FACULTY OF CIVIL LAW (1734)
LABOR LAW AND
SOCIAL LEGISLATION
2022 GOLDEN NOTES
FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS
MANILA
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Released in the Philippines, 2022.
Faculty of Civil Law (1734)
ACADEMIC YEAR 2021-2022
CIVIL LAW STUDENT COUNCIL
NATHAN RAPHAEL D.L. AGUSTIN
STEPHEN FLOYD A. GOPEZ
NICOLO B. BONGOLAN
PATRICIA INGRID M. SEE
JULIENNE CELINE G. OGAYON
IVAN ARNIE C. QUIAMCO
KAREN DARYL L. BRITO
PRESIDENT
VICE PRESIDENT INTERNAL
VICE PRESIDENT EXTERNAL
SECRETARY
TREASURER
PUBLIC RELATIONS OFFICER
CHIEF-OF-STAFF
UST BAR-OPS
SARAH ANGELA D. EVA
JUSTINE RENEE GERVACIO
MA. ANDREA D. CABATU
JAN YSABEL U. DE LEON
PAULINNE STEPHANY G. SANTIAGO
KAREN DARYL L. BRITO
RALPH DOMINIC V. MARTINEZ
JEDIDIAH R. PADUA
SABINA MARIA H. MABUTAS
JOSEPHINE GRACE W. ANG
REBECCA JOY M. MALITAO
JOHN FREDERICK A. NOJARA
CHAIRPERSON
VICE-CHAIRPERSON
SECRETARY
HEAD, PUBLIC RELATIONS OFFICER
HEAD, FINANCE COMMITTEE
HEAD, HOTEL ACCOMMODATIONS COMMITTEE
HEAD, LOGISTICS COMMITTEE
SENIOR MEMBER
SENIOR MEMBER
SENIOR MEMBER
SENIOR MEMBER
SENIOR MEMBER
ATTY. AL CONRAD B. ESPALDON
ADVISER
Faculty of Civil Law (1734)
ACADEMICS COMMITTEE 2022
FRANCINE BLAISE M. LOJA
JOANNA NICOLE A. PAZ
MARC GABRIEL A. ABELLA
KIARA LOUISE T. BALIWAG
DANIELLE B. BARANDA
MA. CARMINA A. DIETA
DAINIELE RENEE R. FAJILAGUTAN
GEORJHIA CZARINAH Q. MALALUAN
MARIA CRISANTA M. PALOMA
MIKAELA CECILLE S. SILVERIO
JERICHO SIMON H. DU
SECRETARY GENERAL
SECRETARY GENERAL
EXECUTIVE COMMITTEE for LEGAL ETHICS
EXECUTIVE COMMITTEE for CRIMINAL LAW
EXECUTIVE COMMITTEE for LABOR LAW AND
SOCIAL LEGISLATION
EXECUTIVE COMMITTEE for CIVIL LAW
EXECUTIVE COMMITTEE for REMEDIAL LAW
EXECUTIVE COMMITTEE for COMMERCIAL LAW
EXECUTIVE COMMITTEE for POLITICAL LAW
EXECUTIVE COMMITTEE for TAXATION LAW
COVER DESIGN ARTIST
LABOR LAW COMMITTEE 2022
PATRICIA MAE H. CABAÑA
LABOR LAW SUBJECT HEAD
MONIQUE E. RENS
ANGELICA ROSCEA S. QUIAMBAO
LYN JEEN I. BINUA
ASST. HEAD, LABOR STANDARDS
ASST. HEAD, SOCIAL LEGISLATION
ASST. HEAD, LABOR RELATIONS
MEMBERS
ARIANA RUBY E. ALCALA
LANCE BERNADETTE F. BASA
NORIEL C. BERNABE
JANIELLA KIM JAZZY B. BESIÑO
DANIELLA K. DE PERALTA
KAREN LOUISE R. FLORECE
JENELYN D. GALVEZ
JEFFREY ISAIAJ G. LABUDAHON
CHELSEA KATE M. LAVILLA
FATIMA JOYCE C. LAXAMANA
GEORJHIA CZARINAH Q. MALALUAN
MA. JERMAINE A. MARTINEZ
PRECIOUS JOY D. PACIONELA
SHALMAE A. PUMARADA
ERIDEEN E. RONQUILLO
ANNA NERISSA C. SABINO
SOFIA PATRICIA L. SALCEDO
PAULINNE STEPHANY G. SANTIAGO
VANESSA A. SIENA
ASTRID A. SOLIS
ATTY. ARNOLD E. CACHO
ATTY. REYNA FE C. ITCHON-FERNANDEZ
ATTY. JACQUELINE O. LOPEZ-KAW
ADVISERS
Faculty of Civil Law (1734)
FACULTY OF CIVIL LAW
UNIVERSITY OF SANTO TOMAS
ACADEMIC OFFICIALS
ATTY. NILO T. DIVINA
DEAN
REV. FR. ISIDRO C. ABAÑO, O.P.
REGENT
ATTY. ARTHUR B. CAPILI
FACULTY SECRETARY
ATTY. ELGIN MICHAEL C. PEREZ
LEGAL COUNSEL
UST CHIEF JUSTICE ROBERTO CONCEPCION LEGAL AID CLINIC
JUDGE PHILIP A. AGUINALDO
SWDB COORDINATOR
LENY G. GADIANA, R.G.C.
GUIDANCE COUNSELOR
Faculty of Civil Law (1734)
OUR DEEPEST APPRECIATION TO OUR
MENTORS AND INSPIRATION
Atty. Arnold E. Cacho
Atty. Ian Jerny E. De Leon
Labor Arbiter Benedict G. Kato
Atty. Jacqueline O. Lopez-Kaw
Atty. Roland L. Marquez
Atty. Alwyn Faye B. Mendoza
Dean Salvador A. Poquiz
Atty. Cesar E. Santamaria, Jr.
