Charter Chemical and
Coating Corporation, G.R. No. 169717 (2011)]
3. Rights and Conditions of
Membership
a. Nature of Relationship
i. Member-Labor Union
The nature of the relationship between the
union and its members is fiduciary in nature,
which arises from the dependence of the
employee on the union, and from the
comprehensive power vested in the union with
respect to the individual. The union may be
considered but the agent of its members for the
purpose of securing for them fair and just
wages and good working conditions. [Heirs of
Cruz v. CIR, G.R. No. L-23331-32 (1969)]
Admission and Discipline of Members
No arbitrary or excessive initiation fees or fines.
No arbitrary or excessive initiation fees shall be
required of the members of a legitimate labor
organization nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed. [Art.
250(e)]
LABOR LAW
Prohibition on subversive activities or
membership
No labor organization shall knowingly admit as
members or continue in membership any
individual who:
1. Belongs to a subversive organization; or
2. Who is engaged directly or indirectly in any
subversive activity;
Unions cannot arbitrarily exclude qualified
applicants
Unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a
closed-shop provision would not justify the
employer in discharging, or a union in insisting
upon the discharge of, an employee whom the
union thus refuses to admit to membership,
without any reasonable ground therefor.
Needless to say, if said unions may be
compelled to admit new members, who have
the requisite qualifications, with more reason
may the law and the courts exercise the
coercive power when the employee involved is
a long-standing union member, who, owing to
provocations of union officers, was impelled to
tender his resignation which he forthwith
withdrew or revoked. [Salunga v. CIR, G.R.
No. L-22456 (1967)]
Members who seek destruction of union
lose right to remain as members
Inherent in every labor union, or any
organization for that matter, is the right of selfpreservation. When members of a labor union,
therefore, sow the seeds of dissension and
strife within the union; when they seek the
disintegration and destruction of the very union
to which they belong, they thereby forfeit their
rights to remain as members of the union which
they seek to destroy. [Villar v. Inciong, G.R. No.
L-50283-84 (1983)]
ii. Labor Union-Federation
Local unions do not owe their creation and
existence to the national federation to which
they are affiliated but, instead, to the will of their
members, […] The local unions remain the
basic units of association, free to serve their
own interests subject to the restraints imposed
by the constitution and by-laws of the national
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federation, and free also to renounce the
affiliation upon the terms laid down in the
agreement which brought such affiliation into
existence. [Philippine Skylanders, Inc. v.
NLRC, G.R. No. 127374 (2002)]
Union Chartering
Affiliate
An independent union affiliated with a
federated, national union or a chartered local
which was subsequently granted independent
registration but did not disaffiliate from its
federation, reported to the Regional Office and
the Bureau in accordance with Rule III, Secs. 6
and 7 [Sec. 1(b), Rule I, Book V, IRR]
Independent Union
A labor organization operating at the enterprise
level that acquired legal personality through
independent registration under Art. 234 of the
Labor Code and Rule III, Sec. 2-A [Sec. 1(x),
Rule I, Book V]
National Union or Federation
A group of legitimate labor unions in a private
establishment
organized
for
collective
bargaining or for dealing with employers
concerning
terms
and
conditions
of
employment for their member union or for
participating in the formulation of social and
employment policies, standards and programs,
registered with the BLR in accordance with
Rule III Sec. 2-B [Sec. 1(ll), Rule I, Book V,
IRR]
Chartered Local (Local Chapter)
A labor organization in the private sector
operating at the enterprise level that acquired
legal personality through registration with
Regional Office [Sec. 1(j), Rule I, Book V, IRR]
A duly registered federation or national union
may directly create a local chapter by issuing a
charter certificate indicating the establishment
of the local chapter. The chapter shall acquire
legal personality only for purposes of filing a
petition for certification election from the date it
was issued a charter certificate.
The chapter shall be entitled to all other rights
and privileges of a legitimate labor organization
LABOR LAW
only upon the submission of the following
documents in addition to its charter certificate:
1. The names of the chapter's officers, their
addresses, and the principal office of the
chapter; and
2. The chapter's constitution and by-laws:
Provided, That where the chapter's
constitution and by-laws are the same as
that of the federation or the national union,
this fact shall be indicated accordingly.
The additional supporting requirements shall
be:
1. Certified under oath by:
a. Secretary; or
b. Treasurer
2. Attested by: Its president [Art. 241]
Lesser requirements for Chartered locals
The intent of the law in imposing less
requirements in the case of a branch or local of
a registered federation or national union is to
encourage the affiliation of a local union with a
federation or national union in order to increase
the local unions’ bargaining powers respecting
terms and conditions of labor. [SMCEUPTGWO v. SMPEU-PDMP, G.R. No. 171153
(2007)]
Trade Union Centers cannot create locals
or chapters
Art. 241 mentions only “a duly registered
federation or national union.”
The solemn power and duty of the Court to
interpret and apply the law does not include the
power to correct by reading into the law what is
not written therein. [SMCEU-PTGWO v.
SMPEU-PDMP, G.R. No. 171153 (2007)]
National Union or Federation v. Trade
Unions
National Union or
Trade Unions
Federation
With at least ten
Composed of a
(10) locals or
group of registered
chapters (or
national unions or
independent unions
federations
[Sec. 2-B(5), Rule
III, Book V, IRR],
each of which must
be a duly
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recognized
collective bargaining
agent [Art. 244]
Can directly create
local chapter [Art.
241]
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Cannot directly
create local chapter
[SMCEU-PTGWO v.
SMPEU-PDMP,
G.R. No. 171153
(2007)]
LABOR LAW
unions are considered principals while the
federation is deemed to be merely their agent.
[Insular Hotel Employees Union NFL v.
Waterfront Insular Hotel, G.R. No. 174040-41
(2010)]
(a) Disaffiliation
Purpose of Affiliation
To foster the free and voluntary organization of
a strong and united labor movement [Art. 218A(c)]
In the absence of specific provisions in the
federation’s
constitution
prohibiting
disaffiliation or the declaration of autonomy of
a local union, a local may dissociate with its
parent union. [Malayang Manggagawa sa M.
Greenfield v. Ramos, G.R. No. 113907 (2000)]
The sole essence of affiliation is to increase, by
collective action, the common bargaining
power of local unions for the effective
enhancement and protection of their interests.
Admittedly, there are times when without
succor and support local unions may find it
hard, unaided by other support groups, to
secure justice for themselves. [Philippine
Skylanders, Inc. v. NLRC, G.R. No. 127374
(2002)]
Local unions have the right to separate from
their mother federation on the ground that as
separate and voluntary associations, local
unions do not owe their creation and existence
to the national federation to which they are
affiliated but, instead, to the will of their
members. [Philippine Skylanders, Inc. v.
NLRC, G.R. No. 127374 (2002)]
Nature of Relationship: Agency
The mother union, acting for and on behalf of
its affiliate, had the status of an agent while the
local union remained the basic unit of the
association, free to serve the common interest
of all its members subject only to the restraints
imposed by the constitution and by-laws of the
association. [...] The same is true even if the
local is not a legitimate labor organization.
[Filipino Pipe and Foundry Corp v. NLRC, G.R.
No. 115180 (1998)]
Effect of Affiliation
Inclusion of [the federation’s initials] in the
registration is merely to stress that they are its
affiliates at the time of registration. It does not
mean that said local unions cannot stand on
their own. [Adamson v. CIR, G.R. No. L-35120
(1984)]
Mere affiliation does not divest the local union
of its own personality, neither does it give the
mother federation the license to act
independently of the local union. It only gives
rise to a contract of agency, where the former
acts in representation of the latter. Hence, local
A local union is free to serve the interests of all
its members, including the freedom to
disaffiliate or declare its autonomy from the
federation to which it belongs when
circumstances warrant, in accordance with the
constitutional guarantee of freedom of
association. [Malayang Samahan ng mga
Manggagawa sa M. Greenfield, Inc. v. Ramos,
G.R. No. 113907 (2000)]
Period of Disaffiliation
Generally, a labor union may disaffiliate from
the mother union to form a local or independent
union only during the 60-day freedom period
immediately preceding the expiration of the
CBA. However, even before the onset of the
freedom period, disaffiliation may be carried
out when there is a shift of allegiance on the
part of the majority of the members of the
union. [Alliance of Nationalist and Genuine
Labor Organization v. Samahan ng mga
Manggagawang Nagkakaisa sa Manila Bay
Spinning Mills, G.R. No. 118562 (1996)]
[A] local union which has affiliated itself with a
federation is free to sever such affiliation
anytime and such disaffiliation cannot be
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considered disloyalty. [Malayang Manggagawa
sa M. Greenfield v. Ramos, G.R. No. 113907
(2000)]
Effect of Disaffiliation
On legal personality
A registered independent union retains its legal
personality while a chartered local loses its
legal personality unless it registers itself.
No effect on CBA
A disaffiliation does not disturb the
enforceability and administration of a collective
agreement; it does not occasion a change of
administrators of the contract nor even an
amendment of the provisions thereof.
[Volkschel Labor Union v. BLR, No. L-45824
(1985)]
Obligation to pay union dues is
coterminous with membership
“The employees’ check-off authorization, even
if declared irrevocable, is good only as long as
they remain members of the union concerned”.
A contract between an employer and the
parent organization as bargaining agent for the
employees is terminated by the disaffiliation of
the local of which the employees are members.
[Volkschel Labor Union v. BLR, No. L-45824
(1985)]
Power to represent principal severed
By [the local union’s disaffiliation from the
federation], the vinculum that previously bound
the two entities was completely severed. [The
federation] was divested of any and all power
to act in representation of the union. Thus, any
act performed by [the federation] affecting the
interests and affairs of the [local union] is
rendered without force and effect. [ANGLO v.
Samana, G.R. No. 118562 (1996)]
(b) Substitutionary Doctrine
The “substitutionary” doctrine provides that the
employees cannot revoke the validly executed
collective bargaining contract with their
employer by the simple expedient of changing
their bargaining agent.
It is in the light of this that the phrase “said new
agent would have to respect said contract”
LABOR LAW
must be understood. It only means that the
employees, thru their new bargaining agent,
cannot renege on their collective bargaining
contract, except of course to negotiate with
management for the shortening thereof.
[Benguet Consolidated v. BCI Employees and
Workers Union-PAFLU, G.R. No. L-24711
(1968)]
Conditions to apply the doctrine
1. Change of bargaining agent (through
affiliation, disaffiliation, or other means);
and
2. Existing CBA with the previous bargaining
agent [Benguet Consolidated v. BCI
Employees and Workers Union-PAFLU,
G.R. No. L-24711 (1998)]
Effects
1. New bargaining agent cannot revoke and
must respect the existing CBA; and
2. It may negotiate with management to
shorten the existing CBA’s lifetime.
B. BARGAINING UNIT
Definition
“Bargaining Unit” refers to a group of
employees sharing mutual interests within a
given employer unit, comprised of all or less
than all of the entire body of employees in the
employer unit or any specific occupational or
geographical grouping within such employer
unit. [Sec. 1(e), Rule I, Book V, IRR]
It is a group of employees of a given employer,
comprised of all or less than all of the entire
body of employees, which the collective
interests of all the employees indicate to be
best suited to serve reciprocal rights and duties
of the parties consistent with equity to the
employer. [Belyca Corp. v. Calleja, G.R. No.
77395 (1988) citing Rothenberg]
Functions of an Appropriate Bargaining
Unit
1. An ELECTORAL DISTRICT. – It marks the
boundaries of those who may participate in
a certification election.
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2. An ECONOMIC UNIT. – They are a group
of employees with community of interests.
3. A SOVEREIGN BODY. – It selects the sole
and exclusive bargaining agent.
Role of a bargaining unit
The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit shall be
the exclusive representative of the employees
in such unit for the purpose of collective
bargaining. [Art. 267]
Right of individual or group of employees
to present grievances
An individual employee or group of employees
shall have the right at any time to present
grievances to their employer. [Art. 267]
CBA Coverage
It is a well-settled doctrine that the benefits of a
collective bargaining agreement extend to the
laborers and employees in the collective
bargaining unit, including those who do not
belong to the chosen bargaining labor
organization. [Mactan Workers Union v.
Aboitiz, G.R. No. L-30241 (1972)]
Note: An employee employed, whether for a
definite period is not, is an EE for purposes of
joining a union [Art. 292(c)]. But, whether or not
a union member, an EE part of the CBU is
entitled to CBA benefits unless excluded under
the CBA.
Effect of Prior Agreement
A prior CBA excluding a group of employees
from the bargaining unit of rank-and-file
employees does not bar the parties from
renewing the existing CBA and proposing and
discussing modifications or amendments
thereto during the freedom period. [De La Salle
University v. DLSU Employees Association EA,
G.R. No. 109002, (2000)]
Rationale
A prior agreement as to the exclusion of
monthly-paid rank-and-file employees from the
bargaining union of the daily-paid rank-and-file
can never bind subsequent federations and
unions. as employees were not privy to that
agreement. And even if [they were privy, it can
LABOR LAW
never bind subsequent federations and unions
because it is a curtailment of the right to self-organization guaranteed by the labor laws
[General Rubber & Footwear Corp. v. BLR,
G.R. No. 74262 (1987)]
Corporate Entities
General Rule: Two companies having
separate juridical personalities shall NOT be
treated as a single bargaining unit. [Diatagon
Labor Federation Local v. Ople, G.R. No. L44493-94 (1980)]
Exception: Pervasive Unitary Aspect of
Management Doctrine
The cross-linking of the agencies’ command,
control, and communication systems indicate
their unitary corporate personality. Accordingly,
the veil of corporate fiction [...] should be lifted
for the purpose of allowing the employees of
the three agencies to form a single labor union.
A settled formulation of the doctrine of piercing
the corporate veil is that when two business
enterprises are owned, conducted, and
controlled by the same parties, both law and
equity will, when necessary to protect the rights
of third parties, disregard the legal fiction that
these two entities are distinct and treat them as
identical or as one and the same. [Ang Lee v.
Samahang
Manggagawa
ng
Super
Lamination, G.R. No. 193816 (2016)]
Determining whether or not to establish
separate bargaining units
The fact that the businesses are related, that
some of the employees are the same persons
working in the other company and the physical
plants, offices and facilities are in the same
compound are NOT sufficient to justify piercing
the corporate veil. [Indophil Textile Mills
Workers Union v. Calica, G.R. No. 96490
(1992)]
Spun-off corporations
The transformation of the companies is a
management prerogative and business
judgment which the courts cannot look into
unless it is contrary to law, public policy or
morals. [...] Considering the spin-offs, the
companies would consequently have their
respective and distinctive concerns in terms of
the nature of work, wages, hours of work and
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LABOR LAW
other conditions of employment. [...] The nature
of their products and scales of business may
require different skills, volumes of work, and
working conditions which must necessarily be
commensurate by different compensation
packages. [San Miguel Union v. Confesor,
G.R. No. 111262 (1996)]
The basic test in determining the appropriate
bargaining unit is that a unit, to be appropriate,
must affect a grouping of employees who have
substantial, mutual interests in wages, hours,
working conditions, and other subjects of
collective bargaining. [UP v. Ferrer-Calleja,
G.R. No. 96189, (1992)]
TEST TO DETERMINE THE CONSTITUENCY
OF AN APPROPRIATE BARGAINING UNIT –
4 Factors:
1. Will of the Employees (Globe Doctrine)
2. Affinity and unity of employees’ interest
(Substantial Mutual Interests Rule)
3. Prior collective bargaining history
4. Employment status [Democratic Labor
Association v. Cebu Stevedoring Co. Inc,
G.R. No. L-10321 (1958); University of the
Philippines v. Ferrer-Calleja, G.R. No.
96189 (1992)]
Rationale: There are greater chances of
success for the collective bargaining process.
The bargaining unit is designed to maintain the
mutuality of interest among the employees in
such unit.
Note: Where the employment status was not at
issue but the nature of work of the employees
concerned; the Court stressed the importance
of the 2nd factor. [Belyca Corp. v. Calleja, G.R.
No. 77395 (1988)]
Other factors:
1. Geography and Location
2. Policy of avoiding fragmentation of the
bargaining unit
Globe Doctrine
A practice designated as the “Globe doctrine,”
sanctions the holding of a series of elections,
not for the purpose of allowing the group
receiving an overall majority of votes to
represent all employees, but for the specific
purpose of permitting the employees in each of
the several categories to select the group
which each chooses as a bargaining unit.
[Kapisanan ng mga Manggagawa sa Manila
Road Co. v. Yard Crew Union, G.R. Nos. L16292-94 (1960)]
Rationale: Highly skilled or specialized
technical workers may choose to form their
own bargaining unit because they may be in
better position to bargain with the employer
considering the market value of their skills.
When the interest between groups has
changed over time, there is reason to dissolve,
change or expand a certain bargaining unit.
Prior Collective Bargaining History
The existence of a prior collective bargaining
history is neither decisive nor conclusive in the
determination of what constitutes an
appropriate bargaining unit. [Sta. Lucia East
Commercial Corporation v. SOLE, G.R. No.
162355 (2009)]
Employment Status
Among the factors to be considered [is the]
employment status of the employees to be
affected
[regular,
casual,
seasonal,
probationary, etc.], that is the positions and
categories of work to which they belong [....]
[Belyca Corp. v. Calleja, G.R. No. 77395
(1988)]
Geography and Location
Geography and location only play a significant
role if:
a. The separation between the camps [...] and
the different kinds of work in each [...] all
militate in favor of the system of separate
bargaining units;
b. [When] the problems and interests of the
workers are peculiar in each camp or
department;
c. The system of having one collective
bargaining unit in each camp [...] [has
operated satisfactorily in the past.]
[Benguet Consolidated Inc. and Balatok
Mining Co. v. Bobok Lumberjack
Association, G.R. No. L-11029 (1958)]
Community or Mutuality of Interests
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Policy of Avoiding Fragmentation of the
Bargaining Unit
It bears noting that the goal of the DOLE is
[geared] towards “a single employer wide unit
which is more to the broader and greater
benefit of the employees working force.”
The philosophy is to avoid fragmentation of the
bargaining unit so as to strengthen the
employees’ bargaining power with the
management. To veer away from such goal
would be contrary, inimical and repugnant to
the objectives of a strong and dynamic
unionism. [Phil. Diamond Hotel and Resort Inc
v. Manila Diamond Hotel and Employees
Union, G.R. No. 158075 (2006)]
Confidential employees lumped with
management
Since the confidential employees are very few
in number and are, by practice and tradition,
identified with the supervisors in their role as
representatives of management, such identity
of interest has allowed their inclusion in the
bargaining unit of supervisors-managers for
purposes of collective bargaining in turn as
employees in relation to the company as their
employer. [Filoil Refinery Corp. v. Filoil
Supervisory and Confidential Employees
Union, G.R. No. L-26736 (1972)]
LABOR LAW
C. BARGAINING
REPRESENTATIVE
The labor organization designated or selected
by the majority of the employees in an
appropriate collective bargaining unit shall be
the exclusive representative of the employees
in such unit for the purpose of collective
bargaining. [Art. 267]
Labor Management Council
Any provision of law to the contrary
notwithstanding, workers shall have the right:
a. To participate in policy and decisionmaking processes of the establishment
where they are employed insofar as said
processes will directly affect their rights,
benefits and welfare.
b. To form labor-management councils, for
this purpose [Art. 267]
Selection of Representatives
In organized establishments,
the workers’ representatives to the council
shall be nominated by the exclusive
bargaining representative.
In establishments where no legitimate labor
organization exists,
the workers representative shall be elected
directly by the employees at large. [Sec. 2,
Rule XXI, Book V, IRR]
Qualification of Voters
Eligible Voter
Eligible voter refers to a voter belonging to the
appropriate bargaining unit that is the subject
of the petition for certification election [Sec.
1(q), Rule VIII, Book V, IRR]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition shall be eligible
to vote. [Sec. 6, Rule IX, Book V, IRR]
Note: Rule VIII, Sec. 14 (f) and Rule IX, Sec. 6
refer to employees as those employed 3
months prior to the issuance of the order/the
filing of the petition for certification election
while Rule IX, Sec. 2 reckon the period of
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employment from the “time of filing the
petition”. This difference has not been resolved
in any case before the Supreme Court.
All rank and file employees in the appropriate
bargaining unit, whether probationary or
permanent are entitled to vote. The Code
makes no distinction as to their employment
status. [...] All they need to be eligible to
support the petition is to belong to a bargaining
unit. [Airtime Specialists, Inc. v. Ferrer-Calleja,
G.R. No. 80612-16 (1990)]
Rationale for Non-Distinction Policy
Collective bargaining covers all aspects of the
employment relation and the resultant CBA
binds all employees in the bargaining unit. All
rank and file employees, probationary or
permanent, have a substantial interest in the
selection of the bargaining representative.
[Airtime Specialists, Inc. v Ferrer-Calleja,
supra.]
Dismissed employees [Sec. 6, Rule IX, Book
V, IRR]
General Rule: [Dismissed] employees [who]
contested legality of the dismissal in a forum of
appropriate jurisdiction at the time of the
issuance of the order for conduct of a
certification election
Exception: Dismissal was declared valid in a
final judgment at the time of the conduct of the
certification election.
Disagreement over voters’ list over
eligibility of voters
All contested voters shall be allowed to vote
[but] their votes shall be segregated and sealed
in individual envelopes. [Sec. 6, Rule IX, Book
V, IRR]
Voting List and Voters
The basis of determining voters may be agreed
upon by the parties (i.e. the use of payroll).
[Acoje Workers Union v. NAMAWU, G.R. No.
L-18848 (1963)]
LABOR LAW
Non-participation in previous election has
no effect
[Failure to take part in previous elections is no
bar to the right to participate in future elections.]
No law, administrative rule or precedent
prescribes forfeiture of the right to vote by
reason of neglect to exercise the right in past
certification elections. [Reyes v. Trajano, G.R.
No. 84433 (1992)]
1. Determination of Representation
Status
Methods of Establishing Majority Status
a. Sole and Exclusive Bargaining Agent
(SEBA) Certification
b. Consent Election
c. Certification Election
d. Run-Off Election
e. Re-Run election
Note: D.O. No. 40-I-15 replaced Voluntary
Recognition with SEBA certification, as of
September 7, 2015.
a. SEBA Certification
PROCEDURE [RULE VII, BOOK V, IRR]
1. File Request for SEBA Certification [Sec.
1]
Who: Any legitimate labor organization
File where: Regional Office which issued
its certificate of registration or certificate of
creation of chartered local
2. Indicate in the request [Sec. 2]:
a. Name and address of the requesting
legitimate labor organization;
b. Name and address of the company
where it operates;
c. Bargaining unit sought to be
represented;
d. Approximate number of employees in
the bargaining unit; and
e. Statement of the existence/nonexistence
of
other
labor
organization/CBA.
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Certificate of
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Duly Certified by
Registration
President of
requesting union
Creation of chartered
local
President of the
local federation of
the local
LABOR LAW
officer for the conduct of election pursuant
to Rule IX of this rules.
Note: If there is more than one Legitimate
Labor Organization, Art. 269 applies
Both certificates should be attached to the
request
3. Regional Director shall act on the request
[Sec. 3]
When: Within one (1) day from submission
of request
Action:
a. Determine
whether
request
is
compliant with Sec. 2 and whether the
bargaining unit sought to be
represented is organized or not; and
b. Request a copy of the payroll
If the Regional Director finds it deficient,
he/she shall advise the requesting union or
local to comply within ten (10) days from
notice. Failure to comply within the
prescribed period shall be deemed
withdrawal of the request.
If Unorganized Establishment [Sec. 4]
a. Finding of only 1 legitimate labor
organization – Regional Director shall call
a conference within five (5) working days
for the SUBMISSION of:
1. Names of employees in the covered
bargaining unit who signify support for
certification; [and these] employees
comprise at least majority of the
number of employees in the covered
bargaining unit; and
2. Certification under oath by the
president of the requesting union or
local that all documents submitted are
true and correct based on personal
knowledge
b. Failure to Complete Requirements for
SEBA Certification - the request for SEBA
certification shall be referred to the election
If Organized Establishment [Sec. 6]
If the Regional Director finds the establishment
organized he/she shall refer it to the mediatorarbitrator for determination and propriety of
conducting a certification election.
4. Regional Director shall
submission [Sec. 4.1]
act
on
the
The request shall be
Incomplete
requirements referred to Election Officer
for the conduct of election
pursuant to Rule IX.
Regional Director shall
Complete
requirements issue a certification as
SEBA
5. Regional Director shall post the SEBA
Certification [Sec. 4.1]
Period: Fifteen (15) consecutive days
Where: At least two (2) conspicuous
places in the establishment or covered
bargaining unit.
EFFECT OF SEBA CERTIFICATION [Sec.
4.2]
Upon the issuance of the [SEBA Certification],
the certified union or local shall enjoy all the
rights and privileges of an exclusive bargaining
agent of all the employees in the covered
bargaining unit.
The certification shall bar the filing of a [PCE]
by any labor organization for a period of one (1)
year from the date of its issuance.
Upon expiration of this one-year period, any
legitimate labor organization may file a [PCE]
in the same bargaining unit represented by the
certified labor organization, unless a [CBA]
between the employer and the certified labor
organization was executed and registered with
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the Regional Office in accordance with Rule
XVII.
b. Consent Election
Consent Election means the election
voluntarily agreed upon by the parties with or
without the intervention by DOLE [Sec. 1(i),
Rule I, Book V, IRR]
Procedure [Sec. 11, Rule VIII, Book V, IRR]
1. The parties may agree to hold a consent
election
a. Where no petition for certification
election was filed; or
b. Where a petition for certification
election had been filed, and upon the
intercession of Med-Arbiter [Sec. 25,
Rule VIII, Book V, IRR]
2. Mediator-Arbiter shall call for the consent
election, reflecting the parties’ agreement
and the call in the minutes of the
conference.
Regional
Director
or
authorized representative shall determine
the Election Officer by raffle in the
presence of representatives of the
contending unions if they so desire
3. First pre-election conference is scheduled
within ten (10) days from the date of the
agreement. Subsequent conferences may
be called to expedite and facilitate the
holding of the consent election.
c. Certification Election
LABOR LAW
BARS TO A CERTIFICATE ELECTION
Petition for certification may be filed:
General Rule: Anytime
Exceptions:
1. One-year bar rule
2. Negotiation bar rule
3. Deadlock bar rule
4. Contract bar rule
See Grounds for denying a Petition for
Certification Election
(1) One-Year Bar Rule
No certification election may be held within 1
year from the time a valid certification, consent
or run-off election has been conducted within
the bargaining unit.
[If the order of the Med-Arbiter certifying the
results of the election has been appealed], the
running of the one-year period shall be
suspended until the decision on the appeal
becomes final and executory. [Sec. 3(a), Rule
VIII, Book V]
Note: This bar also applies to a SEBA
Certification under Rule VII. “The certification
shall bar the filing of a petition for certification
election by any labor organization for a period
of one (1) year from the date of its issuance.”
[Sec. 4.2, Rule VII, Book V, IRR]
(2) Negotiation Bar Rule
Certification Election is the process of
determining, through secret ballot, the sole and
exclusive representative of the employees in
an appropriate bargaining unit for purposes of
collective bargaining or negotiation. [Sec. 1(i),
Rule I, Book V, IRR]
PURPOSE
The purpose of a certification election is
precisely the ascertainment of the wishes of
the majority of the employees in the
appropriate bargaining unit: to be or not to be
represented by a labor organization, and in the
affirmative case, by which particular labor
organization. [Reyes v. Trajano, G.R. No.
84433 (1992)]
No certification of election may be filed when:
1. Within 1 year after the valid certification
election
2. The DULY CERTIFIED union has
COMMENCED
AND
SUSTAINED
negotiations in good faith with the employer
3. In accordance with Art. 261 of the Labor
Code Sec. 3(b), Rule VIII, Book V
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(3) Deadlock Bar Rule
No certification of election may be filed when:
1. The incumbent or certified bargaining
agent is a party;
2. A bargaining deadlock had been:
a. Submitted to conciliation or arbitration
or;
b. Had become the subject of a valid
notice of strike or lockout [Sec. 3(c),
Rule VIII, Book V, IRR]
A “deadlock” is defined as the “counteraction of
things producing entire stoppage;
a state of inaction or of neutralization
caused by the opposition of persons or of
factions (as in government or voting body):
standstill.” [...]
The word is synonymous with the word
impasse
which
[...]
“presupposes
reasonable effort at good faith bargaining
which, despite noble intentions, does not
conclude in agreement between the
parties” [Divine World University v. SOLE,
G.R. No. 91915 (1992)]
LABOR LAW
The five-year representation status acquired by
an incumbent bargaining agent either through
single enterprise collective bargaining or multiemployer bargaining shall not be affected by a
subsequent [CBA] executed between the same
bargaining agent and the employer during the
same five-year period. [Sec. 7, Rule XVII, Book
V, IRR]
Despite an agreement for a CBA with a life of
more than five years, either as an original
provision or by amendment, the bargaining
union’s exclusive bargaining status is effective
only for five years and can be challenged within
sixty (60) days prior to the expiration of the
CBA’s first five years. [FVC Labor UnionPTGWO v. SANAMA-FVC-SIGLO, G.R. No.
176249 (2009)]
The rule is that despite the lapse of the formal
effectivity of the CBA the law still considers the
same as continuing in force and effect until a
new CBA shall have been validly executed.
Hence, the contract bar rule still applies.
[Colegio de San Juan de Letran v. Association
of Employees, G.R. No. 141471 (2000)]
(4) Contract Bar Rule
BLR shall not entertain any petition for
certification election or any other action which
may disturb the administration of DULY
REGISTERED existing collective bargaining
agreements affecting the parties, except under
Arts. 264, 265, and 268 [(60-day freedom
period)]. [Art. 238]
No petition for certification election may be filed
when a [CBA] between the employer and a
SEBA has been registered in accordance with
Art. 237.
Where such [CBA] is registered, the petition
may be filed only within sixty (60) days prior to
its expiry. [Sec. 3(d), Rule VIII, Book V, IRR].
The Contract-Bar Rule shall apply in any of the
following: (1) when there exists an unexpired
registered CBA; or (2) when there is no
challenge on the representation status of the
incumbent union during the freedom period.
[D.O. No. 40-1-15]
Petition
for cancellation
of union
registration DOES NOT suspend or prevent
filing of certification election
A petition for cancellation of union registration
shall not:
1. suspend the proceedings for certification
election; nor
2. prevent the filing of a petition for
certification election. [Art. 246]
A certification election can be conducted
despite pendency of a petition to cancel the
union registration certificate. For the fact is that
at the time the [union], whose registration
certificate is sought to be cancelled, filed its
petition for certification, it still had the legal
personality to perform such act absent an order
directing its cancellation. [Association of Court
of Appeals Employees v. Calleja, G.R. No.
94716, (1991)]
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Allegation of company union a prejudicial
question to a petition for certification
election
A complaint for unfair labor practice may be
considered a prejudicial question in a
proceeding for certification election when it is
charged therein that one or more labor unions
participating in the election are being aided, or
are controlled, by the company or employer
[company union] [United CMC Textile Worker’s
Union v. BLR, G.R. No. 51337(1984)].
Rationale: The certification election may lead
to the selection of an employer-dominated or
company union as the employees’ bargaining
representative, and when the court finds that
said union is employer-dominated in the unfair
labor practice case, the union selected would
be decertified and the whole election
proceedings would be rendered useless and
nugatory. [B.F. Goodrich Phils. Marikina v. B.F.
Goodrich Confidential and Salaried Employees
Union, G.R. No. L-34069-70 (1973)]
NATURE OF PROCEEDING
Certification election is the most effective and
the most democratic way of determining which
labor organization can truly represent the
working force in the appropriate bargaining unit
of a company [Samangang Manggagawa sa
PERMEX v SOLE, G.R. No. 107792 (1998)].
[It] is not a ‘litigation’ [...] but a mere
investigation of a non-adversary, fact-finding
character. [...]
The determination of the proceeding does not
entail the entry of remedial orders or redress of
rights, but culminates solely in an official
designation of bargaining units and an
affirmation of the employees’ expressed choice
of bargaining agent. [Angat River Irrigation
System v. Angat River Worker’s Union
(PLUM), G.R. Nos. L-10943 and L-10944
(1957)]
Technical rules and objections should not
hamper the correct ascertainment of the labor
union that has the support or confidence of the
majority of the workers and is thus entitled to
represent them in their dealings with
LABOR LAW
management. [Port Workers Union
Laguesma, G.R. Nos. 94929-30, (1992)]
Certification
Election
v.
Union Election
To determine the
Exclusive Bargaining
Agent
To elect union
officers
All members of the
appropriate
bargaining unit
Only union members
may vote
WHO MAY VOTE [Sec. 6, Rule IX, Book V,
IRR]
All employees who are members of the
appropriate bargaining unit three (3) months
prior to the filing of the petition/request shall be
eligible to vote.
An employee who has been dismissed from
work but has contested the legality of the
dismissal in a forum of appropriate jurisdiction
at the time of the issuance of the order for the
conduct of a certification election shall be
considered a qualified voter, unless his/her
dismissal was declared valid in a final judgment
at the time of the conduct of the certification
election.
In case of disagreement over the voters’ list or
over the eligibility of voters, all contested voters
shall be allowed to vote. But their votes shall be
segregated and sealed in individual envelopes.
WHO MAY FILE [Sec. 1, Rule VIII, Book V,
IRR]
1. Legitimate labor organization [Art. 219
(h)]
2. Local/chapter that has been issued a
charter certificate
The chapter shall acquire legal personality
only for purposes of filing a petition for
certification election from the date it was
issued a charter certificate. [Art. 241]
3. National union or federation that has
issued a charter certificate to its
local/chapter [in behalf of the latter]
4. A group of legitimate labor unions in a
private establishment organized for
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collective bargaining or for dealing with
employers
concerning
terms
and
conditions of employment for their member
unions or for participating in the formulation
of social and employment policies,
standards and programs, registered with
the BLR in accordance with Rule III Sec. 2B. [Sec. 1 (ll), Rule I, Book V, IRR]
5. Employer (when requested to bargain
collectively and no existing CBA)
Requisites:
a. Employer is requested to bargain
collectively; AND
b. No existing registered CBA in the unit
[Art. 270]
BYSTANDER RULE
In all cases, whether the petition for
certification election is filed by an employer or
a legitimate labor organization, the employer
shall not be considered a party thereto with a
concomitant right to oppose a petition for
certification election. [Art. 271]
The employer’s participation shall be
limited to:
a. Being notified or informed of petitions of
such nature
b. Submitting the list of employees during the
pre-election conference, should the MedArbiter act favorably on the petition [Art.
271]
LABOR LAW
The only instance when the employer may be
involved in that process is when it is obliged to
file a petition for certification election on its
workers’ request to bargain collectively
pursuant to Art. 258 [now Art. 270]. [Hercules
Industries, Inc. v. Sec. of Labor, G.R. No.
96255 (1992)]
[The employer] did not possess the legal
personality to file a motion to dismiss the
petition for certification election even if based
on the ground that its supervisory employees
are in reality managerial employees.
It is well-settled that an employer has no
standing to question a certification election
since this is the sole concern of the workers.
The only exception to this rule is Art. 258 [now
Art. 270]. [PT&T v. Laguesma, G.R. No.
101730 (1993)]
[A] company’s interference in the certification
election below by actively opposing the same
[...] unduly creates a suspicion that it intends to
establish a company union. [Oriental Tin Can
Labor Union v. Secretary of Labor, G.R. No.
116751 (1998)]
VENUE FOR FILING PETITION
File with the Regional Office which issued the
petitioning union’s certificate of registration or
certificate of creation of chartered local.
The principle of the employer as by-stander
shall be strictly observed throughout the
conduct of certification election.
At [petitioner’s option], [it may file] the petition
and its supporting documents [...] online. [Sec.
2, Rule VIII, Book V, IRR]
The employer shall not harass, intimidate,
threat[en], or coerce employees before, during
and after elections. [Sec. 1, Rule IX, Book V,
IRR]
Where two or more petitions involving the
same bargaining unit [Sec. 2, Rule VIII, Book
V, IRR]:
However, manifestation of facts that would aid
the [Med-Arbiter] in expeditiously resolving the
petition such as existence of a contract-bar,
one year bar or deadlock bar may be
considered. [Sec. 1, Rule VIII, Book V, IRR]
The employer is not a party to a certification
election, which is the sole or exclusive concern
of the workers. [...]
Filed in
one
Regional
Office
Automatically consolidated with
[Med-Arbiter] who first acquired
jurisdiction.
Filed in
different
Regional
Offices
The Regional Office in which
the petition was first filed shall
exclude all others; [...] the latter
shall indorse the petition to the
former for consolidation.
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Procedure: CERTIFICATION ELECTION IN
AN UNORGANIZED ESTABLISHMENT
Unorganized Establishment
[It is an] establishment where there is no
certified bargaining agent. [Art. 269]
Procedure [Art. 269]
1. File a petition for certification election.
2. Upon filing of the petition, the Med-Arbiter
shall automatically conduct a certification
election.
Filing of petition is by a legitimate labor
organization
It cannot be filed by an unregistered labor
organization. Art. 251 enumerates the rights
granted to a legitimate labor organization and
one of those rights is the right to be chosen as
the exclusive bargaining representative. This is
one way the law encourages union registration.
Note: Art. 269 should be related to SEBA
Certification. If there are multiple LLOs in an
unorganized establishment, Art. 269 applies. If
there is only one LLO in an unorganized
establishment, Rule VII on SEBA Certification
applies. Under this rule, when there is failure to
complete requirements, the Regional Director
will refer it to the Election Officer.
Procedure: CERTIFICATION ELECTION IN
AN ORGANIZED ESTABLISHMENT
Organized Establishment
Refers to an enterprise where there exists a
recognized or certified sole and exclusive
bargaining agent. [Sec. 1(ll), Rule I, Book V,
IRR]
Procedure [Art. 268]
1. File a verified petition questioning the
majority.
2. It must be filed within the 60-day period
before expiration of CBA (freedom period).
3. Supported by written consent of at least
25% of ALL employees in the bargaining
unit (substantial support).
4. Med-Arbiter shall automatically order an
election.
WHEN PETITION MUST BE FILED
LABOR LAW
Freedom Period
Within the sixty (60)-day period before the
expiration of the collective bargaining
agreement. [Art. 271]
Note: The expiration referred to is the
expiration of the 5-year period for the
representation aspect. (see Art. 265) [Prof.
Battad]
Rationale of Prohibition of Filing Outside
the Freedom Period
To ensure industrial peace between the
employer and its employees during the
existence of the CBA. [Republic Planters Bank
Union v. Laguesma, G.R. No. 119675 (1996)]
SIGNING OF AUTHORIZATION IS MERELY
PREPARATORY
What is prohibited is the filing of the petition for
certification election outside the 60-day
freedom period. [...] The signing of the
authorization to file was merely preparatory to
the filing of the Petition for Certification
Election, or an exercise of [the] right to selforganization. [PICOP Resources Inc. v.
Ricardo Dequita, G.R. No. 172666 (2011)]
25% SUBSTANTIAL SUPPORT RULE
In organized establishments, the incumbent
sole bargaining agent should not be easily
replaced for that would disturb industrial peace.
To justify the disturbance, it must appear that
at least a substantial number (25%
requirement) seeks to have a new exclusive
bargaining unit.
DISCRETIONARY RULE
The [Med-Arbiter], in the exercise of sound
discretion, may order a certification election
notwithstanding the failure to meet the [25%]
requirement [in petitions for certification
election in an organized establishment]. [Scout
Albano Memorial College v. Noriel, G.R. No. L48347 (1978)]
INAPPLICABLE
TO
MOTIONS
FOR
INTERVENTION
[The] requisite written consent of at least 20%
(now 25%) of the workers in the bargaining unit
applies to certification election only, and not to
motions for intervention. Nowhere in the legal
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provisions [and in the Omnibus Rules] does it
appear that a motion for intervention in a
certification election must be accompanied by
a similar written consent. [PAFLU v. Calleja,
G.R. No. 79347 (1989)]
LABOR LAW
2. After the filing of such petition is considered
to be involuntary and does not affect the
[petition]. [S.S. Ventures International v.
S.S. Ventures Labor Union, G.R. No.
161690 (2008)]
INTERVENORS
1. Incumbent bargaining agent as forced
intervenor: The incumbent bargaining
agent shall automatically be one of the
choices in the certification election as
forced intervenor. [Sec. 8, Rule VIII, Book
V, IRR]
2. Legitimate labor union other than the
incumbent bargaining agent operating
within the bargaining unit: When a
petition for certification election was filed in
an organized establishment, any legitimate
labor union other than the incumbent
bargaining agent operating within the
bargaining unit may file a motion for
intervention with the Med-Arbiter during the
freedom period of the collective bargaining
agreement.
In an unorganized establishment, the motion
shall be filed at any time prior to the decision of
the Med-Arbiter. The motion shall be resolved
in the same decision issued in the petition for
certification election.
In both cases, the form and contents of the
motion shall be the same as that of a petition
for certification election. [Sec. 9, Rule VIII,
Book V, IRR]
WHEN
TO
FILE
MOTION
FOR
INTERVENTION
Organized establishment: during the freedom
period of the collective bargaining agreement
Unorganized establishment: any time prior to
the decision of the Med-Arbiter [Sec. 9, Rule
VIII, Book V, IRR]
EFFECT
OF
WITHDRAWAL
OF
SIGNATURES
The employees’ withdrawal from a labor
union made
1. Before the filing of the petition for
certification election is presumed voluntary
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LABOR LAW
Organized v. Unorganized Establishments
Art. 268: Organized
Art. 269: Unorganized
Sole and exclusive
bargaining agent
Existing
None
Petition filed
Must be VERIFIED
No need to be verified
Freedom period
No petition for certification election
EXCEPT within 60 days before
the expiration of the collective
bargaining agreement (See Arts.
264 and 265)
Not applicable (i.e. no
freedom period; petition can
be filed anytime)
Rationale: To keep industrial
peace in organized establishments
Substantial support rule
Must be duly supported by 25% of
ALL THE MEMBERS OF THE
APPROPRIATE BARGAINING
UNIT
Rationale: Law wants to know the
intention of the employees – if they
really want a certification election,
since they already have a
bargaining agent
NO substantial support rule
Rationale: Intention of law is
to bring in the union, to
implement policy behind Art.
218A.
Certification Election v. Consent Election
Certification Election
Consent Election
Purpose
"Certification Election" or "Consent Election" refers to the process of
determining through secret ballot the sole and exclusive representative of
the employees in an appropriate bargaining unit for purposes of collective
bargaining or negotiation. A certification election is ordered by the
Department, while a consent election is voluntarily agreed upon by the
parties, with or without the intervention by the Department [Book V, Rule
1, Sec. 1(h)]
General Procedure
Rule IX
Rule VII, Sec. 11, pars. 1, 2
SECTION 2. Raffle of the Case. —
Within twenty-four (24) hours from
receipt of the notice of entry of final
judgment granting the conduct of a
certification election, the Regional
Director shall cause the raffle of the
case to an Election Officer who
shall have control of the pre-
The contending unions may agree
to the holding of an election, in
which case it shall be called a
consent election. The mediatorarbiter shall forthwith call for the
consent election, reflecting the
parties' agreement and the call in
the minutes of the conference. The
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election conference and election
proceedings. (1a)
LABOR LAW
mediator-arbiter shall immediately
forward the records of the petition
to the regional director or his/her
authorized representative for the
determination of the election officer
who shall be chosen by raffle in the
presence of representatives of the
contending unions if they so desire.
With the exception of aforementioned provisions that specifically apply
only for Certification Election or Consent Election respectively, Rule IX,
on the Conduct of Certification, Secs. 3 – 21, applies to both certification
and consent elections
Conduct
Ordered by the DOLE
d. Run-Off Election
Run-Off Election refers to an election
between the labor unions receiving the two (2)
highest number of votes in a certification or
consent election when the following requisites
have been complied with:
1. Valid election;
2. The certification or consent election
provides for three (3) or more choices
(Note: “No Union” is considered one choice
– Prof. Battad);
3. None of the contending UNIONS received
a majority of the VALID VOTES cast;
4. No objections or challenges which if
sustained, can materially alter the results;
and
5. The total number of votes for all contending
UNIONS is at least fifty (50%) of the
number of VOTES cast [Art. 268; Sec.
1(uu), Rule I, Book V, IRR; Sec. 1, Rule X,
Book V, IRR]
Illustration
The CBU has 100 members and 80 of which
voted. Union “A”= 30; Union “B”= 15; Union
“C”=15 and No Union= 20. There were no
invalid votes. Since none got the majority of the
80 valid votes (40) and the contending unions
obtained 60 votes (which is at least 50% of the
VOTES cast), a run-off election is proper. The
run-off will be between the labor unions
receiving “the two highest number of votes.”
Voluntarily agreed upon by the
parties, with or without the
intervention of DOLE
Pursuant to Art. 268, when an election which
provides for three or more choices results in no
choice receiving a majority of the valid votes
cast, a run-off election shall be conducted
between the labor unions receiving the two
highest number of votes. Thus, the run-off will
be among Union “A”, “B”, and “C.” [Azucena]
Procedure for Run-Off Election
Election Officer shall motu proprio conduct a
run-off election within ten (10) days from the
close of the election proceedings between the
labor unions receiving the two highest number
of votes.
“No Union” shall not be a choice in the run-off
election [Sec. 1, Rule X, Book V, IRR].
Same voters’ list used in the certification
election shall be used in the run-off election.
The labor union receiving the GREATER
number of VALID VOTES cast shall be certified
as the winner [Sec. 2, Rule X, Book V, IRR].
Note: Please note the difference between valid
votes cast versus votes cast – valid votes
excludes spoiled votes.
e. Re-Run Election
Re-run Election refers to an election
conducted to break a tie between contending
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unions, including between "no union" and one
of the unions. It shall likewise refer to an
election conducted after a failure of election
has been declared by the election officer
and/or affirmed by the mediator-arbiter. [Sec.
1(tt), Rule 1, Book V, as amended by DO 40-I15]
Situations Contemplated
1. A tie between two (2) choices.
2. Failure of Elections [see Definition]
Duty of Election Officer
1. Notify parties of a re-run election
2. Cause posting of notice within five (5) days
from said election.
When will re-run be conducted
Within ten (10) days after the posting of the
notice of the union declared as winner and
certified choice receiving the HIGHEST
VOTES CAST.
LABOR LAW
if the latter so desires. [Sec. 5, Rule VIII, Book
V, IRR]
(2) Preliminary Conference
Med-Arbiter shall conduct a preliminary
conference and hearing within ten (10) days
from receipt of the petition to determine the
following:
1. The bargaining unit to be represented;
2. Contending labor unions
3. Possibility of a consent election
4. Existence of any of the bars to certification
election under Sec. 3[, Rule VIII]; and
5. Such other matters as may be relevant for
the final disposition of the case [Sec. 10,
Rule VIII, Book V, IRR]
Note: If contending unions agree to holding of
an election, [...] it shall be called a consent
election. [Sec. 11, Rule VIII, Book V, IRR]
(3) Med-Arbiter to Conduct Hearings
PROCEDURE AFTER FILING PETITION FOR
CERTIFICATION ELECTION
1. Raffling of case to Med-Arbiter
2. Preliminary Conference and hearing
3. Conduct of hearings
4. Determine if petition should be dismissed
on grounds stated in Sec. 15
5. Order/Decision on the petition
6. Appealing the order/decision on the
petition
7. Raffling of the case to an Election Officer
8. Pre-Election Conference
9. Conduct of election
10. Challenging of votes and on the spot
questions
11. Protesting
12. Canvassing of votes
13. Nullification of Election Results
14. Proclamation and Certification of the result
of the election
15. Appeal from Certification Election Order
If contending unions fail to agree to a consent
election during the preliminary conference
the Med-Arbiter may conduct as many
hearings as he/she may deem necessary
○ but in no case shall the conduct thereof
exceed fifteen (15) days from date of
scheduled preliminary conference/
hearing, after which the petition shall
be considered submitted for decision.
[...]
Within the same 15-day period [...], the
contending labor unions may file such
pleadings as they may deem necessary for the
immediate resolution of the petition.
Extensions of time shall not be entertained.
[Sec. 12, Rule VIII, Book V, IRR]
(1) Raffling of Case to Med-Arbiter
The Regional Director or his/her duly
authorized representative shall immediately
assign it by raffle to a [Med-Arbiter]. The raffle
shall be done in the presence of the petitioner
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(4) Determine if Petition should be
dismissed based on Grounds Stated in
Sec. 15
The grounds to dismiss the petition are:
1. Petitioning union or national union/
federation is:
a. Not listed in DOLE’s registry of
legitimate labor unions; or
b. Registration certificate has been
cancelled with finality
2. Failure of a local/chapter or national
union/federation to submit a duly issued
charter certificate upon filing of the petition
for certification election
3. Contract Bar rule
4. One-Year Bar rule
5. Negotiation and Deadlock Bar Rule
6. In an organized establishment, the failure
to submit the 25% signature requirement to
support the filing of the petition.
7. Non-appearance of the petitioner for two
(2) consecutive scheduled conferences
before the [Med-Arbiter] despite due
notice; and
8. Absence
of
employer-employee
relationship between all the members of
the petitioning unit and the establishment
where the proposed bargaining unit is
sought to be represented.
Note: See Bars to Certification Election under
“c. Certification Election”
Commingling is not a ground
The inclusion as union members of employees
outside the bargaining unit [is] not a ground for
cancellation of the registration of the union.
Said employees are automatically deemed
removed from the list of membership. [Sec. 16,
Rule VIII, Book V, IRR]
Posting of notice of Petition for Certificate
Election
The Regional Director or his/her authorized
DOLE personnel, and/or the petitioner shall be
responsible for the posting of the notice of
petition for certification election. [Sec. 7, Rule
VIII, Book V, IRR]
LABOR LAW
(5) Order or Decision on the Petition
[Med-Arbiter] shall issue a ruling granting or
denying the petition
When:
General rule: Within ten (10) days from last
hearing
Exception: In organized establishments, grant
of the petition can only be made after the lapse
of the freedom period [Sec. 14, Rule VIII, Book
V, IRR]
How:
1. Personally to the parties
2. Copy furnished to the employer [Sec. 18,
Rule VIII, Book V, IRR]
The ruling for the conduct of a certification
election shall state the following:
1. Name of the employer or establishment;
2. Description of the bargaining unit;
3. Statement that none of the grounds for
dismissal [...] in Sec. 14 exists;
4. Names of the contending labor unions [...]
in the following order:
a. Petitioner unions in the order of the
date of filing of their respective
petitions
b. The forced intervenor
c. “No union”
5. [If] the local/chapter is one the contending
unions, a directive to an unregistered
local/chapter or a federation/national union
representing all unregistered local/chapter
to personally submit to the Election Officer
its certificate of creation at least five (5)
working days before the actual conduct of
the certification election. [This is to afford
an individual employee-voter an informed
choice.]
6. Non-submission of this requirement as
certified by Election Officer shall disqualify
the local/ chapter from participating in the
certification election
7. Directive to the employer and the
contending unions to submit within ten (10)
days from receipt of order:
a. The certified list of employees in the
bargaining unit, or where necessary,
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LABOR LAW
b. Payrolls covering the members of the
bargaining unit for the last three (3)
months prior to the issuance of the
order
Decision of the Secretary
Period to decide: Fifteen (15) days from receipt
of entire records of the petition to decide the
appeal.
(6) Appealing the Order Granting or
Denying the Conduct of Certification
Election [Sec. 19-20, RULE VIII, BOOK V,
IRR]
Secretary’s decision shall be final and
executory within ten (10) days from receipt by
parties. [Sec. 23, Rule VIII, Book V, IRR]
Form of appeal
1. Verified under oath
2. Consists of a memorandum of appeal
specifically stating the grounds relied upon
by appellant with the supporting arguments
and evidence
Organized
Dismissed
or denied
Granted
Unorganized
Dismissed
or denied
Granted
Note: No motion for reconsideration of decision
shall be entertained. [Sec. 23, Rule VIII, Book
V, IRR]
Implementation of decision
General Rule: Shall not be stayed
Exception: Restrained by appropriate court
[Sec. 24, Rule VIII, Book V, IRR]
(7) Raffling of the Case to an Election
Officer
Appeal to
Office of
Secretary
Unappealable
When: Within ten (10) days from receipt of the
order [of the Med-Arbiter].
Where: Regional Office where the petition
originated
Effect of Filing Memorandum of Appeal
Stays the holding of any certification election.
[Sec. 23, Rule VIII, Book V, IRR]
Reply to Appeal
Reply by any party to the petition shall be filed
within ten (10) days from receipt of the
memorandum of appeal […] and filed directly
with the office of the Secretary. [Sec. 22, Rule
VIII, Book V, IRR]
When no appeal is filed
The decision shall be final and executory if no
appeal is filed within the ten (10) day period.
[Sec. 21, Rule VIII, Book V, IRR]
Regional Director shall cause the raffle of the
case to an Election Officer who shall have
control of:
1. Pre-election conference; and
2. Election proceedings
When: Within twenty-four (24) hours from
receipt of notice of entry of final judgment
granting the conduct of a certification election
[Sec. 2, Rule IX, Book V, IRR]
(8) Pre-Election Conference
Notice of Pre-Election Conference [Sec. 3,
Rule IX, Book V, IRR]
The Election Officer shall cause the issuance
of notice of pre-election conference upon the
contending unions
When: Within twenty-four (24) hours from the
[Election Officer’s] receipt of assignment for the
conduct of a certification election
Schedule of pre-election conference
When: Within ten (10) days from receipt of the
assignment
Completed within thirty (30) days from the date
of the first hearing [Sec. 5, Rule IX, Book V,
IRR]
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LABOR LAW
Employer to Submit: [Sec. 3, Rule IX, Book
V, IRR]
1. Certified list of employees in the bargaining
unit; or where necessary,
2. Payrolls covering the members of the
bargaining unit at the time of the filing of
petition
2. Names of all contending unions;
3. Description of the bargaining unit;
4. List of eligible and challenged voters.
Failure of party to appear during preelection conference despite notice [Sec. 4,
Rule IX, Book V, IRR]
This shall be considered a waiver of right to:
1. To be present; and
2. To question or object to any of the
agreements reached in the pre-election
conference
What cannot be waived by contending
unions or employer:
1. Posting of the notice of election
2. Information required to be included therein
3. Duration of the posting
Shall NOT deprive the non-appearing party of
the right to:
1. Be furnished notices; and
2. To attend subsequent
pre-election
conferences
Minutes of pre-election conference [Sec. 5,
Rule IX, Book V, IRR]
Election Officer shall keep the minutes of
matters raised and agreed upon.
Posting of the list of employees comprising the
bargaining unit shall be done by the DOLE
personnel.
The parties agreed to conduct the election on
[...] a regular business day but a strike was held
on that day. The alleged strike and/or picketing
of some employees at the company’s premises
which coincided with the actual conduct of
certification election might, perhaps have
affected the actual performance of works by
some employees but did not necessarily make
said date an irregular business day of the
company. [Asian Design and Manufacturing
Corp. v. Ferrer-Calleja, G.R. No. L-77415
(1989)]
(9) Conduct of Election
Parties shall acknowledge the completeness
and correctness of entries in the minutes by
affixing their signatures.
When parties refuse to sign the minutes, the
Election Officer shall note such fact in the
minutes, including the reason for refusal to sign
the same.
In all cases, parties shall be furnished a copy
of the minutes.
Posting of Notices [Sec. 7, Rule IX, Book V,
IRR]
Who: Election Officer and/or authorized DOLE
personnel shall cause the posting
What: Notice of election
Where: 2 most conspicuous places in the
company premises
When: At least ten (10) days before the actual
[election date]
Contents of Notice [Sec. 7, Rule IX, Book V,
IRR]
1. Date and time of the election;
Inspection to ensure secrecy and sanctity
of ballot [Sec. 8, Rule IX, Book V, IRR]
By whom:
1. Election Officer, together with
2. Contending
unions’
authorized
representative; and
3. Employer
When: Before start of actual voting
Shall inspect:
1. Polling place;
2. Ballot boxes; and
3. Polling booths
Prohibition on certain devices
General Rule: No device that could record or
identify the voter or otherwise undermine the
secrecy and sanctity of the ballot shall be
allowed within the premises
Exception: Devices brought in by the Election
Officer
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Consequence: Any other device found within
the premises shall be confiscated by the
Election Officer and returned to its owner after
conduct of the certification election.
Spoiled Ballots
A ballot that is torn, defaced, or contains
marking which can lead another to clearly
identify the voter who casts such vote [Sec.
1(ww), Rule I, Book V, IRR]
If the voter inadvertently spoils a ballot, he shall
return it to the Election Officer who shall
destroy it and give him/her another ballot. [Sec.
10, Rule IX, Book V, IRR]
Member unintentionally omitted in the master
list of voters may either be:
1. May be allowed to vote if both parties
agree; [OR]
2. Allowed to vote but the ballot is segregated
LABOR LAW
Shall be passed upon by the Med-Arbiter only
if the number of segregated votes will
materially alter the results of the election.
On-the-spot Questions
What the Election Officer shall rule on: Any
question relating to and raised during the
conduct of election
What the Election Officer SHALL NOT rule
on: Question of eligibility which shall be
decided by the Mediator-Arbiter
Failure of
representative/s
of the
contending unions to appear [Sec. 15, Rule
IX, Book V, IRR]
Considered a waiver of the right to be present
and to question the conduct thereof
(11) Protest [Sec. 13, Rule IX, Book V, IRR]
Who may file: Any party-in-interest
(10) Challenging of Votes and on the Spot
Questions [Sec. 11-12, Rule IX, Book V,
IRR]
Ballot of the voter who has been properly
challenged during the pre-election conferences
shall be:
1. Placed in an envelope sealed by Election
Officer in the presence of:
a. the voter; and
b. representatives of the contending
unions.
2. Election Officer shall indicate on the
envelope the:
a. Voter’s name;
b. Union challenging the voter; and
c. Ground for the challenge
3. Sealed envelope shall be signed by:
a. Election Officer; and
b. Representatives of the contending
unions
Ground: On the conduct or mechanics of the
election
When Protest is Perfected:
1. [Record the protest] in the minutes of the
election proceedings; AND
2. Formalize [the] protest with the MedArbiter, with specific grounds, arguments
and evidence within five (5) days after the
close of the election proceedings
Protests deemed dropped
Protests [which are]:
1. Not recorded in the minutes; AND
2. Formalized within the prescribed period
General reservation to file protest
prohibited
Protesting party shall specify the grounds for
protest.
Election Officer shall:
1. Note all challenges in the minutes of the
election proceedings; and
2. Have custody of all envelopes containing
the challenged votes
Opening of envelopes and question of
eligibility
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Failure to formalize within 5-days cannot be
taken against the union
[The petitioner union misrepresented that they
were independent which caused the members
to disaffiliate and form a new union and their
protest was not filed within the 5-day period.
The] failure to follow strictly the procedural
technicalities regarding the period for filing their
protest should not be taken against them.
Mere technicalities should not be allowed to
prevail over the welfare of the workers. What
is essential is that they be accorded an
opportunity to determine freely and intelligently
which labor organization shall act on their
behalf. [DHL-URFA-FFW v. BMP, G.R. No.
152094 (2004)]
Note: "Election Proceedings" refer to the period
during a certification election, consent or runoff election and election of union officers,
starting from the opening to the closing of the
polls, including the counting, tabulation and
consolidation of votes, but excluding the period
for the final determination of the challenged
votes and the canvass thereof. [Book V, Rule
1, Sec. 1 (q)]
Included:
1. Starting from the opening to the closing of
the polls
2. Counting, tabulation and consolidation of
votes
Excluded:
1. Period for the final determination of the
challenged votes
2. Canvass of the challenged votes [Sec.
1(q), Rule I, Book V, IRR]
(12) Canvassing of Votes [Sec. 15, Rule IX,
Book V, IRR]
Election precincts shall open and close on the
date and time agreed upon during the preelection conference.
The opening and canvass of votes shall
proceed immediately after the precincts have
closed.
LABOR LAW
1. Election Officer shall count and tabulate
the votes in the presence of the
representatives of the contending unions.
2. Upon completion of canvass, the Election
Officer shall give each representative a
copy of the minutes of the election
proceedings and results of the election.
3. Ballots and tally sheets shall be sealed in
an envelope and signed by the Election
Officer and the representatives of the
contending unions and transmitted to the
Med-Arbiter together with the minutes and
results of the election within twenty-four
(24) hours from the completion of the
canvass.
Election conducted in more than one
region Consolidation of results shall be made
within fifteen (15) days from the conduct
thereof.
Double Majority Rule
It is well-settled that under the so-called
"double majority rule,” for there to be a valid
certification election, majority of the bargaining
unit must have voted AND the winning union
must have garnered majority of the valid votes
cast. [NUWHRAIN-Manila Pavilion Hotel
Chapter v. Secretary of Labor and
Employment, G.R. No. 181531 (2009)]
Requisites:
1. There must be a valid certification or
consent election
Valid Election: At least majority of the
number of eligible voters have cast their
votes (VOTES CAST) [Sec. 17, Rule IX,
Book V, IRR]
2. The winning union must garner majority of
the VALID VOTES CAST [Sec. 16, Rule IX,
Book V, IRR]
Winning union certified as SEBA if there is
no protest [Sec. 16, Rule IX, Book V, IRR]
The [winning union] shall be certified as the
[SEBA] in the appropriate bargaining unit within
five (5) days from date of election, provided no
protest is recorded in the minutes of the
election.
Procedure [Sec. 14, Rule IX, Book V, IRR]
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When winning choice is local chapter
without certificate of creation of chartered
local
It must submit its DOLE issued certificate of
creation within five (5) days from the
conclusion of election
Note: Please note that valid votes differ from
mere votes as the former excludes spoiled
ballots.
Abstention: refers to a blank or unfilled ballot
validly cast by an eligible voter. It is not
considered as a negative vote. However, it
shall be considered a valid vote for purposes of
determining a valid election. [Sec. 1(a), Rule I,
Book V, IRR]
Spoiled Ballot: Refers to a ballot that is torn,
defaced, or contains markings which can lead
another to clearly identify the voter who casts
such vote. [Sec. 1(ww), Rule I, Book V, IRR]
(13) Failure of Election [Sec. 17, Rule IX,
Book V, IRR]
The Election Officer shall declare a failure of
election in the minutes of the election
proceedings when:
1. Number of VOTES CAST is less than the
majority of the number of eligible voters;
AND
2. There are no material challenged votes
Effect of Failure of Election [Sec. 19, Rule IX,
Book V, IRR]
Shall not bar the filing of a motion for the
immediate holding of a certification or consent
election within six (6) months from date of
declaration of failure of election.
Note: Under Sec. 1(tt), Rule I, Book V, a RERUN ELECTION “shall likewise refer to an
election conducted after a failure of election
has been declared by the Election Officer
and/or affirmed by the [Med-Arbiter].” Thus,
under the Rules, this is the other definition of a
Re-Run Election.
Motion for another election after failure of
election [Sec. 20, Rule IX, Book V, IRR]
LABOR LAW
Within twenty-four (24) hours from receipt of
the motion, the Election Officer shall:
1. Immediately schedule another election
within fifteen (15) days from receipt of
motion
2. Cause posting of the notice of election
a. At least ten (10) days prior to the
scheduled date of election
b. In two (2) most conspicuous places in
the establishment
Same guidelines and list of voters shall be
used.
Nullification of Election Results
It is precisely because respect must be
accorded to the will of labor thus ascertained
that a general allegation of duress is not
sufficient to invalidate a certification election; it
must be shown by competent and credible
proof. [United Employees Union of Gelmart
Industries Philippines (UEUGIP) v. Noriel, No.
L-40810 (1975)]
(14) Proclamation and Certification of the
result of the election
Certification of the Collective Bargaining
Agent [Sec. 21, Rule IX, Book V, IRR]
Within 24 hours from final canvass of votes,
there being a VALID election, the Election
Officer shall transmit the records of the case to
the Med-Arbiter.
Within the same period from receipt of the
minutes and results of election, [the MedArbiter] shall issue an order proclaiming the
results of the election and certifying the union
as the [SEBA] under any of the following
conditions:
1. No protests were filed, or even if one was
filed, [it] was not perfected within the fiveday period
2. No challenge or eligibility issue was raised,
or even if one was raised, [its] resolution
will not materially change the results of the
elections.
Winning union shall have the rights, privileges,
and obligations of a duly certified collective
bargaining agent from the time the certification
is issued.
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Majority of valid votes cast results in “No
Union” obtaining majority
Med-Arbiter shall declare such fact in the order
(15) Appeal from Certification
Orders [Art. 272]
Election
Who appeals: Any party to an election
What is appealed: Order or results of the
election
Appeal to: Directly to SOLE
members
Bureau.
LABOR LAW
specially
concerned
to
the
Note: Secretary of Labor or his duly authorized
representative may inquire into financial
activities of legitimate labor orgs
a. UPON filing of complaint under oath and
supported by written consent of at least
20% of total membership,
b. Provided, such inquiry shall not be
conducted during (60)-day freedom period
nor within the thirty (30) days immediately
preceding the date of election of union
officials. [Art. 289]
1. Check off, Assessment, Agency
Fees
ASSESSMENT
Special assessments are payments for a
special purpose, especially if required only for
a limited time. [Azucena]
No special assessment or other extraordinary
fees may be levied upon the members of a
labor organization
unless authorized by a written resolution of
a majority of all the members at a general
membership meeting duly called for the
purpose. [Art. 250 (n)]
CHECK-OFF
A check-off is a process or device whereby the
employer, on agreement with the Union,
recognized as the proper bargaining
representative, or on prior authorization from
the employees, deducts union dues or agency
fees from the latter’s wages and remits them
directly to the Union. [Marino v. Gamilla, G.R.
No. 149763 (2009)]
Other than for mandatory activities under the
Code, the following may not be checked off
from any amount due to an employee without
an individual written authorization duly signed
by the employee:
a. special assessments
b. attorney’s fees
c. negotiation fees
d. or any other extraordinary fees
The system of check-off is primarily for the
benefit of the Union and, only indirectly, for the
benefit of the individual employees. [Marino v.
v Gamilla, G.R. No. 149763 (2009)]
The authorization should specifically state the
amount, purpose and beneficiary of the
deduction. [Art. 250 (o)]
Ground: Rules and regulations established by
the SOLE for the conduct of the election have
been violated.
D. RIGHTS OF LABOR
ORGANIZATIONS
Note: For a check-off to be valid, it must comply
with the requirements of a valid special
assessment.
Jurisdiction over Check-off Disputes
The Bureau of Labor Relations has jurisdiction
to hear, decide and to mete out punishment
any violation under Art. 250 upon report of at
least 30% of the union membership OR
Requisites for a Valid Special Assessment
1. Authorization by a written resolution of the
majority of ALL the members at the general
membership meeting called for the
purpose;
2. Secretary’s record of the minutes of the
meeting; AND
3. Individual written authorization for check off
duly signed by the employees concerned
which indicates the:
a. Amount
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b. Purpose
c. Beneficiary of deduction [Gabriel v.
SOLE, G.R. No. 115949 (2000)]
Strict compliance for special assessment
There must be strict and full compliance with
the requisites. Substantial compliance is not
enough. [Palacol v. Ferrer-Calleja, G.R. No.
85333 (1990)]
AGENCY FEES
Art. 259 (e) [2nd sentence to last sentence]
Nothing in this Code or in any other law shall
stop the parties from requiring membership in
a recognized collective bargaining agent as a
condition for employment
EXCEPTION: Those employees who are
already members of another union at the time
of the signing of the collective bargaining
agreement
Employees of an appropriate bargaining unit
who are not members of the recognized
collective bargaining agent may be assessed
a reasonable fee
Amount of reasonable fee: equivalent to
the dues and other fees paid by members
of the recognized collective bargaining
agent
Condition for assessment: If such nonunion members accept the benefits under
the collective bargaining agreement:
o Provided,
That
the
individual
authorization required under Article
242, paragraph (o) shall not apply to
the non-members of the recognized
collective bargaining agent;
An amount, equivalent to union dues, which a
non-union member pays to the union because
he benefits from the CBA negotiated by the
union. [Azucena]
Rationale for Allowing Agency Fees
The legal basis of the union’s right to agency
fees is neither contractual nor statutory but
quasi-contractual,
deriving
from
the
established principle that non-union employees
may not unjustly enrich themselves by
benefiting from employment conditions
negotiated by the bargaining union. [Holy
LABOR LAW
Cross of Davao College, Inc v. Hon. Joaquin,
G.R. No. 110007 (1996)]
When Agency Fee Assessed
If such non-union member accepts the benefits
under the collective bargaining agreement.
[Art. 259(e)]
Measure of Fee
A reasonable fee equivalent to the dues and
other fees paid by members of the recognized
collective bargaining agent. [Art. 259(e)]
Requirements:
1. Non-member of SEBA
2. Member of Collective Bargaining Unit
3. Reasonable fee equivalent to the dues and
other fees paid by members
4. Acceptance of CBA benefits
UNION DUES
Union dues are payments to meet the union’s
general and current obligations. The payment
must be regular, periodic, and uniform.
[Azucena]
Every payment of fees, dues or other
contributions by a member shall be evidenced
by a receipt:
a. signed by the officer or agent making the
collection and
b. entered into the record of the organization
to be kept and maintained for the purpose.
[Art. 250 (h)]
ATTORNEY’S FEES
Payment of Attorney’s fees cannot be imposed
in individual member.
No attorney’s fees, negotiation fees, or similar
charges of any kind arising from any collective
bargaining agreement or conclusion of the
collective agreement shall be imposed on any
individual member. [Art. 228(b)]
Proper charging of attorney’s fees:
a. Charges against union funds; AND
b. In an amount agreed upon by the parties
Any contract, agreement, or arrangement of
any sort to the contrary shall be void. [Art.
228(b)]
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Different types of Attorney’s Fees
Ordinary
Extraordinary
Indemnity for
Reasonable
damages ordered by
compensation paid
the court to be paid
to a lawyer for legal
by the losing party to
services rendered
the winning party
Agreed upon by the Awarded by the
parties
NLRC
Payable to the
Payable to the client
lawyer
Not limited
Limited by Art. 111
(freedom to
to 10%
contract)
[Kaisahan at Kapatiran ng mga Manggagawa
at Kawani sa MWC-East Zone Union v. Manila
Water, G.R. No. 174179 (2011)]
There are two concepts of attorney's fees: In
the ordinary sense, attorney's fees represent
the reasonable compensation paid to a
lawyer by his client for the legal services
rendered to the latter.
LABOR LAW
It dispenses with the requirement of the
individual written authorization duly signed by
the employee [Art. 250(o)]
2. Collective Bargaining
Definition, Nature, and Purpose
Collective bargaining is:
Defined as negotiations towards a
collective agreement
One of the democratic frameworks under
the [Labor] Code
Designed to stabilize the relations between
labor and management and to create a
climate of sound and stable industrial
peace.
A mutual responsibility of the employer and
the Union and is characterized as a legal
obligation. [Kiok Loy v. NLRC, G.R. No. L54334 (1986)]
a. Duty to Bargain Collectively
i.
In its extraordinary concept, attorney's fees
may be awarded by the court as indemnity for
damages to be paid by the losing party to the
prevailing party, such that, in any of the cases
provided by law where such award can be
made, e.g., those authorized in Art. 2208 of the
Civil Code, the amount is payable not to the
lawyer but to the client, unless they have
agreed that the award shall pertain to the
lawyer as additional compensation or as part
thereof. [Masmud v. NLRC, G.R. No. 183385
(2009)]
In Masmud, the contingency agreement
between lawyer and client consisting of 39% of
the monetary award was deemed not
unconscionable by the SC.
MANDATORY ACTIVITIES
Definition: A judicial process of settling
dispute laid down by the law. [Vengco v.
Trajano, G.R. No. 74453 (1989)]
Placement of re-negotiations for a CBA under
compulsory arbitration does not make it a
“mandatory activity”. [Galvadores v. Trajano,
G.R. No. 70067 (1986)]
In General
Definition
The duty to bargain collectively
Meaning: the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith
Purpose: negotiating an agreement with
respect to:
1. wages
2. hours of work,
3. and all other terms and conditions of
employment including:
a. proposals for adjusting any grievances,
or
b. questions
arising
under
such
agreement, and
c. executing a contract incorporating such
agreements,
d. if requested by either party, but such
duty does not compel any party to
agree to a proposal or to make any
concession. [Art. 263]
Jurisdictional Preconditions on Duty To
Bargain
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1. Possession of the status of majority
representation
of
the
employees’
representative in accordance with any of
the means of selection or designation
provided for by the Code;
2. Proof of majority representation; AND
3. Demand to bargain under Art. 261(a) [Kiok
Loy v. NLRC, G.R. No. L-54334 (1986)]
Only the labor organization designated or
selected by the majority of the employees in an
appropriate collective bargaining unit is the
exclusive representative of the employees in
such unit for the purpose of collective
bargaining. [Phil. Diamond Hotel and Resort
Inc v. Manila Diamond Hotel and Employees
Union, G.R. No. 158075 (2006); Art. 267]
Meaning of Bargaining in Good Faith
There is no per se test of good faith in
bargaining.
Good faith or bad faith is an inference to be
drawn from the facts. [Union of Filipino
Employees v. Nestle Philippines, Inc., G.R.
Nos. 158930-31 (2008)]
[T]he failure to reach an agreement after
negotiations continued for a reasonable period
does not establish a lack of good faith.
The laws invite and contemplate a collective
bargaining contract, but they do not compel
one. [Tabangao Shell Refinery Employees
Association v. Pilipinas Shell Petroleum
Corporation, G.R. No. 170007 (2014)]
Duty to Bargain does NOT include:
1. Any legal duty [on the employer] to initiate
contract negotiation [Kiok Loy v. NLRC,
G.R. No. L-54334 (1986)]
2. The obligation to reach an agreement:
While the law makes it an obligation for the
employer and the employees to bargain
collectively with each other, such
compulsion does not include the
commitment to precipitately accept or
agree to the proposals of the other. All it
contemplates is that both parties should
approach the negotiation with an open
mind and make reasonable effort to reach
a common ground of agreement. [Union of
LABOR LAW
Filipro Employees v. Nestle, G.R. Nos.
158930-31 (2008)]
Evading the Mandatory Subjects of
Bargaining
The refusal to negotiate a mandatory subject of
bargaining is an unfair labor practice, although
either party has every desire to reach
agreement and earnestly and in all good faith
bargains to that end. However, the duty to
bargain does not obligate the parties to make
concessions or yield a position fairly held.
[Azucena]
The duty to bargain is limited to mandatory
bargaining subjects; as to other matters, he is
free to bargain or not to bargain.
Over mandatory subjects, a party may insist
on bargaining, even to the point of deadlock,
and his insistence will not be construed as
bargaining in bad faith.
Over a non-mandatory subject, on the other
hand, a party may not insist on bargaining to
the point of impasse, otherwise his insistence
can be construed as bargaining in bad faith.
Blue-Sky Bargaining
Blue-Sky Bargaining is defined as "unrealistic
and unreasonable demands in negotiations by
either or both labor and management, where
neither concedes anything and demands the
impossible." It actually is not collective
bargaining at all. [Roberts Dictionary of
Industrial Relations as cited in Standard Bank
Chartered Employees Union v. Confesor, G.R.
No. 114974 (2004)]
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Surface Bargaining
Surface bargaining is defined as "going
through the motions of negotiating," without
any real intent to reach an agreement. [Roberts
Dictionary of Industrial Relations as cited in
Standard Bank Chartered Employees Union v.
Confesor, supra.]
It violates the Act's requirement that parties
negotiate in "good faith." It is prohibited
because the bargaining status of a union can
be destroyed by going through the motions of
negotiating almost as easily as by bluntly
withholding recognition […] As long as there
are unions weak enough to be talked to death,
there will be employers who are tempted to
engage in the forms of collective bargaining
without the substance. [K-MART Corporation v.
NLRB, 1980 626 F.2d 704]
Individual Bargaining
It is an unfair labor practice for an employer
operating under a CBA to negotiate with his
employees individually.
That constitutes interference because the
company is still under obligation to bargain with
the union as the bargaining representative.
Individual bargaining contemplates a situation
where the employer bargains with the union
through the employees instead of the
employees through the union. [The Insular Life
Assurance Co. Ltd., Employees Assn. v.
Insular Life Assurance Co. Ltd, G.R. No. L25291 (1971)]
Boulwarism
A take-it-or-leave-it approach in negotiation
constitutes bad faith. "Although the law cannot
open a man's mind, it can at least compel him
to conduct himself as if he were trying to
persuade and were willing to be persuaded. To
offer the union a contract saying 'Take it or
leave it,' is not bargaining collectively within the
meaning of the act.” [Herald Delivery Carriers
Union v. Herald Publication Inc., G.R. No. L29966 (1974), citing NLRB v. Pilling and Son
Co. US, 119 F2D 32 (1941)]
LABOR LAW
Duty to bargain collectively in the absence
of collective bargaining agreements
Condition: In the absence of an agreement or
other voluntary arrangement providing for a
more expeditious manner of collective
bargaining
Who has the duty: Employer and the
representatives of the employees
What is their duty: To bargain collectively in
accordance with the provisions of this Code
[Art. 262]
iii. When there is a CBA
General Rule: The duty to bargain collectively
shall also mean that neither party shall
terminate nor modify such agreement during its
lifetime. [Art. 264]
Substitutionary Doctrine
Note: See also discussion under V.b.2
General Rule: Even during the effectivity of a
collective bargaining agreement executed
between employer and employees [through]
their agent, the employees can change said
agent but the contract continues to bind them
up to its expiration date. They may bargain,
however, for the shortening of said expiration
date. [Elisco-Elirol Labor Union v. Noriel, G.R.
No. L-41955 (1977)].
Exception: At least sixty (60) days prior to the
expiration of the collective bargaining
agreement, either party can serve a written
notice to terminate or modify the agreement
[Art. 264].
Note: During this 60-day period, a verified
petition questioning the majority status of the
incumbent bargaining agent may also be filed
[Art. 268].
ii. When there is an Absence of
CBA
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Effect on existing CBA
It shall be the duty of both parties to keep the
status quo and to continue in full force and
effect the terms and conditions of the existing
agreement during the 60-day period and/or
until a new agreement is reached by the
parties. [Art. 264]
iv. Bargaining Procedure [Art.
262]
General Rule: Private Procedure - The
bargaining procedure shall be governed by [the
parties’] agreement or other voluntary
arrangement providing for a more expeditious
manner of collective bargaining [Art. 262]
Rationale: It is the policy of the state to
promote and emphasize the primacy of free
collective bargaining and negotiations [Art.
218-A(a)]
Exception
Labor Code Procedure – In absence of a
private agreement, the collective bargaining
procedure under Art. 261 shall be followed.
1. Written notice and statement of
proposals. When a party desires to
negotiate an agreement, it shall serve a
written notice upon the other party with a
statement of its proposals.
2. Reply. The other party shall make a reply
thereto not later than ten (10) calendar
days from receipt of such notice.
3. Conference. Should differences arise on
the basis of such notice and reply, either
party may request for a conference which
shall begin not later than ten (10) calendar
days from the date of request.
4. Board intervention and conciliation. If
the dispute is not settled, the [NCMB] shall
intervene upon request of either or both
parties or at its own initiative and
immediately call the parties to conciliation
meetings. The [NCMB] shall have the
power to issue subpoenas requiring the
attendance of the parties to such meetings.
It shall be the duty of the parties to
participate fully and promptly in the
conciliation meetings the Board may call.
5. Voluntary arbitration. The [NCMB] shall
exert all efforts to settle disputes amicably
LABOR LAW
and encourage the parties to submit their
case to a voluntary arbitrator.
6. Prohibition against disruptive acts.
During the conciliation proceedings in the
Board, the parties are prohibited from
doing any act which may disrupt or impede
the early settlement of the disputes. [Book
V, IRR Rule XII, Sec. 1]
7. Deadlock. Any certified or duly recognized
bargaining representative may file a notice
or declare a strike or request for preventive
mediation in cases of bargaining deadlocks
and unfair labor practices. The employer
may file a notice or declare lockout or
request for preventive mediation in the
same cases. In the absence of certified or
duly recognized bargaining representative,
any legitimate labor organization in the
establishment may file a notice, request
preventive mediation or declare a strike but
only on grounds of unfair labor practice
[NCMB Manual of Procedure, Rule IV, Sec.
3]
Period to Reply; Bad Faith
[The period to reply] is merely procedural, and
non-compliance cannot be automatically
deemed to be an act of unfair labor practice.
[National Union of Restaurant Workers v. CIR,
G.R. No. L-20044 (1964)]
Failure to Reply as Indicia of Bad Faith
[The employer’s] refusal to make a counterproposal [...] is an indication of its bad faith.
Where the employer did not even bother to
submit an answer to the bargaining proposals
of the union, there is a clear evasion of the duty
to bargain collectively, [...] making it liable for
unfair labor practice. [General Milling Corp. v.
CA, G.R. No. 146728 (2004)]
v. Bargainable Issues
Mandatory Bargainable Issues
1. Wages
2. Hours of work
3. All other terms and conditions of
employment including proposals for
adjusting any grievances or questions
arising under such agreement [Art. 263]
Examples:
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1.
2.
3.
4.
5.
6.
7.
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Vacations and holidays
Bonuses
Seniority, Transfer, and Layoffs
Employee workloads
Work rules and regulations
Union security arrangements
Pension and insurance benefits for active
employees
Permissive Issues
Unilateral benefits extended by the employer
[cf. Union of Filipino Employees v. Nestle, G.R.
Nos. 158930-31 (2008)]
As in all other contracts, the parties in a CBA
may establish such stipulations, clauses, terms
and conditions as they may deem convenient
provided they are not contrary to law, morals,
good customs, public order or public policy.
[Manila Fashions v. NLRC, G.R. No. 117878
(1996)]
Test for Mandatory Bargainable Issues
The nexus between the Nature of Employment
and the Nature of the Demand: For “other
terms and conditions of employment” to
become a mandatory bargainable issue, they
must have a connection between the proposal
and the nature of the work.
In order for a matter to be subject to mandatory
collective bargaining, it must materially or
significantly affect the terms and conditions of
employment. Whether the agreement concerns
a mandatory subject of bargaining depends not
on its form, but on its practical effect. [Azucena]
Importance of Determining the Character of
the Bargaining Issue
The question as to what are mandatory and
what are merely permissive subjects of
collective bargaining is of significance on the
right of a party to insist on his position to the
point of stalemate.
A party may refuse to enter into a collective
bargaining contract unless it includes a
desired provision as to a matter which is a
mandatory subject of collective bargaining.
[But] a refusal to contract is in substance a
refusal to bargain about matters which are
LABOR LAW
mandatory subjects of collective bargaining
unless the agreement covers a matter which is
not a mandatory subject.
It is no answer to the charge of refusal to
bargain in good faith that the insistence on the
disputed clause was not the sole cause of the
failure to agree or that agreement was not
reached with respect to other disputed clauses.
Such refusal will not be deemed as an unfair
labor practice.
However, if a party refuses to contract based
on an issue which is not a mandatory
bargainable issue, the party will be guilty of
ULP. [Samahang Manggagawa sa Top Form v.
NLRC, G.R. No. 113856 (1998)]
Minutes of Negotiation
Where a proposal raised by a contracting party
does not find print in the CBA, it is not a part
thereof and the proponent has no claim
whatsoever to its implementation. [...]
The Minutes [only] reflects the proceedings
and discussions undertaken in the process of
bargaining for worker benefits in the same way
that the minutes of court proceedings show
what transpired therein.
At the negotiations, it is but natural for both
management and labor to adopt positions or
make demands and offer proposals and
counter-proposals.
However, nothing is considered final until the
parties have reached an agreement.
[Samahang Manggagawa sa Top Form v.
NLRC, G.R. No. 113856 (1998)]
Suspension of Bargaining Negotiations
In order to allow the employer to validly
suspend the bargaining process there must be
a valid petition for certification election raising
a legitimate representation issue.
Hence, the mere filing of a petition for
certification election does not ipso facto justify
the suspension of negotiation by the employer.
[Colegio de San Juan de Letran v. Association
of Employees, G.R. No. 141471 (2000)]
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vi. Bargaining Deadlock
Deadlock is defined as the “counteraction of
things producing entire stoppage: a state of
inaction or of neutralization caused by the
opposition of persons or of factions: a
standstill.
There is a deadlock when there is a “complete
blocking or stoppage resulting from the action
of equal and opposed forces.”
The word is synonymous with the word
impasse which, “presupposes reasonable
effort at good faith bargaining which, despite
noble intentions, does not conclude in
agreement between the parties.” [Divine World
Tacloban v. Secretary of Labor, G.R. No.
91915 (1992)]
Collective Bargaining Deadlock is defined as
the situation between the labor and the
management of the company where there is
failure in the collective bargaining negotiations
resulting in a stalemate. [San Miguel Corp. v
NLRC, G.R. No. 99266 (1999)].
Privileged Communication in Conciliation
Proceedings
Information and statements made at
conciliation proceedings shall be treated as
privileged communication and shall not be
used as evidence in the Commission.
Conciliators and similar officials shall not testify
in any court or body regarding any matters
taken up at conciliation proceedings conducted
by them. [Art. 233]
Rationale:
1. A person is entitled to ‘buy his or her peace’
without danger of being prejudiced in case
his or her efforts fail
2. Offers for compromise are irrelevant
because they are not intended as
admissions by the parties making them
[Pentagon Steel v. CA, G.R. No. 174141
(2009)]
b. Collective Bargaining
Agreement
LABOR LAW
Collective Bargaining Agreement or “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. [Sec. 1(k), Rule I, Book V, IRR]
Nature of the CBA
The CBA is the law between the parties and
they are obliged to comply with its provisions.
[Zuellig Pharma Corporation v. Alice Sibal,
G.R. No. 173587 (2013)]
Although it is a rule that a contract freely
entered between the parties should be
respected, since a contract is the law between
the parties, said rule is not absolute. [... Citing
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 the common good.
[Halagueña v. Philippine Airlines, G.R. No.
172013 (2009)]
Beneficiaries of the CBA
The labor organization
a. Designated, or
b. Selected by the majority of the employees
in an appropriate collective bargaining unit,
shall be the exclusive representative of the
employees in such unit for the purpose of
collective bargaining. [Art. 267]
When a collective bargaining contract is
entered into by the union representing the
employees and the employer, even the nonmember employees are entitled to the benefits
of the contract.
To accord its benefits only to members of the
union without any valid reason would constitute
undue discrimination against non-members.
[New Pacific Timber and Supply v. NLRC, G.R.
No. 124224 (2000)]
Contract Interpretation
Art. 1702, Civil Code. In case of doubt, all
labor legislation and all labor contracts shall
be construed in favor of the safety and
decent living for the laborer.
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A CBA, as a labor contract within the
contemplation of Art. 1700 of the Civil Code of
the Philippines which governs the relations
between labor and capital, [it] is not merely
contractual in nature but impressed with public
interest, thus, it must yield to the common
good.
As such, it must be construed liberally rather
than narrowly and technically.
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. [Davao
Integrated Port Stevedoring Services v.
Abarquez, G.R. No. 102132 (1993)]
General Rule: [W]here the CBA is clear and
unambiguous, it becomes the law between the
parties and compliance therewith is mandated
by the express policy of the law. [Zuellig
Pharma Corporation v. Alice Sibal, G.R.