Comm. Leonard Vinz Ochoa Ignacio
Atty. Irvin Joseph Fabella
For being our guideposts in understanding the intricate sphere of Labor Law and
Social Legislation.
– Academics Committee 2022
DISCLAIMER
THE RISK OF USE OF THIS BAR
REVIEW MATERIAL SHALL BE
BORNE BY THE USER
This page is intentionally left blank.
TABLE OF CONTENTS
I. GENERAL PRINCIPLES ............................................................................................................................................................. 1
A. BASIC POLICY ON LABOR ............................................................................................................................................ 1
B. CONSTRUCTION IN FAVOR OF LABOR..................................................................................................................... 2
C. BURDEN OF PROOF AND QUANTUM OF EVIDENCE IN LABOR CASES ............................................................ 3
D. LEGAL BASIS UNDER 1987 CONSTITUTION, CIVIL CODE, AND LABOR CODE .............................................. 4
II. RECRUITMENT AND PLACEMENT OF WORKERS ......................................................................................................... 9
A. RECRUITMENT AND PLACEMENT ............................................................................................................................ 9
1. ILLEGAL RECRUITMENT AND OTHER PROHIBITED ACTIVITIES ........................................................ 9
a. ELEMENTS OF ILLEGAL RECRUITMENT...................................................................................... 11
b. TYPES OF ILLEGAL RECRUITMENT .............................................................................................. 12
c. ILLEGAL RECRUITMENT vs. ESTAFA............................................................................................. 12
2. LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN EMPLOYER .................................... 13
a. SOLIDARY LIABILITY ........................................................................................................................ 14
b. THEORY OF IMPUTED KNOWLEDGE ............................................................................................ 14
3. ENTITIES PROHIBITED FROM RECRUITING ........................................................................................... 14
4. CANCELLATION OF LICENSE OR AUTHORITY........................................................................................ 16
5. TERMINATION OF CONTRACT OF MIGRANT WORKER WITHOUT JUST OR VALID CAUSE ....... 17
6. BAN ON DIRECT HIRING .............................................................................................................................. 18
B. EMPLOYMENT OF NON-RESIDENT ALIENS ........................................................................................................ 19
III. LABOR STANDARDS ........................................................................................................................................................... 24
1. EMPLOYER-EMPLOYEE RELATIONSHIP .................................................................................................. 24
2. TEST TO DETERMINE EXISTENCE ............................................................................................................. 26
3. EMPLOYEE vs. INDEPENDENT CONTRACTOR ........................................................................................ 29
A. CONDITIONS OF EMPLOYMENT ............................................................................................................................. 31
1. COVERED EMPLOYEES/WORKERS ........................................................................................................... 31
2. HOURS OF WORK ........................................................................................................................................... 34
a. NORMAL HOURS OF WORK, HOURS WORKED ........................................................................... 34
b. MEAL PERIODS ................................................................................................................................... 40
c. NIGHT SHIFT DIFFERENTIAL ......................................................................................................... 41
d. OVERTIME WORK .............................................................................................................................. 42
e. COMPRESSED WORK WEEK, FLEXIBLE WORK ARRRANGEMENT, ALTERNATIVE WORK
ARRANGEMENTS, TELECOMMUTING PROGRAM .......................................................................... 47
3. REST PERIODS ................................................................................................................................................ 50
4. HOLIDAY ........................................................................................................................................................... 51
5. SERVICE CHARGES ......................................................................................................................................... 58
6. 13th MONTH PAY ............................................................................................................................................ 59
B. WAGES........................................................................................................................................................................... 65
1. PAYMENT OF WAGES .................................................................................................................................... 66
2. PROHIBITIONS REGARDING WAGES ........................................................................................................ 68
3. FACILITIES vs. SUPPLEMENTS .................................................................................................................... 71
4. MINIMUM WAGE ............................................................................................................................................ 73
5. WAGE DISTORTION ....................................................................................................................................... 75
6. NON-DIMINUTION OF BENEFITS ............................................................................................................... 77
C. LEAVES .......................................................................................................................................................................... 80
1. SERVICE INCENTIVE LEAVE (SIL) ............................................................................................................. 80
2. EXPANDED MATERNITY LEAVE .................................................................................................................82
3. PATERNITY LEAVE .........................................................................................................................................86
4. PARENTAL LEAVE FOR SOLO PARENTS ...................................................................................................88
5. LEAVE BENEFITS FOR WOMEN WORKERS ..............................................................................................89
D. SPECIAL GROUPS OF EMPLOYEES ..........................................................................................................................92
1. WOMEN .............................................................................................................................................................92
a. DISCRIMINATION ...............................................................................................................................93
b. STIPULATION AGAINST MARRIAGE ..............................................................................................94
c. PROHIBITED ACTS ..............................................................................................................................95
2. MINORS (R.A. No. 7610, as amended by R.A. No. 9231) ........................................................................96
a. CHILD LABOR vs. WORKING CHILD................................................................................................96
b. ALLOWED WORKING HOURS AND INDUSTRIES OF A WORKING CHILD ............................96
c. PROHIBITED ACTS ..............................................................................................................................99
3. KASAMBAHAY (R.A. No. 10361) ................................................................................................................ 101
4. HOMEWORKERS .......................................................................................................................................... 109
5. NIGHT WORKERS ......................................................................................................................................... 111
6. PERSONS WITH DISABILITIES ................................................................................................................. 113