No.173587 (2013)]
Exception: If the words appear to be contrary
to the evident intention of the parties, the latter
shall prevail over the former. [Kimberly Clark
Phils. v. Lorredo, G.R. No. 103090 (1993)]
i. Mandatory provisions in a
Collective Bargaining
Agreement
All grievances submitted to the grievance
machinery which are not settled within seven
(7) calendar days from the date of its
submission shall automatically be referred to
voluntary arbitration prescribed in the
Collective Bargaining Agreement.
For this purpose, parties to a Collective
Bargaining Agreement shall:
1. name and designate in advance a
Voluntary Arbitrator or panel of Voluntary
Arbitrators, or
2. include in the agreement a procedure for
the selection of such Voluntary Arbitrator or
panel of Voluntary Arbitrators, preferably
from the listing of qualified Voluntary
Arbitrators duly accredited by the Board.
In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators, the
Board shall designate the Voluntary Arbitrator
or panel of Voluntary Arbitrators
When: as may be necessary
How: pursuant to the selection procedure
agreed upon in the Collective Bargaining
Agreement
Effect: designated Voluntary Arbitrator or
panel of Voluntary Arbitrators shall act with
the same force and effect as if the
Arbitrator or panel of Arbitrators have been
selected by the parties as described above.
ii. Administration and
Enforcement of CBA
Note: See also v. Bargainable Issues under “a.
Duty to bargain collectively”
Art. 273. Grievance Machinery and
Voluntary Arbitration
The parties to a Collective Bargaining
Agreement shall include therein provisions that
will ensure the mutual observance of its terms
and conditions.
They shall establish a machinery for the
adjustment and resolution of grievances
1. Arising from the interpretation or
implementation
of
their
Collective
Bargaining Agreement, and
2. Those arising from the interpretation or
enforcement of company personnel
policies.
LABOR LAW
Substandard CBA
A CBA that falls below the minimum standards
required by law is prohibited. Nonetheless, RA
9481 removed substandard CBAs as a ground
for the cancellation of registration of union
registration.
Note: A substandard CBA cannot bar a petition
for certification election under the contract-bar
rule. [Prof. Battad]
Ratification
Within thirty (30) days from the execution of a
collective bargaining agreement
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The parties shall submit copies of the same
directly to the Bureau or the Regional Offices
of the Department of Labor and Employment
for registration, accompanied with:
1. Verified proofs of its posting in two
conspicuous places in the place of work,
and
2. Ratification by the majority of all the
workers in the bargaining unit. [Art. 237;
Book V, IRR Rule XVII, Sec. 2 (c)]
[T]he posting of copies of the collective
bargaining agreement is the responsibility of
the employer.
The fact that there were "no impartial members
of the unit" is immaterial.
The purpose of the requirement is precisely to
inform the employees in the bargaining unit of
the contents of said agreement so that they
could intelligently decide whether to accept the
same or not. [Associated Labor Unions v.
Ferrer-Calleja, G.R. No. L-77282 (1989)]
Effect of Non-ratification
General Rule: The collective bargaining
agreement should be ratified by the majority of
all the members of the bargaining unit. Noncompliance with this requirement renders the
CBA ineffective. [Associated Trade Unions v.
Trajano, G.R. No. 75321 (1988)]
Exception: Even if there was no ratification,
the CBA will not be invalid or void considering
that the employees have enjoyed benefits from
it.
LABOR LAW
Registration
Within thirty (30) days from the execution of a
Collective Bargaining Agreement, the parties
shall submit copies of the same directly to the
Bureau or the Regional Offices of the
Department of Labor and Employment for
registration […]. [Art. 237]
iii. Requirements for Registration
The application for CBA registration shall be
accompanied by the original and two (2)
duplicate copies of the following documents
which must be certified under oath by the
representative(s) of the employer(s) and labor
union(s) concerned:
1. The collective bargaining agreement
2. A statement that the collective bargaining
agreement was posted in at least two (2)
conspicuous places in the establishment or
establishments concerned for at least five
(5) days before its ratification
3. A statement that the collective bargaining
agreement was ratified by the majority of
the employees in the bargaining unit of the
employer or employees concerned. [Sec.
2, Rule XVII, Book V, IRR]
Specific
information
submitted
confidence
General rule: Shall not be disclosed
in
Exceptions:
1. authorized by Secretary of Labor
2. when it is at issue in any judicial litigation
3. public interest or national security requires
[Art. 237]
[The employees] cannot receive benefits under
provisions favorable to them and later insist
that the CBA is void simply because other
provisions turn out not to the liking of certain
employees. [Planters Products Inc. v. National
Labor Relations Commission, G.R. No. 78524
(1989)]
Note: Ratification of the CBA by the employees
in the bargaining unit is not needed when the
CBA is a product of an arbitral award as a result
of voluntary arbitration under Art. 275 or from
the secretary’s assumption of jurisdiction or
certification under Art. 278 (g).
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Effect of Unregistered CBA
An unregistered CBA is binding upon the
parties but cannot serve as a bar to a petition
for certification election under the contract-bar
rule.
Sec. 3, Rule VIII, Book V states: A petition for
certification election may be filed anytime,
except: [...] (d) when a collective bargaining
agreement between the employer and a duly
recognized or certified bargaining agent has
been registered in accordance with Art. 231
[now 237] of the Labor Code.
iv. CBA Effectivity
If it is the first ever CBA, the effectivity date is
whatever date the parties agree on.
If it is a renegotiated CBA, the retroactivity of
the date of effectivity depends upon the
duration of conclusion [Art. 265]:
1. If it is concluded within 6 months from the
expiry date, the new CBA will retroact to the
date following the expiry date [Illustration:
expiry date: December 13; renegotiations
concluded on November 30; effectivity
date: December 14].
2. If it is concluded beyond 6 months from
the expiry date, the matter of retroaction
and effectivity is left with the parties.
Hold Over Principle
It shall be the duty of both parties to keep the
status quo and to continue in full force and
effect the terms and conditions of the existing
agreement:
a. during the 60-day period and/or
b. until a new agreement is reached by the
parties. [Art. 264, last sentence]
The last sentence of Art. 264, which provides
for automatic renewal [upon expiry], pertains
only to the economic provisions of the CBA
and does not include representational aspect
of the CBA.
A [CBA which continues to take effect beyond
its expiration date] cannot constitute a bar to a
filing of petition for certification election.
LABOR LAW
When there is a representational issue, the
status quo provision insofar as the need to
await the creation of a new agreement will not
apply.
Otherwise, it will create an absurd situation
where the union members will be forced to
maintain membership by virtue of the union
security clause existing under the CBA and,
thereafter, support another union when filing a
petition for certification election.
If we apply it, there will always be an issue of
disloyalty whenever the employees exercise
their right to self-organization. The holding of a
certification election is a statutory policy that
should not be circumvented, or compromised.
[PICOP Resources, Inc. v. Taneca et al., G.R.
No. 160828 (2010)]
Arbitrated CBA
In the absence of an agreement between the
parties, an arbitrated CBA takes on the nature
of any judicial or quasi-judicial award. [Manila
Electric Company v. Quisumbing, G.R. No.
127598 (1999)]
[I]n the absence of the specific provision of law
prohibiting retroactivity of the effectivity of the
arbitral awards issued by the Secretary of
Labor pursuant to Art. 263(g) of the Labor
Code, [the Secretary] is deemed vested with
plenary powers to determine the effectivity
thereof. [LMG Chemicals v. Secretary of Labor,
G.R. No. 127422 (2001)]
v. CBA Duration
Art. 265. Terms of a Collective Bargaining
Agreement – Any Collective Bargaining
Agreement that the parties may enter into
shall, insofar as the representation aspect is
concerned, be for a term of five (5) years. [...]
All other provisions of the Collective
Bargaining Agreement shall be renegotiated
not later than three (3) years after its
execution. [...]
CBA Duration for economic provisions
3 years
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CBA Duration for non-economic provisions
5 years for representational or political issues;
cannot be renegotiated to extend beyond 5
years. [FVC Labor Union-PTGWO v.
SANAMA-FVC-SIGLO, G.R. No. 176249
(2009)]
CBA Duration: Freedom Period
No petition questioning the majority status of
the incumbent bargaining agent shall be
entertained and no certification election shall
be conducted by the DOLE outside of the
sixty-day period immediately before the
date of the expiry of such five-year term of
the Collective Bargaining Agreement. [Art.
265]
CBA and 3rd Party Applicability
Labor contracts such as employment contracts
and CBAs are not enforceable against a
transferee of an enterprise, labor contracts
being in personam, is binding only between the
parties.
As a general rule, there is no law requiring a
bona fide purchaser of the assets of an ongoing concern to absorb in its employ the
employees of the latter.
However, although the purchaser of the assets
or enterprise is not legally bound to absorb in
its employ the employees of the seller of such
assets or enterprise, the parties are liable to the
employees if the transaction between the
parties is colored or clothed with bad faith.
[Sundowner Development Corporation v.
Drilon, G.R. No. 82341 (1989)]
Where the change of ownership is in bad faith
or is used to defeat the rights of labor, the
successor-employer is deemed to have
absorbed the employees and is held liable for
the transgressions of his or her predecessor
[Philippine Airlines, Inc. v. NLRC, G.R. No.
125792 (1998)]
General Rule: An innocent transferee of a
business establishment has no liability to the
employees of the transferor to continue
employing them. Nor is the transferee liable for
past unfair labor practices of the previous
owner.
LABOR LAW
Exception: When the liability therefore is
assumed by the new employer under the
contract of sale, or when liability arises
because of the new owner's participation in
thwarting or defeating the rights of the
employees.
The most that the transferee may do, for
reasons of public policy and social justice, is to
give preference to the qualified separated
employees in the filling of vacancies in the
facilities of the purchaser. [Manlimos v. NLRC,
G.R. No. 113337 (1995)]
The general rule applies only to the sale and
purchase of asset. If the method of acquisition
is by way of purchase of controlling shares, the
employer remains the same and the new
owners must honor the existing contracts.
E. UNFAIR LABOR
PRACTICES
1. Nature, Aspects
Unfair labor practice refers to acts that violate
the workers’ right to organize. The prohibited
acts are related to the workers’ right to selforganization and to the observance of a
CBA. Without that element, the acts, no matter
how unfair, are not unfair labor practices. The
only exception is Art. 259(f) [i.e. to dismiss,
discharge
or
otherwise
prejudice
or
discriminate against an employee for having
given or being about to give testimony under
this Code]. [Philcom Employees Union v. Phil.
Global, G.R. No. 144315 (2006)]
Nature of ULP
a. inimical to the legitimate interests of both
labor and management, including their
right to bargain collectively and otherwise
deal with each other in an atmosphere of
freedom and mutual respect
b. disrupt industrial peace
c. hinder the promotion of healthy and stable
labor-management relations
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d. violations of the civil rights of both labor and
management but are also criminal offenses
[Art. 258]
Four forms of Unfair Labor Practice in
Collective Bargaining
1. Failure or refusal to meet and convene
2. Evading the mandatory subjects of
bargaining
3. Bargaining in bad faith
4. Gross violation of the CBA
Purpose of the Policy Against ULPs
Protection of right to self-organization and/or
collective bargaining:
a. The employee is not only protected from
the employer but also from labor
organizations.
b. The employer is also protected from ULP
committed by a labor organization.
The public is also protected because it has an
interest in continuing industrial peace.
LABOR LAW
an unfair labor practice. [HSBC Employee
Union v. NLRC, G.R. No. 125038 (1997)]
Note: Bargaining in bad faith constitutes Unfair
Labor Practice, which may be committed by
either Employer or Labor Organization.
2. By Employers
a. Interference/Restraint/Coercion
b. Yellow Dog Contracts
c. Contracting
Out
Services
which
Discourage Unionism
d. Company Union
e. Discrimination to Encourage/ Discourage
Unionism
f. Discrimination for having given or about to
give testimony
g. Violation of Duty to Bargain Collectively
h. Payment of Negotiation or Attorney’s Fees
i. Violation of a Collective Bargaining
Agreement
a. Interference/Restraint/Coercion
Employer-Employee Relationship Required
General Rule: An unfair labor practice may be
committed only within the context of an
employer-employee relationship [American
President Lines v. Clave, G.R. No. L-51641
(1982)]
Exception: “Yellow Dog” condition or
contract: to require as a condition of
employment that a person or an employee
shall not join a labor organization or shall
withdraw from one to which he belongs. [Art.
259 (b)]
Parties Not Estopped from Raising ULP by
Eventual Signing of the CBA
The eventual signing of the CBA does not
operate to estop the parties from raising unfair
labor practice charges against each other.
[Standard Chartered Bank Union v. Confesor,
G.R. No. 114974 (2004)]
Statutory Construction
The Labor Code leaves to the court the work of
applying the law's general prohibitory
language, in light of infinite combinations of
events, which may be charged as constituting
Art. 259(a). Unfair Labor Practices of
Employers. – To interfere with, restrain or
coerce employees in the exercise of their
right to self-organization
The fact that the resignations of the union
members occurred during the pendency of the
case before the labor arbiter shows GMC’s
desperate attempts to cast doubt on the
legitimate status of the union. The ill-timed
letters of resignation from the union members
indicate that GMC had interfered with the right
of its employees to self-organization. [General
Milling Corporation v. Court of Appeals, G.R.
146728 (2004)]
Interrogation
General rule: employer may interrogate its
employees regarding their union affiliation for
legitimate purposes and with the assurance
that no reprisals would be taken against the
unionists.
Exception: when interrogation interferes with
or restrains employees' right to selforganization. [Phil. Steam Navigation Co. v.
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Phil. Marine Officer’s Guild, G.R. Nos. L-20667
and 20669 (1965)]
Note: The interrogation of the ER should not be
persistent and/or hostile
Speech
The acts of a company which subjects a union
to vilification and its participation in soliciting
membership for a competing union are also
acts constituting a ULP. [Phil. Steam
Navigation Co. v. Phil. Marine Officer’s Guild,
G.R. Nos. L-20667 and 20669 (1965)]
An employer may not send letters containing
promises or benefits, nor of threats of obtaining
replacements to individual workers while the
employees are on strike due to a bargaining
deadlock. This is tantamount to interference
and is not protected by the Constitution as free
speech. [Insular Life Assurance Co.
Employees Assn. v. Insular Life Assurance
Co. Ltd, G.R. No. L-25291 (1971)]
Espionage
Espionage and/or surveillance by the employer
of union activities are instances of interference,
restraint or coercion of employees in
connection with their right to organize, form
and join unions as to constitute unfair labor
practice. […] The information obtained by
means of espionage is invaluable to the
employer and can be used in a variety of cases
to break a union. [Insular Life Assurance Co.
Employees Assn. v. Insular Life Assurance
Co. Ltd, G.R. No. L-25291 (1971)]
Concerted Activities
The mass demonstration and stoppage of work
of the Union is not ULP. They didn’t
demonstrate against the employer, but against
the Pasig police for alleged human rights
abuses. This is merely an exercise of their
freedom of expression, assembly, and right to
redress of grievances enshrined in the
Constitution. [Philippine Blooming Mills
Employment Organization v. Philippine
Blooming Mills Co., Inc., G.R. No. L-31195
(1973)]
b. Yellow Dog Contracts
LABOR LAW
Art. 259(b). Unfair Labor Practices of
Employers. – To require as a condition of
employment that a person or an employee
shall not join a labor organization or shall
withdraw from one to which he belongs;
Yellow dog contracts require, as a condition of
employment, that a person or an employee
shall not join a labor organization or shall
withdraw from one to which he belongs.
Requisites of a Yellow Dog Contract:
1. A representation by the employee that he
is not a member of a labor organization
2. A promise by the employee that he will not
join a union
3. A promise by the employee that upon
joining a labor organization, he will quit his
employment [Azucena]
c. Contracting Out Services which
Discourage Unionism
Art. 259(c). Unfair Labor Practices of
Employers. – To contract out services or
functions being performed by union
members when such will interfere with,
restrain or coerce employees in the exercise
of their right to self-organization;
General Rule: contracting out is not a ULP, but
is covered by the employer’s management
prerogative.
Exception [Art. 259 (c)]:
1. contracted-out services or functions are
performed by union members AND
2. contracting out will interfere with, restrain,
or coerce employees in the exercise of their
right to self-organization.
d. Company Union
Art. 259(d). Unfair Labor Practices of
Employers. – To initiate, dominate, assist or
otherwise interfere with the formation or
administration of any labor organization,
including the giving of financial or other
support to it or its organizers or supporters;
Company
union
means
any
labor
organization whose formation, function or
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administration has been assisted by any act
defined as unfair labor practice by this Code.
[Art. 219(i)]
The employer commits ULP if it initiates,
dominates, or otherwise interferes with the
formation or administration of any labor
organization.
Example: giving out financial aid to any union's
supporters or organizers.
e. Discrimination to Encourage/
Discourage Unionism [Art. 259
(e)]
General Rule: it is ULP to discriminate in
regard to wages, hours of work, and other
terms and conditions of employment in order to
encourage or discourage membership in any
labor organization.
LABOR LAW
Art. 259(e). Unfair Labor Practices of
Employers. – Nothing in this Code or in any
other law shall stop the parties from requiring
membership in a recognized collective
bargaining agent as a condition for
employment, except those employees who
are already members of another union at the
time of the signing of the collective
bargaining agreement.
The law has allowed stipulations for 'union
shop' and 'closed shop' as means of
encouraging workers to join and support the
union of their choice in the protection of their
rights and interests vis-a-vis the employer. [Del
Monte Philippines v. Salvidar, G.R. No. 158620
(2006)]
Purpose
To safeguard and ensure the existence of the
union and thus, promote unionism in general
as a state policy.
Exception: Union security clauses
Union security is a generic term which is
applied to and comprehends “closed shop,”
“union shop,” “maintenance of membership” or
any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition
affecting employment. [NUWHRAIN v. NLRC,
G.R. No. 179402 (2008)]
[Union security clause] is an indirect restriction
on the right of an employee to selforganization. It is a solemn pronouncement of
a policy that while an employee is given the
right to join a labor organization, such right
should only be asserted in a manner that will
not spell the destruction of the same
organization. [Tanduay Distillery Labor Union
v. NLRC, G.R. No. 75037 (1987)]
It is the policy of the State to promote unionism
to enable the workers to negotiate with the
management on the same level and with more
persuasiveness than if they were to individually
and
independently
bargain
for
the
improvement of their respective conditions. […]
For this reason, the law has sanctioned
stipulations for the union shop and closed shop
as a means of encouraging the workers to join
and support the labor union of their own choice
vis-à-vis the employer. [Liberty Flour Mills
Employees v. Liberty Flour Mills, G.R. No.
58768-70 (1989)]
Coverage
General Rule: All employees in the bargaining
unit covered by the union security clause are
subject to its terms
[Employees], although entitled to disaffiliation
from their union to form a new organization of
their own, must, however, suffer the
consequences of their separation from the
union under the security clause of the CBA.
[Villar v. Inciong, G.R. No. L-50283-84 (1983)].
Statutory Basis and Rationale
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LABOR LAW
Exception:
1. Employees who are already members of
another union at the time of the signing of
the collective bargaining agreement may
not be compelled by any union security
clause to join any union. [Art. 254 (e)]
2. Employees already in service at the time
the closed shop union security clause took
effect.
A closed shop provision in a CBA is not to
be given a retroactive effect as to preclude
its being applied to employees already in
service. [Guijarno v. CIR, G.R. No. L28791-93 (1973)]
3. Any employee who, at the time the union
security clause took effect, is a bona fide
member of religious organization which
prohibits its members from joining labor
unions on religious grounds [Reyes v.
Trajano, 209 SCRA 484 (1992)].
4. Confidential employees who are excluded
from the rank-and-file bargaining unit.
5. Employees excluded from the union
security provisions by express terms of the
agreement [BPI v. BPI Employees UnionDavao Chapter, G.R. No. 164301 (2010)].
in the first place. Hence, any doubt as to the
existence of a closed shop provision in the CBA
will be resolved in favor of the nonexistence of
the closed shop provision. [Azucena]
TYPES OF UNION SECURITY CLAUSE
3. Union shop
1. Closed shop
Condition for continued employment
There is union shop when all new regular
employees are required to join the union within
a certain period as a condition for their
continued employment. [General Milling
Corporation (GMC) v. Casio, G.R. No. 149552
(2010)]
Condition for employment
An agreement where only union members may
be employed and, for the duration of the
agreement, remains a member in good
standing of a union.
A closed shop may be defined as an enterprise
in which, by agreement between the employer
and his employees or their representatives, no
person may be employed in any or certain
agreed departments of the enterprise unless
he or she is, becomes, and, for the duration of
the agreement, remains a member in good
standing of a union entirely comprised of or of
which the employees in interest are a part.
[General Milling Corporation (GMC) v. Casio,
G.R. No. 149552 (2010)]
The closed shop provision can also be a potent
weapon wielded by the union against the
workers whom the union is supposed to protect
2. Maintenance of membership shop
Condition for continued employment
An agreement where present and future
employees are not compelled to join the SEBA,
but once so joined, they must maintain their
membership as a condition for continued
employment until they are promoted or
transferred out of the bargaining unit or the
agreement is terminated.
There is maintenance of membership shop
when employees, who are union members as
of the effective date of the agreement, or who
thereafter become members, must maintain
union membership as a condition for [their]
continued employment until they are promoted
or transferred out of the bargaining unit or the
agreement is terminated. [General Milling
Corporation (GMC) v. Casio, G.R. No. 149552
(2010)]
Non-members may be hired, but to retain
employment, they must become union
members after a certain period. The
requirement applies to present and future
employees. [Azucena]
4. Modified union shop
Condition for continued employment of
future employees
Employees who are not union members at the
time of signing the contract need not join the
union, but all workers hired thereafter must
join. [Azucena]
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5. Agency shop
Employees belonging to an appropriate
collective bargaining unit who are not members
of the recognized collective bargaining agent
may be assessed a reasonable fee equivalent
to the dues and other fees paid by members of
the recognized collective bargaining agent, if
such non-union members accept the benefits
under the collective agreement.
Provided, That the individual authorization
required under Art. [250], paragraph (o) of [the
Labor] Code shall not apply to non-members of
the recognized collective bargaining agent [Art.
259(e)].
ENFORCEMENT
CLAUSE
OF
UNION
SECURITY
Termination due to Union Security
Provision
Termination of employment by virtue of a union
security clause strengthens the union and
prevents disunity in the bargaining unit within
the duration of the CBA. The authorized
bargaining representative gains more numbers
and strengthens its position as against other
unions which may want to claim majority
representation. [Alabang Country Club v.
NLRC, G.R. No. 170287 (2008)]
Requisites for the enforcement of Union
Security Clauses
In terminating the employment of an employee
by enforcing the union security clause, the
employer needs only to determine and prove
that:
1. The union security clause is applicable;
2. The union is requesting for the
enforcement of the union security provision
in the CBA;
3. There is sufficient evidence to support the
union’s decision to expel the employee
from the union. [Alabang Country Club v.
NLRC, G.R. No. 170287 (2008)]
Company
must
conduct
separate
investigation or hearing
The enforcement of union security clauses is
authorized by law provided such enforcement
is not characterized by arbitrariness, and
LABOR LAW
always with due process. Even if there are
valid grounds to expel the union officers, due
process requires that these union officers be
accorded a separate hearing by respondent
company.
[Malayang
Samahan
ng
Manggagawa sa M. Greenfield v. Ramos, G.R.
No. 113907 (2000)]
Requirement of Due Process
The requirements laid down by the law in
determining whether or not an employee was
validly terminated must still be followed even if
it is based on a [union security clause] of a
CBA, i.e. the substantive as well as the
procedural due process requirements. [Del
Monte v. Saldivar, G.R. No. 158620 (2006)]
Obligations and Liabilities
Where the employer dismissed his employees
in the belief in good faith that such dismissal
was required by the [union security provision]
of the collective bargaining agreement with the
union, he may not be ordered to pay back
compensations to such employees although
their dismissal is found to be illegal.
[Confederated Sons of Labor v. Anakan
Lumber Co., G.R. No. L-12503 (1960)]
As dictated by fairness, […] the union shall be
liable to pay their backwages. This is because
management would not have taken the action
it did, had it not been for the insistence of the
labor union seeking to give effect to its
interpretation of a closed shop provision.
[Guijarno v. CIR, G.R. No. L-28791-93 (1973)]
f.
Discrimination for having given
or about to give testimony
Art. 259(f). Unfair Labor Practices of
Employers. — To dismiss, discharge or
otherwise prejudice or discriminate against
an employee for having given or being about
to give testimony;
Note: This is broader than the prohibition under
Art. 118 because Art. 259 (f) covers testimony
under the whole Code, while Art. 118 only
covers testimony under Book I: PreEmployment, Title II: Wages.
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Note further: Includes not giving testimony
[Azucena].
g. Violation of Duty to Bargain
Collectively
Art. 259(g). Unfair Labor Practices of
Employers — To violate the duty to bargain
collectively as prescribed by this Code;
Collective bargaining does not end with the
execution of an agreement. Being a continuous
process, the duty to bargain necessarily
imposes on the parties the obligation to live up
to the terms of such a collective bargaining
agreement if entered into, it is undeniable that
non-compliance therewith constitutes an unfair
labor practice. [Shell Oil Workers Union v. Shell
Co., G.R. No. L-28607 (1971)]
Note: See ULP in Collective Bargaining above.
ACTS DEEMED AS REFUSAL TO BARGAIN
1. Refusal to bargain when there is an
unresolved
petition
for
union
cancellation
“That there is a pending cancellation
proceedings against the union is not a bar to
set in motion the mechanics of collective
bargaining. […] Unless [the union’s] certificate
of registration and status as the certified
bargaining agent is revoked, [the employer], by
express provision of the law, is duty bound to
collectively bargain with the Union.” [Capitol
Medical Center v. Trajano, G.R. No. 155690
(2005)]
2. Employer’s suspension of operations in
order to forestall a demand for
collective bargaining
By admitting that the closure [of the business]
was due to irreconcilable differences between
the Union and the school management, […]
SJCI in effect admitted that it wanted to end the
bargaining deadlock and eliminate the problem
dealing with the demands of the union. [St.
John Colleges Inc. v. St. John Academy
Faculty and Employees Union, G.R. No.
167892 (2006)]
LABOR LAW
3. Implied refusal
The school is guilty of unfair labor practice
when it failed to make a timely reply to the
proposals of the union more than one month
after the same were submitted by the union. In
explaining its failure to reply, the school merely
offered a feeble excuse that its Board of
Trustees had not yet convened to discuss the
matter. Clearly, its actuation showed a lack of
sincere desire to negotiate. [Colegio de San
Juan de Letran v. Association of Employees
and Faculty of Letran, G.R. No. 141471 (2000)]
ACTS NOT DEEMED REFUSAL TO
BARGAIN
1. Adoption of an adamant bargaining
position in good faith, particularly where the
company is operating at a loss
2. Refusal to bargain over demands for
commission of unfair labor practices
3. Refusal to bargain during period of illegal
strike
4. Not initiating the bargaining
5. Refusal to bargain where the union
demands for recognition and bargaining
within the year following a certification
election, and the clear choice is no union
and no ad interim significant change has
taken place in the unit
6. Refusal to bargain because the other party
is making unlawful bargaining demands
h. Payment of Negotiation or
Attorney’s Fees
Art. 259(h). Unfair Labor Practices of
Employers — To pay negotiation or
attorney's fees to the union or its officers or
agents as part of the settlement of any issue
in collective bargaining or any other dispute;
Sweetheart contracts are favorable both to the
union and the employer at the expense of the
employees. The settlement of bargaining
issues must be made by fair bargaining in good
faith, and not through the payment of
negotiation or attorney's fees which will
ultimately lead to sweetheart contracts.
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Violation of a Collective
Bargaining Agreement [Art. 259
(i)]
Art. 259(i) Unfair Labor Practices of
Employers — To violate a collective
bargaining agreement.
Flagrant and/or Malicious Refusal to
Comply
with
Economic
Provisions
Required
Art. 274. Jurisdiction of Voluntary
Arbitrators. – Accordingly, violations of a
Collective Bargaining Agreement, except
those which are gross in character, shall no
longer be treated as unfair labor practice and
shall be resolved as grievances under the
Collective Bargaining Agreement.
For purposes of this Art., gross violations of
Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply
with the economic provisions of such
agreement.
Violations of collective bargaining agreements,
except flagrant and/or malicious refusal to
comply with its economic provisions, shall not
be considered unfair labor practice and shall
not be strikeable. [Book V, Rule XXII, Sec. 5]
Note: The list in Art. 259 is not exhaustive.
Other acts which are analogous to those
enumerated can be ULPs.
The alleged violation of the CBA, even
assuming it was malicious and flagrant, is not
a violation of an economic provision, thus
not an Unfair Labor Practice. [BPI Employees
Union-Davao FUBU v. BPI, G.R. No. 174912
(2013)]
LABOR LAW
Motive, Conduct, Proof
To constitute ULP, the dismissals by the ER
need not be entirely motivated by union
activities or affiliations. It is enough that
discrimination was a factor. [Me-Shurn Corp. v.
Me-Shurn Workers Union-FSM, G.R. No.
156292 (2005)]
Note: The basic inspiration of the dismissals
should concern the right to self-organization.
Totality of Evidence
Where the attendant circumstances, the history
of the employer's past conduct and like
considerations, coupled with an intimate
connection between the employer's action and
the union affiliations or activities of the
particular employee or employees, taken as a
whole, raise a suspicion as to the motivation for
the employer's action, the failure of the
employer to ascribe a valid reason therefor
may justify an inference that his unexplained
conduct in respect of the particular employee
or employees was inspired by the latter's union
membership or activities. [Royal Undergarment
Corporation of the Philippines v. CIR, G.R. No.
L-39040 (1990)]
3. By Labor Organizations
a. Restraint or Coercion
b. Discrimination:
Encourage/Discourage
Unionism
c. Violation of Duty, or Refuse to Bargain
d. Illegal Exaction (Featherbedding)
e. Asking or Accepting Negotiation and other
Attorney's Fees
f. Violation of a Collective Bargaining
Agreement
a. Restraint or Coercion
An employer cannot be considered to have
committed a gross and economic violation of
the CBA when it, in good faith, withheld union
dues and death benefits from the union upon
written request of the union members in light of
the conflict between the members and the
union officers and instead deposited such
amount to the DOLE. [Arellano University
Employees and Workers Union v. Court of
Appeals, G.R. 139940 (2006)]
Art. 260(a). Unfair Labor Practices of
Labor Organizations — To restrain or
coerce employees in the exercise of their
right to self-organization. However, a labor
organization shall have the right to prescribe
its own rules with respect to the acquisition
or retention of membership;
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“Interfere” is not included in Art. 260 simply
because any act of a labor organization
amounts to interference to the right of selforganization.
b. Discrimination: Encourage/
Discourage Unionism
Art. 260(b). Unfair Labor Practices of
Labor Organizations — To cause or
attempt to cause an employer to discriminate
against
an
employee,
including
discrimination against an employee with
respect to whom membership in such
organization has been denied; or terminate
an employee on any ground other than the
usual terms and conditions under which
membership or continuation of membership
is made available to other members;
General rule: It is a ULP for a labor
organization to cause an employer to
discriminate against an employee.
Exception: Provisions of a valid union security
clause and other company policies applicable
to all employees.
c. Violation of Duty, or Refuse to
Bargain
Art. 260(c) Unfair Labor Practices of
Labor Organizations — To violate the duty,
or refuse to bargain collectively with the
employer, provided it is the representative of
the employees;
Note: See ULP in Collective Bargaining above.
Note further: See discussion under 2(g).
d. Illegal Exaction
(Featherbedding)
Art. 260(d). Unfair Labor Practices of
Labor Organizations — To cause or
attempt to cause an employer to pay or
deliver or agree to pay or deliver any money
or other things of value, in the nature of an
exaction, for services which are not
performed or not to be performed, including
the demand for fee for union negotiations;
LABOR LAW
The practice of the labor organization to cause
or attempt to cause an employer to pay or
deliver or agree to pay or deliver money or
other things of value, in the nature of an
exaction, for services which are not performed
or are not to be performed, including the
demand for a fee for union negotiations.
e. Asking or Accepting
Negotiation and other
Attorney's Fees
Art. 260(e). Unfair Labor Practices of
Labor Organizations — To ask for or
accept negotiation or attorney's fees from
employers as part of the settlement of any
issue in collective bargaining or any other
dispute
See counterpart in ULP by Employers
(sweetheart contracts).
f.
Violation of a Collective
Bargaining Agreement
Art. 260(f). Unfair Labor Practices of
Labor Organizations — To violate a
collective bargaining agreement.
Gross Violations of the CBA
Art. 274. Jurisdiction of Voluntary
Arbitrators. – Accordingly, violations of a
Collective Bargaining Agreement, except
those which are gross in character, shall no
longer be treated as unfair labor practice and
shall be resolved as grievances under the
Collective Bargaining Agreement.
For purposes of this Art., gross violations of
Collective Bargaining Agreement shall mean
flagrant and/or malicious refusal to comply
with the economic provisions of such
agreement.
See counterpart in ULP by Employers.
F. PEACEFUL CONCERTED
ACTIVITIES
Definition
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A concerted activity is one undertaken by two
or more employees to improve their terms and
conditions of work.
Nature of the Right to Strike and Lockout
The right to strike is a constitutional and legal
right of the workers, as the employers have the
inherent and statutory right to lockout within the
context of labor relations and collective
bargaining.
It is a means of last resort and presupposes
that the duty to bargain in good faith has been
fulfilled and other voluntary modes of dispute
settlement have been tried and exhausted.
[Guidelines Governing Labor Relations (1987)]
Non-abridgment
of
right
to
selforganization
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
with employees and workers in their exercise
of the right to self-organization. Such right shall
include the right to (…) engage in lawful
concerted activities for the same purpose or for
their mutual aid and protection, subject to the
provisions of Art. [279] of this Code. [Art. 257]
Limitation: Concerted activities must be in
accordance with law
The strike is a powerful weapon of the working
class. Thus, it must be declared only after the
most thoughtful consultation among them,
conducted in the only way allowed; that is,
peacefully, and in every case conformably to
reasonable regulation. Any violation of the
legal requirements and strictures will render
the strike illegal, to the detriment of the very
workers it is supposed to protect. [Batangas
Laguna Tayabas Bus Co. v. NLRC, G.R. No.
101858 (1992)]
FORMS OF CONCERTED ACTIVITIES
Concerted
Activities
by
Labor
Organization:
a. Strike (includes slow downs, mass leaves,
sitdowns, attempts to damage destroy or
sabotage plant equipment and similar
activities)
b. Picketing
c. Boycott
LABOR LAW
Response to Concerted Activities available
to Employers:
a. Lockout
1. By Labor Organization
a. Strike
Definition
Any temporary stoppage of work by the
concerted action of employees as a result of an
industrial or labor dispute. [Art. 219(o)]
Labor Dispute
Includes any controversy or matter concerning
terms and conditions of employment or the
association or representation of persons in
negotiating, fixing, maintaining, changing or
arranging the terms and conditions of
employment, regardless of whether or not the
disputants stand in the proximate relation of
employers and employees. [Solidbank Corp. v.
EU Gamier, G.R. No. 159460 and G.R. No.
159461 (2010)]
Strikes not limited to work stoppages
The term “strike” shall comprise not only
concerted work stoppages, but also
slowdowns, mass leaves, sit-downs, attempts
to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
[Samahang Manggagawa v. Sulpicio Lines,
G.R. No. 140992 (2004)]
As coercive measure by employees
A strike is a coercive measure resorted to by
laborers to enforce their demands. The idea
behind a strike is that a company engaged in a
profitable business cannot afford to have its
production or activities interrupted, much less,
paralyzed. [Phil. Can Co. v. CIR, G.R. No. L3021 (1950)]
Who may declare a strike
1. The certified or duly recognized bargaining
representative
2. Any legitimate labor organization in the
absence of a certified or duly recognized
bargaining representative, but only on
grounds of ULP [Sec. 6, Rule XXII, Book V,
IRR]
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LABOR LAW
No severance of employer-employee
relationship during lawful strike
Although during a strike the worker renders no
work or service and receives no compensation,
yet his relationship as an employee with his
employer is not severed or dissolved. [Elizalde
Rope Factory, Inc. v. SSS, G.R. No. L-15163
(1962)]
It would be inapplicable to prevent a strike
which is grounded on unfair labor practice.
[Panay Electric Co. v. NLRC, G.R. No. 102672
(1995); Malayang Samahan ng mga
Manggagawa sa Greenfield v. Ramos, G.R.
No. 113907 (2000)]
Payment of wages during lawful strikes
General rule: Striking employees are not
entitled to the payment of wages for un-worked
days during the period of the strike pursuant to
the “no work-no pay” principle.
AS TO GROUNDS
1. Economic strike – one staged by workers
to force wage or other economic
concessions from the employer which he is
not required by law to grant; not a
strikeable ground [Consolidated Labor
Association of the Phil. v. Marsman and
Company, G.R. No. L-17038 (1964)]
2. ULP strike – called against a company's
unfair labor practice to force the employer
to desist from committing such practices.
Exception: If there is no work performed by
the employee there can be no wage or pay
unless the laborer was able, willing and ready
to work but was illegally locked out, suspended
or dismissed or otherwise illegally prevented
from working. For this exception to apply, it is
required that the strike be legal. [Visayas
Community Medical Center v. Yballe, G.R. No.
196156 (2014)]
Reinstatement after a lawful strike
When strikers abandon the strike and apply for
reinstatement despite the existence of valid
grounds, but the employer either:
a. refuses to reinstate them or
b. imposes upon their reinstatement new
conditions,
then the employer commits an act of ULP.
The strikers who refuse to accept the new
conditions and are consequently refused
reinstatement are entitled to the losses of pay
they may have suffered by reason of the
employer’s discriminatory acts from the time
they were refused reinstatement. [Philippine
Marine Officers’ Guild v. Compania Maritima,
G.R. Nos. L-20662 and L-20663 (1968)]
No Strike No Lockout Clause
A "no strike, no lock-out" provision in the [CBA]
is a valid stipulation, although the clause may
be invoked by an employer only when the strike
is economic in nature or one which is
conducted to force wage or other concessions
from the employer that are not mandated to be
granted by the law itself.
Other Forms of Strike
AS TO HOW COMMITTED
1. Slowdown strike – one by which workers,
without a complete stoppage of work,
retard production or their performance of
duties
and
functions
to
compel
management to grant their demands.
A slowdown is inherently illicit and
unjustifiable because while the employees
continue to work, they, at the same time,
select what part of their duties they
perform. In essence, they work on their
own terms. It is a strike on installment
basis. [Ilaw at Buklod ng Manggagawa v.
NLRC, G.R. No. 91980 (1991)]
2. Wild-cat strike – one declared and staged
without filing the required notice of strike
and without the majority approval of the
recognized bargaining agent [NUWHRAIN
– The Peninsula Manila Chapter v. NLRC,
G.R. No. 125561 (1998)]
3. Sit-down strike – one wherein workers
take over possession of the property of
such business to cease production and to
refuse access to owners. [Sukhothai
Cuisine & Restaurant v. CA, G.R. No.
150437 (2006)]
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4. Sympathetic strike – one in which the
striking workers have no demands of their
own, but strike to make common cause
with other strikers in other establishments
(ex. Welga ng Bayan). This is illegal
because there is no labor dispute between
workers who are joining the workers [Biflex
Phils. Inc. Labor Union v. Filflex Industrial
and Manufacturing Corporation, G.R. No.
155679 (2006)]
5. Mass leave – one in which workers
collectively abandon or boycott regular
work causing temporary stoppage of work
[Solidbank Corp. v. E.U. Gamier, G.R. No.
159460-61 (2010)]
Conversion from economic to ULP strike
It is possible for a strike to change its character
from an economic to a ULP strike.
In the instant case, initially, the strike staged by
the Union was meant to compel the Company
to grant it certain economic benefits set forth in
its proposal for collective bargaining. However,
the strike changed its character from the time
the
Company
refused
to
reinstate
complainants because of their union activities
after it had offered to admit all the strikers and
in fact did readmit the others. It was then
converted into an unfair labor practice strike.
[Consolidated Labor Association of the Phil. v.
Marsman and Company, G.R. No. L-17038
(1964)]
LABOR LAW
1. Bargaining deadlocks
2. ULP [Art. 278(c)]
Note: A strike, justified by the employees’ belief
in good faith that ULP was done by the
employer at the time the strikers went on strike,
is presumed valid even if the fact of ULP was
later found to be untrue [Master Iron Labor v.
NLRC, 219 SCRA 47 (1993)].
Procedural Requirements for Strike [Art.
278]
1. Effort to bargain (for bargaining deadlock
strikes)
2. Filing and service of notice of strike
3. Observance of cooling-off period
a. 15 days for ULP
No cooling-off period when the ULP
can be considered union busting
(dismissal of duly elected union officers
from employment)
b. 30 days for bargaining deadlock
4. Notice of strike vote meeting to NCMB
within 24 hours before the strike vote [Sec.
10, Rule XXII, Book V, IRR]
5. Strike vote
6. Strike vote report sent to NCMB
7. Observance of the waiting period (7-day
strike ban)
Strike cannot be converted to a lockout by
a return to work offer
A strike cannot be converted into a pure and
simple lockout by the mere expedient filing
before the trial court a notice of offer to return
to work during the pendency of the labor
dispute between the union and the employer.
[Rizal Cement Workers Union v. CIR, G.R. No.
L-18442 (1962)]
Requisites for a Valid Strike
A valid strike must have a lawful ground and
must conform with the procedural requirements
set by law.
Substantial Requirements/Grounds
A strike or lockout may be declared in cases of:
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(1) EFFORT TO BARGAIN
No labor organization […] shall declare a strike
[…] without first having bargained collectively
in accordance with Title VII of this Book […]
[Art. 279(a)]
In case of bargaining deadlocks, the notice
shall, as far as practicable:
a. Further state the unresolved issues in the
bargaining negotiations; and
b. Be accompanied by the written proposals
of the union, the counter-proposals of the
employer and the proof of a request for
conference to settle differences.
In cases of unfair labor practices, the notice
shall, as far as practicable, state the acts
complained of, and efforts taken to resolve the
dispute amicably. [Sec. 4, Rule XXII, Book V,
IRR]
The Implementing Rules use the words as far
as practicable. In this case, attaching the
counter-proposal of the company to the notice
of strike of the union was not practicable. It was
absurd to expect the union to produce the
company’s counter-proposal which it did not
have. [Club Filipino, Inc. v. Bautista, G.R. No.
168406 (2009)]
(2) FILING AND SERVICE OF NOTICE OF
STRIKE
Ground: Bargaining Deadlocks [Art. 278(c)]
Filed by: The duly certified or recognized
bargaining agent may file a notice of strike
Filed with: With the Ministry [now DOLE]
When: At least 30 days before the intended
date of the strike
Ground: Unfair Labor Practice [Art. 278(c)]
Filed by: The duly certified or recognized
bargaining agent, or in the absence of such
agent, any legitimate labor organization in
behalf of its members may file a notice of strike
Filed with: With the Ministry [now DOLE]
When: The period of notice shall be 15 days
Note: In case of dismissal from employment of
union officers duly elected in accordance with
the union constitution and by-laws, which may
LABOR LAW
constitute union-busting, where the existence
of the union is threatened, the 15-day coolingoff period shall not apply and the union may
take action immediately.
Notice to the Employer
In case of unfair labor practice and/or union
busting, the notice must be served to the
employer. Failure to do so will constitute
noncompliance
with
the
procedural
requirements and will result to an illegal strike.
[Filipino Pipe and Foundry Corp v. NLRC, G.R.
No. 115180 (1999)]
Rationale: Due process. [IRR]
Contents of Notice of Strike
1. Names and addresses of the employer and
the union involved
2. Nature of the industry to which the
employer belongs
3. Number of union members and of workers
in the bargaining unit
4. Such other relevant data as may facilitate
the settlement of the dispute.
Additional Requirements
In case of Bargaining Deadlocks:
1. Statement of unresolved issues in the
bargaining negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to settle
the differences. [Sec. 4, Rule XXII, Book V,
IRR]
In cases of ULP:
1. Statement of acts complained of
2. Efforts taken to resolve the dispute
amicably. [Sec. 4, Rule XXII, Book V, IRR]
Action on Notice:
1. Upon receipt of a valid notice of strike or
lockout, the NCMB, through its ConciliatorMediators, shall call the parties to a
conference the soonest possible time in
order to actively assist them to explore all
possibilities for amicable settlement.
2. The
Conciliator-Mediator
may
suggest/offer proposals as an alternative
avenue for the resolution of their
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disagreement/conflict which may not
necessarily bind the parties.
3. If conciliation/mediation fails, the parties
shall be encouraged to submit their dispute
for voluntary arbitration.
(3) OBSERVANCE
OF
COOLING-OFF
PERIODS
Cooling off periods
1. Bargaining deadlock – 30 days
2. ULP but not union busting – 15 days
3. ULP and union busting – no cooling-off
period
Purpose of Cooling Off Period
During the cooling-off period, it shall be the
duty of the Ministry [now DOLE] to exert all
efforts at mediation and conciliation to effect a
voluntary settlement.
Should the dispute remain unsettled until the
lapse of the requisite number of days from the
mandatory filing of the notice, the labor union
may strike or the employer may declare a
lockout. [Art. 278 (e)]
The purpose of the cooling-off period is to
provide an opportunity for mediation and
conciliation. [National Federation of Sugar
Workers v. Ovejera, G.R. No. L-59743 (1982)]
(4) NOTICE OF STRIKE-VOTE MEETING
Art. 278 (f). Strikes, Picketing and
Lockouts. – [T]he Department may, at its
own initiative or upon the request of any
affected party, supervise the conduct of the
secret balloting. […]
Sec. 10, Rule XXII, Book V. Strike or
Lockout Vote. – In every case, the union or
the employer shall furnish the regional
branch of the Board the notice of meetings
referred to in the preceding paragraph at
least twenty-four (24) hours before such
meetings […]
The purpose of the notice is to allow the NCMB
to decide whether or not they will send a
representative to supervise the strike vote.
(5) STRIKE VOTE
LABOR LAW
Art. 278 (f). Strikes, Picketing and
Lockouts. – A decision to declare a lockout
must be approved by a majority of the board
of directors of the corporation or association
or of the partners in a partnership, obtained
by secret ballot in a meeting called for that
purpose […]
Requirements for a declaration of a strike
in a strike vote
1. approval by a majority of the total union
membership in the bargaining unit
concerned
2. approval is obtained by secret ballot in a
meeting/referendum called for the purpose
Duration of the Validity of the Strike-Vote
Art. 278 (f). Strikes, Picketing and
Lockouts. – [T]he decision shall be valid for
the duration of the dispute based on
substantially the same grounds considered
when the strike or lockout vote was taken.
[…]
(6) STRIKE VOTE REPORT
Art. 278 (f). Strikes, Picketing and
Lockouts. – [I]n every case, the union or the
employer shall furnish the Department the
results of the voting at least 7 days before
the intended strike or lockout, subject to
the cooling-off period herein provided.
(7) OBSERVANCE OF THE 7-DAY WAITING
PERIOD
7 Day Observance of the Strike Ban
The waiting period, on the other hand, is
intended to provide opportunity for the
members of the union or the management to
take the appropriate remedy in case the strike
or lockout vote report is false or inaccurate.
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)]
The waiting period is intended to give the
DOLE an opportunity to verify whether the
projected strike really carries the imprimatur of
the majority of the union members. [Lapanday
Workers Union v. NLRC, G.R. Nos. 95494-97
(1995)]
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Compliance with Both Cooling-off and
Waiting Periods
The observance of both periods must be
complied with, although a labor union may take
a strike vote and report the same within the
statutory cooling-off period. The cooling-off and
7-day strike ban provisions of law constitute a
valid exercise of police power of the State.
[National Federation of Sugar Workers v.
Ovejera, G.R. No. L-59743 (1982)]
Mutually exclusive periods (used in the
NCMB Manual)
The cooling off period and the 7-day period are
mutually exclusive. Thus, in the case of Capitol
Medical Center v. NLRC [G.R. No. 147080
(2005)], the Court held that when the strike vote
is conducted within the cooling-off period, the
7-day requirement shall be counted from the
day following the expiration of the cooling off
period.
Improved Offer Balloting
In case of a strike, the regional branch of the
Board shall, at its own initiative or upon the
request of any affected party, conduct a
referendum by secret balloting on the improved
offer of the employer on or before the 30th day
of strike.
When at least a majority of the union members
vote to accept the improved offer:
a. The striking workers shall immediately
return to work and;
b. The employer shall thereupon re-admit
them upon the signing of the agreement
[Sec. 12, Rule XXII, Book V]
i.
Valid Strikes as
distinguished from Illegal
Strikes
VALID v. ILLEGAL STRIKE
a. Legal strike – one called for a valid
purpose and conducted through means
allowed by law.
b. Illegal strike – one staged for a purpose
not recognized by law, or if for a valid
purpose, conducted through means not
sanctioned by law.
LABOR LAW
EFFECT OF ILLEGALITY / LIABILITY OF
PARTICIPATING MEMBERS/OFFICERS OF
THE UNION
a. Ordinary Striking Worker – cannot be
terminated for mere participation in an
illegal strike; proof must be adduced
showing that he or she committed illegal
acts during the strike.
b. Participating Union Officer – may be
terminated, not only when he actually
commits an illegal act during a strike, but
also if he knowingly participates in an
illegal strike [Phimco Industries, Inc. v.
PILA, G.R. No. 170830 (2010)]
Prohibited Grounds for Strike
1. Labor standards cases such as wage
orders
2. Issues involving wage distortion caused by
legislated wage orders
3. Inter or intra union disputes
4. Execution and enforcement of final orders
or awards of cases pending at the DOLE
Regional Offices, BLR, NLRC, VA, CA and
SC and related offices
5. Violations of the CBA which are not gross
in character (not ULP) [BPI Employees
Union-Davao FUBU v. BPI, G.R. No.
174912 (2013)]
Gross in character shall mean flagrant
and/or malicious refusal to comply with the
economic provisions of such agreement.
[Art. 274]
PROHIBITED ACTIVITIES IN STRIKE
1. By anyone. No person shall obstruct,
impede, or interfere with, by force,
violence, coercion, threats, or intimidation,
any peaceful picketing by employees [Art.
279(b)];
a. Blocking the free ingress to/ egress
from work premises for lawful purposes
b. Obstruction of public thoroughfares
c. Threatening, coercing and intimidating
non-striking
employees,
officers,
suppliers and customers
d. Resistance
and
defiance
of
assumption of jurisdiction by the Labor
Secretary or an injunction
e. Acts of violence [Association of
Independent Unions in the Philippines
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(AIUP), et. al. v. NLRC, G.R. No.
120505 (1999)]
The violence must be pervasive and
widespread, consistently and deliberately
resorted to as a matter of policy [Shell Oil
Workers v. Shell Company of the Phil., 39
SCRA 276 (1971)] (if violence was resorted
to by both sides, such violence cannot be a
ground for declaring the strike as illegal)
[Malayang Samahan ng Manggagawa sa
M. Greenfield v. Ramos, 357 SCRA 77
(2000)]
2. By employer. No employer shall use or
employ any strike-breaker, nor shall any
person be employed as a strike-breaker.
[Art. 279(c)]
3. By public official or police force. No
public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall
bring in, introduce or escort in any manner,
any individual who seeks to replace strikers
in entering or leaving the premises of a
strike area, or work in place of the strikers.
[Art. 279(d)]
CATEGORIES OF ILLEGAL STRIKE
1. Prohibited by Law (e.g. Strike By
Government Employees)
Government employees
While the Constitution guarantees the right of
government employees to organize, they are
not allowed to strike.
2. Improper Grounds (e.g. Intra or Inter
Union Dispute, Wage Distortion)
A legal strike must be based on a bargaining
deadlock and/or a ULP act only.
Intra-union and inter-union disputes are not
proper grounds to strike.
Note: Good faith strike
Good faith may be used as a defense if the
strike is held on the basis of an act of ULP by
LABOR LAW
the employer even if it turned out that there was
no act of ULP. However, the mandatory
procedural requirements cannot be dispensed
with (notice of strike, cooling-off period, strike
vote, strike vote report). [Grand Boulevard
Hotel v. GLOWHRAIN, G.R. No. 153664
(2003)]
Good faith strike requires rational basis
A mere claim of good faith would not justify the
holding of a strike under the aforesaid
exception as, in addition thereto, the
circumstances must have warranted such
belief. It is, therefore, not enough that the union
believed that the employer committed acts of
ULP when the circumstances clearly negate
even a prima facie showing to sustain such
belief. [Interwood Employees Assoc. v. Int’l
Hardwood, G.R. No. L-7409 (1956)]
3. Noncompliance
Requirements
with
Procedural
See: Procedural requirements of a valid strike
previously discussed
A strike which does not strictly comply with the
procedural requirements set by law and the
rules is an unlawful/illegal strike. [Sta. Rosa
Coca-Cola Plant Employees Union v. CocaCola Bottlers Philippines, Inc., G.R. Nos.
164302-03 (2007)]
Note: Good faith strike must still comply
with procedural requirements.
Even if the union acted in good faith in the
belief that the company was committing an
unfair labor practice, if no notice of strike and a
strike vote were conducted, the said strike is
illegal.
[Grand
Boulevard
Hotel
v.
GLOWHRAIN, G.R. No. 153664 (2003)]
General Rule: A strike based on a nonstrikeable ground is an illegal strike; a strike
grounded on ULP is illegal if no such acts
actually exist.
Exception: Even if no ULP acts are committed
by the employer, if the employees believe in
good faith that ULP acts exist so as to
constitute a valid ground to strike, then the
strike held pursuant to such belief may be legal.
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[NUWHRAIN v. NLRC, G.R. No. 125561
(1998)]
4. Unlawful Means and Methods
Purpose and means test
There must be concurrence between the
validity of the purpose of the strike and the
means of conducting it.
To be valid, a strike must be pursued within
legal bounds. The right to strike as a means
for the attainment of social justice is never
meant to oppress or destroy the employer.
The law provides limits for its exercise. Among
such limits are the prohibited activities under
Art. [279], particularly paragraph (e), which
states that no person engaged in picketing
shall:
1. commit any act of violence, coercion, or
intimidation or
2. obstruct the free ingress to or egress from
the employer's premises for lawful
purposes or
3. obstruct public thoroughfares.
A legal strike may turn into an illegal strike
Even if the strike is valid because its objective
or purpose is lawful, the strike may still be
declared invalid where the means employed
are illegal. [Phil. Diamond Hotel and Resort,
Inc. v. Manila Diamond Hotel Employees
Union, G.R. No. 158075 (2006)]
Examples of unlawful means and methods
1. Acts of violence and terrorism
2. Destruction of property
LABOR LAW
and deliberately resorted to as a matter of
policy. It could be reasonably concluded
then that even if justified as to ends, it
becomes illegal because of the means
employed.
4. This is not by any means to condone the
utilization of force by labor to attain its
objectives. It is only to show awareness
that in labor conflicts, the tension that fills
the air as well as the feeling of frustration
and bitterness could break out in sporadic
acts of violence.
It would be unjustified, considering all the facts
disclosed, to stamp the strike with illegality. It is
enough that individual liability be incurred by
those guilty of such acts of violence that call for
loss of employee status. [Shell Oil Workers
Union v. Shell Co. of the Phils, G.R. No. L28607 (1971)]
It bears stressing that the requirements of
strike notice and strike-vote report are
mandatory,
meaning,
non-compliance
therewith makes the strike illegal. The evident
intention of the law in requiring these is to
reasonably regulate the right to strike.
[Stamford Mark Corp. v. Julian, G.R. No.
145496 (2004)]
5. Violation of Injunction Order
An automatic injunction under Art. 278(g) or a
valid injunction order under the exceptions to
Art. 279 must be complied with. Otherwise, the
strike becomes illegal.
Guidelines and balancing of Interest
1. A strike, otherwise valid, if violent in
character, may be placed beyond the pale.
2. Care is to be taken especially where an
unfair labor practice is involved, to avoid
stamping it with illegality just because it is
tainted by such acts. To avoid rendering
illusory the recognition of the right to strike,
responsibility in such a case should be
individual and not collective.
3. A different conclusion would be called for if
the existence of force while the strike lasts
is pervasive and widespread, consistently
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6. Those Contrary
Agreement
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to
an
Existing
(e.g. No strike/lockout provisions in the CBA)
[Citing Ludwig Teller in Toyota Motors v.
NLRC, G.R. Nos. 158786 & 158787 (2007)]
No Strike/Lockout Provisions in the CBA
A “no strike, no lock-out” is a valid provision in
the CBA. However, it only applies to economic
provisions. It cannot prevent a strike which is
grounded on unfair labor practice. [Malayang
Samahan ng mga Manggagawa sa Greenfield
v. Ramos, G.R. No. 113907 (2000)]
7. The Strikers do not belong to a
Legitimate Labor Organization [Magdala
Multipurpose & Livelihood Coop. v.
Kilusang Manggagawa Ng LGS, G.R. Nos.
191138-39 (2011)]
Liabilities of Parties
Any union officer who knowingly participates in
an illegal strike and any worker or union officer
who knowingly participates in the commission
of illegal acts during a strike may be declared
to have lost his employment status. [Art.
279(a)]
Note: Mere participation in an illegal strike by a
union officer is sufficient ground to terminate
his employment. In case of a lawful strike, the
union officer must commit illegal acts during a
strike for him to be terminated. [Art. 279(a)]
Procedural due process is still required for
dismissing union officers/ordinary workers.
Where an opportunity to be heard either
through oral arguments or through pleadings is
accorded, there is no denial of procedural due
process. [Equitable PCI Banking Corp. v.
RCBC Capital Corp, 574 SCRA 858 (2004)]
Liability of Ordinary Workers
General rule: Participation by a worker in a
lawful strike is not ground for termination of his
employment. [Art. 279(a)]
Exception: When the worker participated in
illegal acts during the strike; needs clear,
substantial and convincing proof available
under the circumstances to justify the penalty
LABOR LAW
of dismissal [Toyota Motors Philippines
Workers Association v. NLRC, 537 SCRA 171
(2007)].
Note: The mere fact that the criminal
complaints against terminated Union members
were subsequently dismissed does not
extinguish their liability under the Labor Code
[C. Alcantara & Sons, Inc. v. CA, G.R. No.
155109 (2011)].
Liability of Employer
Any worker whose employment has been
terminated as a consequence of any unlawful
lockout shall be entitled to reinstatement with
full backwages. [Art. 279(a)]
WAIVER OF ILLEGALITY OF
CONDONATION DOCTRINE
STRIKE/
When defense of illegality of strike is
deemed waived
An employer can be deemed to have waived
the defense that a strike is illegal. In one case,
the Court held that: “Admitting for the sake of
argument that the strike was illegal for being
premature, this defense was waived by the
[Company], when it voluntarily agreed to
reinstate the radio operators.” [Bisaya Land
Transportation Co., Inc. v. CIR, G.R. No. L10114 (1957)]
When defense of illegality of strike is not
deemed waived
The ruling cited in the Bisaya case that the
employer waives his defense of illegality of the
strike upon reinstatement of strikers is
applicable only to strikers who signified their
intention to return to work and were accepted
back. […]
Condonation shall apply only to strikers who
signified their intention to return, and did return
to work, since these strikers took the initiative
in normalizing relations with their employer and
thus helped promote industrial peace.
However, as regards the strikers who
decided to pursue with the case, […] the
employer could not be deemed to have
condoned their strike, because they had not
shown any willingness to normalize relations
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with it. [Philippine Inter-Fashion, Inc. v. NLRC,
G.R. No. L-59847 (1982)]
However, the mere act of entering into a
compromise agreement cannot be deemed to
be a waiver of the illegality of the strike, unless
such a waiver is clearly shown in the
agreement. [Filcon Manufacturing Corp v.
Lakas Manggagawa sa Filcon – Lakas
Manggagawa Labor Center, G.R. No. 150166
(2004)]
b. Picket
The right of legitimate labor organizations to
strike and picket and of employers to lockout,
consistent with the national interest, shall
continue to be recognized and respected. [Art.
278(b)]
Picketing involves merely the marching to and
fro at the premises of the employer, usually
accompanied by the display of placards and
other signs making known the facts involved in
a labor dispute.
As applied to a labor dispute, to picket means
the stationing of one or more persons to
observe and attempt to observe. The purpose
of pickets is said to be a means of peaceable
persuasion. [Sta. Rosa Coca-Cola Plant
Employees Union v. Coca-Cola Bottlers
Philippines, Inc., G.R. Nos. 164302-03 (2007)]
Peaceful Picketing is the right of workers
during strikes consisting of marching to and fro
before an establishment involved in a labor
dispute generally accompanied by the carrying
and display of signs, placards and banners
intended to inform the public about the dispute.
[Guidelines Governing Labor Relations,
October 19, 1987; NCMB Manual, Sec. 1]
Purpose
The purpose of the picket line is to persuade
employers peacefully by publicizing the labor
dispute to inform the public of what is
happening and thus cause other workers not to
work in the establishment and for customers
not to do business there [Phimco Industries,
Inc. v. Phimco Industries Labor Association
(PILA), et al., 628 SCRA 119 (2010)].
LABOR LAW
PROHIBITED ACTIVITIES IN PICKETING
1. By any person. No person shall obstruct,
impede, or interfere with, by force,
violence, coercion, threats or intimidation,
any peaceful picketing by employees
during any labor controversy or in the
exercise of the right to self-organization or
collective bargaining, or shall aid or abet
such obstruction or interference. [Art.
279(b)]
2. By police force. The police force shall
keep out of the picket lines unless actual
violence or other criminal acts occur
therein: Provided, That nothing herein shall
be interpreted to prevent any public officer
from taking any measure necessary to
maintain peace and order, protect life and
property, and/or enforce the law and legal
orders. [Art. 279(d)]
3. By person engaged in picketing. No
person engaged in picketing shall commit
any act of violence, coercion or intimidation
or obstruct the free ingress to or egress
from the employer’s premises for lawful
purposes, or obstruct public thoroughfares.
[Art. 279(e)]
Picketing as Part of Freedom of
Speech/Expression
General rule: picketing enjoys constitutional
protection as part of freedom of speech and/or
expression.
Exceptions/limitations:
a. When picketing is coercive rather than
persuasive [Security Bank Employees
Union v. Security Bank, G.R. No. L-28536
(1968)]
b. When picketing is achieved through illegal
means [Mortera v. CIR, G.R. No. L-1340
(1947)]
c. Courts may confine the communication/
demonstration to the parties to the labor
dispute [PCIB v. Philnabank Employees
Association, G.R. No. L-29630 (1981)]
d. Innocent bystander rule. Courts may
insulate establishments or persons with no
industrial connection or having interest
totally foreign to the context of the dispute
[PCIB
v.
Philnabank
Employees
Association, G.R. No. L-29630 (1981)]
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Picketing and Libel
Libel laws are not applied strictly considering
that there is emotional tension in the picket
lines and expected discourteous and impolite
exchanges between the employees and the
employer. [PCIB v. Philnabank Employees
Association, G.R. No. L-29630 (1981)]
Peaceful picketing is legal even in the
absence
of
employer-employee
relationship
Picketing, peacefully carried out, is not illegal
even in the absence of employer-employee
relationship, for peaceful picketing is a part of
the freedom of speech guaranteed by the
Constitution. [De Leon v. National Labor Union,
G.R. No. L-7586 (1957)]
LABOR LAW
2. Filing and service of notice of lockout to the
NCMB
3. Observance of cooling-off period
4. 15 days for ULP
5. 30 days for bargaining deadlock
6. Notice of lockout vote meeting within 24
hours before the intended vote [Sec. 10,
Rule XXII, Book V, IRR]
7. Lockout vote
8. Report of lockout vote
9. Observance of the waiting period (7-day
strike ban)
(1) Effort to Bargain
No employer shall declare a […] lockout
without first having bargained collectively in
accordance with Title VII of this Book. [Art.
279(a)]
(2) Filing and Service of Notice of Lockout
Filed by: The duly certified or recognized
bargaining agent may file notice of lockout
2. By Employer
a. Lockout
Lockout is the temporary refusal of an
employer to furnish work as a result of an
industrial or labor dispute. [Art. 219 (p)]
Illegal strike and illegal lockout/In Pari
Delicto Doctrine
When the employer engaged in illegal lockout
and the employee engaged in illegal strike,
both parties are in pari delicto, and such
situation warrants the restoration of the status
quo ante and bringing the parties back to the
respective positions before the illegal strike
and illegal lockout. [Philippines Inter-Fashion
Inc. v. NLRC, G.R. No. L-59847 (1982)]
Similar to a strike, the proper grounds for a
lockout are
1. Bargaining deadlock
2. ULP by labor organizations
Art. 278 (b). Strikes, Picketing and
Lockouts. – [N]o employer may declare a
lockout on grounds involving inter-union and
intra-union disputes.
Procedural Requirements
1. Effort to bargain (in case of bargaining
deadlock)
Filed with: With the Department
When: At least 30 days before the intended
date of the lockout [Art. 278(c)]
Note: The notice must be served to the
employees through the SEBA or the legitimate
labor organization (if no SEBA).
Contents of notice
1. Names and addresses of the employer and
the union involved
2. Nature of the industry to which the
employer belongs
3. Number of union members and of workers
in the bargaining unit
4. Such other relevant data as may facilitate
the settlement of the dispute.
Additional Requirements [Sec. 8, Rule XXII,
Book V, IRR]
In cases of bargaining deadlocks
1. Statement of unresolved issues in the
bargaining negotiations
2. Written proposals of the union
3. Counter-proposals of the employer
4. Proof of a request for conference to settle
the differences.
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In cases of ULP
1. Statement of acts complained of
2. Efforts taken to resolve the dispute
amicably.
Action on notice
1. Upon receipt of a valid notice of strike or
lockout, the NCMB, through its ConciliatorMediators, shall call the parties to a
conference the soonest possible time in
order to actively assist them to explore all
possibilities for amicable settlement.
2. The Conciliator-Mediator may suggest/
offer proposals as an alternative avenue for
the resolution of their disagreement/conflict
which may not necessarily bind the parties.
3. If conciliation/mediation fails, the parties
shall be encouraged to submit their dispute
for voluntary arbitration. [Sec. 9, Rule XXII,
Book V, IRR]
(3) Observance of Cooling-off Periods
Lockout cooling-off periods:
1. Based on bargaining deadlock – 30 days
2. Based on ULP – 15 days [Art. 278(c)]
(4) Notice of Lockout Vote Meeting
Sec. 10, Rule XXII, Book V. Strick or
Lockout Vote – In every case, the union or
the employer shall furnish the regional
branch of the Board the notice of meetings
referred to in the preceding paragraph at
least twenty-four (24) hours before such
meetings [...]
(5) Lockout Vote
Art. 278 (f). Strikes, Picketing and
Lockouts. – A decision to declare a lockout
must be approved by a majority of the board
of directors of the corporation or association
or of the partners in a partnership, obtained
by secret ballot in a meeting called for that
purpose. The decision shall be valid for the
duration of the dispute based on
substantially the same grounds considered
when the strike or lockout vote was taken.
(6) Report of Lockout Vote
LABOR LAW
Art. 278 (f). Strikes, Picketing and
Lockouts. – In every case, the union or the
employer shall furnish the Ministry the
results of the voting at least seven days
before the intended strike or lockout, subject
to the cooling-off period herein provided.
(7) Observance of Waiting Period (7 Days)
See notes under Strike.
Effect of Illegal Lockout
Par. 3, Art. 279 (a). Prohibited Activities. –
Any worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages.
3. Assumption of Jurisdiction by
Secretary of Labor and
Employment
When May the SOLE Assume Jurisdiction
When in his opinion, there exist a labor dispute
causing or likely to cause a strike or lockout in
an industry indispensable to the national
interest, the SOLE may assume jurisdiction
over the dispute and decide it or certify the
same to the Commission for compulsory
arbitration. [Art. 278(g)]
Requisites for Assumption of Jurisdiction
1. Both parties have requested the SOLE to
assume jurisdiction; or
2. After a conference called by the Office of
the SOLE on the propriety of its issuance,
motu proprio or upon a request or petition
by either parties to the labor dispute [Book
V, IRR Rule XXII, sec. 15, IRR as amended
by D.O. No. 40-H-13 s 2013]
Immediately Executory
The assumption and certification orders are
executory in character and must be strictly
complied with by the parties. [Allied Banking v.
NLRC, G.R. No. 116128 (1996)]
Effect of defiance
certification orders
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of
assumption
or
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No strike or lockout shall be declared after
assumption of jurisdiction by the President or
the Minister or after certification or submission
of the dispute to compulsory or voluntary
arbitration or during the pendency of cases
involving the same grounds for the strike or
lockout. [Art. 279(a), par. 2]
A strike undertaken despite the issuance by the
Secretary of Labor of an assumption or
certification order becomes a prohibited activity
and thus, illegal, pursuant to Art. 279(a) of the
Labor Code. [Allied Banking v. NLRC, G.R. No.
116128 (1996)]
a. Industry Indispensable to the
National Interest
1. Hospital sector
2. Electric power industry
3. Water supply service, to exclude small
water supply services, such as bottling and
refilling stations
4. Air traffic control
5. Other industries as may be recommended
by the National Tripartite Industrial Peace
Council (TIPC) [Sec. 16, Rule XXII, Book
V, IRR as amended by D.O. No. 40-H-13]
Who determines industries indispensable
to the national interest [Art. 278(g)]
1. Secretary of Labor and Employment
2. President
Strikes and lockouts in hospitals, clinics
and similar medical institutions
It shall be the duty of the striking union or
locking-out employer to provide and maintain
an effective skeletal workforce of medical and
other health personnel, whose movement and
services
shall
be
unhampered
and
unrestricted, as are necessary to insure the
proper and adequate protection of the life and
health of its patients, most especially
emergency cases, for the duration of the strike
or lockout.
In such cases, therefore, the Secretary of
Labor and Employment may immediately
assume, within twenty-four (24) hours from
knowledge of the occurrence of such a strike or
lockout, jurisdiction over the same or certify it
LABOR LAW
to the Commission for compulsory arbitration.
[Art. 278, par. 2]
Rationale: The highest respect is accorded to
the right of patients to life and health.
b. Effects of Assumption of
Jurisdiction
Automatic Injunction of Intended of
Impending Strike or Lockout
The assumption of jurisdiction by the SOLE
automatically enjoins intended or impending
strike or lockout. [Art. 278 (g)]
Return-to-work and readmission if strike or
lockout has already taken place
If strike or lockout has already taken place at
the time of assumption or certification,
1. All striking or locked out employees shall
immediately return-to-work; and
2. The employer shall immediately resume
operations and readmit all workers under
the same terms and conditions prevailing
before the strike or lockout. [Art. 278 (g)]
The SOLE may also determine the retroactivity
of arbitral awards pursuant to power to assume
jurisdiction as part of his/her plenary powers to
determine the effectivity thereof in absence of
specific provision of law [LMG Chemicals Corp.
v. Sec. of Labor and Employment, 356 SCRA
577 (2001)]
Nature of return-to-work order
The return-to-work order not so much confers
a right as it imposes a duty; and while as a right
it may be waived, it must be discharged as a
duty even against the worker's and/or
employers’ will.
The worker must return to his job together with
his co-workers so the operations of the
company can be resumed and it can continue
serving the public and promoting its interest.
That is the real reason such return can be
compelled. So imperative is the order in fact
that it is not even considered violative of the
right against involuntary servitude. [Kaisahan
ng Mga Manggagawa sa Kahoy v. Gotamco
Sawmills, G.R. No. L-1573 (1948)]
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Note: It must be strictly complied with even
during the pendency of any petition questioning
its validity. [Manila Hotel Employees
Association and its Members v. Manila Hotel
Corp., 517 SCRA 349 (2007)]
The purpose of SOLE’s extraordinary power is
aimed at arriving at a peaceful and speedy
solution to labor disputes without jeopardizing
national interest [Union of Filipro EmployeesDrug v. Nestle, 499 SCRA 521 (2006)]
VI.
MANAGEMENT
PREROGATIVE
Basis
The State recognizes the indispensable role of
the private sector, encourages private
enterprise, and provides incentives to needed
investments. [Sec. 20, Art. II, 1987
Constitution]
The State shall regulate the relations between
workers and employers, recognizing the right
of labor to its just share in the fruits of
production and the right of enterprises to
reasonable returns to investments, and to
expansion and growth. [Sec. 3, pars. 4, Art.
XIII, 1987 Constitution]
The law in protecting the rights of the
employees authorizes neither oppression nor
self-destruction of the employer. It should be
made clear that when the law tilts the scale of
justice in favor of labor, it is but a recognition of
the inherent economic inequality between labor
and management. Never should the scale be
so tilted if the result is an injustice to the
employer. [Panuncillo v. CAP, G.R. No.
161305 (2007)]
LABOR LAW
Definition
“Management Prerogative” is the right of an
employer to regulate all aspects of
employment.
Courts often decline to interfere in legitimate
business decisions of employers. In fact, labor
laws discourage interference in employers’
judgment concerning the conduct of their
business.
Scope
Management prerogative gives employers the
freedom to regulate, according to their
discretion and best judgment, all aspects of
employment, including:
a. Work assignment
b. Working methods,
c. Processes to be followed,
d. Working regulations,
e. Transfer of employees,
f. Work supervision, lay-off of workers and
the discipline, dismissal and recall of
workers.
Limits to Management Prerogative
1. Good faith - So long as a company’s
management prerogatives are exercised in
good faith for the advancement of the
employer’s interest and not for the purpose
of defeating or circumventing the rights of
the employees under special laws or under
valid agreements, this Court will uphold
them. [Ernesto G. Ymbong v. ABS-CBN
Broadcasting Corp.]
It is incumbent upon the company to show
that decisions made under management
prerogative are in good faith and not
intended to circumvent employees’ rights.
[San Miguel Brewery Sales Force Union
(PTGWO) v. Ople, G.R. No. L-53515
(1989)]
The exercise of management prerogative
is valid, provided it is not performed in a
malicious, harsh, oppressive, vindictive or
wanton manner or out of malice or spite.
[Magdadaro v. PNB, G.R. No. 166198
(2009)]
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LABOR LAW
2. Without grave abuse of discretion - The
managerial
prerogative
to
transfer
personnel must be exercised without grave
abuse of discretion, bearing in mind the
basic elements of justice and fair play.
Having the right should not be confused
with the manner in which the right is
exercised. [Tinio v. CA, G.R. No. 171764
(2007)]
5. Equity and/or Substantial Justice – The
Court should still ensure that the employer
exercises the prerogative to discipline
humanely and considerately, and that the
sanction imposed is commensurate to the
offense involved and to the degree of the
infraction. [Dongon v. Rapid Movers and
Forwarders Co., Inc., G.R. No. 163431
(2013)]
3. Law – The privilege of management
prerogative is not absolute, but subject to
limitations imposed by law.
A. DISCIPLINE
Management prerogative is limited by Sec.
236(g), which gives the Secretary the
power to assume jurisdiction and resolve
labor
disputes
involving
industries
indispensable to national interest. The
company’s management prerogatives are
not being unjustly curtailed but duly
tempered by the limitations set by law,
taking into account its special character
and the particular circumstances in the
case at bench. [Metrolab Industries, Inc. v.
Roldan-Confesor, G.R. No. 108855 (2013);
University of Immaculate Concepcion Inc.
v. Sec. of Labor, G.R. No. 151379 (2005)]
Although management prerogative refers
to the right to regulate all aspects of
employment, it cannot be understood to
include the right to temporarily withhold
salary/wages without the consent of the
employee.
To
sanction
such
an
interpretation would be contrary to Art. 116
of the Labor Code. [SHS Perforated
Materials, Inc. v. Diaz, G.R. No. 185814
(2010)]
4. Collective Bargaining – The CBA
provisions agreed upon by the Company
and the Union delimit the free exercise of
management prerogative. 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. [Goya Inc. v.
Goya, Inc., Employees Union-FFW, G.R.
No. 170054 (2013)]
Management has the prerogative to discipline
its employees and to impose appropriate
penalties on erring workers pursuant to
company rules and regulations. [Jose P.
Artificio v. NLRC, G.R. No. 172988 (2010)]
Among
the
employer’s
management
prerogatives is the right to prescribe
reasonable rules and regulations necessary or
proper for the conduct of its business or
concern, to provide certain disciplinary
measures to implement said rules and to
assure that the same would be complied with.
[St. Luke’s Medical Center, Inc. v. Sanchez,
G.R. 212054 (2015)]
The employer’s right to conduct the affairs of
his business, according to its own discretion
and judgment, includes the prerogative to instill
discipline in its employees and to impose
penalties, including dismissal, upon erring
employees. [Consolidated Food Corporation v.
NRLC, G.R. No. 118647 (1999))]
Right to dismiss or otherwise impose
disciplinary sanctions upon an employee for
just and valid cause, pertains in the first place
to the employer, as well as the authority to
determine the existence of said cause in
accordance with the norms of due process.
[Makati Haberdashery, Inc. v. NLRC, G.R. Nos.
83380-81 (1989)]
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Corollary Duty of Employees
The employee has the corollary duty to obey all
reasonable rules, orders, and instructions of
the employer; and willful or intentional
disobedience thereto, as a general rule,
justifies termination of the contract of service
and the dismissal of the employee. [St. Luke’s
Medical Center, Inc. v. Sanchez, G.R. 212054
(2015)]
Criteria
The policies, rules and regulations on workrelated activities of the employees must
always be fair and reasonable and the
corresponding penalties, when prescribed,
commensurate to the offense involved and
to the degree of the infraction. [Consolidated
Food Corporation v. NRLC, G.R. No. 118647
(1999); St. Michael’s Institute v. Santos, G.R.
No. 145280 (2001)]
Although the right of employers to shape their
own work force is recognized, this
management prerogative must not curtail the
basic right of employees to security of
tenure. [Alert Security & Investigation Agency,
Inc. v. Saidali Pasawilan, et. al., G.R. No.
182397 (2011)]
Disciplinary action against an erring employee
is a management prerogative which, generally,
is not subject to judicial interference. However,
this policy can be justified only if the disciplinary
action is dictated by legitimate business
reasons and is not oppressive. [Areno v.
Skycable, G.R. No 180302 (2010)]
B. TRANSFER OF
EMPLOYEES
An employee’s right to security of tenure does
not give him such a vested right in his position,
as would deprive the company of its
prerogative to change his assignment or
transfer him where he will be most useful.
The employer has the right to transfer or assign
employees from one area of operation to
another, or one office to another or in pursuit of
its legitimate business interest.
LABOR LAW
Management has the prerogative on whether
or not to renew the contract of a fixed-term
employee. [Fonterra Brands Phils., Inc. v.
Largado, G.R. No. 205300 (2015)]
Criteria
Provided there is no demotion in rank or
diminution of salary, benefits and other
privileges and not motivated by discrimination
or made in bad faith, or effected as a form of
punishment or demotion without sufficient
cause. [Westin Phil. Plaza Hotel v. NLRC, G.R.
No. 121621 (1999)]
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee,
and it does not involve a demotion in rank or
diminution of salaries, benefits, and other
privileges, the employee may not complain that
it amounts to a constructive dismissal. [Bisig ng
Manggagawa sa TRYCO v. NLRC, G.R. No.
151309 (2008)]
It is management prerogative for employers to
transfer employees on just and valid grounds
such as genuine business necessity. [William
Barroga v. Data Center College of the
Philippines, G.R. No. 174158 (2011)]
Re-assignments
Re-assignments made by management
pending investigation of irregularities allegedly
committed by an employee fall within the ambit
of management prerogative. The purpose of
reassignments is no different from that of
preventive suspension which management
could validly impose as a disciplinary measure
for the protection of the company's property,
pending investigation of any alleged
malfeasance or misfeasance committed by the
employee. [Ruiz v. Wendel Osaka Realty
Corp., G.R. No. 189082 (2012)]
Employer Bears the Burden of Proof
In cases of a transfer of an employee, the rule
is settled that the employer is charged with the
burden of proving that its conduct and action
are for valid and legitimate grounds such as
genuine business necessity and that the
transfer is not unreasonable, inconvenient or
prejudicial to the employee. If the employer
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cannot overcome this burden of proof, the
employee’s transfer shall be tantamount to
unlawful constructive dismissal. [Jonathan
Morales v. Harbor Centre Port Terminal Inc.,
G.R. No. 174208 (2012)]
C. PRODUCTIVITY
STANDARDS
The employer has the right to demote and
transfer an employee who has failed to observe
proper diligence in his work and incurred
habitual tardiness and absences and indolence
in his assigned work. [Petrophil Corporation v.
NLRC, G.R. No. L-64048 (1986)]
In the consolidated cases of Leonardo v. NLRC
[G.R. No. 125303 (2000)] and Fuerte v. Aquino
[G.R. No. 126937 (2000)], the employer
claimed that the employee was demoted
pursuant to a company policy intended to foster
competition among its employees. Under this
scheme, its employees are required to comply
with a monthly sales quota. Should a
supervisor such as the employee fail to meet
his quota for several consecutive months, he
will be demoted, whereupon his supervisor’s
allowance will be withdrawn and be given to the
individual who takes his place. When the
employee concerned succeeds in meeting the
quota again, he is re-appointed supervisor and
his allowance is restored.
The Supreme Court held that this arrangement
is an allowable exercise of company rights
since an employer is entitled to impose
productivity standards for its workers. In fact,
non-compliance may be visited with a penalty
even more severe than demotion.
LABOR LAW
D. BONUS
A bonus is "a gratuity or act of liberality of the
giver which the recipient has no right to
demand as a matter of right" [Philippine
National Construction Corp. v. National Labor
Relations Commission, 345 Phil. 324, 331
(1997)]. It is something given in addition to
what is ordinarily received by or strictly due the
recipient.
The granting of a bonus is basically a
management prerogative which cannot be
forced upon the employer "who may not be
obliged to assume the onerous burden of
granting bonuses or other benefits aside from
the employee's basic salaries or wages" xxx.
[Kamaya Point Hotel v. National Labor
Relations Commission, Federation of Free
Workers and Nemia Quiambao, G.R. No.
75289, (1989); Traders Royal Bank v. NLRC,
G.R. No. 120592 (1990)]
The matter of giving a bonus over and above
the worker’s lawful salaries and allowances is
entirely dependent on the financial capability of
the employer to give it. [Kimberly-Clark
Philippines, Inc. v. Dimayuga, G.R. No. 177705
(2009)]
E. CHANGE OF WORKING
HOURS
Management
retains
the
prerogative,
whenever exigencies of the service so require,
to change the working hours of its employees.
So long as such prerogative is exercised in
good faith for the advancement of the
employer’s interest and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or under valid
agreements, this Court will uphold such
exercise. [Sime Darby Pilipinas Inc. v. NLRC,
G.R. No. 119205 (1998)]
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F. BONA FIDE OCCUPATIONAL
QUALIFICATIONS
General Rule: Employment in particular jobs
may not be limited to persons of a particular
sex, religion, or national origin unless the
employer can show that sex, religion, or
national origin is an actual qualification for
performing the job.
Exception: The exception is called a bona fide
occupational qualification (BFOQ).
In the United States, there are a few federal
and many state job discrimination laws that
contain an exception allowing an employer to
engage in an otherwise unlawful form of
prohibited discrimination when the action is
based on a BFOQ necessary to the normal
operation of a business or enterprise. BFOQ is
valid "provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance." [Yrasuegui v. PAL, G.R. No.
168081 (2008)]
BFOQ in Philippine Jurisdiction
The concept of a bona fide occupational
qualification is not foreign in our jurisdiction.
We employ the standard of reasonableness of
the company policy which is parallel to the
bona
fide
occupational
qualification
requirement.
In Duncan Association of Detailman-PTGWO
and Pedro Tecson v. Glaxo Wellcome
Philippines, Inc., we passed on the validity of
the policy of a pharmaceutical company
prohibiting its employees from marrying
employees of any competitor company. We
held that Glaxo has a right to guard its trade
secrets, manufacturing formulas, marketing
strategies and other confidential programs and
information from competitors. We considered
the prohibition against personal or marital
relationships with employees of competitor
companies
upon
Glaxo’s
employees
reasonable under the circumstances because
relationships of that nature might compromise
the interests of Glaxo. In laying down the
assailed company policy, we recognized that
Glaxo only aims to protect its interests against
LABOR LAW
the possibility that a competitor company will
gain access to its secrets and procedures.
[Star Paper Corp. v. Simbol, G.R. No. 164774
(2006)]
A requirement that a woman employee must
remain unmarried could be justified as a "bona
fide occupational qualification," or BFOQ,
where the particular requirements of the job
would justify the same, but not on the ground
of a general principle, such as the desirability
of spreading work in the workplace. A
requirement of that nature would be valid
provided it reflects an inherent quality
reasonably necessary for satisfactory job
performance. [Phil. Telegraph and Telephone
Company v. NLRC, G.R. No. 118978 (1997)]
G. POST-EMPLOYMENT
RESTRICTIONS
In cases where an employee assails a contract
containing a provision prohibiting him or her
from accepting competitive employment as
against public policy, the employer has to
adduce evidence to prove that the restriction is
reasonable and not greater than necessary to
protect the employer’s legitimate business
interests. The restraint may not be unduly
harsh or oppressive in curtailing the
employee’s legitimate efforts to earn a
livelihood, and must be reasonable in light of
sound public policy. [Rivera v. Solidbank, G.R.
No. 163269 (2006)]
H. MARRIAGE BETWEEN EMPLOYEES
OF COMPETITOR-EMPLOYERS
See F. Bonafide Occupational Qualifications,
above
VII. SOCIAL LEGISLATION
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[Republic Act 8282, as amended by RA 11199]
1. Coverage and Exclusions
a. Compulsory
(1) Employees not over 60 years old and
their employers, including domestic
helpers [Sec. 9(1), RA 11199]
Provided, That any benefit already earned by
the employees under private benefit plans
existing at the time of the approval of this Act
shall not be discontinued, reduced or otherwise
impaired.
Private plans which are existing and in force at
the time of compulsory coverage shall be
integrated with the plan of the SSS, in such a
way where the employer’s contribution to his
private plan is more than required of him in
this Act:
a. He shall pay to the SSS only the
contribution required of him; and
b. He shall continue his contribution to such
private plan less his contribution to the SSS
c. So that the employer’s total contribution to
his benefit plan and to the SSS shall be the
same as his contribution to his private
benefit plan before the compulsory
coverage. [Sec. 9(1), RA 11199]
Domestic workers or “kasambahays” as
defined under RA10361 or the Batas
Kasambahay, who are receiving a monthly
income lower than minimum salary credit
prescribed under this Act, shall pay
contributions based on their actual monthly
salary. [Sec. 4(a)(9), RA 11199]
LABOR LAW
(2) Self-employed persons as may be
determined by the Commission,
including but not limited to:
a. All self-employed professionals
b. Partners and single proprietors of
businesses
c. Actors and actresses, directors,
scriptwriters and news correspondents
who do not fall within the definition of
the term “employee” under Sec. 8 (d) of
this Act;
Employee [Sec 8(d), RA 11199] - Any
person who performs services for an
employer in which either or both mental
or physical efforts are used and who
receives compensation for such
services, where there is an employeremployee relationship: Provided, That
a self-employed person shall be an
employer and employee at the same
time.
d. Professional atheism coaches, trainers
and jockeys
e. Individual farmers and fishermen [Sec.