a. DISCRIMINATION ............................................................................................................................ 114
b. INCENTIVES FOR EMPLOYERS .................................................................................................... 115
E. SEXUAL HARRASSMENT IN THE WORK ENVIRONMENT .............................................................................. 116
1. ANTI-SEXUAL HARASSMENT ACT (R.A. No. 7877).............................................................................. 116
2. SAFE SPACES ACT (R.A. No. 11313) ........................................................................................................ 118
IV. SOCIAL WELFARE LEGISLATION ................................................................................................................................. 122
A. SOCIAL SECURITY ACT OF 2018 (R.A. No. 11199) ........................................................................................... 122
1. COVERAGE AND EXCLUSIONS .................................................................................................................. 122
2. DEPENDENTS AND BENEFICIARIES ....................................................................................................... 126
3. BENEFITS ....................................................................................................................................................... 129
B. GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) LAW (R.A. No. 8291) ............................................ 137
1. COVERAGE AND EXCLUSIONS .................................................................................................................. 138
2. DEPENDENTS AND BENEFICIARIES ....................................................................................................... 139
3. BENEFITS ....................................................................................................................................................... 139
C. LIMITED PORTABILITY LAW ................................................................................................................................ 146
D. DISABILITY AND DEATH BENEFITS ................................................................................................................... 148
1. UNDER THE LABOR CODE ......................................................................................................................... 148
2. UNDER THE POEA STANDARD EMPLOYMENT CONTRACT (POEA-SEC) ...................................... 154
V. LABOR RELATIONS ............................................................................................................................................................ 167
A. RIGHT TO SELF-ORGANIZATION ......................................................................................................................... 168
1. WHO MAY JOIN, FORM, OR ASSIST LABOR ORGANIZATIONS OR WORKERS’ ASSOCIATIONS 168
2. RESTRICTIONS AS TO MANAGERIAL EMPLOYEES, SUPERVISORY EMPLOYEES, CONFIDENTIAL
EMPLOYEES, EMPLOYEE-MEMBERS OF COOPERATIVES, AND GOVERNMENT EMPLOYEES ..... 169
3. DETERMINATION OF APPROPRIATE BARGAINING UNIT (ABU) & EFFECT OF INCLUSION OF
EMPLOYEES OUTSIDE OF THE ABU ............................................................................................................ 173
4. NON-INTERFERENCE WITH WORKERS’ RIGHT TO SELF-ORGANIZATION .................................. 177
B. LEGITIMATE LABOR ORGANIZATIONS .............................................................................................................. 178
1. REGISTRATION WITH THE DOLE ............................................................................................................ 178
2. CANCELLATION OF REGISTRATION ....................................................................................................... 179
3. AFFILIATION/DISAFFILIATION FROM NATIONAL UNION OR FEDERATION .............................. 179
4. RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS ............................................................................ 183
5. RIGHTS AND CONDITIONS OF MEMBERSHIP IN LEGITIMATE LABOR ORGANIZATIONS ........ 183
6. CHECK OFF, ASSESSMENTS, UNION DUES, AND AGENCY FEES ....................................................... 185
7. UNION SECURITY CLAUSE ......................................................................................................................... 188
C. BARGAINING REPRESENTATIVE .......................................................................................................................... 188
1. MODES TO ACQUIRE STATUS AS SOLE AND EXCLUSIVE BARGAINING AGENT .......................... 189
a. SEBA CERTIFICATION ..................................................................................................................... 189
b. CERTIFICATION/CONSENT ELECTION ...................................................................................... 190
c. BARS TO THE HOLDING OF CERTIFICATION/CONSENT ELECTION .................................. 194
d. FAILURE OF ELECTION, RUN-OFF ELECTION, RE-RUN ELECTION .................................... 198
e. EMPLOYER AS A MERE BYSTANDER RULE ............................................................................... 199
D. COLLECTIVE BARGAINING .................................................................................................................................... 200
1. DUTY TO BARGAIN COLLECTIVELY, BARGAINING IN BAD FAITH.................................................. 200
2. COLLECTIVE BARGAINING AGREEMENT (CBA), MANDATORY PROVISIONS .............................. 201
3. SIGNING, POSTING, REGISTRATION ........................................................................................................ 203
4. TERM OF THE CBA, FREEDOM PERIOD .................................................................................................. 204
E. UNFAIR LABOR PRACTICES ................................................................................................................................... 205
1. NATURE, ASPECTS ....................................................................................................................................... 205
2. ULP BY EMPLOYERS .................................................................................................................................... 206
3. ULP BY LABOR ORGANIZATIONS ............................................................................................................. 212
F. PEACEFUL CONCERTED ACTIVITIES ................................................................................................................... 214
1. STRIKES .......................................................................................................................................................... 215
a. GROUNDS FOR STRIKE ................................................................................................................... 216
b. MANDATORY PROCEDURAL REQUIREMENTS ........................................................................ 217
c. LEGAL STRIKE vs. ILLEGAL STRIKE ............................................................................................. 219
d. PROHIBITED ACTS DURING A STRIKE ....................................................................................... 221
e. LIABILITY OF UNION OFFICERS AND MEMBERS FOR ILLEGAL STRIKE AND ILLEGAL
ACTS DURING STRIKE ......................................................................................................................... 222
2. PICKETING ..................................................................................................................................................... 226
3. LOCKOUTS...................................................................................................................................................... 228
a. GROUNDS FOR LOCKOUT............................................................................................................... 228
b. MANDATORY PROCEDURAL REQUIREMENTS ........................................................................ 228
4. ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY ........................................................... 230
5. INJUNCTIONS ................................................................................................................................................ 233
VI. TERMINATION OF EMPLOYMENT ............................................................................................................................... 236
A. SECURITY OF TENURE ............................................................................................................................................ 236
1. CATEGORIES OF EMPLOYMENT AS TO TENURE ................................................................................. 237
a. REGULAR EMPLOYMENT ............................................................................................................... 237
b. CASUAL EMPLOYMENT .................................................................................................................. 241