9-A, RA11199]
(3) All sea-based and land-based Overseas
Filipino Workers (OFWs) not over 60
years of age [Sec. 9-B, RA 11199]
b. Voluntary
1. Spouses who devote full time to managing
household and family affairs, unless they
are also engaged in another vocation or
employment (in which case, coverage will
be mandatory). [Sec. 9(b), RA 11199]
2. Employees previously under compulsory
coverage)
already
separated
from
employment or those self-employed (under
compulsory coverage) with no realized
income for a given month, who chose to
continue with contributions to maintain the
right to full benefit. [Sec. 11, RA 11199]
3. Self-employed members realizing no
income in any given month, who choose to
continue paying contributions under the
same rules and regulations applicable to a
separated employee member. [Sec. 11-A,
RA 11199]
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Note: Foreign governments and international
organizations
or
their
wholly owned
instrumentality employing workers in the
Philippines or employing Filipinos outside of
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 their civil service
retirement system. [Sec. 8(j)(3), RA 11199]
c. Exclusions
1. Receives only when
beneficiaries are absent
2. Dependent parents
the
primary
Others
1. Receives only when primary and
secondary beneficiaries are absent
2. Any other person designated by member
as his/her secondary beneficiary. [Sec. 8
(k), RA 11199]
3. Benefits
1. Services where there is no employeremployee relationship in accordance with
existing labor laws, rules, regulations and
jurisprudence;
2. Service performed in the employ of the
Philippine Government or instrumentality
or agency thereof;
3. Service performed in the employ of a
foreign government or international
organization, or their wholly-owned
instrumentalities; and
Note: Foreign governments and international
organizations may enter into an agreement
with the PH government to include their
employees in the Philippines in the SSS.
4. Services performed by temporary and
other employees which may be excluded
by regulation of the Social Security
Commission. Employees of bona fide
independent contractors shall not be
deemed employees of the employer
engaging the services of said contractors.
[Sec. 8(j), RA 11199]
2. Dependents and Beneficiaries
Primary
1. Dependent spouse - until remarriage
2. Dependent
children
[legitimate,
legitimated,
legally
adopted
and
illegitimate] - Illegitimate children are
entitled only to 50% of the share of
legitimate children. Where there are no
legitimate children, the illegitimate children
get 100%.
Secondary
LABOR LAW
a. Monthly Pension [Sec. 12, RA
11199]
The monthly pension shall be the highest of the
following amounts:
1. P300 + [20% x (average monthly credit)] +
[2% x (average monthly credit) x (# of cash
credit years of service in excess of 10
years)]
2. 40% x [average monthly credit]
3. P1000, provided that the monthly pension
shall in no case be paid for an aggregate
amount of less than 60 months [Sec. 12 (a)]
4. Notwithstanding the above mentioned,
minimum pension is:
a. P1,200 - members with at least 10
years credit service
b. P 2,400 - members with at least 20
years
b. Dependents' Pension [Sec. 12A, RA 11199]
1. Paid on account of members’
a. Death
b. Permanent total disability, or
c. Retirement
2. Paid to each child conceived on or prior to
contingency, but not exceeding 5,
beginning with the youngest and preferring
the legitimate
3. Amount is either P250 or 10% of the
monthly pension as computed above,
whichever is higher.
c. Retirement benefits [Sec. 12-B,
RA 11199]
Requisites for Eligibility
1. 120 monthly contributions
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2. Age
a. Has reached the age of 60 years and is
already separated from employment or
has ceased to be self-employed; or
b. Has reached the age of 65 years
Period of entitlement - From retirement until
death
The monthly pension shall be suspended upon
the reemployment or resumption of selfemployment of a retired member who is less
than 65 years old.
In Case of Death of Member
1. His/her primary beneficiaries as of the date
of his/her retirement shall be entitled to
receive the monthly pension;
2. If he/she has no primary beneficiaries AND
he/she dies within 60 months from the start
of his/her monthly pension, his/her
secondary beneficiaries shall be entitled to
a lump sum benefit equivalent to the total
monthly pensions corresponding to the
balance of the 5 year guaranteed period,
excluding the dependents’ pension.
Lump Sum Alternative
The member may opt to receive the first 8
monthly pensions in lump sum but such is
discounted at a preferential rate of interest to
be determined by the SSS.
Lump Sum Eligibility (Equal to total
contributions)
A covered member who is 60 years old at
retirement and who does not qualify for
pension benefits (see requisites for eligibility)
shall be entitled 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.
LABOR LAW
Monthly pension
The monthly pension of a member who retires
after reaching age 60 shall be the highest 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.
d. Permanent disability benefits
[Sec. 13-A, RA 11199]
Eligibility
1. 36 monthly contributions prior to the
semester of disability
Note: This is the same as death benefit, but
permanent disability pension is paid
directly to the member.
2. In case the permanently disabled member
dies, he/she is given the same treatment as
a retiree dying.
3. For permanent partial disability, the
pension is not lifetime. It shall be paid in
lump sum if the period is less than 12
months.
Ex. loss of thumb entitles member to 10
months of pension; loss of arm entitles
member to 50 months.
4. For multiple partial disabilities, they shall
be additive when related or deteriorating the percentage shall be equal to the
number of months the partial disability is
entitled to, divided by 75 months.
Ex. loss of sight in 1 eye - 25/75; loss of
arm = 50/75
If both occur due to same cause then 25/75
+ 50/75 = 100% (as if it were a permanent
total disability)
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Lump Sum Alternative
A member is entitled to a lump sum benefit
equivalent to the monthly pension x number of
monthly contributions paid to the SSS or 12
times the monthly pension, whichever is
higher. To be entitled, he must not have paid at
least 36 monthly contributions.
LABOR LAW
f.
Funeral benefits [Sec. 13-B, RA
11199]
P12,000 in cash or in kind, upon the death of
member.
g. Loan
Subject to compulsory coverage again
A member who:
1. Received a lump sum benefit, and
2. Is
reemployed
or
resumed
selfemployment not earlier than 1 year from
date of disability ,
shall be subject to compulsory coverage and
considered a new member.
Death of Member
1. His/her primary beneficiaries as of the date
of his/her retirement shall be entitled to
receive the monthly pension;
2. If he/she has no primary beneficiaries AND
he/she dies within 60 months from the start
of his/her monthly pension, his/her
secondary beneficiaries shall be entitled to
a lump sum benefit equivalent to the total
monthly pensions corresponding to the
balance of the 6 year guaranteed period,
excluding the dependents’ pension.
e. Death Benefits [Sec. 13, RA
11199]
Eligibility
36 monthly contributions prior to the semester
of death
Benefit
1. Monthly pension to primary beneficiaries,
or
2. If no primary beneficiaries, lump sum
equivalent to 36 times the monthly pension
to secondary beneficiaries
If ineligible/has not paid 36 monthly
contributions
A lump sum benefit which shall be that which is
higher between the ff. will be given to the
beneficiaries:
a. (monthly pension) x 12, or
b. (monthly pension) x (# of monthly
contributions)
Social Security Commission Reso. No. 669,
SSS Circular No. 21-P and 52 pertain to
treatment of salary loans, which sometimes
provide for more flexible payment terms or
condonation for delinquent payers.
h. Sickness benefits [Sec. 14, RA
11199]
Eligibility
1. Inability to work due to sickness or injury,
2. Confined for more than 3 days either in a
hospital or elsewhere with SSS approval
3. At least 3 months of contribution paid in the
12 month period immediately before the
semester of sickness or injury
4. All company sick leaves with pay for the
current year have been used up;
5. Maximum of 120 days per 1 calendar year
(i.e. max permissible for the same sickness
and confinement is 240 days for 2
consecutive years)
6. Employer has been notified, or, if a
separated, voluntary or self-employed
member, the SSS has been directly notified
within 5 days from confinement.
Notice to employers or SSS is not needed
when confinement is in a hospital.
Notice to employer is not required when
employee became sick or injured while working
or within the premises of the employer.
Benefit
Daily cash allowance paid for the number of
days a member is unable to work due to
sickness of injury equivalent to 90% x (average
daily salary credit)
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Reimbursement of SSS to Employer
Upon satisfactory proof of payment and legality
of sickness benefits, reimbursement shall be
made by the SSS if the following conditions are
met:
1. Employer notified SSS of the confinement
within 5 calendar days after receipt of the
notification from the employee-member 100% reimbursement
2. If the notification to SSS is made beyond 5
calendar days after receipt of notification
from
the
employee-member
reimbursement only for each day of
confinement starting from the 10th
calendar day immediately preceding the
date of notification to SSS
LABOR LAW
Full payment shall be advanced by the
employer within 30 days from filing the
maternity leave application.
SSS shall reimburse the employer of 100% of
the amount of maternity benefits advanced
upon receipt of satisfactory proof of payment
and legality thereof.
Note: All benefits herein mentioned are taxexempt.
j.
Unemployment Insurance or
Involuntary Separation Benefits
[Sec. 14-B, RA 11199]
SSS shall reimburse the employer or pay the
unemployed member only for confinement
within the 1 year period immediately preceding
the date the claim for benefit/reimbursement is
received by SSS.
Eligibility
1. Not over 60 years of age
2. At least 36 months contributions, 12
months of which should be in the 18th
month period immediately preceding the
involuntary unemployment or separation
Exception: Confinement in a hospital - the
claim for benefit or reimbursement must be
filed within 1 year from the last day of
confinement
Benefit
Monthly cash payments equivalent to 50% of
the average monthly salary credit for a
maximum of 2 months
i.
Maternity Leave benefits [Sec.
14-A, RA 11199]
Eligibility
1. Female member
2. Paid at least 3 monthly contributions in the
12-month period immediately preceding
the semester of her childbirth or
miscarriage
3. Member notified her employer of her
pregnancy and probable date of childbirth,
which notice shall be transmitted to the
SSS
Full payment shall be advanced by the
employer within 30 days from filing the
maternity leave application.
Coverage
Covers only the first four deliveries or
miscarriages.
Employer’s reimbursement
Frequency of claiming benefit
An employee who is involuntarily unemployed
can only claim unemployment benefits once
every 3 years.
In case of concurrence of 2 or more
compensable contingencies, only the highest
benefit shall be paid, subject to the rules and
regulations that the Commission may
prescribe.
B. GOVERNMENT SERVICE
INSURANCE SYSTEM LAW
[Republic Act 8291]
1. Coverage and Exclusions
Coverage
All public sector employees below the
compulsory retirement age of 65, irrespective
of employment status. [Sec. 3]
Exclusions
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1. AFP and PNP
2. Members
of
the
Judiciary
and
Constitutional Commissions who are
covered only by life insurance as they have
separate retirement schemes
3. Contractual employees with no employeremployee relationship [Sec. 3]
The amount shall be [37.5% x (revalued
average monthly compensation)] + [2.5 x
(revalued average monthly compensation) x
(years in service in excess of 15 years)]
2. Dependents and Beneficiaries
It shall not be less than P24,000 for those with
20 years of service and not less than P1,300
for everyone else.
Primary
1. Dependent spouse - until remarriage
2. Dependent
children
(legitimate,
legitimated,
legally
adopted
and
illegitimate)
Provided, the monthly pension shall not exceed
90% of the average monthly compensation.
b. Retirement Benefits [Sec. 13]
Note: Unlike the SSS law, the GSIS law does
not distinguish between the share of legitimate
and illegitimate children.
Eligibility
1. At least 15 years of service
2. At least 60 years of age
3. Not receiving pension benefit
permanent total disability
Secondary
In the absence of primary beneficiaries,
1. Dependent parents
2. Legitimate
descendants
(excluding
dependent children)
Compulsory Retirement [Sec. 13-A]
Retirement is compulsory for employees:
1. 60 years of age
2. Who have rendered at least 15 years of
service
3. Benefits
If employee has less than 15 years of service,
he may be allowed to continue in accordance
with civil service laws.
Computation of service [Sec. 10]
From date of original appointment/election
including periods of service at different times
under 1 or more employers, those performed
overseas under the authority of the Republic of
the Philippines, and those that may be
prescribed by the GSIS in coordination with the
Civil Service Commission.
In case of reinstatement in the service of an
employer and subsequent retirement or
separation which is compensable under this
Act, all service credited for retirement,
resignation
or
separation
for
which
corresponding benefits have been awarded
under this Act or other laws shall be excluded
in the computation.
from
Benefit [Sec. 13]
The member may choose between
1. 60 x (basic monthly pension) lump sum
payment at the time of retirement + basic
monthly pension payable monthly for life
after expiry of the 5-year guaranteed period
which is already covered by the lump sum,
or
2. Cash payment equal to 18 x (basic monthly
pension) + monthly pension for life
immediately but with no 5-year guarantee
GSIS may prescribe rules for the inclusion of
part time and
other
services with
compensation.
a. Monthly Pension [Sec. 9]
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c. Permanent Disability Benefits
Total and
Permanent
[Sec. 16]
Partial and
Permanent
[Sec. 17]
1. Complete loss of
sight of both
eyes
2. Loss of 2 limbs
at or above the
ankle or wrist
3. Permanent
complete
paralysis of 2
limbs
4. Brain injury
resulting in
incurable
imbecility or
insanity
5. Other cases as
determined by
GSIS
1. Complete and
permanent loss
of the use of
a. Any finger
b. Any toe
c. One arm
d. One hand
e. One foot
f. One leg
g. One/both
ears
h. Hearing of
one/both
ears
i. Sight of one
eye
2. Other cases as
determined by
GSIS
Eligibility for Permanent Total Disability
1. Disability not due to employee’s own grave
misconduct, notorious negligence, habitual
intoxication, or willful intention to kill himself
for another [Sec. 15]
2. Employee is:
a. In service at time of disability
b. Even if separated, has paid at least 36
monthly contributions within the 5-year
period immediately prior to disability or
has paid a total of at least 180 monthly
contributions prior to disability
c. Not enjoying old-age retirement benefit
[Sec. 16].
Benefit for Permanent Total Disability
1. Monthly income benefit for life equal to
basic monthly pension, from date of
disability
2. If member is in service at time of disability
and has paid at least 180 monthly
contributions, he receives an additional
cash payment of 18 x basic monthly
pension
LABOR LAW
Ineligible members
If member has rendered at least 3 years of
service, he shall receive cash payment equal
to 100% of average monthly compensation for
each year of service (essentially total amount
of contributions made) or P12,000 whichever is
higher [Sec. 16].
Partial Disability
Paid according to GSIS prescribed schedule.
Member must satisfy conditions regarding the
disability not being due to his own fault and
regarding employment status and services
rendered.
d. Death benefits [Sec. 21]
When member dies, the primary beneficiaries
are entitled to only ONE of the following:
1. Survivorship pension
a. He was in service when he died, or
b. Even if separated from service, he has
at least 3 years of service and has paid
36 monthly contributions within the 5
years preceding death, or
c. Even if separated from the service, he
has paid 180 monthly contributions
prior to death.
2. Survivorship pension + cash payment of
100% of average monthly compensation
for every year of service [pension + total
contributions made]
a. He was in service when he died, and
b. With 3 years of service
3. Cash payment equivalent to 100% average
monthly compensation for each year of
service he paid contributions or P12,000
whichever is higher
a. With 3 years of service
b. He has failed to qualify in the prior 2
schemes.
e. Funeral Benefits [Sec. 23]
Eligibility
1. Active member
2. Member separated from service but still
entitled to the benefit
3. Pensioner
4. Retiree who at time of retirement was of
pensionable age but opted to retire under
RA 1616
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1. Employee separated from service due to
abolition of his office or position and
2. Employee has been paying integrated
contributions for at least 1 year prior to
separation
Loan
The following are the loans provided:
1. Consolidated Loan
2. Policy loan
3. Emergency loan
4. Pension loan
g. Temporary Disability Benefits
[Sec. 18]
Eligibility
1. Employee must be:
a. In service at time of disability, or
b. If separated, he has rendered at least
3 years of service and paid at least 6
monthly contributions in the 12 month
period immediately prior to disability
2. All sick leave credits including those in the
CBA for the current year have been used
3. Maximum of 120 days per 1 calendar year
Ex. maximum for the same sickness and
confinement is 240 days for 2 consecutive
years
Benefit
Monthly cash payments of 50% x average
monthly compensation for a duration which is
proportional to years rendered, ranging from 2
to 6 months.
j.
Survivorship Benefits
Benefit
1. Basic survivorship pension - 50% x basic
monthly pension (see Death Benefits) and
2. Dependent
children’s
pension
not
exceeding 50% of the basic monthly
pension
k. Life Insurance Benefits
Members of the Judiciary and Constitutional
Commissions are only entitled to life insurance.
Benefit
75% x current daily compensation for every
day or fraction thereof of disability OR P70.00,
whichever is higher.
h. Separation Benefits [Sec. 11]
Eligibility and benefit received
1. 60 years of age, or separation from service
with at least 3 years but not over 15 years
served – cash payment of 100% of ave.
monthly compensation for each year of
service (total amount of all contributions
paid) or P12,000 whichever is higher
2. Below 60 years of age, but at least 15 years
of service rendered – cash payment of 18
x (monthly pension) at time of
resignation/separation + old age pension
benefit (equal to basic monthly pension)
i.
LABOR LAW
Unemployment Benefits [Sec.
12]
Eligibility
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LABOR LAW
SSS
Enabling
law
GSIS
RA 1161 as amended by RA 8282 or the PD 1146 as amended by RA 8291
Social Security Act of 1997, and RA11199
or the Social Security Act of 2018
Employer – any person, natural or
juridical, domestic or foreign, who carries
on in the Philippines any trade business,
industry, undertaking, and uses the
services of another person who is under his
orders as regards the employment, except
those considered as employer under
the GSIS. A self- employed person shall be
both employer and employee at the same
time.
Employer – National government, its
political subdivisions, branches, agencies
or
instrumentalities,
including
government- owned or controlled
corporations and financial institutions
with
original
charters
[GOCCs];
constitutional commissions; and judiciary
Employee – any person who performs
services for an employer in which either or
both mental and physical efforts are used
and who receives compensation for such
services, where there is an employer—
employee relationship; also, a selfemployed person who is both employee
and employer at the same time.
Employee – any person receiving
compensation while in service of an
employer whether by election or
appointment, irrespective of status of
appointment; barangay officials; and
sanggunian officials
Self-employed - any person whose No counterpart
Definition
income is not derived from employment,
of terms
including but not limited to
a. Self-employed professionals
b. Partners and single proprietors of
businesses
c. Actors, directors, scriptwriters, news
correspondents not considered as
employees under the above definition
d. Individual farmers and fishers
Same, except child here is below 18
Dependents
a. Legal spouses entitled by law to years old.
receive support
b. Child - unmarried, not gainfully
employed, and below 21 or
c. Child over 21 if he or she became
permanently
incapacitated
and
incapable of self-support, physically or
mentally; child may be legitimate,
legitimated,
legally
adopted
or
illegitimate
d. Parent who is receiving legal support
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Same except no distinction in the share
Beneficiaries
of legitimate and illegitimate children
Primary
1. Dependent spouse - until remarriage
2. Dependent
children
[legitimate,
legitimated, legally adopted and
illegitimate] - Illegitimate children are
entitled only to 50% of the share of
legitimate children. Where there are no
legitimate children, the illegitimate
children get 100%
Secondary
1. Receives only when the primary
beneficiaries are absent
2. Dependent parents
Others
1. Receives only when primary and
secondary beneficiaries are absent
2. Any other person designated by
member
as
his/her
secondary
beneficiary.
Compensation – all actual remuneration
for employment, including mandated costof-living allowance, as well as the cash
value of any remuneration paid in any
medium other than cash except that portion
already above the max salary credit as
provided in this Act.
Compensation – basic pay received
excluding per diems, bonuses, overtime,
honoraria,
allowances
and
other
emoluments not integrated into the basic
pay under existing laws.
Compulsory
1. Employers as defined above
2. Employees not over 60 years including
household helpers
3. Self-employed
Public sector employees below the
compulsory retirement age of 65.
Exceptions:
1. AFP & PNP
2. Members
of
Judiciary
and
Voluntary
Constitutional Commissions who are
1. Spouses who devote full time to
covered only by life insurance
managing household and family affairs 3. Contractual employees with no EER
2. Employers already separated form
with the agency they serve
employment or those self-employed
with no realized income for a given
month, who chose to continue with
contributions to maintain right to full
benefit
Note: Foreign governments, international
organizations or their wholly owned
instrumentality employing workers in the
Philippines may enter into an agreement
with the Philippine government to include
their employees in the SSS except those
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already covered by their civil service
retirement system.
1.
2.
3.
4.
5.
6.
Summary 7.
of
8.
9.
Benefits
10.
Monthly pension
Dependents’ pension
Retirement benefits
Permanent disability benefits
Death benefits
Funeral benefits
Loan
Sickness benefits
Maternity leave benefits
Unemployment benefit
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Monthly pension
Dependents’ pension
Retirement benefits
Permanent disability benefits
Death benefits
Funeral benefits
Loan
Separation benefits
Unemployment benefits
Survivorship benefits
Life insurance benefits
Note: Members of the Judiciary and
Constitutional Commissions are entitled
to life insurance only.
1. Employer’s
contribution,
and
Effects of
employee’s
obligation
to
pay
separacontribution both cease at the end of
the month of separation
tion from
2. Employee shall be credited with all
employcontributions paid on his behalf and
ment
entitled to all benefits set forth by law.
Continued
membership
for
the
unemployed member, and entitlement to
whatever benefits he has qualified to in
the event of any compensable
contingency.
Dispute
settlement
Social Security Commission
CA (Rule GSIS
CA (Rule 43)
SC (Rule 45);
43, questions of law & fact) SC (Rule 45, appeal does not stay execution
questions of law only)
Prescriptive
period
20 years
4 years
C. LIMITED PORTABILITY
LAW
[RA 7699: “An Act Instituting Limited Portability
Scheme in the Social Security Insurance
Systems by Totalizing the Workersʹ Creditable
Services or Contributions in each of the
Systems”]
Policy declaration
To promote the welfare of our workers by
recognizing their efforts in productive
endeavors and to further improve their
conditions by providing benefits for their long
years of contribution to the national economy.
Towards this end, the State shall institute a
scheme for totalization and portability of social
security benefits, with the view of establishing
within a reasonable period a unitary social
security system [Section 1, RA 7699].
Coverage
All worker‐members of the Government
Service Insurance System (GSIS) and/or
Social Security System (SSS) who transfer
from one sector to another, and who wish to
retain their membership in both Systems.
Portability
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Refers to the transfer of funds for the account
and benefit of a worker who transfers from one
system to the other [Section 2(b), RA 7699].
Provisions of any general or special law or
rules and regulations to the contrary
notwithstanding, a covered worker shall have
his credible services or contributions in both
Systems credited to his service or contribution
record in each of the Systems and shall be
totalized for purposes of old-age, disability,
survivorship and other benefits in case the
covered member does not qualify for such
benefits in either or both Systems without
totalization.
Provided: That overlapping periods of
membership shall be credited only once for
purposes of totalization [Section 4, RA 7699].
Totalization
Refers to the process of adding up the period
of creditable services or contributions under
each of the Systems, for purposes of eligibility
and computation of benefits [Section 2(e), RA
7699].
Totalization of service credits is only resorted
to when the retiree does not qualify for benefits
in either or both of the System. In this case,
since the petitioner may be entitled to some
benefits from the GSIS, he cannot avail of the
benefits under RA 7699 [Gamogamo v. PNOC
Shipping and Transport Corp, G.R. No. 141707
(2002)].
All contributions paid by such member
personally, and those that were paid by his
employers to both Systems shall be considered
in the processing of benefits which he can
claim from either or both Systems: Provided,
however, that the amount of benefits to be paid
by one System shall be in proportion to the
number of contributions actually remitted to
that System. [Section 4, RA 7699].
LABOR LAW
benefits [Rule V, Sec. 1, RA 7699 Rules and
Regulations].
Totalization shall apply in the following
instances:
a. If a worker is not qualified for any benefits
from both Systems;
b. If a worker in the public sector is not
qualified for any benefits in the GSIS; or
c. If a worker in the private sector is not
qualified for any benefits from the SSS.
For the purpose of computation of benefits,
totalization shall apply in all cases so that the
contributions made by the worker‐member in
both Systems shall provide maximum benefits
which otherwise will not be available. In no
case shall the contribution be lost or forfeited
[Rule V, Sec. 3, RA 7699 Rules and
Regulations].
If after totalization the worker‐member still
does not qualify for any benefit listed in Rule III,
Section 1 (j), the member will then get whatever
benefits correspond to his/her contributions in
either or both Systems [Rule V, Sec. 4, RA
7699 Rules and Regulations].
If a worker qualifies for benefits in both
Systems, totalization shall not apply [Rule V,
Sec. 5, RA 7699 Rules and Regulations].
The process of totalization of creditable
services or periods of contributions and
computation of benefits provided for under the
Act shall be the joint responsibility of the GSIS
and the SSS [Rule V, Sec. 6, RA 7699 Rules
and Regulations].
Overlapping periods of creditable services or
contributions in both Systems shall be credited
only once for purposes of totalization [Rule V,
Sec. 7, RA 7699 Rules and Regulations].
All creditable services or periods of
contributions made continuously or in the
aggregate of a worker under either of the
Sectors shall be added up and considered for
purposes of eligibility and computation of
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D. DISABILITY AND DEATH
BENEFITS
1. Labor Code
Under
the
Labor
Code,
employees'
compensation (EC) benefits are granted to
employees or their dependents for workconnected disability or death, or those
resulting from accident arising out of and in
the course of employment. [Art. 166, LC in
rel. to Sec. 1, Rule III, IRR]
Types of disability
1. Temporary Total Disability [Art. 197]
2. Permanent Total Disability [Art. 198]
3. Permanent Partial Disability [Art. 199]
a. Disability Benefits
Disability does not refer to the injury nor to the
pain and suffering it has occasioned, but to the
loss and impairment of earning capacity.
There is disability when there is a loss or
diminution of earning power because of actual
absence from work due to injury or illness
arising out of and in the course of employment.
The basis of compensation is reduction of
earning power. [Azucena, p. 525]
TEMPORARY TOTAL DISABILITY
A total disability is temporary if as a result of
the injury or sickness, the employee is unable
to perform any gainful occupation for a
continuous period not exceeding 120 days
[Art. 197 in rel. to Sec. 2(a), Rule VII, Amended
Rules on Employees’ Compensation].
The object of the law in allowing compensation
during temporary disability is to compensate
the laborer or employee for what he might have
earned during the period of the treatment of his
injury. [Cañete v. Insular Lumber Co., 61 Phil.
592 (1935)]
Amount of benefit
An employee suffering from temporary total
disability shall be paid by the System an
equivalent of ninety percent (90%) of the
average salary credit, provided:
LABOR LAW
1. The daily income benefit is not less than
Ten (10) pesos nor more than Ninety (90)
pesos, nor paid for a continuous period
longer than 120 days. [Art. 197]
2. The monthly income benefit shall be
suspended if the employee fails to submit
a monthly medical report certified by its
attending physician [Art.194]
Period of Entitlement
The employee is entitled to the benefit from the
day of the start of the disability. 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
to exceed 240 days from onset of disability.
When after the period of temporary total
disability had ceased, an employee was found
to be suffering from a permanent partial
disability, he was entitled to an award based
upon partial disability permanent in character.
[Cañete v. Insular Lumber Co., 61 Phil. 592
(1935)]
PERMANENT TOTAL DISABILITY
A disability is total and permanent if as a result
of the injury or sickness the employee is unable
to perform any gainful occupation for a
continuous period exceeding 120 days. [Art.
198 in rel. to Sec. 2(b), Rule VII]
The test of whether 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. It does not mean an
absolute helplessness but rather an incapacity
to perform gainful work which is expected to be
permanent. [Vicente vs. ECC, G.R. No. 85024,
(1991)]
The Labor Code enumerates six instances
considered to be a permanent total disability:
1. Temporary
total
disability
lasting
continuously for more than one hundred
twenty days, except as otherwise provided
for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or
wrist;
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4. Permanent complete paralysis of two
limbs;
5. Brain injury resulting in incurable imbecility
or insanity; and
6. Such cases as determined by the Medical
Director of the System and approved by the
Commission. [Art. 197(c)]
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 permanent
and total, regardless of any justification.
Rules for the determination of disability
(120-day or 240-day)
Initially, there was confusion as to the
application of the 120-day period found in
Article 192 (c) (1) of the Labor Code vis-à-vis
the application of the 240-day period found in
Section 2, Rule X of the Amended Rules on
Employees' Compensation Implementing Title
II, Book IV of the Labor Code.
It must be emphasized that the companydesignated physician must:
1. ISSUE a final medical assessment of the
seafarer's medical condition; AND
2. GIVE his assessment to the seafarer
concerned.
Permanent disability:
Article 192(c)(1): Temporary total disability
lasting continuously for more than one hundred
twenty days, except as otherwise provided in
the Rules.
Section 2, Rule X: …where such injury or
sickness still requires medical attendance
beyond 120 days but not to exceed 240 days
from onset of disability.
To reconcile these provisions, the Supreme
Court laid down the following rules in the case
of Dagasdas v. Grand Placement and General
Services Corporation. [G.R. No. 205727,
(2017)]
1. The company-designated physician must
issue a final medical assessment on the
seafarer's disability grading within a period
of 120 days from the time the seafarer
reported to him;
2. If the company-designated physician fails
to give his assessment within the period of
120 days, without any justifiable reason,
then the seafarer's disability becomes
permanent and total;
3. If the company-designated physician fails
to give his assessment within the period of
120 days with a sufficient justification (e.g.
seafarer required further medical treatment
or seafarer was uncooperative), then the
period of diagnosis and treatment shall be
extended to 240 days. The employer has
the burden to prove that the company-
That is to say that the seafarer must be fully
and properly informed of his medical
condition.
The results of his/her medical examinations,
the treatments extended to him/her, the
diagnosis and prognosis, his/her disability
grading must be fully explained to him/her by
no less than the company-designated
physician.
The
company-designated
physician
is
mandated to issue a medical certificate,
which should be personally received by the
seafarer, or, if not practicable, sent to him/her
by any other means sanctioned by present
rules.
To require the seafarer to seek the decision of
a neutral third-party physician without primarily
being informed of the assessment of the
company-designated physician is a clear
violation of the tenets of due process.
Amount of Benefit
The employee suffering from a permanent total
disability shall be entitled to an amount
equivalent to the monthly income benefit, plus
ten percent thereof for each dependent child,
but not exceeding five, beginning with the
youngest and without substitution: Provided,
That the monthly income benefit shall be the
new amount of the monthly benefit for all
covered pensioners. [Art. 198]
Period of Entitlement
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An employee with permanent total disability
shall be entitled to receive benefits monthly for
five (5) years.
However, Art. 198(b) provides that the benefits
may be suspended if the employee is gainfully
employed, or recovers from his permanent total
disability, or fails to present himself for
examination at least once a year.
PERMANENT PARTIAL DISABILITY
A disability is partial and permanent if as a
result of the injury or sickness the employee
suffers a permanent partial loss of the use of
any part of his body. [Art. 199 in rel. to Sec.
2(c), Rule VII, Amended Rules on Employees’
Compensation].
The object of the law in granting compensation
for a permanent partial disability is to
compensate the injured laborer or employee
for the actual and permanent loss of a member
of the body, or the use thereof. [Cañete v.
Insular Lumber Co., 61 Phil. 592 (1935)]
Amount of benefits
For an employee who has suffered a
permanent partial disability, the amount of
benefits, as well as the period of entitlement to
receive such benefits is based upon the degree
of disability, as well as the lost body part. The
body parts and the corresponding period of
equivalent disability are specified in Art 199.
LABOR LAW
One arm
50
One hand
39
One foot
31
One leg
46
One ear
10
Both ears
20
Hearing of one ear
10
Hearing of both ears
50
Sight of one eye
25
Notes:
1. A loss of a wrist shall be considered as a
loss of the hand, and a loss of an elbow
shall be considered as a loss of the arm.
2. A loss of an ankle shall be considered as
loss of a foot, and a loss of a knee shall be
considered as a loss of the leg.
3. A loss of more than one joint shall be
considered as a loss of one-half of the
whole finger or toe: Provided, That such a
loss shall be either the functional loss of the
use or physical loss of the member. [Art.
199(c)]
Table of benefits [Art. 199(b)]
Body part/s
Number of months
One thumb
10
One index finger
8
One middle finger
6
One ring finger
5
One little finger
3
One big toe
6
One toe
3
In case of permanent partial disability less
than the total loss of the member specified
in Art. 199(b), the same monthly income
benefit shall be paid for a portion of the period
established for the total loss of the member, in
accordance with the 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 [Art. 199(d)].
In cases of simultaneous loss of more than
one member or a part thereof as specified
in Art. 199(b) the same monthly income
benefit shall be paid for a period equivalent to
the sum of the periods established for the loss
of the member or the part thereof. If the result
is a decimal fraction, the same shall be
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rounded off to the next higher integer [Art.
199(e)].
In cases of injuries or illnesses resulting in
a permanent partial disability not listed in
the Art. 199(b), the benefit shall be an income
benefit equivalent to the percentage of the
permanent loss of the capacity to work [Art.
199(f)].
Distinguished from permanent total
disability
While “permanent total disability” invariably
results in an employee’s loss of work or inability
to perform his usual work, “permanent partial
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. [Vicente v.
ECC, G.R. No. 85024, (1991)]
Conversion
from
permanent
partial
disability to permanent total disability
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 partial disability may
become totally and permanently disabled from
the same cause. There is nothing in the law
that prohibits the conversion of permanent
partial disability benefit to permanent total
disability benefit, if it is shown that the
employee’s ailment qualifies as such. [GSIS v.
Court of Appeals and R. Balais, G.R. No.
117572 (1998)].
When salary is higher after the injury
In a case where the employee filed a claim for
permanent partial disability but the ECC denied
the claim because in fact his salary was higher
than before, the Court ruled that the fact of
higher earning capacity fact would not in itself
necessarily affect the laborer’s claim for
compensation for a permanent partial
disability. The amount of his salary may be
affected by various extraneous matters or
factors. [Central Azucarera Don Pedro v. C. de
Leon, in his capacity as Workmen’s
Compensation Commissioner and L. Alla, G.R.
No. L-10036 (1957)].
LABOR LAW
b. Death Benefits
Monthly Income Benefit
Under such regulations as the Commission
may approve, the System shall pay to the
primary beneficiaries:
1. Upon the death of the covered
employee under this Title:
a. An amount equivalent to his monthly
income benefit;
b. Plus 10% thereof for each dependent
child, but not exceeding five, beginning
with the youngest and without
substitution, except as provided for in
par. (j) of Article 167 hereof: Provided,
That –
i. The monthly income benefit shall
be guaranteed for five years;
ii. If he has no primary beneficiary,
the System shall pay to his
secondary
beneficiaries
the
monthly income benefit but not to
exceed sixty months; and
iii. The minimum death benefit shall
not be less than fifteen thousand
pesos. (As amended by Section 4,
Presidential Decree No. 1921).
2. Upon the death of a covered employee
who is under permanent total disability
under this Title: 80% of the monthly
income benefit and his dependents to the
dependents’ pension: Provided, That –
a. The marriage must have been validly
subsisting at the time of disability;
b. If he has no primary beneficiary, the
System shall pay to his secondary
beneficiaries the monthly pension
excluding the dependents’ pension, of
the remaining balance of the five-year
guaranteed period; and
c. The minimum death benefit shall not be
less than fifteen thousand pesos. (As
amended by Section 4, Presidential
Decree No. 1921).
Note: The monthly income benefit provided
herein shall be the new amount of the monthly
income benefit for the surviving beneficiaries
upon the approval of this decree. [Art. 200 (a)(c)]
Condition to entitlement
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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 of 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. [Sec.
1(a), Rule XIII, IRR]
Notes:
1. 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 of his disability.
2. In addition, the cause of death must be a
complication or natural consequence of the
compensated Permanent Total Disability.
[Sec. 1(b), Rule XIII, IRR]
Beneficiaries
The beneficiaries are:
1. Primary beneficiaries:
a. Dependent spouse until he/she
remarries;
b. Dependent
children
(legitimate,
legitimated, natural-born, or legally
adopted).
2. Secondary beneficiaries:
1. Illegitimate children and legitimate
descendants;
2. Parents, grandparents, grandchildren.
[Azucena, p. 541]
LABOR LAW
Dependents
"Dependent" means:
1. The legitimate, legitimated or legally
adopted or acknowledged natural child
who is:
a. Unmarried,
b. Not gainfully employed, and
c. Not over twenty-one (21) years of age
or over twenty-one (21) years of age
provided he is incapacitated and
incapable of self-support due to a
physical or mental defect which is
congenital or acquired during minority;
2. The legitimate spouse living with the
employee and the parents of said
employee wholly dependent upon him for
regular support. [Art. 173(i)]
The test of dependency is not merely whether
the contributions were necessary to bare
subsistence. Dependency may exist if such
contributions were relied on by claimant for
his/her means of living as determined by
his/her position in life. [Malate Taxicab v. Del
Villar, G.R. No. L-7489 (1956)]
Period of entitlement
For primary beneficiaries
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. [Sec. 2, Rule XII, IRR]
For secondary beneficiaries
The income benefit shall be sixty (60) times the
monthly income benefit of a primary beneficiary
which in no case be less than P 15,000.00,
which shall likewise be paid in monthly
pension. [Sec. 2(a), Rule XII, IRR]
Manner of payment
Death benefits are paid in the form of cash
monthly pension:
1. For life to the primary beneficiaries,
guaranteed for five years;
2. For not more than 60 months to the
secondary beneficiaries in case there are
no primary beneficiaries;
3. In no case shall the total benefit be less
than P15,000. [Art. 200]
Amount of benefits
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For primary beneficiaries
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 5, beginning
with the youngest and without substitution.
[Sec. 3, Rule XII, IRR]
Notes:
1. 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;
2. The minimum income benefit shall not be
less than Fifteen Thousand Pesos
(P15,000.00). [Sec. 3, Rule XII, IRR]
For secondary beneficiaries
Income benefit is payable in monthly pension
which shall not exceed the period of 60 months
and the aggregate income benefit shall not be
less than P15, 000.00. [Sec. 3, Rule XII, IRR]
Death benefits after retirement are allowed
Generally, the term “covered employees”
refers to an employee who, at the time of his
death, is still covered by the GSIS. However,
the implementing rules and regulations of the
Employees’ Compensation Commission allows
death benefits to those retired employees
whose retirement was brought about by
permanent disability.
The Court is aware that death benefits must be
granted to the primary beneficiaries of the
decedent to help the family of a permanent and
totally disabled person who was so disabled
because of causes that are work-oriented. The
rule applies all the more when the disabled
person later dies because of the same cause
or related cause. [Manuzon v. ECC, G.R. No.
88573, (1990)]
Death of a person receiving permanent
total disability benefits
Under Art. 200(b), death benefit shall be paid
to the beneficiaries if an employee, while
receiving permanent total disability benefit,
dies.
LABOR LAW
Prescription of claims
All money claims arising from employeremployee relations shall be filed within three
(3) years from the time the cause of action
accrued; otherwise they shall forever be
barred. [Art. 306]
2. Employees Compensation and
State Insurance Fund
Policy
To promote and develop a tax-exempt
employees’ compensation program whereby
employees and their dependents, in the
event of work-connected disability or death,
may promptly secure adequate income
benefit and medical related benefits [Art.
172 [166]]
"Dependent" means:
1. The legitimate, legitimated or legally
adopted or acknowledged natural child
who is:
a. Unmarried,
b. Not gainfully employed, and
c. Not over twenty-one (21) years of age
or over twenty-one (21) years of age
provided he is incapacitated and
incapable of self-support due to a
physical or mental defect which is
congenital or acquired during minority;
2. The legitimate spouse living with the
employee and the parents of said
employee wholly dependent upon him for
regular support. [Art. 173(i)]
The beneficiaries are:
1. Primary beneficiaries:
a. Dependent spouse until he/she
remarries;
b. Dependent
children
(legitimate,
legitimated, natural-born, or legally
adopted).
2. Secondary beneficiaries:
a. Illegitimate children and legitimate
descendants;
b. Parents, grandparents, grandchildren.
[Art. 173(j)]
Compulsory coverage
Coverage in the State Insurance Fund shall be
compulsory upon all employers and their
employees not over sixty (60) years of age:
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Provided, That an employee who is over (60)
years of age and paying contributions to qualify
for the retirement or life insurance benefit
administered by the System shall be subject to
compulsory coverage [Art. 174[168]] (“System”
- SSS or GSIS, as the case may be).
Foreign employment - Filipino employees
employed abroad shall be adequately covered,
subject to regulations as the Commission may
prescribe [Art. 175[169]] (“Commission” Employees Compensation Commission)
Limitation of liability
The State Insurance fund shall be liable for
compensation to the employee or his
dependents, except when the disability or
death was occasioned by the employees’
intoxication, willful intention to injure or kill
himself or another, notorious negligence, or
otherwise provided in this title. [Art. 178 [172]]
Extent of liability
Unless otherwise provided, the liability of the
State Insurance Fund under this Title shall be
exclusive and in place of all other liabilities of
the employer to the employee, his dependents
or anyone otherwise entitled to receive
damages on behalf of the employee or his
dependents. The payment of compensation
under this Title shall not bar the recovery of
benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act
Numbered Eleven hundred sixty-one, as
amended, Republic Act Numbered Forty-eight
hundred sixty-four as amended, and other laws
whose benefits are administered by the
System or by other agencies of the government
[Art. 179 [173]].
Employer’s contributions
a. Under such regulations as the System may
prescribe, beginning as of the last day of
the
month
when
an
employee’s
compulsory coverage takes effect and
every month thereafter during his
employment, his employer shall prepare to
remit to the System a contribution
equivalent to one percent of his monthly
salary credit.
b. The rate of contribution shall be reviewed
periodically and subject to the limitations
LABOR LAW
herein provided, may be revised as the
experience in risk, cost of administration
and actual or anticipated as well as
unexpected losses, may require.
c. Contributions under this Title shall be paid
in their entirety by the employer, and any
contract or device for the deductions of any
portion thereof from the wages or salaries
of the employees shall be null and void.
d. When a covered employee dies, becomes
disabled or is separated from employment,
his employer’s obligation to pay the
monthly contribution arising from that
employment shall cease at the end of the
month of contingency and during such
months that he is not receiving wages or
salary [Art. 189[183]].
Medical benefits
Immediately after an employee contracts
sickness or sustains an injury, he shall be
provided by the System during the subsequent
period of his disability with such medical
services and appliances as the nature of his
sickness or injury and progress of his recovery
may require, subject to the expense limitation
prescribed by the Commission [Art. 191[185]]
Rehabilitation services
The System shall establish:
a. A
continuing
program,
for
the
rehabilitation of injured and handicapped
employees who shall be entitled to
rehabilitation services, which shall consist
of medical, surgical or hospital treatment,
including appliances to help them become
physically independent.
b. Centers equipped and staffed to provide 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,
including
assistance to help each rehabilitee to
develop his mental, vocational or social
potential. [Art. 196 [190]]
3. Philippine Overseas Employment
Administration-Standard
Employment Contract
As part of a seafarer's deployment for overseas
work, he/she and the vessel owner or its
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representative local manning agency are
required to execute the POEA-SEC.
Containing the standard terms and conditions
of seafarers' employment, the POEA-SEC is
deemed included in their contracts of
employment in foreign ocean-going vessels.
[Sharpe Sea Personnel Inc. v. Mabunay, G.R.
No. 206113 (2017)]
a. Compensation and benefits for
injury or illness
There are two requisites for a seafarer’s injury
or disability to be considered compensable: (1)
“the injury or illness must be work-related;” and
(2) “the work-related injury or illness must have
existed during the term of the seafarer's
employment contract.” [Magsaysay Maritime
Services v. Laurel, 707 Phil. 210 (2013)]
Work-related injury or illness
For an illness to be compensable, "it is not
necessary that the nature of the employment
be the sole and only reason for the illness
suffered by the seafarer."
It is enough that there is "a reasonable linkage
between the disease suffered by the 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.”
[Madridejos
v.
NYK-FIL
Ship
Management, Inc., 810 Phil. 704 (2017)]
See Sec. 32 of POEA-SEC for the schedule of
disability or impediment for injuries suffered
and diseases including occupational diseases
of illness contracted in the course of work.
Those illnesses not listed in Sec. 32 are
disputably presumed as work-related. [Sec. 20,
A.4, POEA-SEC]
LIABILITIES OF EMPLOYER IN CASE OF
WORK-RELATED INJURY OR ILLNESS
LABOR LAW
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/she shall be so provided at
cost to the employer until such time he/she is
declared fit or the degree of his/her disability
has been established by the companydesignated physician. [Sec. 20, A.2, POEASEC]
2. Sickness allowance
The seafarer shall also receive sickness
allowance from his/her employer in an amount
equivalent to his/her basic wage computed
from the time he/she signed off until he is
declared fit to work, or the degree of disability
has been assessed by the companydesignated physician.
The period within the seafarer shall be entitled
to 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. [Sec. 20. A.3, POEA-SEC]
3. Cost
of
medicines,
mode
transportation and accommodation
of
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 outpatient basis as determined by the companydesignated physician, the company shall
approve the appropriate mode of transportation
and accommodation.
The reasonable cost of actual traveling
expenses and/or accommodation shall be paid
subject to liquidation and submission of official
receipts and/or proof of expenses. [Sec. 20,
A.3, POEA-SEC]
1. Medical expenses
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,
Mandatory
post-employment
medical
examination; strict compliance
General rule: The seafarer shall submit
himself/herself to a post-medical examination
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by a company-designated physician within
three working days upon his return.
Exceptions:
a. When
the
seafarer
is
physically
incapacitated to do so. In which case, a
written notice to the agency within the
same period is deemed as compliance.
[Sec. 20, A.3, POEA-SEC]
b. When the non-compliance with the
mandatory post-employment medical
examination was “not due to the seafarer’s
fault but to the inadvertence or deliberate
refusal of the [employer].” [Interorient
Maritime Enterprises, Inc. v. Remo, 636
Phil. 240 (2010)]
Rationale
The rationale for the rule [on the mandatory
post-employment medical examination] is that
reporting the illness or injury within three days
from repatriation fairly makes it easier for a
physician to determine the cause of the illness
or injury. To ignore the rule might set a
precedent with negative repercussions, like
opening floodgates to a limitless number of
seafarers claiming disability benefits. [Wallem
Maritime Services, Inc. v. Tanawan, 693 Phil.
416 (2012)]
Third Doctor Opinion Rule
If a doctor appointed by the seafarer disagrees
with the assessment [of the companydesignated physician], 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. [Sec. 20, A.4, POEASEC]
Rationale: It is understandable that a companydesignated physician is more positive than that
of a physician of the seafarer's choice. It is on
this account that a seafarer is given the option
by the POEA Standard Employment Contract
to seek a second opinion from his preferred
physician [Abante v. KJGS Fleet Management
Manila, G.R. No. 182430 (2009)]
LABOR LAW
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. [Sec. 20, A.3, POEA-SEC]
GUIDELINES FOR THE CLAIM OF
PERMANENT
TOTAL
DISABILITY
BENEFITS
The employer must also compensate the
seafarer for his/her permanent total disability
as finally determined by the companydesignated physician.
The following guidelines shall govern
seafarers' claims for permanent and total
disability benefits:
1. The company-designated physician must
issue a final medical assessment on the
seafarer's disability grading within a period
of 120 days from the time the seafarer
reported to him.
2. If the company-designated physician fails
to give his/her assessment within the
period of 120 days, without any justifiable
reason, then the seafarer's disability
becomes permanent and total;
3. If the company-designated physician fails
to give his/her assessment within the
period of 120 days with a sufficient
justification, then the period of 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 permanent
and total, regardless of any justification.
[Jebsens Maritime Inc. v. Rapiz, G.R. No.
218871 (2017)]
Mandatory reporting requirement
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In case of work-related death of the seafarer,
during the term of his contract, the employer
shall pay his/her 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 the age
of twenty-one (21) but not exceeding four (4)
children, at the exchange rate prevailing during
the time of payment. [Sec. 20, B.1, POEASEC]
Requisites
For death to be compensable, the claimant
bears the burden to establish that:
1. The seafarer died during the duration of
his/her contract, and
2. His/her illness was work-related. [Sec. 20,
B.1, POEA-SEC]
Exception: When the seafarer’s death
occurred after the termination of his/her
contract after medical repatriation repatriation
on account of a work-related injury or illness
Rationale: The 2000 POEA-SEC must be
liberally construed, as impelled by the plight of
the bereaved heirs who stand to be deprived of
a just and reasonable compensation for the
seafarer’s death, notwithstanding its evident
work-connection. [Racelis v. United Philippine
Lines, 746 Phil. 758 (2014)]
LABOR LAW
case death occurs at sea, the disposition of
the 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 dollars (US$1,000) for burial expenses
at the exchange rate prevailing during the
time of payment. [Sec. 20, B.4, POEASEC]
When compensation is not payable (applies
to both disability and death benefits)
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 duties, provided however, that the employer
can prove that such injury, incapacity, disability
or death is directly attributable to the seafarer.
[Sec. 20, D, POEA-SEC]
Prescription of claims
All claims arising from this contract shall be
made within three (3) years from the date the
cause of action arises, otherwise the same
shall be barred. [Sec. 30, POEA-SEC]
When compensation payable is double
Where death is caused by warlike activity while
sailing within a declared war zone or war risk
area, the compensation payable shall be
doubled. [Sec. 20, B.2, POEA-SEC]
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
the seafarer under this Contract.
b. The employer shall transport the remains
and personal effects of the seafarer to the
Philippines at employer’s expense, except
if the death occurred in a port where local
government laws or regulations do not
permit the transport of such remains. In
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E. SOLO PARENTS
[RA 8972: Solo Parents’ Welfare Act]
See also III. C. 2. a. and III. E. 7. for work
entitlements of solo parents
Non work-related support for solo parents
1. Comprehensive Package of Social
Development and Welfare Services [Sec.
5]
2. Educational Benefits [Sec. 9]
3. Housing Benefits [Sec. 10]
4. Medical Assistance [Sec. 11]
Criteria for Support
1. Solo parent,
2. Income in the place of domicile falls below
the poverty threshold as set by the NEDA,
and
3. Assessed by the DSWD.
Note: If the solo parent’s income is above the
poverty threshold, he shall still enjoy the
benefits of Flexible Work Schedule, Protection
against Work Discrimination, and Parental
Leave [Sec. 4].
Comprehensive
Package
of
Social
Development and Welfare Services
The package will initially include:
a. Livelihood development services, which
include training on livelihood skills, basic
business management, value orientation
and the provision of seed capital or job
placement;
b. Counseling services, which include
individual, peer group or family counseling.
These will focus on the resolution of
personal relationship and role conflicts;
c. Parent effectiveness services which
include the provision and expansion of
knowledge and skills of the solo parent on
early childhood development, behavior
management, health care and proper
nutrition, rights and duties of parents and
children;
d. Critical incidence stress debriefing, which
includes preventive stress management
LABOR LAW
strategy designed to assist solo parents in
coping with crisis situations and cases of
abuse;
e. Special projects for individuals in need of
protection which include temporary shelter,
counseling, legal assistance, medical care,
self-concept
or
ego-building,
crisis
management and spiritual enrichment.
[Sec. 15, IRR]
Educational benefits
The DepEd, CHED, and TESDA shall provide
the following benefits and privileges:
1. Scholarship programs for qualified solo
parents and their children in institutions of
basic,
tertiary,
and
technical/skills
education;
2. Non-formal
education
programs
appropriate for solo parents and their
children. [Sec. 22, IRR]
Housing benefits
Solo parents who meet the eligibility criteria for
housing assistance under R.A. No. 7279
(Urban Development and Housing Act of 1992)
and other related rules and regulations of
participating housing agencies shall be
provided with liberal terms of payment on
government low-cost housing projects, in
accordance with housing law provisions,
prioritizing applicants below the poverty line as
declared by the NSCB. [Sec. 23, IRR]
The National Housing Authority shall make
available housing units to solo parents in its
housing projects, subject to existing disposition
policies, or may refer them to other housing
projects, as appropriate, provided:
a. The identified solo parent must be eligible
for assistance under the provisions of this
Act;
b. Solo parents applying for housing benefits
must meet the qualification criteria for
housing assistance under Republic Act
7279, or the Urban Development and
Housing Act (UDHA) and other NHA
eligibility criteria under existing policies,
rules and regulations; and
c. Eligible solo parents shall file their
application for housing unit directly with the
concerned NHA Project Offices. [Sec. 24,
IRR]
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Medical Assistance
The DOH shall develop a comprehensive
health care program for solo parents and their
children. [Sec. 25, IRR]
Health/medical services shall be made
available at all times, in all levels of health care
delivery system as mentioned in the previous
section. [Sec. 26, IRR]
F. KASAMBAHAY
[RA 10361: Batas Kasambahay or Domestic
Workers Act]
See III. E. 5. Kasambahays
G. AGRARIAN RELATIONS
1. Concept of Agrarian Reform
Declaration of Policy
The agrarian reform program is founded on the
right of farmers and regular farmworkers, who
are landless, to own directly or collectively the
lands they till or, in the case of other farm
workers, to receive a just share of the fruits
thereof.
To this end, the State shall encourage and
undertake the just distribution of all agricultural
lands, subject to the payment of just
compensation.
[Sec.
2,
RA
6657,
Comprehensive Agrarian Reform Law]
Definition
Agrarian Reform – The redistribution of lands,
regardless of crops or fruits produced to
farmers and regular farmworkers who are
landless, irrespective of tenurial arrangement,
including:
1. The totality of factors and support services
designed to lift the economic status of the
beneficiaries; and
2. All other arrangements alternative to the
physical redistribution of lands, such as:
LABOR LAW
a. Production or profit-sharing,
b. Labor administration, and
c. The distribution of shares of stocks,
which will allow beneficiaries to receive
a just share of the fruits of the lands
they work. [Sec. 3(a), RA 6657]
2. Existence and Concept of
Agricultural Tenancy
Agricultural tenancy – The physical
possession by a person of land devoted to
agriculture belonging to, or legally possessed
by another:
1. For the purpose of production through the
labor of the former and of the members of
his immediate farm household
2. In consideration of which the former agrees
to:
a. Share the harvest with the latter; OR
b. Pay a price certain, either in produce or
in money, or both. [Sec. 3, RA 1199,
Agricultural Tenancy Act]
Tenancy relationship defined [Sec. 6,
RA1199]
Tenancy relationship is a juridical tie which
arises between a landholder and a tenant,
wherein:
a. They agree, expressly or impliedly, to
undertake jointly the cultivation of land
belonging to the former, either under the
share tenancy or leasehold tenancy
system;
b. The tenant acquires the right to continue
working on and cultivating the land, until
and unless he is dispossessed of his
holdings for any of the just causes, or the
relationship is terminated in accordance
with [the Agricultural Tenancy Act].
Requisites for the existence of agricultural
tenancy relationship
1. The parties are landowner and the tenant
or agricultural lessee;
2. The subject of the relationship is
agricultural land;
3. There is mutual consent to the tenancy
between the parties;
4. The purpose of the relationship is
agricultural production;
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5. There is personal cultivation by the tenant
or agricultural lessee; and
6. There is a sharing of harvests between the
parties. [Fuentes v. Caguimbal, G.R. No.
150305 (2007)]
Establishment of tenancy relationship [Sec.
7, RA 1199]
Tenancy relationships may be established
either verbally or in writing, expressly or
impliedly. Once such relationship is
established, the tenant shall be entitled to
security of tenure.
Types of agricultural tenancy [Sec. 4, RA
1199, as amended by RA 2263]
1. Share tenancy exists when
a. Two persons agree on a joint
undertaking for agricultural production;
b. Wherein one party furnishes land and
the other his labor;
c. With either or both contributing any one
or several of the items of production;
d. The tenant cultivating the land
personally with the aid of labor
available to members of his immediate
farm household;
e. And the produce thereof to be divided
between the landholder and the tenant
in proportion to their respective
contributions.
2. Leasehold tenancy exists when
a. A person, who either personally or with
the aid of labor available from the
members of his immediate farm
household;
b. Undertakes to cultivate a piece of
agricultural
land susceptible of
cultivation by a single person, together
with members of his immediate farm
household;
c. Belonging to or legally possessed by,
another, in consideration of a fixed
amount in money or in produce or in
both.
3. Rights of Agricultural Tenants
Rights common to both share and
leasehold tenants [Sec. 22, RA 1199, as
amended by RA 2263]
The tenant shall:
LABOR LAW
1. Be free to work elsewhere whenever the
nature of his farm obligation;
2. Have the right to provide any of the
contributions for production, aside from his
labor, whenever he can do so adequately
and on time subject to the provisions of
Sec. 14 of this Act
Sec. 14, RA 1199, as amended by RA 2263
– The tenant shall have the right to change
the tenancy contract from one of share
tenancy to leasehold tenancy and vice versa
and from one crop sharing arrangement to
another of the share tenancy. If the share
tenancy contract is in writing and is duly
registered, the right to change from one crop
sharing arrangement to another or from one
tenancy system or another may be exercised
at least one month before the beginning of
the next agricultural year after the expiration
of the period of the contract, the right may be
exercised at least one month before the
agricultural year when the change shall be
effected.
3. Have the right to demand for a home lot
suitable for dwelling with an area:
a. not more than 3% of the area of his
landholding; provided
b. it does not exceed 1000 sq. m.; and
that
c. it shall be located at a convenient and
suitable place within the land of the
landholder to be designated by the
latter where the tenant shall construct
his dwelling and may raise vegetables,
poultry, pigs and other animals and
engage in minor industries, the
products of which shall accrue to the
tenant exclusively.
d. The tenant’s dwelling shall not be
removed from the lot already assigned
to him by the landholder, except:
i. If the landholder designates
another site for the tenant’s home
lot and the tenant agrees to the
transfer [Sec. 26, RA1199, as
amended by RA2263]
ii. There is a severance of the
tenancy relationship
iii. The tenant is ejected for cause
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LABOR LAW
In any case, the tenant shall only be removed
after the expiration of 45 days following such
severance of relationship or dismissal for
cause.
provided they are reasonable and adequate to
the purposes of the lease.
Specific rights of rice share tenants [Sec.
36, RA 1199]
The rice share tenant shall have the right to:
1. Determine when to scatter the seeds, to
transplant the seedlings, and to reap the
harvest, provided they shall be in
accordance with proven farm practices and
after due notice to the landholder.
2. Choose the thresher which shall thresh the
harvest whenever it is the best available in
the locality and the best suited to the
landholder’s and tenant’s needs and
provided that the rate charged by the
owner of other threshers under similar
circumstances.
A farmworker is a natural person who renders
services for value as an employee or laborer in
an agricultural enterprise or farm regardless of
whether his compensation is paid on a daily,
weekly, monthly or “pakyaw” basis.
If there are multiple tenants, the choice of
the majority of the tenants shall prevail.
If the landholder is the owner of a thresher
and is ready and willing to grant equal or
lower rates under the same conditions, the
use of the landholder’s thresher shall be
given preference.
3. Apply appropriate pest, insect, disease and
rodent control measures whenever in his
judgment such action is necessary.
4. Apply fertilizer of the kind or kinds shown
by proven farm practices to be adapted to
the requirements of the land, provided the
landholder has not exercised his right to
require the use of such fertilizer.
Specific rights of leasehold tenants [Sec.
43, RA 1199]
The tenant-lessee shall have the right to:
1. Enter the premises of the land, and to the
adequate and peaceful enjoyment thereof;
2. Work the land according to his best
judgment, provided this manner and
method of cultivation and harvest are in
accordance with proven farm practices.
Upon termination of the relationship, have ½ of
the value of the improvements made by him,
4. Concept of Farmworkers
The term includes an individual whose work
has ceased as a consequence of, or in
connection with, a pending agrarian dispute
and who has not obtained a substantially
equivalent and regular farm employment. [Sec.
3(g), RA 6657, Comprehensive Agrarian
Reform Law]
Types of farmworkers
1. Regular Farmworker - a natural person
who is employed on a permanent basis by
an agricultural enterprise or farm. [Sec.
3(h), RA 6657]
2. Seasonal Farmworker - a natural person
who is employed on a recurrent, periodic or
intermittent basis by an agricultural
enterprise or farm, whether as a permanent
or a non-permanent laborer, such as
“dumaan,” “sacada,” and the like. [Sec. 3(i),
RA 6657]
3. Other Farmworker - a farmworker who
does not fall under Sec. 3(g) (farmworker),
Sec. 3(h) (regular farmworker), and Sec.
3(i) (seasonal farmworker). [Sec. 3(j), RA
6657]
Entitlements of different
under the Constitution
farmworkers
Sec. 4, Art. XIII, 1987 Constitution – The
State shall, by law, undertake an agrarian
reform program founded on the right of
farmers and regular farm workers, who are
landless, to own directly or collectively the
lands they till on, or in the case of other farm
workers, to receive a just share of the fruits
thereof.
The 1987 Constitution distinguishes between
regular farmworkers and other farmworkers.
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1. Farmers and regular farmworkers have the
right to own directly or collectively the lands
they till on.
2. Other farmworkers have the right to receive
a just share of the fruits thereof.
Seasonal
farm
workers
have
no
constitutional right to own land
Seasonal farm workers, not having a
constitutional right to own land, do not have a
legal or actual and substantial interest in the
land subject of agrarian reform. They may not
be allowed to intervene in the case concerning
the land. [Fortich v. Corona, G.R. No. 131457
(1998)]
H. UNIVERSAL HEALTH CARE
[RA 11223]
1. Policy
It is the policy of the State to promote and
protect the right to health of all Filipinos and
instill health consciousness among them.
Towards this end, the State shall adopt:
a. An
integrated
and
comprehensive
approach to ensure that all Filipinos are
health literate, provided with healthy living
conditions, and protected from hazards
and risks that could affect their health;
b. A health care model that provides all
Filipinos access to a comprehensive set of
quality and cost-effective, promotive,
preventive, curative, rehabilitative and
palliative health services without causing
financial hardship, and prioritizes the
needs of the population who cannot afford
such services;
c. A framework that fosters a whole-ofsystem, whole-of-government, and wholeof-society approach in the development,
implementation,
monitoring,
and
evaluation of health policies, programs and
plans; and
d. A people-oriented approach for the delivery
of health services that is centered on
people's needs and well-being, and
LABOR LAW
cognizant of the differences in culture,
values, and beliefs. [Sec. 2]
The Universal Health Care Act seeks to:
a. Progressively realize universal health care
in the country through a systemic approach
and clear delineation of roles of key
agencies and stakeholders towards better
performance in the health system; and
b. Ensure that all Filipinos are guaranteed
equitable access to quality and affordable
health care goods and services, and
protected against financial risk. [Sec. 3]
2. Coverage
Population coverage [Sec. 5]
Every Filipino citizen shall be automatically
included into the National Health Insurance
Program.
Service coverage [Sec. 6]
Every Filipino shall be granted immediate
eligibility and access to preventive, promotive,
curative, rehabilitative, and palliative care for
medical, dental, mental and emergency health
services, delivered either as population-based
or individual-based health services.
Provided, That the goods and services to be
included shall be determined through a fair and
transparent Health Technology Assessment
(HTA) Process. [Sec. 6(a)]
HTA - The systematic evaluation of properties,
effects,
or
impact
of
health-related
technologies, devices, medicines, vaccines,
procedures and all other health-related
systems developed to solve a health problem
and improve quality of lives and health
outcomes. [Sec. 4(n)]
Every Filipino shall register with a public or
private primary care provider of choice. The
DOH shall promulgate the guidelines on the
licensing of primary care providers and the
registration of every Filipino to a primary care
provider. [Sec. 6(d)]
Financial coverage [Sec. 7]
Population-based health services shall be
financed by the National Government through
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the DOH and provided free of charge at point
of service for all Filipinos. [Sec. 7(a)]
Population-based
health
service
interventions such as health promotion,
disease surveillance, and vector control, which
have population groups as recipients. [Sec.
4(p)]
Individual-based health services shall be
financed primarily through prepayment
mechanisms such as social health insurance,
private health insurance, and HMO plans to
ensure predictability of health expenditures.
[Sec. 7(b)]
Individual-based health services - services
which can be accessed within a health facility
or remotely that can be definitively traced back
to 1 recipient, has limited effect at a population
level and does not alter the underlying cause of
illness such as ambulatory and inpatient care,
medicines, laboratory tests and procedures,
among others [Sec. 4(p)]
2.
3.
4.
5.
6.
7.
8.
LABOR LAW
elective or appointive position, regardless
of the status of appointment, whose
premium contribution payments are equally
shared by the employee and the employer;
Kasambahays, as defined in the
Kasambahay Law;
All other workers who are not covered by
formal contracts or agreements or who
have no employee-employer relationship
and whose premium contributions are selfpaid, and with capacity to pay premiums,
such as the following:
a. Self-earning individuals; and
b. Professional practitioners;
Overseas Filipino Workers
Filipinos living abroad;
Filipinos with dual citizenship;
Lifetime members as defined in RA 10606
(National Health Insurance Act); and
All Filipinos aged 21 years and above who
have the capacity to pay premiums. [Sec.
8, IRR]
Membership into the NHIP falls under 2
categories [Sec. 8]
1. Direct contributors - Those who have the
capacity to pay premiums, are gainfully
employed and are bound by an employeremployee relationship, or are self-earning,
professional practitioners, migrant workers,
including their qualified dependents, and
lifetime members [Sec. 4(f)]
2. Indirect contributors - All others not
included as direct contributors, as well as
their qualified dependents, whose premium
shall be subsidized by the national
government including those who are
subsidized as a result of special laws [Sec.
4(o)]
Indirect contributors
1. Indigents identified by the DSWD;
2. Beneficiaries of Pantawid Pamilyang
Pilipino Program/Modified Conditional
Cash Transfer (4Ps/MCCT);
3. Senior citizens who are not currently
covered by the Program;
4. Persons with disability, as defined in RA
10754 (An Act Expanding the Benefits and
Privileges of Persons with Disability);
5. All Filipinos aged 21 years old and above
without the capacity to pay premiums;
6. Sangguniang Kabataan officials, as
defined in RA 10742 (Sangguniang
Kabataan Reform Act); and
7. Those previously identified at point-ofservice (POS) or during registration,
members previously sponsored by LGUs
and those who are not yet in the PhilHealth
database and are financially incapable to
pay premiums. [Sec. 8, IRR]
Direct contributors
1. Employees with formal employment
characterized by the existence of an
employer-employee relationship, which
include workers in the government and
private sector, whether regular, casual, or
contractual, are occupying either an
Dependents
1. Legal spouse/s who is/are not an active
member;
2. Unmarried and unemployed legitimate,
illegitimate children, and legally adopted or
stepchildren below twenty-one (21) years
of age;
3. National Health Insurance
Program
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3. Foster children as defined in RA 10165
(Foster Care Act of 2012); and
4. Parents who are sixty (60) years old and
above, not otherwise an enrolled member.
[Sec. 8, IRR]
Benefits [Sec. 9]
Every member shall be granted immediate
eligibility for health benefit package under the
NHIP under the following rules:
1. The PhilHealth ID Card shall not be
required in the availing of any health
service.
2. No co-payment shall be charged for
services rendered in basic or ward
accommodation.
3. Co-payments and co-insurance for
amenities in public hospitals shall be
regulated by the DOH and PhilHealth
Co-payment - a flat fee or predetermined
rate paid at point of service [Sec. 4(e)]
Co-insurance - a percentage of a medical
charge that is paid by the insured, with the
rest paid by the health insurance plan [Sec.
4(d)]
4. The current PhilHealth package
members shall not be reduced.
for
PhilHealth shall provide additional NHIP
benefits for direct contributors, where
applicable: Provided,
1. Failure to pay premiums shall not prevent
the enjoyment of NHIP benefits.
2. Employers and self-employed direct
contributors shall be required to pay all
missed contributions with an interest,
compounded monthly, of at least 3% for
employers and not exceeding 1.5% for selfearning, professional practitioners, and
migrant workers.
VIII. JURISDICTION AND
REMEDIES
A. LABOR ARBITER
LABOR LAW
1. Jurisdiction of the Labor Arbiter
as distinguished from the
Regional Director
JURISDICTION OF THE LABOR ARBITER
Except as otherwise provided under the Code,
the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide:
a. Unfair labor practices cases;
b. Termination disputes;
c. Cases that workers may file involving
wages, rates of pay, hours of work and
other terms and conditions of employment,
if accompanied with a claim for
reinstatement;
d. Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations;
e. Cases arising from any violation of Art.
[279] of this Code, including questions
involving the legality of strikes and
lockouts;
f. Except
claims
for
Employees
Compensation, Social Security, Medicare
[Philhealth] and maternity benefits, all other
claims, arising from employer-employee
relations, including those of persons in
domestic or household service, involving
an amount exceeding P5,000 regardless of
whether accompanied with a claim for
reinstatement. [Art. 224]
g. Money claims arising out of employeremployee relationship or by virtue of any
law or contract, involving claims for actual,
moral, exemplary and other forms of
damages, as well as employment
termination of OFWs;
h. Wage distortion disputes in unorganized
establishments not voluntarily settled by
the parties. [Art. 124]
i. Enforcement of compromise agreements
when there is non-compliance by any of the
parties. [Art. 233]
j. Other cases as may be provided by law.
Requisites of LA’s jurisdiction over Money
Claims
1. Money claims arose from ER-EE relations;
Note: If not, regular courts have jurisdiction
2. Money claims arose from law or contracts
other than a CBA.
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Note: If not, Voluntary Arbitrator has
jurisdiction
LABOR ARBITER v. REGIONAL DIRECTOR
[Art. 129]
A money claim arising from employeremployee
relations,
except
SSS,
ECC/Medicare [Philhealth] claims, is within the
jurisdiction of a Labor Arbiter if:
a. The claim, regardless of amount, is
accompanied with a claim of reinstatement;
or
b. The claim exceeds P5,000, whether or not
there is a claim for reinstatement.
The Regional Director has jurisdiction if:
a. Money claim arose out of employeremployee relationships;
b. Money claim is NOT accompanied by a
claim for reinstatement; AND
c. Money claim does not exceed P5,000,
whether or not claim arose from ER-EE
relationships.
PROCEDURE BEFORE LABOR ARBITER
Where to File [Sec. 1, Rule IV, 2011 NLRC
Rules of Procedure]
All cases which Labor Arbiters have authority
to hear and decide may be filed in the Regional
Arbitration Branch (RAB) having jurisdiction
over the workplace of the complainant or
petitioner.
a. Workplace – place or locality where the
employee is regularly assigned at the time
the cause of action arose. It shall include
the place where the employee is supposed
to report back after a temporary detail,
assignment, or travel.
b. In the case of field employees, ambulant or
itinerant workers, their workplace is (a)
where they are regularly assigned or (b)
where they are supposed to regularly
receive their salaries and wages or work
instructions from, and report the results of
their assignment to their employers.
NATURE OF THE PROCEEDING
Proceedings before the LA are non-litigious.
The Labor Arbiter is not bound by the technical
rules of procedure.
LABOR LAW
The Labor Arbiter shall use all reasonable
means to ascertain the facts in each speedily
and objectively. [Art. 227]
2. Requirements to perfect appeal to
National Labor Relations
Commission
Period of Appeal
Labor Arbiter to NLRC: Decisions, awards, or
orders of the [LA] shall be final and executory
unless appealed to the [NLRC] by any or both
parties within 10 calendar days from receipt
[thereof]. [Art. 229]
Note: If the last day of the reglementary period
falls on a Sunday or a holiday, the last day shall
be the next working day.
Grounds of Appeal [Art. 229]
a. If there is prima facie evidence of abuse of
discretion on the part of the Labor Arbiter
or Regional Director;
b. If the decision, resolution or order was
secured through fraud or coercion,
including graft and corruption;
c. If made purely on questions of law; and/or
d. If serious errors in the findings of fact are
raised which, if not corrected, would cause
grave or irreparable injury to the appellant.
When Appeal is Perfected
Judgment involving a monetary award
An appeal by the employer may be perfected
only upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the Commission in the amount
equivalent to the monetary award in the
judgment appealed from. [Art. 229]
It is clear from the NLRC Rules of Procedure
that appeals must be verified and certified
against forum-shopping by the parties-ininterest themselves. [Antonio B. Salenga, et al.
v. CA, G.R. No. 174941 (2012)]
Note: Decisions of the Labor Arbiter are
appealable to the NLRC. Decisions by the
NLRC are appealable to the CA via Rule 65.
[St. Martin’s Funeral Homes v. NLRC, 295
SCRA 494 (1998)]
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Memorandum of Appeal
In all cases, the appellant shall furnish a copy
of the memorandum of appeal to the other
party who shall file an answer not later than ten
(10) calendar days from receipt thereof. [Art.
229]
3. Reinstatement and/or execution
pending appeal
Reinstatement Pending Appeal and Effect
of NLRC reversal of Labor Arbiter’s order of
reinstatement
In any event, the decision of the Labor Arbiter
reinstating a dismissed or separated
employee, insofar as the reinstatement aspect
is concerned, shall immediately be
executory, even pending appeal.
The employee shall either be:
a. Admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation; or
b. Merely reinstated in the payroll, at the
option of the employer.
The posting of a bond by the employer shall not
stay the execution for reinstatement provided
herein. [Art. 229]
Reversal of the order of reinstatement of
the Labor Arbiter
During the period of appeal until reversal by the
higher court, it is obligatory on the part of the
employer to:
1. Reinstate, and
2. Pay the wages of the dismissed employee.
If the employee has been reinstated during the
appeal period and such reinstatement order is
reversed with finality, the employee is NOT
required to reimburse whatever salary he
received. He is entitled to such especially if he
actually rendered services during the period.
[Garcia v. Philippine Airlines, Inc., G.R. No.
164856 (2009)]
B. NATIONAL LABOR
RELATIONS COMMISSION
LABOR LAW
1. Jurisdiction/Powers
NLRC en banc
a. To promulgate rules and regulations
governing the hearing and disposition of
cases
b. To formulate policies affecting its
administration and operations
c. To allow cases within the jurisdiction of any
division to be heard and decided by
another division
d. To recommend appointment of a Labor
Arbiter
NLRC in divisions (8 divisions with 3
commissioners each)
a. Exclusive appellate jurisdiction from
decisions of LA (within respective territorial
jurisdiction)
b. Jurisdiction over petitions for injunction or
temporary restraining order under Art.
225(e)
c. Certified cases: “national interest” labor
disputes certified (or referred) to the
Commission by the SOLE for compulsory
arbitration under Art. 278 (g)
Exclusive Appellate Jurisdiction: over all
cases decided by Labor Arbiters [Art. 224(b)]
and the DOLE Regional Directors under Art.
129.
2. Remedies
Appeal: Appeal from decisions of the NLRC
after denial of Motion for Reconsideration
appealed via Rule 65 to CA then Rule 45 to the
SC. [St. Martin’s Funeral Homes v. NLRC, 295
SCRA 494 (1998)]
Requisites for Perfection of Appeal to the
Court of Appeals [Rule VI, 2011 NLRC Rules
of Procedure]
1. The appeal shall be:
a. Filed within the reglementary period;
b. Verified by the appellant himself in
accordance with Sec. 4, Rule 7 of the
Rules of Court;
c. In the form of a memorandum of appeal
which shall state the grounds relied
upon and the arguments in support
thereof, the relief prayed for, and with a
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statement of the date the appellant
received the appealed decision,
resolution or order;
d. In three (3) legibly typewritten or
printed copies; and
e. Accompanied by (a) proof of payment
of the required appeal fee; (b) posting
of a cash or surety bond as provided in
Sec. 6 of the NLRC Rules; and (c) proof
of service upon the other parties.
2. A mere notice of appeal without complying
with the other requisites aforestated shall
not stop the running of the period for
perfecting an appeal.
3. The appellee may file with the Regional
Arbitration Branch or Regional Office
where the appeal was filed, his answer or
reply to appellant’s memorandum of
appeal, not later than 10 calendar days
from receipt thereof.
a. Failure on the part of the appellee who
was properly furnished with a copy of
the appeal to file his answer or reply
within the said period may be
construed as a waiver on his part to file
the same.
4. Subject to the provisions of Art. [225] of the
Labor Code, once the appeal is perfected
in accordance with these Rules, the
Commission shall limit itself to reviewing
and deciding only the specific issues that
were elevated on appeal.
EXTRAORDINARY REMEDY
Verified Petition: A party aggrieved by any
order or resolution of the Labor Arbiter,
including a writ of execution and others issued
during execution proceedings, may file a
verified petition to annul or modify the same.
The petition may be accompanied by an
application for the issuance of a temporary
restraining order and/or writ of preliminary or
permanent injunction:
a. To enjoin the Labor Arbiter, or any person
acting under his/her authority
b. To desist from enforcing said resolution,
order or writ. [Rule XII, Sec. 1, 2011 NLRC
Rules of Procedure, as amended by En
Banc Resolution No. 07-14]
CERTIFIED CASES
LABOR LAW
Definition
Certified labor disputes are cases certified to
the Commission for compulsory arbitration
under Art. 278(g) of the Labor Code. [Sec. 2,
The 2011 NLRC Rules and Procedures]
Power of the Secretary of Labor to Certify
Cases
When, in his opinion, there exists a labor
dispute causing or likely to cause a strike or
lockout in an industry indispensable to the
national interest, the Secretary of Labor and
Employment may:
1. Assume jurisdiction over the dispute; and
2. Decide it or certify the same to the
Commission for compulsory arbitration.
Such assumption or certification shall have the
effect of automatically enjoining the intended or
impending strike or lockout as specified in the
assumption or certification order. [Art. 278(g)]
Function of the NLRC
When sitting in a compulsory arbitration
certified to by the Secretary of Labor, the NLRC
is tasked:
a. To implement the order of the Secretary as
an administrative body, not as a judicial
court
b. To formulate the terms and conditions of
the CBA, staying within the scope of the
order
c. To act within the earliest time possible and
with the end in view that its action would not
only serve the interests of the parties
alone, but would also have favorable
implications to the community and to the
economy as a whole. [Art. 278(g); Union of
Filipino Employees v. NLRC, G.R. No.
91025 (1990)]
Effects of Certification
1. Upon certification, the intended or
impending strike or lockout is automatically
enjoined, notwithstanding:
a. The filing of any motion for
reconsideration of the certification
order;
b. The non-resolution of any such motion,
which may have been duly submitted to
the Office of the Secretary of Labor and
Employment.
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2. If a work stoppage has already taken place
at the time of the certification:
a. All striking or locked out employees
shall immediately return to work; and
b. The employer shall immediately
resume operations and readmit all
workers under the same terms and
conditions prevailing before the strike
or lockout.
3. All cases between the same parties, shall
be considered subsumed or absorbed by
the certified case, and shall be decided by
the
appropriate
Division
of
the
Commission,
EXCEPT
where
the
certification order specifies otherwise the
issues submitted for arbitration which are:
a. Already filed or may be filed, and
b. Relevant to or are proper incidents of
the certified case.
4. The parties to a certified case, under pain
of contempt, shall inform their counsels
and the Division concerned of all cases
pending with the Regional Arbitration
Branches and the Voluntary Arbitrators
relative or incident to the certified case
before it.
5. When a certified labor dispute involves a
business entity with several workplaces
located in different regions, the Division
having territorial jurisdiction over the
principal office of the company shall
acquire jurisdiction to decide such labor
dispute; unless the certification order
provides otherwise. [Sec. 3, Rule VIII, 2011
NLRC Rules and Procedures]
Effects of Defiance
Non-compliance with the certification order of
the SOLE shall:
1. Be considered as an illegal act committed
in the course of the strike or lockout; and
2. Authorize the Commission to enforce the
same under pain of immediate disciplinary
action, including:
a. Dismissal or loss of employment
status; or
b. Payment by the locking-out employer
of backwages, damages; and/or
c. Other affirmative relief, even criminal
prosecution against the liable parties.
LABOR LAW
The Commission may also seek the assistance
of law enforcement agencies to ensure
compliance and enforcement of its orders and
resolutions. [Sec. 4, Rule VIII, 2011 NLRC
Rules and Procedures]
Strict Compliance of Assumption and
Certification Orders
The Secretary's assumption and certification
orders being executory in character are to be
strictly complied with by the parties even during
the pendency of a petition questioning their
validity.
The extraordinary authority given by law to the
Secretary of Labor is "aimed at arriving at a
peaceful and speedy solution to labor disputes,
without jeopardizing national interests." [Union
of Filipino Employees v. NLRC, G.R. No.
91025 (1990)]
Procedure in certified cases
a. When there is no need to conduct a
clarificatory hearing, the Commission
shall resolve all certified cases within 30
calendar days from receipt by the assigned
Commissioner of the complete records,
which shall include the position papers of
the parties and the order of the SOLE
denying the motion for reconsideration of
the certification order, if any.
b. Where a clarificatory hearing is needed,
the Commission shall, within 5 calendar
days from receipt of the records, issue a
notice to be served on the parties through
the fastest means available, requiring them
to appear and submit additional evidence,
if any. All certified cases shall be resolved
by the Commission within 60 calendar days
from receipt of the complete records by the
assigned Commissioner.
No motion for extension or postponement shall
be entertained. [Sec. 5, Rule VIII, 2011 NLRC
Rules and Procedures]
Execution of Judgment
Upon issuance of the entry of judgment, the
Commission motu proprio or upon motion by
the proper party, may cause the execution of
the judgment in the certified case. [Sec. 6,
Rule VIII, 2011 NLRC Rules and Procedures]
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C. COURT OF APPEALS
Appeal via Rule 65, Rules of Court
Petition for certiorari
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
annulling or modifying the proceedings of
any tribunal, board or officer exercising judicial
or quasi-judicial functions, and granting such
incidental reliefs as law and justice may
require:
1. When such tribunal, board or officer has
acted:
a. Without or in excess its or his
jurisdiction, or
b. With grave abuse of discretion
amounting to lack or excess of
jurisdiction; AND
2. When there is no appeal, or any plain,
speedy, and adequate remedy in the
ordinary course of law.
LABOR LAW
The petition shall be accompanied by:
1. A certified true copy of the judgment, order
or resolution subject thereof;
2. Copies of all pleadings and documents
relevant and pertinent thereto; and
3. A sworn certification of non-forum
shopping as provided in the third
paragraph of Sec. 3, Rule 46.
Petition for prohibition
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
commanding the any tribunal, corporation,
board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions to
desist from further proceedings in the action
or matter specified therein, or otherwise
granting such incidental reliefs as law and
justice may require:
1. When the proceedings of such tribunal,
corporation, board, officer or person are:
a. Without or in excess of its or his
jurisdiction; or
b. With grave abuse of discretion
amounting to lack or excess of
jurisdiction, AND
2. When there is no appeal or any other plain,
speedy, and adequate remedy in the
ordinary course of law.
The petition shall be accompanied by:
1. A certified true copy of the judgment, order
or resolution subject thereof;
2. Copies of all pleadings and documents
relevant and pertinent thereto; and
3. A sworn certification of non-forum
shopping as provided in the third
paragraph of Sec. 3, Rule 46.
Petition for mandamus
A person may file a verified petition in the
proper court, alleging the facts with certainty
and praying that judgment be rendered
commanding any tribunal, corporation, board,
officer or person, immediately or at some other
time to be specified by the court, to do the act
required to be done to protect the rights of the
petitioner, and to pay the damages sustained
by the petitioner by reason of the wrongful acts
of the respondent:
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1. When any tribunal, corporation, board,
officer or person:
a. Unlawfully neglects the performance of
an act which the law specifically
enjoins as a duty resulting from an
office, trust, or station; or
b. Unlawfully excludes another from the
use and enjoyment of a right or office
to which such other is entitled; AND
2. When there is no other plain, speedy and
adequate remedy in the ordinary course of
law.
LABOR LAW
cannot avail himself of the writ of certiorari, his
predicament being the effect of his deliberate
inaction. [Tirazona v Phil EDS Techno-Service
Inc, G.R. No. 169712 (2009)]
Note: Review of decisions of the NLRC shall be
done through (in order):
1. Motion for reconsideration
2. Rule 65 to the CA
3. Rule 45 to the SC
E. BUREAU OF LABOR
RELATIONS
D. SUPREME COURT
1. Jurisdiction
All references in the amended Sec. 9 of B.P.
No. 129 to supposed appeals from the NLRC
to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions
for certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals, in
strict observance of the doctrine on the
hierarchy of courts, as the appropriate forum
for the relief desired. [St. Martin Funeral Home
v. NLRC, G.R. No. 130866 (1998)]
Rule 45, Rules of Court
Filing of petition with Supreme Court
A party desiring to appeal by certiorari from a
judgment or final order or resolution of the
Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever
authorized by law, may file with the Supreme
Court a verified petition for review on certiorari.
The petition shall raise only questions of law
which must be distinctly set forth. [Sec. 1]
Since the Court of Appeals had jurisdiction
over the petition under Rule 65, any alleged
errors committed by it in the exercise of its
jurisdiction would be errors of judgment which
are reviewable by timely appeal, and not by a
special civil action of certiorari.
If the aggrieved party fails to do so within the
reglementary period, and the decision
accordingly becomes final and executory, he
The Bureau of Labor Relations and the Labor
Relations Divisions in the regional offices of the
Department of Labor and Employment shall
have original and exclusive authority:
a. To act –
1. At their own initiative, or
2. Upon request of either or both parties,
b. On all inter-union and intra-union conflicts,
and
c. All disputes, grievances or problems
arising from or affecting labor-management
relations in all workplaces –
1. Whether agricultural or non-agricultural
2. Except those arising from the
implementation or interpretation of
collective
bargaining
agreements
which shall be the subject of grievance
procedure and/or voluntary arbitration.
[Art. 232]
The Bureau shall have fifteen (15) calendar
days to act on labor cases before it, subject to
extension by agreement of the parties.
Original Jurisdiction
a. Inter-union and intra-union disputes and
other related labor relations disputes.
b. All disputes, grievances or problems
arising from or affecting labor-management
relations in all workplaces whether
agricultural or non-agricultural, except
those arising from the implementation or
interpretation of collective bargaining
agreements which shall be the subject of
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grievance procedure
arbitration. [Art. 232]
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and/or
voluntary
Note: If the complaint involves an independent
union, chartered local or worker’s association,
file with the DOLE Regional Office but if the
complaint involves a federation or an
industry/national union, file with the BLR.
Inter-Union Dispute: one which occurred
between or among legitimate labor unions
involving
representation
questions
for
purposes of collective bargaining or to any
other conflict or dispute between legitimate
labor unions [IRR Book V, IRR Rule 1, Sec. 1
(x)]
Intra-Union Dispute: conflict within and inside
a union between and among union members
including grievances from any violation of
rights and conditions of membership or
provisions from the union’s constitution and bylaws and chartering of unions [D.O. No. 40-03,
Rule I, Sec. 1 (bb)]
Inter/Intra – Union Disputes shall include:
[DO No. 040-I-15, Book V, Rule XI]
1. Cancellation of registration of a labor
organization filed by its members or by
another labor organization [Sec. 1a]
2. Conduct of election of union and workers'
association officers/nullification of election
of union and workers' association officers
[Sec. 1(b)]
3. Audit/accounts examination of union or
workers' association funds [Sec. 1(c)]
4. Deregistration of collective bargaining
agreements [Sec. 1(d)]
5. Validity/invalidity
a. Of union affiliation or disaffiliation [Sec.
1(e)]
b. Of acceptance/non-acceptance for
union membership [Sec. 1(f)]
c. Of impeachment/expulsion of union
and workers' association officers and
members [Sec. 1(g)]
d. Of the SEBA certification [Sec. 1(h)]
e. Or disagreements over any provision in
a union or workers' association
constitution and by-laws [Sec. 1(j)]
6. Opposition to application for union and
CBA registration [Sec. 1(i)]
LABOR LAW
7. Disagreements
over
chartering
or
registration of labor organizations and
collective bargaining agreements [Sec.