c. PROBATIONARY EMPLOYMENT .................................................................................................. 242
d. PROJECT EMPLOYMENT ................................................................................................................ 250
e. SEASONAL EMPLOYMENT ............................................................................................................. 253
f. FIXED-TERM EMPLOYMENT.......................................................................................................... 254
g. WORK POOL EMPLOYEES .............................................................................................................. 256
2. LEGITIMATE SUBCONTRACTING vs. LABOR-ONLY CONTRACTING ............................................... 256
a. ELEMENTS ......................................................................................................................................... 256
b. TRILATERAL RELATIONSHIP ....................................................................................................... 258
c. SOLIDARY LIABILITY ...................................................................................................................... 259
B. TERMINATION BY EMPLOYER.............................................................................................................................. 261
1. SUBSTANTIVE DUE PROCESS ................................................................................................................... 261
a. JUST CAUSES ..................................................................................................................................... 263
b. AUTHORIZED CAUSES .................................................................................................................... 277
2. PROCEDURAL DUE PROCESS .................................................................................................................... 287
a. TWO-NOTICE RULE ......................................................................................................................... 287
3. ILLEGAL DISMISSAL, RELIEFS THEREFROM ........................................................................................ 294
a. REINSTATEMENT ............................................................................................................................ 296
b. BACKWAGES ..................................................................................................................................... 299
c. SEPARATION PAY, DOCTRINE OF STRAINED RELATIONS ................................................... 301
d. DAMAGES .......................................................................................................................................... 304
e. ATTORNEY’S FEES ........................................................................................................................... 304
f. LIABILITIES OF CORPORATE OFFICERS ..................................................................................... 305
g. BURDEN OF PROOF ......................................................................................................................... 305
C. TERMINATION BY EMPLOYEE .............................................................................................................................. 306
1. RESIGNATION vs. CONSTRUCTIVE DISMISSAL .................................................................................... 306
2. ABANDONMENT ........................................................................................................................................... 313
D. PREVENTIVE SUSPENSION.................................................................................................................................... 314
E. FLOATING STATUS................................................................................................................................................... 315
F. RETIREMENT............................................................................................................................................................. 316
VII. MANAGEMENT PREROGATIVE ................................................................................................................................... 321
A. RIGHT TO DISCIPLINE ............................................................................................................................................ 321
B. RIGHT TO TRANSFER OF EMPLOYEES ............................................................................................................... 322
C. PRODUCTIVITY STANDARDS ................................................................................................................................ 323
D. BONUS ......................................................................................................................................................................... 323
E. CHANGE OF WORKING HOURS ............................................................................................................................. 324
F. BONA FIDE OCCUPATIONAL QUALIFICATIONS ............................................................................................... 325
G. POST-EMPLOYMENT RESTRICTIONS ................................................................................................................. 326
H. CLEARANCE PROCEDURES ................................................................................................................................... 327
I. LIMITATIONS ON MANAGEMENT PREROGATIVE, POLICE POWER OF THE STATE ............................... 328
VIII. JURISDICTION AND RELIEFS ...................................................................................................................................... 330
A. MANDATORY CONCILIATION-MEDIATION, SENA .......................................................................................... 330
B. LABOR ARBITER ....................................................................................................................................................... 332
C. NATIONAL LABOR RELATIONS COMMISSION (NLRC) ................................................................................... 336
D. JUDICIAL REVIEW OF LABOR RULINGS ............................................................................................................. 345
E. BUREAU OF LABOR RELATIONS .......................................................................................................................... 347
F. NATIONAL CONCILIATION AND MEDIATION BOARD .................................................................................... 349
G. POEA ............................................................................................................................................................................ 353
H. DOLE REGIONAL DIRECTORS ............................................................................................................................... 354
I. DOLE SECRETARY ..................................................................................................................................................... 355
J. GRIEVANCE MACHINERY ........................................................................................................................................ 359
K. VOLUNTARY ARBITRATOR ................................................................................................................................... 360
L. PRESCRIPTION OF ACTIONS ................................................................................................................................. 366
General Principles
BFOQ BLR
CB
CBA
CE
DOLE
Ee
Er
IRR
LA
LC
LLO
LOA
NCC
NCMB NLRC
NSD
OFW
OT
PCE
POEA
-
RAB
RD
RH
RTWPB
-
RW
RWD
SEBA
SEnA
SIL
SOLE
ULP
UT
VA
VR
WD
WRD
-
LEGEND
Bona Fide Occupational Qualification
Bureau of Labor Relations
Collective Bargaining
Collective Bargaining Agreement
Certification Election
Department of Labor and Employment
Employee
Employer
Implementing Rules and Regulations
Labor Arbiter
Labor Code
Legitimate Labor Organization
Leave of Absence
New Civil Code
National Conciliation and Mediation
Board
National Labor Relations Commission
Night Shift Differential
Overseas Filipino Worker
Overtime
Petition for Certification Election
Philippine
Overseas
Employment
Administration
Regional Arbitration Branch
Regional Director
Regular Holiday
Regional
Tripartite
Wages
and
Productivity Boards
Regular Wage
Regular Working Day
Sole and Exclusive Bargaining Agent
Single Entry Approach
Service Incentive Leave
Secretary of Labor and Employment
Unfair Labor Practice
Undertime
Voluntary Arbitrator
Voluntary Recognition
Wage Distortion
Weekly Rest Day
I. GENERAL PRINCIPLES
A. BASIC POLICY ON LABOR
Labor
It is the exertion by human beings of physical or
mental efforts, or both, towards the production of
goods and services. (Poquiz, 2012)
The State affirms labor as a primary social economic
force. It shall protect the rights of workers and
promote their welfare. (Sec. 18, Art. II, 1987
Constitution)
Labor Law
The law that governs the rights and duties of the
employer (Er) and employees (Ee) as to:
1.
2.
The terms and conditions of employment; and
Labor disputes arising from collective
bargaining or other concerted activities
respecting such terms and conditions.
Labor Legislation
It consists of statutes, regulations, and
jurisprudence governing the relations between
capital and labor, by providing for certain
employment standards and a legal framework for
negotiating, adjusting, and administering those
standards and other incidents of employment.
(Azucena, 2016)
Classification of Labor Laws
1.
1
Labor
Standards
–
The
minimum
requirements prescribed by existing laws, rules
and regulations as to the terms and conditions
of employment relating to wages, hours of
work, cost-of-living allowance, and other
monetary and welfare benefits, including
occupational, safety and health standards.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
2.
(Maternity Children’s Hospital v. Secretary of
Labor, G.R. No. 78909, 30 June 1989)
1.
2.
e.g., 13th month pay
3.
4.
5.
6.
Labor Relations – Defines and regulates the
status, rights and duties, and the institutional
mechanisms that govern the individual and
collective interactions of Ers, Ees, or their
representatives.
Constitution;
Labor Code and other related special legislation
(including their respective IRR);
Contracts;
Collective Bargaining Agreements (CBAs);
Company practices; and
Company policies.
B. CONSTRUCTION IN FAVOR OF LABOR
e.g., Collective Bargaining Negotiations
All doubts in the implementation and interpretation
of the provisions of the Labor Code, including its
implementing rules and regulations, shall be
resolved in favor of labor. (Art. 4, Labor Code)
Social Legislation
It refers to all laws passed by the State to promote
public welfare. Social legislation involves laws that
provide specific type of protection or benefits to
society or segments thereof in furtherance of social
justice. It includes statutes intended to enhance the
welfare of the people even where there is no Er-Ee
relationship.
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. (Art. 1702, New
Civil Code)
In case of doubt in the interpretation or application
of laws, it is presumed that the lawmaking body
intended right and justice to prevail. (Art. 10, NCC)
e.g., GSIS Law, SSS Law, PhilHealth, Agrarian Laws
Labor Legislation vs. Social Legislation
Labor Legislation
Directly affects
employment
Protection to Labor
Social Legislation
Governs effects of
employment
(e.g., wages)
(e.g., compensation for
injuries)
Refers to labor
statutes like Labor
Relations Law and
Labor Standards Law
Refers to Social
Security Laws
Focuses on the rights
of the worker in the
workplace
Focuses on the
particular part of the
society or segment
thereof.
When the conflicting interests of labor and capital
are weighed on the scales of social justice, the
heavier influence of the latter must be counterbalanced by the sympathy and compassion the law
must accord the underprivileged worker.
This is in line with the express mandate of the Labor
Code and the principle that those with less in life
should have more in law. (Eastern Shipping Lines v.
POEA, G.R. No. 76633, 18 Oct. 1998)
It is a time-honored rule that in controversies
between a laborer and his master, doubts
reasonably arising from the evidence, or in the
interpretation of agreements and writing, should be
resolved in the former’s favor. The policy is to
extend the doctrine to a greater number of Ees who
can avail themselves of the benefits under the law,
which is in consonance with the policy of the State
to give maximum aid and protection to labor.
NOTE: All labor laws are social legislation, but not
all social legislation is labor law. Social legislation as
a concept is broader while labor laws are narrower.
(Duka, 2016)
Sources of Labor Laws
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
2
General Principles
(Lepanto Consolidated Mining Co. v. Moreno
Dumapis, et. al., G.R. No. 163210, 13 Aug. 2008)
that maybe applied to him in the light of the many
disadvantages that weigh heavily on him like an
albatross on his neck.
We need to protect labor because there is no doubt
that the Er stands on higher footing than the Ee.
First of all, there is greater supply than demand for
labor. Secondly, the need for employment by labor
comes from vital and even desperate necessity.
Consequently, the law must protect labor; at least to
the extent of raising him to equal footing in
bargaining relations with capital and to shield him
from abuses brought about by the necessity for
survival. (Daniel Sanchez et. al. v. Harry Lyons
Construction, Inc., et. al., G.R. No. L-2779, 18 Oct.
1950)
Labor law determinations are not only secundum
rationem (according to reason) but also secundum
caritatem (according to charity). (Zenaida Paz v.
Northern Tobacco Redrying Co., Inc., G.R. No. 199554,
18 Feb. 2015)
It is disregarding rigid rules and giving due weight
to all equities of the case. (Gandara Mill Supply and
Milagros Sy v. NLRC and Silvestre Germano, G.R. No.
126703, 29 Dec. 1998)
The law must protect labor, at least to the extent of
raising him to equal footing in bargaining relations
with capital and to shield him from abuses brought
about by the necessity for survival. (Azucena, 2016)
Q: Several employees of Novo Jeans filed a case
of illegal dismissal against Novo Jeans. However,
Novo Jeans argued that they were able to
present the First Notice of Termination of
Employment sent to employees, asking them to
explain their sudden absence from work
without proper authorization. In contrast, the
employees alleged that there were only sample
letters of the Notices, and there was no evidence
to prove that the Notices were sent to them at
their last known addresses. They insist that if
doubt exists between the evidence presented by
the Er and the evidence presented by the
employees, the doubt must be resolved in favor
of the employees, consistent with the Labor
Code's policy to afford protection to labor. Are
the employees correct?
C. BURDEN OF PROOF AND QUANTUM OF
EVIDENCE IN LABOR CASES
Burden of Proof
In determining the Ee’s entitlement to monetary
claims, the burden of proof is shifted from the Er or
the Ee, depending on the monetary claim sought.