1(k)]
8. Violations of –
a. The rights and conditions of union or
workers' association membership [Sec.
1(l)]
b. The rights of legitimate labor
organizations, except interpretation of
collective bargaining agreements [Sec.
1(m)]; and
9. Such other disputes or conflicts involving
the rights to self-organization, union
membership and collective bargaining
a. Between and among legitimate labor
organizations; or
b. Between and among members of a
union or workers' association [Sec.
1(n)]
Appellate Jurisdiction
The BLR Director exercises exclusive
appellate jurisdiction over:
1. All decisions of the Med-Arbiter in:
a. Inter/Intra-union
disputes
(Note:
Complaints involving Federations,
National Unions, etc. pursuant to Rule
XI Sec. 4, formerly Sec. 5, as amended
by D.O. 40-F-03).
b. Other related labor relations disputes.
2. All decisions from the DOLE Regional
Director in the cases falling under their
original jurisdiction as enumerated. [Sec.
14, Rule XI, Book V, IRR]
Decisions of the BLR through its appellate
jurisdiction are final and executory 10 days
after receipts by the parties. [Sec. 20, Rule XI,
Book V, IRR].
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LABOR LAW
2. Appeals
Decisions of the BLR through its original
jurisdiction are appealable to the Secretary of
Labor and Employment. [Sec. 15, Rule XI,
Book V, IRR].
Decisions of the BLR in its appellate jurisdiction
are final and executory, unless appealed to the
CA via Rule 65 and later to the SC via Rule 45.
[Abbot Laboratories Philippines, Inc. v. Abbot
Laboratories Employees Union, 323 SCRA 392
(2000)]
3. Administrative Functions of the
BLR
a. Regulation of registration of the labor
unions;
b. Keeping a registry of legitimate labor
unions;
c. Maintenance of a file of CBAs;
d. Maintenance of a file of all settlements or
final decisions in the SC, CA, NLRC and
other agencies on labor disputes.
F. NATIONAL CONCILIATION
AND MEDIATION BOARD
All issues arising from labor and employment
shall be subject to mandatory conciliationmediation.
Exception: As provided in Title VII-A, Book V
of this Code, as amended, or as may be
excepted by the Secretary of Labor and
Employment.
The Labor Arbiter or the appropriate DOLE
agency or office that has jurisdiction over the
dispute shall entertain only endorsed or
referred cases by the duly authorized officer.
Any or both parties involved in the dispute may
pre-terminate
the
conciliation-mediation
proceedings
and request referral
or
endorsement to the appropriate DOLE agency
or office which has jurisdiction over the dispute,
or if both parties so agree, refer the unresolved
issues to voluntary arbitration. [Art. 228]
Nature of proceedings
Conciliation and mediation is non-litigious/nonadversarial, less expensive, and expeditious.
Under this informal set-up, the parties find it
more expedient to fully ventilate their
respective positions without running around
with legal technicalities and, in the course
thereof, afford them wider latitude of possible
approaches to the problem.
SENA
The Single-Entry Approach (SENA) is a
prescribed 30-day Mandatory ConciliationMediation Services to be made operational
through the Single Entry Approach Desk
(SEAD) for all labor and employment cases
except:
1. cases on notices of strikes or lock-outs, or
on preventive mediation cases (NCMB)
2. interpretation and implementation of CBA
(Grievance Machinery) [D.O. No. 107-10]
1. Jurisdiction
The NCMB is an agency attached to the DOLE
principally in charge of the settlement of labor
disputes through conciliation, mediation and of
the promotion of voluntary approaches to labor
dispute prevention and settlement. [NCMB
Manual of Procedures for Conciliation and
Preventive Mediation Cases, Rule III, sec. 1]
The following procedures shall be observed in
collective bargaining:
1. When a party desires to negotiate an
agreement, it shall serve a written notice
upon the other party with a statement of its
proposals [Art. 261(a)].
a. The other party shall make a reply
thereto not later than ten (10) calendar
days from receipt of such notice [Art.
261(a)];
b. Should differences arise on the basis of
such notice and reply, either party may
request for a conference which shall
begin not later than ten (10) calendar
days from the date of request [Art.
261(b)].
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2. If the dispute is not settled, the Board shall
intervene upon request of either or both
parties or at its own initiative and
immediately call the parties to conciliation
meetings [Art. 261(c)].
a. The Board shall have the power to
issue
subpoenas
requiring
the
attendance of the parties to such
meetings.
i. It shall be the duty of the parties to
participate fully and promptly in the
conciliation meetings the Board
may call [Art. 261(c)];
b. During the conciliation proceedings in
the Board, the parties are prohibited
from doing any act which may disrupt
or impede the early settlement of the
disputes [Art. 261(d)]; and
c. The Board shall exert all efforts to
settle
disputes
amicably
and
encourage the parties to submit their
case to a voluntary arbitrator [Art.
261(e)].
In Collective Bargaining:
1. If the dispute is not settled, the NCMB will
intervene upon request of either party or at
its own initiative to call for conciliation with
the power to issue subpoenas requiring
attendance:
a. During
conciliation
proceedings,
parties are prohibited from doing any
act which may disrupt or impede the
early settlement of the dispute;
b. NCMB will exert all efforts to settle
disputes amicable and encourage
submission to a voluntary Arbitrator.
[Art. 261(c)(d)]
2. Procedure for Correction of Wage
Distortion:
a. In organized establishments with CBA
i. Submit
issue
to
grievance
machinery
ii. If unresolved, refer to voluntary
arbitration who will decide within 10
days unless otherwise agreed
upon by parties in writing
LABOR LAW
b. If unorganized establishments without
CBA:
i. Submit issue before the NCMB for
conciliation after endeavors to
correct have failed
ii. If not fruitful within 10 days, refer to
the NLRC for arbitration to be
decided within 20 days from
submission [Rule VII, Rules of
Procedure of Minimum Wage
Fixing]
2. Conciliation as distinguished from
mediation
Conciliation
Mediation
Both refer to a process where a third
person called a Conciliator/Mediator
intervenes in a dispute to reconcile
differences or persuade them to adjust or
settle their dispute
C-M facilitates
C-M assists parties
disputants to keep
to voluntarily reach
things calm, delivers
mutually
messages back and
acceptable
forth between the
settlement.
parties.
[Conciliation-Mediation, DOLE – NCMB
Website,
available
at:
http://ncrwp.ncmb.ph/?page_id=99]
Conciliator-Mediator [C-M] — Official of the
NCMB whose principal function is to settle and
dispose potential and actual labor disputes
through conciliation and preventive mediation
including the promotion and encouragement of
voluntary approaches to labor disputes
prevention and settlement. [Sec. 1, Rule III,
NCMB Manual of Procedure for Conciliation
and Preventive Mediation Cases]
Pre-Termination of Conciliation-Mediation:
Any or both parties in the dispute may preterminate the proceedings and request referral
or endorsement to the appropriate DOLE
agency or office with jurisdiction or to the
voluntary arbiter if both parties agreed.
Privileged Communication not Available as
Evidence: Any statement made in conciliation
proceedings shall be treated as privileged
communication, and shall not be used as
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evidence in the NLRC. Conciliators may not
testify in any court or body regarding any
matter during the conciliation proceedings.
[D.O. No. 40-03, Rule XXII, Sec. 2]
LABOR LAW
G. DEPARTMENT OF LABOR AND
EMPLOYMENT REGIONAL DIRECTORS
1. Jurisdiction
3. Preventive mediation
Note: Refer also to Sec. 3 (Action on NonStrikeable Issues) & Sec. 4 (Notice Converted
to Preventive Mediation) of Rule V of the
NCMB Manual of Procedure for Conciliation
and Preventive Mediation Cases involving nonstrikeable issues.
Definition [Sec. 1(20), Rule III, NCMB Manual
of Procedure for Conciliation and Preventive
Mediation Cases]
Preventive Mediation Cases - refer to the
potential labor disputes which are the subject
of a formal or informal request for conciliation
and mediation assistance –
a. Sought by either or both parties, or
b. Upon the initiative of the NCMB to avoid the
occurrence of actual labor disputes.
Purpose of Preventive Mediation — to
remedy, contain or prevent potential labor
disputes’
degeneration into a full-blown
dispute through amicable settlement. It can be
initiated by:
a. Filing a notice or request of preventive
mediation; or
b. Conversion of the notice of strike/lockout
into at preventive mediation case.
Note: If the subject of the strike is nonstrikeable, the NCMB can motu proprio convert
the notice into preventive mediation or refer the
issues to voluntary arbitration
The DOLE Regional Directors shall have
original and exclusive jurisdiction over:
a. Labor standards enforcement cases under
Art. 128;
Note: as the duly authorized representative
of the SOLE
b. Small money claims from labor standards
violations not exceeding P5,000 and not
accompanied
with
a
claim
for
reinstatement under Art. 129;
c. Operational safety and health conditions
(can order stoppage or suspension of
operations) [Art. 128; Bk. IV, Rule II, Sec.
8];
d. Registration of unions and cancellations
thereof, cases filed against unions and
other labor relations related cases [Sec. 4,
Rule XI (renumbered, D.O. 40-F-03];
Note: only if against an independent labor
union, chartered local or workers’
association;
e. Complaints against private recruitment and
placement agencies (PRPAs) for local
employment [Secs. 45/46, D.O. 141-14];
and
f. Cases submitted to voluntary arbitration in
their capacity as Ex Officio Voluntary
Arbiters under D.O 83-07 (2007).
Note: The DOLE Regional Director, as the duly
authorized representative of the SOLE, also
has visitorial and enforcement power under:
1. Art. 37, Art. 128 (have access to
employer’s records and premises with right
to copy or investigate to determine
violations of law); and
2. Art. 289 (where it can inquire into the
financial activities of any legitimate labor
organization and examine their books and
records to determine compliance with the
law if requested by at least 20% of total
membership).
Appeal: Appeal of decisions from visitorial and
enforcement power to the SOLE within 10
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calendar days from receipt thereof [Rule IV,
sec. 1, Rules on Disposition of Labor Standard
Cases in the Regional Offices]
2. Recovery and adjudicatory power
Art. 129. Recovery of Wages, Simple Money
Claims and Other Benefits.
Who: The Regional Director of the Department
of Labor and Employment or any of the duly
authorized hearing officers of the Department
[par. 1]
What: They are empowered to hear and
decide any matter involving the recovery of
wages and other monetary claims and benefits
including legal interest, owing to an
employee or person employed in domestic
or household service or househelper under
this Code, arising from employer-employee
relations
How: Through summary proceeding and after
due notice
When: Upon complaint of any interested party
Conditions:
a. Provided that such complaint does not
include a claim for reinstatement;
b. Provided, further, That the aggregate
money claims of each employee or
househelper do not exceed five thousand
pesos (P5,000).
Period to decide: The Regional Director or
hearing officer shall decide or resolve the
complaint within thirty (30) calendar days from
the date of the filing of the same [Art. 129, par.
2].
Effects of decision to the recovered sum on
behalf of any employee or househelper
General rule: Shall be held in a special deposit
account by, and shall be paid, on order of the
Secretary of Labor and Employment or the
Regional Director directly to the employee or
househelper concerned [Art. 129, par. 3].
Exception: Shall be held as a special fund of
the Department of Labor and Employment to
LABOR LAW
be used exclusively for the amelioration and
benefit of workers –
When any such sum not paid to the
employee or househelper because he
cannot be located after diligent and
reasonable effort to locate him within a
period of three (3) years [Art. 129, par. 4]
Appeal of decision or resolution [Art. 129,
par. 5]:
Any decision or resolution of the Regional
Director or hearing officer pursuant to this
provision may be appealed on the same
grounds provided in Article 223 of this Code.
Period: Within five (5) calendar days from
receipt of a copy of said decision or resolution
To whom: To the National Labor Relations
Commission which shall resolve the appeal
within ten (10) calendar days from the
submission of the last pleading required or
allowed under its rules.
The Secretary of Labor and Employment or his
duly authorized representative may supervise
the payment of unpaid wages and other
monetary claims and benefits, including legal
interest, found owing to any employee or
househelper under this Code [Art. 129, par. 6].
Small money claims
Note: See also discussion in VI.F. on Money
Claims arising from Employer-Employee
Relationship
Period of Appeal to NLRC: Decisions of the
Regional director on recovery of wages, simple
money claims and other benefits, shall be final
and executory unless appealed within 5 days
from receipt thereof. [Art. 129]
Definition: Recovery/adjudicatory power is the
power of the Regional Director or any duly
authorized hearing officer of DOLE to
adjudicate on recovery of wages of
employees/househelpers employed in a
domestic household for claims not exceeding
P5,000 and without seeking reinstatement.
[Art. 129].
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If any of the requisites are missing, the Labor
Arbiter shall have jurisdiction over claims
arising from ER-EE relations except claims for
employees’ compensation, SSS, PhilHealth
and maternity benefits. [Art. 224]
Money claims should be filed within 3 years
from the time the cause of action accrued. [Art.
306]
H. DEPARTMENT OF LABOR AND
EMPLOYMENT SECRETARY
POWERS
1. Visitorial (access to employer’s records
and premises and to copy therefrom) and
enforcement powers (to question any
employee and investigate any fact which
may be necessary to determine violations)
2. Power to suspend effects of termination
3. Assumption of jurisdiction
4. Appellate jurisdiction
5. Voluntary arbitration powers
1. Jurisdiction
a. Assumption of jurisdiction
When May the SOLE Assume Jurisdiction
Art. 278 (g). Strikes, Picketing and
Lockouts. – The SOLE may:
a. Assume jurisdiction over the dispute and
decide it; or
b. Certify the same to the Commission for
compulsory arbitration,
when in his opinion there exists a labor dispute
causing, or likely to cause, a strike or lockout in
an industry indispensable to the national
interest.
Requisites for Assumption of Jurisdiction
1. Both parties have requested the SOLE to
assume jurisdiction; or
2. After a conference called by the Office of
the SOLE on the propriety of its issuance,
motu proprio or upon a request or petition
by either party to the labor dispute. [Book
V, IRR Rule XXII, sec. 15, IRR as amended
by D.O. No. 40-H-13 s 2013]
LABOR LAW
Industries Indispensable to the National
Interest
a. Hospital sector
b. Electric power industry
c. Water supply service, to exclude small
water supply services such as bottling and
refilling stations
d. Air traffic control
e. Other industries as may be recommended
by the National Tripartite Industrial Peace
Council (TIPC) [Sec. 16, Rule XXII, Book
V, IRR as amended by D.O. No. 40-H-13]
Who determines industries indispensable
to the national interest [Art. 278(g)]
a. Secretary of Labor and Employment
b. President
Power of the Secretary of Labor to Assume
Jurisdiction (alternative)
a. Decide the labor dispute himself/herself.
b. Certify the labor dispute to the NLRC for
compulsory arbitration.
Scope: The authority of the Secretary to
assume jurisdiction over a labor dispute
includes and extends to all questions and
controversies arising from such labor dispute.
The power is plenary and discretionary in
nature to enable him to effectively and
efficiently dispose of the dispute. [Philcom
Employees Union v. Philippine Global
Communications, 495 SCRA 214 (2006)]
Powers of the President (Not precluded by
the powers of the Secretary of Labor)
a. Determine the industries indispensable to
the national interest
b. Assume jurisdiction over any such labor
dispute to settle or terminate such dispute
Effects of Assumption of Jurisdiction:
Automatically enjoins intended or impending
strike or lockout. If one has already taken place
at the time of assumption or certification, all
striking or locked out employees shall
immediately return-to-work and the employer
shall immediately resume operations and
readmit all workers under the same terms and
conditions prevailing before the strike or
lockout. [Art. 278 (g)]
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The SOLE may also determine the retroactivity
of arbitral awards pursuant to power to assume
jurisdiction as part of his/her plenary powers to
determine the effectivity thereof in absence of
specific provision of law. [LMG Chemicals
Corp. v. Sec. of Labor and Employment, 356
SCRA 577 (2001)]
i. Automatic Injunction of
Intended Of Impending Strike
or Lockout
Art. 278 (g). Strikes, Picketing and
Lockouts. – [S]uch assumption or
certification shall have the effect of
automatically enjoining the intended or
impending strike or lockout as specified in
the assumption or certification order. […]
ii. Return-to-work and
readmission if strike or
lockout has already taken
place
Art. 278 (g). Strikes, Picketing and
Lockouts. – [I]f one has already taken place
at the time of assumption or certification, all
striking or locked out employees shall
immediately
return-to-work
and
the
employer
shall
immediately resume
operations and readmit all workers under the
same terms and conditions prevailing before
the strike or lockout. […]
Nature of return-to-work order
[T]he return-to-work order not so much confers
a right as it imposes a duty; and while, as a
right, it may be waived, it must be discharged
as a duty even against the worker's and/or
employers’ will.
Returning to work in this situation is not a
matter of option or voluntariness but of
obligation.
The worker must return to his job together with
his co-workers so the operations of the
company can be resumed and it can continue
serving the public and promoting its interest.
LABOR LAW
That is the real reason such return can be
compelled. So imperative is the order in fact
that it is not even considered violative of the
right against involuntary servitude. [Kaisahan
ng Mga Manggagawa sa Kahoy v. Gotamco
Sawmills, G.R. No. L-1573 (1948)]
Note: It must be strictly complied with even
during the pendency of any petition questioning
its validity. [Manila Hotel Employees
Association and its Members v. Manila Hotel
Corp., 517 SCRA 349 (2007)]; the purpose of
SOLE’s extraordinary power is aimed at
arriving at a peaceful and speedy solution to
labor disputes without jeopardizing national
interest. [Union of Filipro Employees-Drug v.
Nestle, 499 SCRA 521 (2006)]
The SOLE also has plenary powers to
determine the retroactivity of its arbitral
awards. [LMG Chemicals Corp. v. Sec. of
Labor and Employment, 356 SCRA 577
(2001)]
Immediately Executory
The assumption and certification orders are
executory in character and must be strictly
complied with by the parties. [Allied Banking v.
NLRC, G.R. No. 116128 (1996)]
Strikes and lockouts in hospitals, clinics
and similar medical institutions
It shall be the duty of the striking union or
locking-out employer to provide and maintain
an effective skeletal workforce of medical and
other health personnel, whose movement and
services
shall
be
unhampered
and
unrestricted, as are necessary to insure the
proper and adequate protection of the life and
health of its patients, most especially
emergency cases, for the duration of the strike
or lockout.
In such cases, therefore, the Secretary of
Labor and Employment may immediately
assume, within twenty-four (24) hours from
knowledge of the occurrence of such a strike or
lockout, jurisdiction over the same or certify it
to the Commission for compulsory arbitration.
[Art. 278, par. 2]
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Rationale: The highest respect is accorded to
the right of patients to life and health.
Effect of defiance of assumption or
certification orders
Par. 2, Art. 279 (a). Prohibited Activities. –
No strike or lockout shall be declared:
a. after assumption of jurisdiction by the
President or the Minister;
b. after certification or submission of the
dispute to compulsory or voluntary
arbitration; or
c. during the pendency of cases involving the
same grounds for the strike or lockout.
LABOR LAW
Stricter penalties for non-compliance with
orders, prohibitions, and/or injunctions
issued by the Secretary of Labor in strikes
involving hospitals, clinics, and similar
medical institutions
1. Immediate disciplinary action against both
union and employer
2. Dismissal/loss of employment for members
of the striking union
3. Payment by employer of backwages,
damages, and other affirmative relief
4. Criminal prosecution against either or both
the union and employer
INJUNCTIONS
Strike/lockout becomes illegal
A strike undertaken despite the issuance by the
Secretary of Labor of an assumption or
certification order becomes a prohibited activity
and thus, illegal, pursuant to Art. 279(a) of the
Labor Code. [Allied Banking v. NLRC, G.R. No.
116128 (1996)]
See notes on Liabilities of employer, union
officers, and ordinary workers under illegal
strike.
SUMMARY
OF
LIABILITIES
OF
PARTICIPANTS IN AN ILLEGAL STRIKE/
LOCKOUT [Art. 279]
1. Employer in an illegal lockout – workers
terminated due to illegal lockout shall be
entitled to reinstatement plus full
backwages.
2. Union
officers
who
knowingly
participated in illegal strike – deemed to
have lost their employment
3. Union
officers
who
knowingly
participated in illegal acts during a
LAWFUL strike – deemed to have lost
their employment.
4. Ordinary workers – deemed to have lost
their employment only if they knowingly
participated in illegal acts.
Art. 266. Injunction Prohibited. – No
temporary or permanent injunction or
restraining order in any case involving or
growing out of labor disputes shall be issued
by any court or other entity, except as
otherwise provided in Arts. [225] and [279]
of this Code.
General Rule: Injunctions are prohibited.
Exceptions: Those provided under Art. 225
(referring to the Powers of the NLRC) in
connection with Art. 279 (on Prohibited
Activities) under the Labor Code.
Findings of fact by the NLRC for an
Injunction to issue
Art. 225(e) Powers of the Commission
a. To enjoin or restrain any actual or
threatened commission of any or all
prohibited or unlawful acts; or
b. To require the performance of a particular
act in any labor dispute which, if not
restrained or performed forthwith, may
cause grave or irreparable damage to any
party or render ineffectual any decision in
favor of such party
Provided, That no temporary or permanent
injunction in any case involving or growing out
of a labor dispute as defined in this Code shall
be issued except:
1. After hearing the testimony of witnesses
2. With opportunity for cross-examination, in
support of the allegations of a complaint
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made under oath, and testimony in
opposition thereto, if offered, and
3. Only after a finding of fact by the
Commission, to the effect:
a. That prohibited or unlawful acts have
been threatened and will be committed
unless restrained, or have been
committed and will be continued unless
restrained
i. But no injunction or temporary
restraining order shall be issued on
account of any threat, prohibited or
unlawful act
ii. Except against the person or
persons,
association
or
organization making the threat or
committing the prohibited or
unlawful act or actually authorizing
or ratifying the same after actual
knowledge thereof;
b. That substantial and irreparable injury
to complainant's property will follow;
c. That as to each item of relief to be
granted, greater injury will be inflicted
upon complainant by the denial of relief
than will be inflicted upon defendants
by the granting of relief;
d. That complainant has no adequate
remedy at law; and
e. That the public officers charged with
the duty to protect complainant's
property are unable or unwilling to
furnish adequate protection.
Prohibited Activities [Art. 279]
1. No labor organization or employer shall
declare a strike or lockout:
a. Without
first
having
bargained
collectively in accordance with Title VII
of this Book or without first having filed
the notice required in the preceding
Art.; or
b. Without the necessary strike or lockout
vote first having been obtained and
reported to the Ministry [DOLE].
No strike or lockout shall be declared:
a. After assumption of jurisdiction by the
President or the Minister; or
b. After certification or submission of the
dispute to compulsory or voluntary
arbitration or during the pendency of
LABOR LAW
cases involving the same grounds for
the strike or lockout.
Any worker whose employment has been
terminated as a consequence of any
unlawful lockout shall be entitled to
reinstatement with full backwages.
Any union officer who knowingly
participates in an illegal strike, and any
worker or union officer who knowingly
participates in the commission of illegal
acts during a strike may be declared to
have lost his employment status:
Provided, That mere participation of a
worker in a lawful strike shall not constitute
sufficient ground for termination of his
employment, even if a replacement had
been hired by the employer during such
lawful strike.
2. No person shall:
a. Obstruct, impede, or interfere with, by
force, violence, coercion, threats or
intimidation, any peaceful picketing by
employees
during
any
labor
controversy or in the exercise of the
right to self-organization or collective
bargaining; or
b. Aid or abet such obstruction or
interference.
3. No employer shall use or employ any
strike-breaker, nor shall any person be
employed as a strike-breaker.
4. No public official or employee, including
officers and personnel of the New Armed
Forces of the Philippines or the Integrated
National Police, or armed person, shall:
a. Bring in, introduce or escort in any
manner, any individual who seeks to
replace strikers in entering or leaving
the premises of a strike area, or work in
place of the strikers.
5. The police force shall keep out of the picket
lines unless actual violence or other
criminal acts occur therein:
a. Provided, That nothing herein shall
be interpreted to prevent any public
officer from taking any measure
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necessary to maintain peace and
order, protect life and property,
and/or enforce the law and legal
order.
6. No person engaged in picketing shall
commit any act of violence, coercion or
intimidation or obstruct the free ingress to
or egress from the employer’s premises for
lawful purposes, or obstruct public
thoroughfares.
INNOCENT BYSTANDER RULE
Test to Determine if a Party is an “Innocent
Bystander”
An "innocent bystander," who seeks to enjoin a
labor strike, must satisfy the court that aside
from the grounds specified in Rule 58 of the
Rules of Court, it is entirely different from,
without any connection whatsoever to,
either party to the dispute and, its interests
are totally foreign to the context thereof.
[MSF Tire and Rubber Inc. v. CA, G.R. No.
128632 (1999)]
Injunction
Available
to
Innocent
Bystanders
An innocent by-stander is entitled to injunction
if it is affected by the activities of a picketing
union.
Rationale
The right [to picket] may be regulated at the
instance of […] `innocent bystanders' if it
appears that the inevitable result of its exercise
is:
a. To create an impression that a labor
dispute with which they have no connection
or interest exists between them and the
picketing union; or
b. Constitute an invasion of their rights.
[Liwayway Publishing v. Permanent
Concrete Worker's Union, G.R. No. L25003 (1981)]
LABOR LAW
TRO
Art. 225, last 2 pars. – A temporary restraining
order may be issued.
Why issued: If a complainant shall also allege
that a substantial and irreparable injury to
complainant's property will be unavoidable
unless a temporary restraining order shall be
issued without notice/
When issued: Upon testimony under oath,
sufficient, if sustained, to justify the
Commission in issuing a temporary injunction
upon hearing after notice.
Conditions before issuing the TRO:
The complainant shall first file an undertaking
with adequate security in an amount to be fixed
by the Commission –
a. Sufficient to recompense those enjoined
for any loss, expense or damage caused
by the improvident or erroneous issuance
of such order or injunction;
b. Including all reasonable costs, together
with a reasonable attorney's fee, and
expense of defense against the order or
against the granting of any injunctive relief
sought in the same proceeding and
subsequently denied by the Commission.
Effectivity of TRO:
Period: It shall be effective for no longer than
twenty (20) days and shall become void at the
expiration of said twenty (20) days.
Effect: It shall be understood to constitute an
agreement entered into by the complainant and
the surety –
a. Upon which an order may be rendered in
the same suit or proceeding against said
complainant and surety upon a hearing to
assess damages, of which hearing,
complainant and surety shall have
reasonable notice, the said complainant
and surety submitting themselves to the
jurisdiction of the Commission for that
purpose.
b. But nothing herein contained shall deprive
any party having a claim or cause of action
under or upon such undertaking from
electing to pursue his ordinary remedy by
suit at law or in equity:
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1. Provided, further, That the reception of
evidence for the application of a writ of
injunction may be delegated by the
Commission to any of its Labor Arbiters
who shall conduct such hearings in
such places as he may determine to be
accessible to the parties and their
witnesses and shall submit thereafter
his
recommendation
to
the
Commission.
b. Appellate Jurisdiction
1. Orders issued by the duly authorized
representative of the SOLE under Art. 128
may be appealed to the latter.
2. Denial of application for union registration
or cancellation of union registration
originally rendered by the BLR may be
appealed to the SOLE (if originally
rendered by the Regional Office, appeal
should be made to the BLR)
3. POEA — The Office of the SOLE shall
have exclusive jurisdiction to act on
appeals from the Orders of the
Administration. [Sec. 185, Rule VII,
Revised POEA Rules and Regulations
Governing
The
Recruitment
And
Employment Of Landbased Overseas
Filipino Workers Of 2016]
4. Decisions of the Med-Arbiter in certification
election cases are appealable to the SOLE.
[Art. 272] (decisions of med-arbiters in
intra-union disputes are appealable to the
BLR [Sec. 15, Rule XI, Book V, IRR])
c. Voluntary Arbitration Powers
Art. 278 (h). Strikes, Picketing and
Lockouts. – The parties may opt to submit
their dispute to voluntary arbitration.
When: Before or at any stage of the
compulsory arbitration process.
Sec. 15, Rule XXII, Book V. Assumption by
the Secretary of Labor and Employment. –
… parties to the case may agree at any time to
submit the dispute to the SOLE or his/her duly
authorized representative as Voluntary
Arbitrator…
LABOR LAW
DOLE Circular No. 1 Series of 2006. –
…this administrative procedure for the
voluntary settlement of labor disputes is
hereby established:
1. Either or both the employer and the
certified collective bargaining agent (or
representative of the employees where
there is no certified bargaining agent)
may voluntarily bring to the Office of the
SOLE through a REQUEST FOR
INTERVENTION, any potential or
ongoing dispute defined below.
A potential or ongoing dispute refers to:
a. live and active dispute;
b. that may lead to a strike or lockout or
to massive labor unrest;
c. is not the subject of any complaint or
notice of strike or lockout at the time
a REQUEST FOR INTERVENTION
is made.
This recourse is separate from the
established dispute resolution modes of
mediation, conciliation and arbitration
under the Labor Code, and is an
alternative to other voluntary modes of
dispute resolution such as the voluntary
submission of a dispute to the Regional
Director for mediation, to the NCMB for
preventive mediation, or to the
intervention of a regional or local
tripartite peace council for the same
purpose.
2. All REQUESTS shall be in writing and
filed with the Office of the Secretary. A
REQUEST shall state:
a. the name and address of the
employer;
b. the name of the certified bargaining
agent,
or
the
employee
representative duly designated in
writing by a majority of the
employees where there is no
collective bargaining agent;
c. the number of employees affected by
the potential or ongoing dispute; and
d. a brief description of the potential
or ongoing dispute.
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Code. Alternatively, the parties may
submit their dispute to the Office of
the
Secretary
for
voluntary
arbitration. Such voluntary arbitration
shall be limited to the issues defined
in the parties’ submission to
voluntary arbitration agreement and
shall be decided on the basis of the
parties’
position
papers
and
submitted evidence. The Office of
the Secretary shall resolve the
dispute within sixty (60) days from
the parties’ submission of the dispute
for resolution.
b. This circular shall take effect fifteen
(15) days after publication in a
newspaper of general publication.
Done in the City of Manila,
Philippines, 11 August 2006.
3. Upon receipt of the REQUEST, the
Office of the Secretary shall forthwith
notify the parties and invite them for
conference.
The
conference
for
REQUESTS coming from the National
Capital Region, Regions III, IV-A or IV- B
shall be held at the Office of the
Secretary of Labor and Employment
unless the Secretary otherwise directs.
The conference for REQUESTS coming
from the other regions shall be
conducted by the Regional Director for
the Secretary.
4. The Office of the Secretary or the
Regional director, in the proper case,
shall proceed to intervene after the
parties shall have manifested that;
a. they voluntarily submit their potential
or ongoing dispute to intervention by
the Office of the Secretary of Labor
and Employment;
b. there is no pending notice of strike or
lockout or any related complaint in
relation with their potential or
ongoing dispute;
c. they shall refrain from any strike or
lockout or any form of work stoppage
or from filing any related complaint
while the SOLE’s intervention is in
effect; and
d. they shall abide by the agreement
reached, whose terms may be
enforced through the appropriate
writs issued by the SOLE
All agreements settling the dispute shall
be in writing and signed by the parties as
well as the official who mediated the
dispute.
5. The parties and officials or employees of
the DOLE who took part in the
proceedings shall not testify in any court
or body regarding the disclosures,
submissions or positions made by the
parties in these proceedings.
a. If the intervention fails, either or both
parties may avail themselves of the
remedies provided under the Labor
LABOR LAW
Administrative Intervention for Dispute
Avoidance: Separate from established modes
of mediation, conciliation and arbitration and is
an alternative to other voluntary modes of
dispute resolution [DOLE Circular No. 1, series
of 2006]
Pre-Requisite for the Intervention by the
SOLE: The parties must have manifested that:
a. They voluntarily submit their potential or
ongoing dispute to intervention by the
Office of the SOLE;
b. No pending notice of strike or lockout or
any related complaint in relation to their
potential or ongoing dispute;
c. They shall refrain from any strike or lockout
or any form of work stoppage or filing any
related complaint while the SOLE’s
intervention is in effect;
d. They shall abide by the agreement reached
whose terms may be enforced through the
appropriate writs issued by the SOLE;
Note: DOLE Regional Directors and Assistant
Regional Directors may act as ex-officio
voluntary arbitrators [D.O No. 83-07, 2007]
2. Visitorial and enforcement powers
Art. 128. Visitorial and Enforcement Power
- The Secretary of Labor and Employment or
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his duly authorized representatives, including
labor regulation officers, shall:
1. Have access to employer’s records and
premises at any time of the day or night
whenever work is being undertaken therein
a. And the right:
i. To copy therefrom,
ii. To question any employee and
iii. To investigate any fact, condition or
matter which may be necessary to
determine violations or which may
aid in the enforcement of this Code
and of any labor law, wage order or
rules and regulations issued
pursuant thereto.
2. Have the power to issue compliance orders
a. Purpose: to give effect to the labor
standards provisions of this Code and
other labor legislation based on the
findings of labor employment and
enforcement officers or industrial
safety engineers made in the course of
inspection.
b. Notwithstanding the provisions of Arts.
129 and [224] of this Code to the
contrary, and in cases where the
relationship of employer-employee still
exists
3. Issue writs of execution to the appropriate
authority for the enforcement of their orders
a. Exception: cases where the employer
contests the findings of the labor
employment and enforcement officer
and raises issues supported by
documentary proofs which were not
considered in the course of inspection.
Art. 37. Visitorial Power. – The Secretary of
Labor or his duly authorized representatives
may, at any time –
1. Inspect the premises, books of accounts
and records of any person or entity covered
by this Title
2. Require it to submit reports regularly on
prescribed forms, and
3. Act on violation of any provisions of this
Title.
Art. 289. Visitorial Power. –The Secretary of
Labor and Employment or his duly authorized
representative is hereby empowered:
LABOR LAW
1. To inquire into the financial activities of
legitimate labor organizations
a. Upon the filing of a complaint under
oath and duly supported by the written
consent of at least twenty percent
(20%) of the total membership of the
labor organization concerned
2. To examine their books of accounts and
other records to determine compliance or
non-compliance with the law
3. To prosecute any violations of the law and
the union constitution and by-laws
Provided, That such inquiry or examination
shall not be conducted during the sixty (60)-day
freedom period nor within the thirty (30) days
immediately preceding the date of election of
union officials.
The visitorial and enforcement powers of the
DOLE Regional Director to order and enforce
compliance with labor standard laws can be
exercised even where the individual claim
exceeds P5,000.00. [Cirineo Bowling Plaza,
Inc. v. Sensing, G.R. No. 146572 (2005)].
If a complaint is brought before the DOLE to
give effect to the labor standards provisions of
the Labor Code or other labor legislation, and
there is a finding by the DOLE that there is an
existing employer-employee relationship, the
DOLE exercises jurisdiction to the exclusion of
the NLRC.
The findings of the DOLE, however, may still
be questioned through a petition for certiorari
under Rule 65 of the Rules of Court.
The DOLE's labor inspection program can now
proceed without being sidetracked by
unscrupulous employers who could render
nugatory the "expanded visitorial and
enforcement power of the DOLE granted by RA
7730 . . . by the simple expedient of disputing
the employer-employee relationship [and] force
the referral of the matter to the NLRC.”
[People's Broadcasting Service v. Secretary of
the Department of Labor and Employment,
G.R. No. 179652 (2012 Resolution)]
The factual findings of the SOLE or the
Regional Directors made in the exercise of
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their visitorial and enforcement powers are
binding on Labor Arbiters and the NLRC under
the doctrine of res judicata [Norkis Trading v.
Buenavista, G.R. No. 182018, (2012)]
3. Power to suspend effects of
termination
Art. 292 (b). Visitorial and Enforcement
Power - The SOLE may suspend the effects of
a termination pending resolution of the dispute
in the event of a prima facie finding by the
appropriate official of the DOLE that:
a. The termination may cause a serious labor
dispute (may or may not be a strike or a
lockout)
b. The termination is in implementation of a
mass lay-off.
4. Remedies
The aggrieved party from a decision of the
SOLE may file one motion for reconsideration
within ten (10) days from receipt thereof.
If the motion for reconsideration is denied, the
party may appeal via Rule 65 to the CA 60 days
from receipt of the denial. Upon denial, the
party may proceed via Rule 45 to the SC. [Rule
65, ROC; St. Martin Funeral Home v. NLRC,
G.R. No. 130866 (1998)]
Clearly, before a petition for certiorari under
Rule 65 of the Rules of Court may be availed
of, the filing of a motion for reconsideration is a
condition sine qua non to afford an opportunity
for the correction of the error or mistake
complained of.
[PIDLTRANCO Service
Enterprises Inc v. PWU – AGLO, G.R. No.
180962 (2014)]
I. VOLUNTARY ARBITRATOR
Automatic Referral If Grievance Machinery
Fails
All grievances submitted to the grievance
machinery which are not settled within 7
calendar days from the date of its submission
LABOR LAW
shall automatically be referred to voluntary
arbitration prescribed in the CBA. [Art. 273]
Constitutional Basis
Sec. 3, Art. XIII, 1987 Constitution - The State
shall promote:
1. The principle of shared responsibility
between workers and employers and
2. The preferential use of voluntary modes in
settling disputes, including conciliation,
3. And shall enforce their mutual compliance
therewith to foster industrial peace.
Who is a voluntary arbitrator
A “voluntary arbitrator” is:
1. Any person accredited by the [National
Conciliation and Mediation Board] as such;
or
2. Any person named or designated in the
Collective Bargaining Agreement by the
parties to act as their Voluntary Arbitrator;
or
3. One chosen, with or without the assistance
of the National Conciliation and Mediation
Board, pursuant to a selection procedure
agreed upon in the Collective Bargaining
Agreement; or
4. Any official that may be authorized by the
Secretary of Labor and Employment to act
as Voluntary Arbitrator upon the written
request and agreement of the parties to a
labor dispute. [Art. 219 (n)]
Provision for Voluntary Arbitration in the
CBA
1. Parties to a CBA shall:
a. Name and designate in advance a
Voluntary Arbitrator or panel of
Voluntary Arbitrators, OR
b. Include in the agreement a procedure
for the selection of such Voluntary
Arbitrator or panel of Voluntary
Arbitrators, preferably from the listing
of qualified Voluntary Arbitrators duly
accredited by the Board.
2. In case the parties fail to select a Voluntary
Arbitrator or panel of Voluntary Arbitrators,
the Board shall designate the Voluntary
Arbitrator or panel of Voluntary Arbitrators,
as may be necessary, pursuant to the
selection procedure agreed upon in the
[CBA], which shall act with the same force
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and effect as if the has been selected by
the parties as described above. [Art. 273]
Voluntary Arbitration as a Condition
Precedent
The stipulation to refer all future disputes to an
arbitrator or to submit an ongoing dispute to
one is valid. Being part of a contract between
the parties, it is binding and enforceable in
court in case one of them neglects, fails or
refuses to arbitrate.
In the event that they declare their intention to
refer their differences to arbitration first before
taking court action, this constitutes a condition
precedent, such that where a suit has been
instituted prematurely, the court shall suspend
the same and the parties shall be directed
forthwith to proceed to arbitration. [...] A court
action may likewise be proper where the
arbitrator has not been selected by the parties.
[Chung Fu Industries v. CA, G.R. No. 96283
(1992)]
1. Jurisdiction
EXCLUSIVE AND ORIGINAL JURISDICTION
OVER UNRESOLVED GRIEVANCES
a. Interpretation or implementation of the
CBA [Art. 274]
b. Interpretation or enforcement of company
personnel policies [Art. 274]
c. Violations of a CBA which are not gross in
character (gross being flagrant and/or
malicious refusal to comply with the
economic provisions of [the CBA]) [Art.
274]
Note: Gross violations of the CBA shall mean
flagrant and/or malicious refusal to comply with
the economic provisions of such agreement.
Termination Cases: Plenary Jurisdiction of
Voluntary Arbitrator vis-à-vis Labor Arbiter
Termination cases arising in or resulting from
the interpretation and implementation of CBAs
and interpretation and enforcement of
company personnel policies which were initially
processed at the various steps of the plantlevel Grievance Procedures under the parties'
CBAs fall within the original and exclusive
jurisdiction of the VA.
LABOR LAW
If such is filed before the LA, these cases shall
be dismissed by the LA for lack of jurisdiction
and referred to the concerned NCMB Regional
Branch for appropriate action towards an
expeditious selection by the parties of a VA or
Panel of Arbitrators based on the procedures
agreed upon in the CBA. [Policy Instruction #56
(April 6, 1993)]
Even if the specific issue brought before the
arbitrators merely mentioned the question of
“whether an employee was discharged for just
cause,” they could reasonably assume that
their
powers
extended
beyond
the
determination thereof to include the power to
reinstate the employee or to grant back wages.
In the same vein, if the specific issue brought
before the arbitrators referred to the date of
regularization of the employee, law and
jurisprudence gave them enough leeway as
well as adequate prerogative to determine the
entitlement of the employees to higher benefits
in accordance with the finding of regularization.
[Manila Pavilion Hotel, etc. v. Henry Delada,
G.R. No. 189947 (2011)]
Other Labor Disputes
Art. 275. Jurisdiction Over Other Labor
Disputes. – The VA or panel of VAs, upon
agreement of the parties, shall also hear and
decide all other labor disputes including ULP
and bargaining deadlocks.
Art. 274. Jurisdiction of Voluntary
Arbitrators or Panel of Voluntary
Arbitrators. – The Commission, its Regional
Offices and the Regional Directors of the
DOLE:
1. Shall not entertain disputes, grievances
or matters under the exclusive and
original jurisdiction of the Voluntary
Arbitrator or panel of Voluntary
Arbitrators and
2. Shall immediately dispose and refer the
same to the grievance machinery or
Voluntary Arbitration provided in the
Collective Bargaining Agreement.
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Art. 224 (c). Jurisdiction of the Labor
Arbiters and the Commission. – Cases
arising
from
the
interpretation
or
implementation of CBAs and those arising
from the interpretation or enforcement of
company personnel policies shall be
disposed of by the LA by referring the same
to the grievance machinery and VA as may
be provided for in said agreements.
Option – Voluntary Arbitration
Art. 278 (h). Strikes, Picketing and
Lockouts. – Before or at any stage of the
compulsory arbitration process, the parties
may opt to submit their dispute to voluntary
arbitration.
Summary of Arbitrable Issues
a. Interpretation or implementation of the
CBA [Art. 274]
b. Interpretation or enforcement of company
personnel policies [Art. 274]
c. Violations of a CBA which are not gross in
character (gross being flagrant and/or
malicious refusal to comply with the
economic provisions of [the CBA]) [Art.
274]
d. All other labor disputes including ULP and
bargaining deadlock, if the parties agree
[Art. 275]
e. Wage distortions arising from application of
any
wage
orders
in
organized
establishments [Art. 124]
f. Unresolved grievances arising from the
interpretation and implementation of the
productivity incentives program under RA
6971 [Book V, IRR Rule XIX. Sec. 4]
In general, the arbitrator [“VA”] is expected to
decide those questions expressly stated and
limited in the submission agreement.
However, since arbitration is the final resort for
the adjudication of disputes, the arbitrator can
assume that he has the power to make a final
settlement.
[The VA has] plenary jurisdiction and authority
to interpret the [CBA] and to determine the
scope of his [or her] own authority. [...] Subject
to judicial review, this leeway of authority [and]
adequate
prerogative
is
aimed
at
LABOR LAW
accomplishing the rationale of the law on
voluntary arbitration – speedy labor justice.