(Minsola v. New City Builders, Inc., G.R. No. 207613,
31 Jan. 2018)
In an illegal dismissal case, the Ee has the burden of
proof to first show that he was indeed dismissed
from employment. Before the Er must bear the
burden of proving that the dismissal was legal, the
employee must first establish by substantial
evidence the fact of his dismissal from service.
(Reyes v. Global Beer Below Zero, Inc., G.R. No.
222816, 04 Oct. 2017)
A: YES. Under the law, where both parties in a labor
case have not presented substantial evidence to
prove their allegations, evidence will be considered
in equipoise. In such a case, the scales of justice are
tilted in favor of labor. (Charlie Hubilla et al. v. HSY
Marketing Ltd., Co., et al. G.R. No. 207354, 10 Jan.
2008)
Compassionate Justice
Quantum of Evidence
The social justice policy mandates a compassionate
attitude towards the working class in its relation to
management. In calling for protection to labor, the
Constitution does not condone wrongdoing by the
Ee. However, it urges a moderation of the sanctions
Q: What is the quantum of evidence required in
labor cases? (2012 BAR)
3
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
A: In labor cases, as in other administrative and
quasi-judicial proceedings, the quantum of proof
necessary is substantial evidence, or such amount
of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion. (Valencia
v. Classique Vinyl Products Corporation, G.R. No.
206390, 30 Jan. 2017)
D. LEGAL BASIS UNDER 1987 CONSTITUTION,
CIVIL CODE, AND LABOR CODE
a. 1987 CONSTITUTION
I.
Limitation to Protection of Labor
1.
Recognition of management rights - The law
also recognizes that management has rights
which are also entitled to respect and
enforcement in the interest of fair play. (St.
Luke’s Medical Center Ees Ass’n v. NLRC, G.R. No.
162053, 07 Mar. 2007)
2.
Principle of non-oppression - Neither capital
nor labor shall act oppressively against the
other, or impair the interest or convenience of
the public. (Art. 1701, NCC)
The protection to labor clause in the Constitution is
not designed to oppress or destroy capital. (Capili v.
NLRC, G.R. No. 117378, 26 Mar. 1997)
The law, in protecting the rights of the Ees,
authorizes neither oppression nor self-destruction
of the Er. (Pacific Mills Inc. v. Alonzo, G.R. No. 78090,
26 July 1991)
1.
Sec. 9 – The State shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation and
free the people from poverty through policies
that provide adequate social services, promote
full employment, a rising standard of living, and
an improved quality of life for all.
2.
Sec. 10 – The State shall promote social justice
in all phases of national development.
3.
Sec. 14 - The State recognizes the role of
women in nation-building, and shall ensure the
fundamental equality before the law of women
and men.
Law: R.A. 9710 – Magna Carta of Women
It should be made clear that when the law tilts the
scale of justice in favor of labor, it is a recognition of
the inherent economic inequality between labor
and management. The intent is to balance the scale
of justice; to put the two parties on relatively equal
positions. There may be cases where the
circumstances warrant favoring labor over the
interests of management, but never should the scale
be so tilted if the result is an injustice to the Er.
Justitia nemini neganda est. (Justice is to be denied
to none.) (Philippine Geothermal, Inc. v. NLRC and
Alvarez, G.R. No. 106370, 08 Sept. 1994)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Article II – Declaration of Principles and
State Policies
4.
Sec. 18 – The State affirms labor as a primary
social economic force. It shall protect the rights
of workers and promote their welfare.
5.
Sec. 20 – The State recognizes the
indispensable role of the private sector,
encourages private enterprise and provides
incentives to needed investments.
II.
4
Article III – Bill of Rights
1.
Sec. 1 - No person shall be deprived of life,
liberty, or property without due process of law,
nor shall any person be denied the equal
protection of the laws.
2.
Sec. 4 – No law shall be passed abridging the
freedom of speech, of expression, or of the
press, or the right of the people peaceably to
assemble and petition the government for
redress of grievances.
General Principles
3.
disputes, including conciliation, and shall
enforce their mutual compliance therewith to
foster industrial peace.
Sec. 8 – The right of the people, including those
employed in the public and private sectors, to
form unions, associations, or societies for
purposes not contrary to law shall not be
abridged.
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.
Law: E.O. No. 180 series of 1987 providing
guidelines for the exercise of the right to
organize of government employees, creating a
Public Sector Labor Management Council and
for other purposes.
3.
4.
Sec. 10 – No law impairing the obligation of
contracts shall be passed.
5.
Sec. 16 – All persons shall have the right to a
speedy disposition of their cases before all
judicial, quasi-judicial or administrative bodies.
6.
1.
2.
Law: R.A. 7277 – Magna Carta for Disabled
Person
Sec. 18(2) – No involuntary servitude in any
form shall exist except as a punishment for a
crime whereof the party shall have been duly
convicted.
III.
Sec. 13 – The State shall establish a special
agency for disabled persons for their
rehabilitation, self-development and selfreliance and their integration into the
mainstream of society.
4.
Article XIII – Social Justice and Human
Rights
Sec. 2 – The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative
and self-reliance.
Sec. 14 – The State shall protect working
women by providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities
that will enhance their welfare and enable them
to realize their full potential in the service of the
nation.
Law: R.A. 9710 – Magna Carta of Women
Q: Are the constitutional provisions on labor
self-executing?
Sec. 3 – The State shall afford full protection to
labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their
rights and benefits as may be provided by law.
A: The constitutional mandates of protection to
labor and security of tenure may be deemed as selfexecuting in the sense that these are automatically
acknowledged and observed without need for any
enabling legislation. However, to declare that the
constitutional provisions are enough to guarantee
the full exercise of the rights embodied therein, and
the realization of ideals therein expressed, would be
impractical, if not unrealistic. The espousal of such
view presents the dangerous tendency of being
overbroad and exaggerated. (Agabon v. NLRC, G.R.
No. 158693, 17 Nov. 2004)
The State shall promote the principle of shared
responsibility between workers and Ers and the
preferential use of voluntary modes in settling
5
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Basic Rights of Workers Guaranteed by the
Constitution
1.
2.
3.
4.
5.
6.
7.
8.
9.
Management rights are subject to limitations
provided by:
1.
2.
Security of tenure;
Living wage;
Share in the fruits of production;
Just and humane working conditions;
Self-organization;
Collective bargaining;
Collective negotiations;
Engage in peaceful concerted activities,
including the right to strike; and
Participate in policy and decision-making
processes. (Sec. 3, Art. XIII, 1987 Constitution)
3.
Law;
Contract, whether individual or collective;
and
General principles of fair play and justice.
Balancing of Rights between Labor and Capital
It should not be deduced that the basic policy is in
favor of labor to prejudice capital. The basic policy
is to balance or to coordinate the rights and
interests of both workers and employers. (Azucena,
2016)
Rights of Management
Arts. 3 and 4 of the LC explicitly recognize shared
responsibility of the employers and workers and
the right of enterprise to reasonable returns on
investment and to expansion and growth. (Ibid.)
It should not be supposed that every labor dispute
will be automatically decided in favor of labor.
Management also has its own rights which are
entitled to respect and enforcement in the interest
of simple fair play. (Sosito v. Aguinaldo Development
Corporation, G.R. No. 48926, 24 Dec. 1987)
In employment bargaining, there is no doubt that
the Er stands on higher footing than the Ee. The law
must protect labor, at least, to the extent of raising
him to equal footing in bargaining relations with
capital and to shield him from abuses brought about
by the necessity for survival. (Sanchez, et al v. Harry
Lyons Construction Inc., et al, G.R. No. L-2799, 19 Oct.
1950)
The Secretary of Labor is duly mandated to equally
protect and respect not only the laborer, but also the
management.
Fundamental Management Rights (S-P-I-T)
1.
2.
3.
4.
Yet, the Constitution has not overlooked the rights
of capital. The State is mandated to regulate the
relations between workers and employers.
Right to Select employees;
Right to Prescribe rules;
Right to reasonable return on Investments;
and
Right to Transfer or discharge employees.
While labor is entitled to a just share in the fruits
of production, the enterprise has the right not
only to reasonable returns on investments, but
also to expansion and growth.
Management has the right to regulate all aspects of
employment which include, among others, work
assignment, working methods, and place and
manner of work. (Marsman & Co., Inc. v. Rodil Sta.
Rita, G.R. No. 194765, 23 Apr. 2018)
b. NEW CIVIL CODE
Restrictions to Management Rights
Management rights are never absolute. Under the
Constitution, the right to own and operate economic
enterprises is subject to the duty of the State to
promote distributive justice and to intervene when
the common good so demands.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
6
1.
Art. 19 – Every person must, in the exercise of
his rights and in the performance of his duties,
act with justice, give everyone his due, and
observe honesty and good faith. This is known
as the Principle of Abuse of Rights.
2.
Art. 1700 – The relations between capital and
labor are not merely contractual. They are so
General Principles
3.
charter of human rights and a bill of obligations for
every working man.
impressed with public interest that labor
contracts must yield to the common good.
Therefore, such contracts are subject to the
special laws on labor unions, collective
bargaining, strikes and lock outs, closed-shop,
wages, working conditions, hours of labor, and
similar subject.
Art. 1701 – Neither capital nor labor shall act
oppressively against the other, or impair the
interest or convenience of the public. This is
known as the Principle of Non-Oppression.
Date of Effectivity
P.D. 442 was signed into law on 01 May 1974 and
took effect on 01 Nov. 1974, six (6) months after its
promulgation.
Declaration of Basic Policy
The State shall:
4.
5.
6.
Art. 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.
Art. 1703 – No contract which practically
amounts to involuntary servitude, under any
guise whatsoever, shall be valid.
4.
5.
Art. 1704 – In collective bargaining, the labor
union or members of the board or committee
signing the contract shall be liable for nonfulfillment thereof.
7.
Art. 1708 – The laborer’s wages shall not be
subject to execution or attachment, except for
debts incurred for food, shelter, clothing, and
medical attendance.
8.
Art. 1709 – The employer shall neither seize
nor retain any tool or other articles belonging
to the laborer.
9.
1.
2.
3.
Afford full protection to labor;
Promote full employment;
Ensure equal work opportunities regardless of
sex, race, or creed;
Regulate the relations between workers and
employers; and
Assure the rights of workers to selforganization, collective bargaining, security of
tenure, and just and humane conditions of
work. (Art. 3, LC)
Rule-Making Power Granted by the Labor Code
The Department of Labor and Employment (DOLE)
through the Secretary of Labor and Employment
(SOLE) and other Government agencies charged
with the administration and enforcement of the LC
or any of its parts shall promulgate the necessary
IRRs. (Art. 5, LC)
Limitations to the Rule-Making Power Granted
by the Labor Code
Art. 1710 – Dismissal of laborers shall be
subject to the supervision of the Government,
under special laws.
1.
2.
c. LABOR CODE
3.
Presidential Decree (PD) No. 442, otherwise known
as the Labor Code of the Philippines, is a decree
instituting a Labor Code, thereby revising and
consolidating labor and social laws to afford
protection to labor, promote employment and
human resources development, and ensure
industrial peace based on social justice. It is a
It must be issued under the authority of
law;
It must not be contrary to law and the
Constitution; and
It must not go beyond the law itself.