[Goya, Inc. v. Goya, Inc. Employees UnionFFW, G.R. No. 170054 (2013)]
PROCEDURE
Art. 276. Procedures. — The Voluntary
Arbitrator or panel of Voluntary Arbitrators shall
have the power to:
a. Hold hearings,
b. Receive evidences, and
c. Take whatever action is necessary to
resolve the issue or issues subject of the
dispute,
d. Including efforts to effect a voluntary
settlement between parties.
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion
of any witness from the proceedings shall be
determined by the Voluntary Arbitrator or panel
of Voluntary Arbitrators. Hearing may be
adjourned for cause or upon agreement by the
parties.
Unless the parties agree otherwise, it shall be
mandatory for the Voluntary Arbitrator or panel
of Voluntary Arbitrators to render an award or
decision within twenty (20) calendar days from
the date of submission of the dispute to
voluntary arbitration.
The award or decision of the Voluntary
Arbitrator or panel of Voluntary Arbitrators shall
contain the facts and the law on which it is
based. It shall be final and executory after ten
(10) calendar days from receipt of the copy of
the award or decision by the parties.
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the
absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for
any reason, may issue a writ of execution
requiring either of the following to execute the
final decision, order or award:
a. The sheriff of the Commission or regular
courts; or
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b. Any public official whom the parties may
designate in the submission agreement.
[Rule XI, Book V, IRR]
Hearing
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion
of any witness from the proceedings shall be
determined by the VA or panel of VAs. Hearing
may be adjourned for cause or upon
agreement by the parties.
Days to render an award/decision
Unless the parties agree otherwise, it shall be
mandatory for the VA or panel of VAs to render
an award or decision within 20 calendar days
from the date of submission of the dispute to
voluntary arbitration.
Form of award/decision
The award or decision of the VA or panel of
VAs must state in clear, concise and definite
terms the facts, the law and/contract upon
which it is based.
Finality
It shall be final and executory after 10 calendar
days from the receipt of the copy of the award
or decision by the parties.
Execution of award/decision
Upon motion of any interested party, the
Voluntary Arbitrator or panel of Voluntary
Arbitrators or the Labor Arbiter in the region
where the movant resides, in case of the
absence or incapacity of the Voluntary
Arbitrator or panel of Voluntary Arbitrators, for
any reason, may issue a writ of execution
requiring either the sheriff of the Commission
or regular courts or any public official whom the
parties may designate in the submission
agreement to execute the final decision, order
or award.
Costs
The parties to a Collective Bargaining
Agreement
shall
provide
therein
a
proportionate sharing scheme on the cost of
the voluntary arbitration including the Voluntary
Arbitrator’s fee. [Art. 277]
LABOR LAW
Voluntary Arbitrator's Fee
The fixing of the fee of the Voluntary Arbitrators
or panel of Voluntary Arbitrators, whether
shouldered wholly by the parties or subsidized
by the special voluntary arbitration fund, shall
take into account the following factors:
a. Nature of the case;
b. Time consumed in hearing the case;
c. Professional standing of the voluntary
arbitrator;
d. Capacity to pay of the parties;
e. Fees provided for in the Rules of Court [Art.
277]
2. Remedies
Motion for Reconsideration
The absence of a categorical language in Art.
[276] does not preclude the filing of a motion
for reconsideration of the VA’s decision within
the 10-day period. [Teng v Pahagac, G.R.
169704 (2010)]
Appeal
The decision of a Voluntary Arbitrator or panel
of Voluntary Arbitrators is appealable by
ordinary appeal under Rule 43 of the Rules of
Civil Procedure directly to the Court of Appeals.
[AMA Computer College-Santiago City, Inc. v.
Nacino, G.R. No. 162739 (2008)]
But See: Guagua National Colleges v. CA,
G.R. 188412, Aug. 28, 2018, the 10-day period
under Article 276 of the Labor Code refers to
the filing of a motion for reconsideration vis-àvis the Voluntary Arbitrator's decision or award,
while the 15 days is the period to file petition for
review under Rule 43 of the Rules of Court.
J. PRESCRIPTION OF
ACTIONS
1. Money claims
Art. 306. Money claims. – All money claims
arising from employer-employee relations
accruing during the effectivity of this Code shall
be filed within three (3) years from the time
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the cause of action accrued; otherwise they
shall be forever barred.
All money claims accruing prior to the
effectivity of this Code
a. Shall be filed with the appropriate entities
established under this Code within one (1)
year from the date of effectivity, and
b. Shall be processed or determined in
accordance with the implementing rules
and regulations of the Code;
c. Otherwise, they shall be forever barred.
Workmen's compensation claims accruing
prior to the effectivity of this Code and during
the period from November 1, 1974 up to
December 31, 1974,
a. Shall be filed with the appropriate regional
offices of the Department of Labor not
later than March 31, 1975;
b. Otherwise, they shall forever be barred.
c. The claims shall be processed and
adjudicated in accordance with the law and
rules at the time their causes of action
accrued.
The Labor Code has no specific provision on
when a monetary claim accrues. Thus, again
the general law on prescription applies. Art.
1150 of the Civil Code provides that, “The time
for prescription for all kinds of actions, when
there is no special provision which ordains
otherwise, shall be counted from the day they
may be brought.”
The day the action may be brought is the day a
claim started as a legal possibility. [Anabe v.
Asian Construction, G.R. No. 183233 (2009)]
2. Illegal dismissal
Art. 1146, Civil Code. – The following
actions must be instituted within four years:
a. Upon an injury to the rights of the
plaintiff;
b. Upon a quasi-delict;
However, when the action arises from or out
of any act, activity, or conduct of any public
officer involving the exercise of powers or
authority arising from Martial Law including
the arrest, detention and/or trial of the
LABOR LAW
plaintiff, the same must be brought within
one year. [As amended by PD No. 1755,
Dec. 24, 1980.]
4 years from dismissal
In illegal dismissal cases, the employee
concerned is given a period of four years from
the time of his dismissal within which to institute
a complaint. This is based on Art. 1146 of the
Civil Code which states that actions based
upon an injury to the rights of the plaintiff must
be brought within four years. [Victory Liner, Inc.
v. Race, G.R. No. 164820 (2007)]
3. Unfair labor practice
All unfair labor practice arising from Book V
a. Shall be filed with the appropriate agency
within one (1) year from accrual of such
unfair labor practice;
b. Otherwise, they shall be forever barred.
Art. 258. Concept of unfair labor practice
and procedure for prosecution thereof – No
criminal prosecution under this Title may be
instituted without a final judgment finding that
an unfair labor practice was committed, having
been first obtained in the preceding paragraph.
During the pendency of such administrative
proceeding, the running of the period of
prescription of the criminal offense herein
penalized shall be considered interrupted:
a. The final judgment in the administrative
proceedings shall not be binding in the
criminal case nor be considered as
evidence of guilt
b. But merely as proof of compliance of the
requirements therein set forth.
4. Offenses under the Labor Code
Art. 305, LC. – Offenses penalized under
this Code and the rules and regulations
issued pursuant thereto shall prescribe in
three (3) years.
Art. 305, Civil Code. – Offenses penalized
under this Code and the rules and
regulations issued pursuant thereto shall
prescribe in three (3) years.
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3 years, except ULP (see: above)
5. Illegal recruitment
Illegal recruitment cases under this Act shall
prescribe in five (5) years.
Provided, however, that illegal recruitment
cases involving economic sabotage as defined
herein shall prescribe in twenty (20) years.
[Migrant Workers and Overseas Filipinos Act of
1995, Sec. 12]
LAWS AND RULES OF
PROCEDURE
The Civil Code of the Philippines
Article 1700. The relations between capital
and labor are not merely contractual. They
are so impressed with public interest that
labor contracts must yield to the common
good. Such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lockouts, closed
shop, wages, working conditions, hours of
labor and similar subjects.
Article 1701. Neither capital nor labor shall
act oppressively against the other, or impair
the interest or convenience of the public.
Article 1702. In case of doubt, all labor
legislation and all labor contracts shall be
construed in favor of the safety and
decent living for the laborer.
Article 1703. No contract which practically
amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
Migrant Workers and Overseas Filipinos
Act of 1995
See II. Recruitment and Placement, and III. E.
9. Migrant workers
Anti-Trafficking in Persons Act of 2003
LABOR LAW
SECTION 4. Acts of Trafficking in
Persons. — It shall be unlawful for any
person, natural or juridical, to commit any of
the following acts:
(a) To recruit, obtain, hire, provide, offer,
transport, transfer, maintain, harbor, or
receive a person by any means,
including those done under the pretext of
domestic or overseas employment or
training or apprenticeship, for the
purpose of prostitution, pornography, or
sexual exploitation;
(b) To introduce or match for money, profit,
or material, economic or other
consideration, any person or, as
provided for under Republic Act No.
6955, any Filipino women to a foreign
national, for marriage for the purpose of
acquiring, buying, offering, selling or
trading him/her to engage in prostitution,
pornography, sexual exploitation, forced
labor, slavery, involuntary servitude or
debt bondage;
(c) To offer or contract marriage, real or
simulated, for the purpose of acquiring,
buying, offering, selling, or trading them
to engage in prostitution, pornography,
sexual exploitation, forced labor or
slavery, involuntary servitude or debt
bondage;
(d) To undertake or organize tours and
travel plans consisting of tourism
packages or activities for the purpose of
utilizing and offering persons for
prostitution, pornography or sexual
exploitation;
(e) To maintain or hire a person to engage
in prostitution or pornography;
(f) To adopt persons by any form of
consideration for exploitative purposes
or to facilitate the same for purposes of
prostitution,
pornography,
sexual
exploitation, forced slavery, involuntary
servitude or debt bondage;
(g) To adopt or facilitate the adoption of
persons for the purpose of prostitution,
pornography, sexual exploitation, forced
labor, slavery, involuntary servitude or
debt bondage;
(h) To recruit, hire, transport, obtain,
transfer, harbor, maintain, provide, offer,
receive, or abduct a person, by means of
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threat or use of force, fraud, deceit,
violence, coercion, or intimidation for the
purpose of removal or sale of organs of
said person;
(i) To recruit, transport, obtain, transfer,
harbor, maintain, offer, hire, provide,
receive or adopt a child to engage in
armed activities in the Philippines or
abroad;
(j) To recruit, transport, transfer, harbor,
obtain, maintain, offer, hire, provide or
receive a person by means defined in
Section 3 of this Act for purposes of
forced labor, slavery, debt bondage and
involuntary servitude, including a
scheme, plan, or pattern intended to
cause the person either:
(1) To believe that if the person did not
perform such labor or services, he or
she or another person would suffer
serious harm or physical restraint; or
(2) To abuse or threaten the use of law
or the legal processes; and
(k) To recruit, transport, harbor, obtain,
transfer, maintain, hire, offer, provide,
adopt or receive a child for purposes of
exploitation or trading them, including
but not limited to, the act of buying
and/or selling a child for any
consideration or for barter for purposes
of exploitation. Trafficking for purposes
of exploitation of children shall include:
(1) All forms of slavery or practices
similar to slavery, involuntary
servitude, debt bondage and forced
labor, including recruitment of
children for use in armed conflict;
(2) The use, procuring or offering of a
child for prostitution, for the
production of pornography, or for
pornographic performances;
(3) The use, procuring or offering of a
child for the production and
trafficking of drugs; and
(4) The use, procuring or offering of a
child for illegal activities or work
which, by its nature or the
circumstances in which it is carried
out, is likely to harm their health,
safety or morals; and
LABOR LAW
(5) To organize or direct other persons
to commit the offenses defined as
acts of trafficking under this Act.
SECTION 4-A. Attempted Trafficking in
Persons. — Where there are acts to initiate
the commission of a trafficking offense but
the offender failed to or did not execute all
the elements of the crime, by accident or by
reason of some cause other than voluntary
desistance, such overt acts shall be deemed
as an attempt to commit an act of trafficking
in persons. As such, an attempt to commit
any of the offenses enumerated in Section 4
of this Act shall constitute attempted
trafficking in persons.
In cases where the victim is a child, any of
the following acts shall also be deemed as
attempted trafficking in persons:
(a) Facilitating the travel of a child who
travels alone to a foreign country or
territory without valid reason therefor
and without the required clearance or
permit from the Department of Social
Welfare and Development, or a written
permit or justification from the child's
parent or legal guardian;
(b) Executing, for a consideration, an
affidavit of consent or a written consent
for adoption;
(c) Recruiting a woman to bear a child for
the purpose of selling the child;
(d) Simulating a birth for the purpose of
selling the child; and
(e) Soliciting a child and acquiring the
custody thereof through any means from
among hospitals, clinics, nurseries,
daycare centers, refugee or evacuation
centers, and low-income families, for the
purpose of selling the child.
SECTION 4-B. Accomplice Liability. —
Whoever knowingly aids, abets, cooperates
in the execution of the offense by previous
or simultaneous acts defined in this Act shall
be punished in accordance with the
provisions of Section 10(c) of this Act.
SECTION 4-C. Accessories. — Whoever
has the knowledge of the commission of the
crime, and without having participated
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therein, either as principal or as
accomplices, take part in its commission in
any of the following manners:
(a) By profiting themselves or assisting the
offender to profit by the effects of the
crime;
(b) By concealing or destroying the body of
the crime or effects or instruments
thereof, in order to prevent its discovery;
(c) By harboring, concealing, or assisting in
the escape of the principal of the crime,
provided the accessory acts with abuse
of his or her public functions or is known
to be habitually guilty of some other
crime.
LABOR LAW
(e)
(f)
Acts defined in this provision shall be
punished in accordance with the provision of
Section 10(d) as stated thereto.
(g)
SECTION
5.
Acts
that
Promote
Trafficking in Persons. — The following
acts which promote or facilitate trafficking in
persons shall be unlawful:
(a) To knowingly lease or sublease, use or
allow to be used any house, building or
establishment for the purpose of
promoting trafficking in persons;
(b) To produce, print and issue or distribute
unissued, tampered or fake counseling
certificates,
registration
stickers,
overseas employment certificates or
other certificates of any government
agency which issues these certificates,
decals and such other markers as proof
of
compliance
with
government
regulatory
and
pre-departure
requirements for the purpose of
promoting trafficking in persons;
(c) To advertise, publish, print, broadcast or
distribute, or cause the advertisement,
publication, printing broadcasting or
distribution by any means, including the
use of information technology and the
internet, of any brochure, flyer, or any
propaganda material that promotes
trafficking in persons;
(d) To assist in the conduct of
misrepresentation or fraud for purposes
of facilitating the acquisition of
clearances
and
necessary
exit
documents from government agencies
(h)
(i)
(j)
that are mandated to provide predeparture registration and services for
departing persons for the purpose of
promoting trafficking in persons;
To facilitate, assist or help in the exit and
entry of persons from/to the country at
international and local airports, territorial
boundaries and seaports who are in
possession of unissued, tampered or
fraudulent travel documents for the
purpose of promoting trafficking in
persons;
To confiscate, conceal, or destroy the
passport, travel documents, or personal
documents or belongings of trafficked
persons in furtherance of trafficking or to
prevent them from leaving the country or
seeking redress from the government or
appropriate agencies; and
To knowingly benefit from, financial or
otherwise, or make use of, the labor or
services of a person held to a condition
of involuntary servitude, forced labor, or
slavery.
To tamper with, destroy, or cause the
destruction of evidence, or to influence
or attempt to influence witnesses, in an
investigation or prosecution of a case
under this Act;
To destroy, conceal, remove, confiscate
or possess, or attempt to destroy,
conceal, remove, confiscate or possess,
any actual or purported passport or other
travel, immigration or working permit or
document, or any other actual or
purported government identification, of
any person in order to prevent or restrict,
or attempt to prevent or restrict, without
lawful authority, the person's liberty to
move or travel in order to maintain the
labor or services of that person; or
To utilize his or her office to impede the
investigation, prosecution or execution
of lawful orders in a case under this Act.
SECTION 6. Qualified Trafficking in
Persons. — The following are considered
as qualified trafficking:
(a) When the trafficked person is a child;
(b) When the adoption is effected through
Republic Act No. 8043, otherwise known
as the "Inter-Country Adoption Act of
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(c)
(d)
(e)
(f)
(g)
(h)
(i)
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1995" and said adoption is for the
purpose of prostitution, pornography,
sexual exploitation, forced labor,
slavery, involuntary servitude or debt
bondage;
When the crime is committed by a
syndicate, or in large scale. Trafficking is
deemed committed by a syndicate if
carried out by a group of three (3) or
more
persons
conspiring
or
confederating with one another. It is
deemed committed in large scale if
committed against three (3) or more
persons, individually or as a group;
When the offender is a spouse, an
ascendant, parent, sibling, guardian or a
person who exercises authority over the
trafficked person or when the offense is
committed by a public officer or
employee;
When the trafficked person is recruited
to engage in prostitution with any
member of the military or law
enforcement agencies;
When the offender is a member of the
military or law enforcement agencies;
When by reason or on occasion of the
act of trafficking in persons, the offended
party dies, becomes insane, suffers
mutilation or is afflicted with Human
Immunodeficiency Virus (HIV) or the
Acquired Immune Deficiency Syndrome
(AIDS);
When the offender commits one or more
violations of Section 4 over a period of
sixty (60) or more days, whether those
days are continuous or not; and
When the offender directs or through
another manages the trafficking victim in
carrying out the exploitative purpose of
trafficking.
SECTION 10. Penalties and Sanctions. —
The following penalties and sanctions are
hereby established for the offenses
enumerated in this Act:
(a) Any person found guilty of committing
any of the acts enumerated in Section 4
shall suffer the penalty of imprisonment
of twenty (20) years and a fine of not less
than One million pesos (P1,000,000.00)
LABOR LAW
(b)
(c)
(d)
(e)
(f)
(g)
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but not more than Two million pesos
(P2,000,000.00);
Any person found guilty of committing
any of the acts enumerated in Section 4A of this Act shall suffer the penalty of
imprisonment of fifteen (15) years and a
fine of not less than Five hundred
thousand pesos (P500,000.00) but not
more
than
One
million
pesos
(P1,000,000.00);
Any person found guilty of Section 4-B of
this Act shall suffer the penalty of
imprisonment of fifteen (15) years and a
fine of not less than Five hundred
thousand pesos (P500,000.00) but not
more
than
One
million
pesos
(P1,000,000.00);
In every case, conviction shall cause
and carry the automatic revocation of the
license or registration of the recruitment
agency involved in trafficking. The
license of a recruitment agency which
trafficked a child shall be automatically
revoked.
Any person found guilty of committing
any of the acts enumerated in Section 5
shall suffer the penalty of imprisonment
of fifteen (15) years and a fine of not less
than Five hundred thousand pesos
(P500,000.00) but not more than One
million pesos (P1,000,000.00);
Any person found guilty of qualified
trafficking under Section 6 shall suffer
the penalty of life imprisonment and a
fine of not less than Two million pesos
(P2,000,000.00) but not more than Five
million pesos (P5,000,000.00);
Any person who violates Section 7
hereof shall suffer the penalty of
imprisonment of six (6) years and a fine
of not less than Five hundred thousand
pesos (P500,000.00) but not more than
One million pesos (P1,000,000.00);
If the offender is a corporation,
partnership,
association,
club,
establishment or any juridical person,
the penalty shall be imposed upon the
owner, president, partner, manager,
and/or any responsible officer who
participated in the commission of the
crime or who shall have knowingly
U.P. LAW BOC
(h)
(i)
(j)
(k)
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permitted or failed to prevent its
commission;
The registration with the Securities and
Exchange Commission (SEC) and
license to operate of the erring agency,
corporation,
association,
religious
group, tour or travel agent, club or
establishment, or any place of
entertainment shall be cancelled and
revoked permanently. The owner,
president, partner or manager thereof
shall not be allowed to operate similar
establishments in a different name;
If the offender is a foreigner, he or she
shall be immediately deported after
serving his or her sentence and be
barred permanently from entering the
country;
Any employee or official of government
agencies who shall issue or approve the
issuance of travel exit clearances,
passports,
registration
certificates,
counseling
certificates,
marriage
license, and other similar documents to
persons, whether juridical or natural,
recruitment agencies, establishments or
other individuals or groups, who fail to
observe the prescribed procedures and
the requirement as provided for by laws,
rules and regulations, shall be held
administratively liable, without prejudice
to criminal liability under this Act. The
concerned government official or
employee shall, upon conviction, be
dismissed from the service and be
barred permanently to hold public office.
His or her retirement and other benefits
shall likewise be forfeited; and
Conviction, by final judgment of the
adopter for any offense under this Act
shall result in the immediate rescission
of the decree of adoption.
SECTION 12. Prescriptive Period. —
Trafficking cases under this Act shall
prescribe in ten (10) years: Provided,
however, That trafficking cases committed
by a syndicate or in a large scale as defined
under Section 6, or against a child, shall
prescribe in twenty (20) years.
LABOR LAW
The prescriptive period shall commence to
run from the day on which the trafficked
person is delivered or released from the
conditions of bondage, or in the case of a
child victim, from the day the child reaches
the age of majority, and shall be interrupted
by the filing of the complaint or information
and shall commence to run again when the
proceedings terminate without the accused
being convicted or acquitted or are
unjustifiably stopped for any reason not
imputable to the accused.
Handbook for OFWs Act of 2018
SECTION 2. Creating a Handbook for
Overseas Filipino Workers. — The
handbook for overseas Filipino workers,
known in this Act as "Handbook," shall be
created and issued to every land-based and
sea-based worker free of charge. It shall
serve as a ready reference for migrant
workers when they need to assert their rights
and responsibilities. It shall also deal with
key issues that they need to know in order to
maintain decent employment conditions
overseas.
PAR. b.1, SEC. 23 (Migrant Workers and
Overseas Filipinos Act of 1995, amended
by Handbook for OFWs Act of 2018). The
[POEA] is hereby mandated to develop,
publish, disseminate and update periodically
a
Handbook
on
the
rights
and
responsibilities of migrant workers as
provided by Philippine laws and the existing
labor and social laws of the countries of
destination that will protect and guarantee
the rights of migrant workers. The Handbook
shall be written in simple words that can be
easily understood with translation in local
language as may be necessary.
It shall also be responsible for the
implementation, in partnership with other law
enforcement agencies, of an intensified
program against illegal recruitment activities.
For this purpose, the POEA shall provide
comprehensive
gender-sensitive
Preemployment Orientation Seminars (PEOS)
that will discuss topics not only on the
prevention of illegal recruitment but also on
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the content of the Handbook on the rights
and responsibilities of migrant workers.
(b)
Amending Certain Articles of the Labor
Code
[amendments already incorporated into the
aforecited provisions of the Labor Code]
(c)
(d)
13th Month Pay Law
See III. B. 1. c. Bonus, 13th month pay
Telecommuting Act
SECTION 3. Telecommuting Defined. —
As used in this Act, the term
"telecommuting"
refers
to
a
work
arrangement that allows an employee in the
private sector to work from an alternative
workplace
with
the
use
of
telecommunication
and/or
computer
technologies.
SECTION 4. Telecommuting Program. —
An employer in the private sector may offer
a telecommuting program to its employees
on a voluntary basis, and upon such terms
and conditions as they may mutually agree
upon: Provided, That such terms and
conditions shall not be less than the
minimum labor standards set by law, and
shall include compensable work hours,
minimum number of work hours, overtime,
rest days, and entitlement to leave benefits.
The
employer
shall
provide
the
telecommuting employee with relevant
written information in order to adequately
apprise the individual of the terms and
conditions of the telecommuting program,
and the responsibilities of the employee.
SECTION 5. Fair Treatment. — The
employer
shall
ensure
that
the
telecommuting employees are given the
same treatment as that of comparable
employees working at the employer's
premises. All telecommuting employees
shall:
(a) Receive a rate of pay, including overtime
and night shift differential, and other
similar monetary benefits not lower than
(e)
(f)
those provided in applicable laws, and
collective bargaining agreements.
Have the right to rest periods, regular
holidays, and special nonworking days.
Have the same or equivalent workload
and performance standards as those of
comparable workers at the employer's
premises.
Have the same access to training and
career development opportunities as
those of comparable workers at the
employer's premises, and be subject to
the same appraisal policies covering
these workers.
Receive appropriate training on the
technical equipment at their disposal,
and the characteristics and conditions of
telecommuting.
Have the same collective rights as the
workers at the employer's premises, and
shall not be barred from communicating
with workers' representatives.
The employers shall also ensure that
measures are taken to prevent the
telecommuting employee from being
isolated from the rest of the working
community in the company by giving the
telecommuting employee the opportunity to
meet with colleagues on a regular basis, and
allowing access to company information.
SECTION 6. Data Protection. — The
employer shall be responsible for taking the
appropriate measures to ensure the
protection of data used and processed by
the
telecommuting
employee
for
professional purposes. The employer shall
inform the telecommuting employee of all
relevant laws, and company rules
concerning
data
protection.
The
telecommuting employee shall ensure that
confidential and proprietary information are
protected at all times.
For this purpose, the provisions of the Data
Privacy Act of 2012 shall have suppletory
effect.
SECTION 7. Administration. — The parties
to a telecommuting work arrangement shall
be
primarily
responsible
for
its
administration. In case of differences in
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interpretation, the following guideline shall
be observed:
(a) The differences shall be treated as
grievances under
the applicable
grievance mechanism of the company.
(b) If there is no grievance mechanism or if
the mechanism is inadequate, the
grievance shall be referred to the
regional office of the Department of
Labor and Employment (DOLE) which
has jurisdiction over the workplace for
conciliation.
(c) To facilitate the resolution of grievances,
employers shall keep and maintain, as
part of their records, the documents
proving that the telecommuting work
arrangement was voluntarily adopted.
LABOR LAW
105 Day Expanded Maternity Leave Law
See III. C. 2. b. Expanded Maternity Leave
Paternity Leave Act of 1996
See III. C. 2. c. Paternity Leave
Solo Parents’ Welfare Act
See III. C. 2. a., Parental Leave for Solo
Parents, III. E. 7. Solo Parents, and VII. E. Solo
Parents
Magna Carta of Women
See III. E. 3. a. Discrimination
Amending Art. 135 of the Labor Code Re:
Prohibition on Discrimination Against
Women
See III. E. 3. c. Prohibited Acts
Anti-Violence Against Women and Their
Children Act of 2004
See III. C. 2. e. Battered women leave
Safe Spaces Act
See III. D. Sexual Harassment in the Work
Environment
Special Protection of Children Against
Abuse, Exploitation, and Discrimination Act
See III. E. 4. Minors
Batas Kasambahay
See III. E. 5. Kasambahays
Anti-Sexual Harassment Act of 1995
See III. D. Sexual Harassment in the Work
Environment
Portability Law
See VII. C. Limited Portability Law
New Labor Relations Law
[amended certain Articles in the Labor Code;
already incorporated into the provisions
previously cited]
Wage Rationalization Act
See III. B. Wages
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Productivity Incentives Act of 1990
SECTION
5.
Labor-Management
Committee. — a) A business enterprise or
its employees, through their authorized
representatives, may initiate the formation of
a labor-management committee that shall be
composed of an equal number of
representatives from the management and
from the rank-and-file employees: Provided,
That both management and labor shall have
equal voting rights: Provided, further, That at
the request of any party to the negotiation,
the National Wages and Productivity
Commission of the Department of Labor and
Employment shall provide the necessary
studies,
technical
information
and
assistance, and expert advice to enable the
parties to conclude productivity agreements.
(b) In business enterprises with duly
recognized or certified labor organizations,
the representatives of labor shall be those
designated by the collective bargaining
agent(s) of the bargaining unit(s).
(c) In business enterprises without duly
recognized or certified labor organizations,
the representatives of labor shall be elected
by at least a majority of all rank-and-file
employees who have rendered at least six
(6) months of continuous service.
SECTION 6. Productivity Incentives
Program. — a) The productivity incentives
program shall contain provisions for the
manner of sharing and the factors in
determining productivity bonuses: Provided,
That the productivity bonuses granted to
labor under this program shall not be less
than half of the percentage increase in the
productivity of the business enterprise.
b) Productivity agreements reached by the
parties as provided in this Act supplement
existing collective bargaining agreements.
c) If, during the existence of the productivity
incentives program or agreement, the
employees will join or form a union, such
program or agreement may, in addition to
the terms and conditions agreed upon by
LABOR LAW
labor and management, be integrated in the
collective bargaining agreement that may be
entered into between them.
SECTION 7. Benefits and Tax Incentives.
— (a) Subject to the provisions of Section 6
hereof, a business enterprise which adopts
a productivity incentives program, duly and
mutually agreed upon by parties to the labormanagement committee, shall be granted a
special deduction from gross income
equivalent to fifty percent (50%) of the total
productivity bonuses given to employees
under the program over and above the total
allowable ordinary and necessary business
deductions for said bonuses under the
National Internal Revenue Code, as
amended.
(b) Grants for manpower training and special
studies given to rank-and-file employees
pursuant to a program prepared by the labormanagement
committee
for
the
development of skills identified as necessary
by the appropriate government agencies
shall also entitle the business enterprise to a
special deduction from gross income
equivalent to fifty per cent (50%) of the total
grants over and above the allowable
ordinary and necessary business deductions
for said grants under the National Internal
Revenue Code, as amended.
(c) Any strike or lockout arising from any
violation of the productivity incentives
program shall suspend the effectivity thereof
pending settlement of such strike or lockout:
Provided, That the business enterprise shall
not be deemed to have forfeited any tax
incentives accrued prior to the date of
occurrence of such strike or lockout, and the
workers shall not be required to reimburse
the productivity bonuses already granted to
them under the productivity incentives
program. Likewise, bonuses which have
already accrued before the strike or lockout
shall be paid the workers within six (6)
months from their accrual.
(d) Bonuses provided for under the
productivity incentives program shall be
given to the employees not later than every
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six (6) months from the start of such program
over and above existing bonuses granted by
the business enterprise and by law:
Provided, That the said bonuses shall not be
deemed as salary increases due the
employees and workers.
(e) The special deductions from gross
income provided for herein shall be allowed
starting the next taxable year after the
effectivity of this Act.
families. It is endowed with powers to
administer a trust fund to be called the
OWWA Fund. Being a chartered institution,
the OWWA shall not fall under any of the
following
categories:
government
instrumentalities with corporate powers
(GICPs), government corporate entities
(GCEs), government financial institutions
(GFIs) and/or government- owned or controlled corporations (GOCCs).
SECTION 9. Disputes and Grievances. —
Whenever disputes, grievances, or other
matters arise from the interpretation or
implementation of the productivity incentives
program, the labor-management committee
shall meet to resolve the dispute, and may
seek the assistance of the National
Conciliation and Mediation Board of the
Department of Labor and Employment for
such purpose. Any dispute which remains
unresolved within twenty (20) days from the
time of its submission to the labormanagement committee shall be submitted
for voluntary arbitration in line with the
pertinent of the Labor Code, as amended.
The OWWA shall be an attached agency of
the Department of Labor and Employment
(DOLE). Its officials and employees are
covered by the Salary Standardization Law.
The productivity incentives program shall
include the name(s) of the voluntary
arbitrator or panel of voluntary arbitrators
previously chosen and agreed upon by the
labor-management committee.
SSS Law
See VII. A. Social Security System Law
GSIS Law
See VII. B. Government Service Insurance
Service Law
Social Security Act of 2018
See VII. A. Social Security System Law
Overseas Workers Welfare Administration
Act
SECTION 4. Nature of the OWWA. — The
OWWA is a national government agency
vested with the special function of
developing and implementing welfare
programs and services that respond to the
needs of its member-OFWs and their
SECTION 6. Functions. — The OWWA
shall exercise the following functions:
(a) To protect the interest and promote the
welfare of member-OFWs in all phases
of overseas employment in recognition
of their valuable contribution to the
overall national development effort;
(b) To protect the interest and promote the
welfare of member-OFWs in all phases
of overseas employment in recognition
of their valuable contribution to the
overall national development effort;
(c) To facilitate the implementation of the
provisions of the Labor Code of the
Philippines (Presidential Decree No.
442, as amended) and the Migrant
Workers and Overseas Filipinos Act of
1995 (Republic Act No. 8042, as
amended), concerning the responsibility
of the government to promote the wellbeing of OFWs. Pursuant thereto, and in
furtherance thereof, it shall provide legal
assistance to member-OFWs;
(d) To provide social and welfare programs
and services to member-OFWs,
including social assistance, education
and training, cultural services, financial
management,
reintegration,
and
entrepreneurial development services;
(e) To provide prompt and appropriate
response to global emergencies or crisis
situations affecting OFWs and their
families;
(f) To ensure the efficiency of collections
and the viability and sustainability of the
OWWA Fund through sound, judicious,
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and transparent investment
and
management policies;
(g) To undertake studies and researches for
the enhancement of the social,
economic, and cultural well-being of
member-OFWs and their families;
(h) To develop, support and finance specific
projects for the welfare of memberOFWs and their families; and
(i) To ensure the implementation of all laws
and ratified international conventions
within its jurisdiction.
SECTION 8. Registration of Membership.
— Membership in the OWWA may be
obtained in two (2) ways:
(a) By compulsory registration upon
processing of employment contracts of
OFWs at the POEA; and
(b) By voluntary registration of OFWs at job
sites, or through electronic registration.
SECTION 9. Amount of Contribution and
Effectivity of Membership. — Membership
in the OWWA, either through the compulsory
or voluntary coverage, shall be effective
upon payment of membership contribution in
the amount of twenty-five US dollars
(US$25.00) or its equivalent in the prevailing
foreign exchange rates. Such membership
shall be considered active until the expiration
of the OFWs existing employment contract
or after two (2) years from contract
effectivity, whichever comes first.
In
case
of
voluntary
registration,
membership shall be considered active until
the expiration of the OFWs existing
employment contract or after two (2) years
from the date of voluntary registration,
whichever comes first.
LABOR LAW
member-OFWs, the OWWA Board may
adjust or modify the amount of membership
contribution.
SECTION 11. Proof of Membership. —
Upon payment of the required contribution,
an OWWA member shall be issued an
official receipt, an OWWA E-Card,
identification card, or other proof of
membership. No additional or extra charges
shall be levied on the member-OFW.
The OWWA shall maintain a comprehensive
database of member-OFWs, which shall be
updated regularly.
SECTION 13. Authorized Collecting
Officers. — (a) Membership contributions
shall be collected by duly authorized OWWA
collecting officers, deputized collecting
officers, or accredited collecting agents. The
collection of membership contributions shall
be made at the POEA contract processing
hub, OWWA regional and overseas offices,
and other accredited collection centers.
(b) In case of voluntary members who
register at the job site, membership
contributions shall be made directly to the
OWWA Overseas Offices located in the
respective foreign service posts of the
Philippines.
SECTION 14. Reportorial Requirements.
— The collecting officer, deputized collecting
officer, or the accredited collecting agent
shall prepare and submit the required
monthly reports to the OWWA Central Office
in the Philippines.
The OWWA shall be allowed to collect a
subsequent membership contribution from
the member-OFW only after every two (2)
years from the last membership contribution
made.
SECTION
17.
Prohibition
against
Discrimination on Membership. — No
OFW shall be denied membership to the
OWWA by reason of age, gender, religious
belief, or political affiliation. The OWWA shall
take affirmative steps to enhance the access
of OFWs to its programs and services.
SECTION 10. Power of the Board to
Adjust the Membership Contribution. —
Based on actuarial studies and taking into
consideration the welfare and interest of the
SECTION 18. Payment of Contribution or
OWWA Fee by Employer. — Contributions
to the OWWA Fund must be paid by the
employers or principals, or in their default, by
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the recruitment/manning agency in the case
of new hires. The POEA shall ensure that
this stipulation is made an integral part of the
overseas employment contract.
SECTION 19. Penalty for Violation by
Recruitment/Manning
Agency.
—
Violation by a recruitment/manning agency
of the preceding section shall constitute an
offense punishable by revocation of its
license and all its officers and directors shall
be perpetually disqualified from engaging in
the business of recruitment/placement of
overseas workers. Such penalty is without
prejudice to any other liability which the
officers and directors may have incurred
under existing laws, rules and regulations.
SECTION 35. Benefits and Services to
OFWs. —
(a) Reintegration of OFWs. — The
reintegration of OFWs, taking into
consideration the needs of women
migrant workers, shall be one of the core
programs of the OWWA. In this regard,
and for purposes of policy and program
coordination, the National Reintegration
Center for OFWs created under
Republic Act No. 10022 shall be an
attached office of the OWWA. It shall be
headed by an Executive Director who
shall be under the supervision of the
OWWA Administrator.
To be able to sustain the viability of this
program, not less than ten percent (10%)
of OWWA's collection of contribution for
the immediately preceding year shall be
allocated annually for the reintegration
program.
(b) Repatriation Assistance. — Consistent
with the provisions of Republic Act No.
8042, as amended, the OWWA shall
assist the Department of Foreign Affairs
in providing OFWs with services
necessary to facilitate repatriation, as
may be required.
LABOR LAW
authority to hire experts in finance or
banking to assist in implementing the
said loan programs.
(d) Workers Assistance and On-site
Services. — The OWWA shall sustain
and maintain assistance to memberOFWs in all its overseas and regional
offices. Services shall be genderresponsive and shall include information
regarding the names, occupation/job
categories and addresses of the
member-OFWs;
legal
assistance
providing guidance and information on
protection of migrant rights, including the
prevention of gender-based violence;
developing
materials
for
the
predeparture
orientation
seminars;
conducting psycho-social counseling
services;
conciliation
services;
appropriate services and intervention for
victims of gender-based violence, and
outreach missions, among others. The
OWWA shall likewise make competent
representations with employers, agents,
and host government authorities to
assist member-OFWs in obtaining relief
from grievances and work-related
issues, including claims for unpaid
wages, and illegal recruitment cases
among others.
(e) Social Benefits. — A member-OFW shall
be covered with the following social
benefits:
(1) Death and Disability Benefits:
(i) Death Benefits. — A member
shall be covered with life insurance
for the duration of his or her
employment contract. The coverage
shall include one hundred thousand
pesos (P100,000.00) for natural
death and two hundred thousand
pesos (P200,000.00) for accidental
death;
(c) Loan and Other Credit Assistance. —
The OWWA shall provide low-interest
loans to member-OFWs. It shall have the
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(ii) Disability and Dismemberment
Benefits.
—
Disability
and
dismemberment benefits shall be
included in a member's life
insurance policy, as provided for in
the impediment schedule contained
in the OWWA Manual of Systems
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and Procedures. The coverage is
within the range of two thousand
pesos (P2,000.00) to fifty thousand
pesos (P50,000.00);
technical or
scholarship;
(iv) Seafarers' Upgrading Program.
— To ensure the competitive
advantage of Filipino seafarers in
meeting competency standards, as
required by the International
Maritime
Organization
(IMO),
International Labor Organization
(ILO) conventions, treaties and
agreements, sea-based members
shall be entitled to one upgrading
program for every three (3)
membership contributions.
(iv) Burial Benefit. — A burial benefit
of
twenty
thousand
pesos
(P20,000.00) shall be provided in
case of the member's death.
Based on actuarial studies, the
Board may increase the amount of
the abovementioned benefits.
(i) Death Benefits. — A member
shall be covered with life insurance
for the duration of his or her
employment contract. The coverage
shall include one hundred thousand
pesos (P100,000.00) for natural
death and two hundred thousand
pesos (P200,000.00) for accidental
death;
(ii)
Scholarship
Skills-for-Employment
Program. — For
training
(iii) Education for Development
Scholarship Program. — For
baccalaureate programs; and
(iii) Total Disability Benefit. — In
case of total permanent disability, a
member shall be entitled to one
hundred
thousand
pesos
(P100,000.00); and
(2) Health Care Benefits. — Within two
(2) years from the effectivity of this
Act, the OWWA shall develop and
implement health care programs for
the bene t of member-OFWs and
their
families,
taking
into
consideration the health care needs
of women as provided for in
Republic Act No. 9710, or the
Magna Carta of Women, and other
relevant laws.
(3) Education and Training Benefits. —
A member, or the member's
designated beneficiary, may avail
any of the following scholarship
programs, subject to a selection
process and accreditation of
participating institutions:
vocational
The annual scholarship lists of all
these programs shall be submitted to
the Board.
Universal Health Care Act
See VII. H. Universal Health Care
Rules 45 and 65
RULE 45
Appeal by Certiorari to the Supreme Court
Section 1. Filing of petition with Supreme
Court. — A party desiring to appeal by
certiorari from a judgment or final order or
resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or
other courts whenever authorized by law,
may file with the Supreme Court a verified
petition for review on certiorari. The petition
shall raise only questions of law which must
be distinctly set forth.
Section 2. Time for filing; extension. —
The petition shall be filed within fifteen (15)
days from notice of the judgment or final
order or resolution appealed from, or of the
denial of the petitioner's motion for new trial
or reconsideration filed in due time after
notice of the judgment. On motion duly filed
and served, with full payment of the docket
and other lawful fees and the deposit for
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costs before the expiration of the
reglementary period, the Supreme Court
may for justifiable reasons grant an
extension of thirty (30) days only within
which to file the petition.
Section 6. Review discretionary. — A
review is not a matter of right, but of sound
judicial discretion, and will be granted only
when there are special and important
reasons thereof. The following, while neither
controlling nor fully measuring the court's
discretion, indicate the character of the
reasons which will be considered:
a. When the court a quo has decided a
question of substance, not theretofore
determined by the Supreme Court, or
has decided it in a way probably not in
accord with law or with the applicable
decisions of the Supreme Court; or
b. When the court a quo has so far
departed from the accepted and usual
course of judicial proceedings, or so far
sanctioned such departure by a lower
court, as to call for an exercise of the
power of supervision.
RULE 65
Certiorari, Prohibition and Mandamus
Section 1. Petition for certiorari. — When
any tribunal, board or officer exercising
judicial or quasi-judicial functions has acted
without or in excess its or his jurisdiction, or
with grave abuse of discretion amounting to
lack or excess of jurisdiction, and there is no
appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law, a
person aggrieved thereby may file a verified
petition in the proper court, alleging the facts
with certainty and praying that judgment be
rendered annulling or modifying the
proceedings of such tribunal, board or
officer, and granting such incidental reliefs
as law and justice may require.
The petition shall be accompanied by a
certified true copy of the judgment, order or
resolution subject thereof, copies of all
pleadings and documents relevant and
pertinent thereto, and a sworn certification of
LABOR LAW
non-forum shopping as provided in the third
paragraph of section 3, Rule 46.
Section 2. Petition for prohibition. —
When the proceedings of any tribunal,
corporation, board, officer or person,
whether exercising judicial, quasi-judicial or
ministerial functions, are without or in excess
of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of
jurisdiction, and there is no appeal or any
other plain, speedy, and adequate remedy in
the ordinary course of law, a person
aggrieved thereby may file a verified petition
in the proper court, alleging the facts with
certainty and praying that judgment be
rendered commanding the respondent to
desist from further proceedings in the action
or matter specified therein, or otherwise
granting such incidental reliefs as law and
justice may require.
The petition shall likewise be accompanied
by a certified true copy of the judgment,
order or resolution subject thereof, copies of
all pleadings and documents relevant and
pertinent thereto, and a sworn certification of
non-forum shopping as provided in the third
paragraph of section 3, Rule 46.
Section 3. Petition for mandamus. —
When any tribunal, corporation, board,
officer or person unlawfully neglects the
performance of an act which the law
specifically enjoins as a duty resulting from
an office, trust, or station, or unlawfully
excludes another from the use and
enjoyment of a right or office to which such
other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary
course of law, the person aggrieved thereby
may file a verified petition in the proper court,
alleging the facts with certainty and praying
that judgment be rendered commanding the
respondent, immediately or at some other
time to be specified by the court, to do the
act required to be done to protect the rights
of the petitioner, and to pay the damages
sustained by the petitioner by reason of the
wrongful acts of the respondent.
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The petition shall also contain a sworn
certification of non-forum shopping as
provided in the third paragraph of section 3,
Rule 46.
~
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