A rule or regulation promulgated by an
administrative body to implement a law in excess of
its rule-making power is void. (Azucena, 2016)
An administrative interpretation which takes away
a benefit granted in the law is ultra vires, that is,
7
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
beyond one’s power. (CBTC Employees Union v.
Clave, G.R. No. 49582, 07 Jan. 1986)
It is the Public Sector Labor-Management Council,
not the DOLE, which shall hear the dispute. (Sec. 15,
EO No. 180, 01 June 1987)
Applicability of Labor Code
Applicability without Er-Ee Relationship
GR: All rights and benefits granted to workers
under the LC shall apply alike to all workers,
whether agricultural or non-agricultural. (Art. 6, LC)
The LC may apply even if the parties are not Ers and
Ees of each other. It is not correct to say that
employment relationship is a pre-condition to the
applicability of the Code (e.g., illegal recruitment,
misuse of POEA license). (Azucena, 2016)
XPNs:
1. Government employees;
2. Employees of government-owned and
controlled corporations created by special or
original charter;
3. Foreign governments;
4. International agencies;
Likewise, in legitimate independent jobcontracting arrangements under Art. 106 of the LC,
in case of non-payment of the wages of the agency
employees and other monetary benefits under the
Service Contract, said monetary claims shall be the
joint and solidary liability of the principal and the
job contractor. So too, in security of tenure cases
where the agency employees are claiming that they
are regular employees already of the principal
where they occupy core positions and performing
functions which are necessary and desirable in the
usual business or trade of the principal who
likewise gets to exercise control and supervision
over them. (Cacho, 2022)
NOTE: International organizations and
intergovernmental bodies are not covered by
the Philippine Labor Laws. The remedy of the
aggrieved employee is to file a complaint
before the Department of Foreign Affairs
(DFA). (Duka, 2016)
5.
Corporate officers / intra-corporate disputes
which fall under PD 902-A and now falls
under the jurisdiction of the regular courts
pursuant to the Securities Regulation Code;
6.
Local water district except where the NLRC’s
jurisdiction is invoked; and
7.
As may otherwise be provided by the LC.
Extra-Territorial Application of LC
Whether employed locally or overseas, all Filipino
workers enjoy the protective mantle of Philippine
labor and social legislation, contract stipulations to
the contrary notwithstanding. This is in keeping
with the basic public policy of the State to afford
protection to labor, promote full employment,
ensure equal work opportunities regardless of sex,
race or creed, and regulate the relations between
workers and employers. For the State assures the
basic rights of all workers to self-organization,
collective bargaining, security of tenure, and just
and humane conditions of work. (PNB v. Cabansag,
G.R. No. 157010, 21 June 2005)
Test to Determine the Applicability of the LC to
GOCC; Original Charter or Manner of Creation
Test
When a GOCC is created by a special charter, it is
subject to the provisions of the Civil Service Law,
while those incorporated under the general
Corporation Law are subject to the provisions of the
Labor Code. (PNOC-EDC v. Legardo, G.R. No. 58494,
05 July 1989)
Labor Dispute between Government Ees
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
8
Recruitment and Placement of Workers
evidence that where a fee is collected in
consideration of a promise or offer of employment
to two (2) or more prospective workers, the
individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and
placement. The words "shall be deemed" create that
presumption. (People v. Panis, G.R. L-58674-77, 11
July 1990)
II. RECRUITMENT AND PLACEMENT OF
WORKERS
A. RECRUITMENT AND PLACEMENT
1. ILLEGAL RECRUITMENT AND OTHER
PROHIBITED ACTIVITIES
Governing Laws
1.
2.
Labor Code; and
Migrant Workers and Overseas Filipinos Act of
1995. (R.A. No. 8042, as amended by R.A. No.
10022)
Illegal Recruitment
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 non-licensee or
non-holder of authority. (Sec. 6, R.A. No. 8042, as
amended by R.A. No. 10022)
Recruitment and Placement
1.
Any act of Canvassing, Enlisting, Transporting,
Contracting, Hiring, Utilizing, or Procuring
workers; (C-E-T-C-H-U-P) and
2.
Includes
Contract
services,
Referrals,
Advertising or Promising for employment,
locally or abroad, whether for profit or not.
(C-R-A-P) (Art. 13(b), LC)
Any recruitment activities, including the prohibited
practices enumerated under Art. 34 of the Labor
Code, to be undertaken by non-licensed or nonholders of authority, shall be deemed illegal and
punishable. (Art. 38(a), LC)
Persons Deemed Engaged in Recruitment and
Placement
Illegal Recruitment as Economic Sabotage
Illegal recruitment, when committed by a syndicate
or in large scale, shall be considered an offense
involving economic sabotage. (Art. 38(b), LC)
Any person or entity which, in any manner, offers or
promises for a fee, employment to two or more
persons shall be deemed engaged in recruitment
and placement. (Art. 13(b), LC)
It is deemed to be committed by a syndicate if
carried out by a group of three (3) or more persons
conspiring and/or confederating with one another
in carrying out any unlawful or illegal transaction,
enterprise or scheme. (Ibid.)
The definition of "recruitment and placement"
under Art. 13(b) of the Labor Code includes
promising or 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, employment to
two or more persons shall be deemed engaged in
recruitment and placement. (People v. Racho, G.R.
No. 227505, 02 Oct. 2017)
It is deemed committed in large scale if committed
against three (3) or more persons individually or as
a group. (Ibid.)
Prohibited Acts in Recruitment and Placement
NOTE: Regardless of the number of persons dealt
with, recruitment and placement are still
constituted. The proviso merely lays down a rule of
1.
9
Overcharging – To charge or accept, directly or
indirectly, any amount greater than that
specified in the schedule of allowable fees
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
8.
False Notice – To furnish or publish any false
notice or information or document in relation to
recruitment or employment.
Contract Substitution – To substitute or alter
to the prejudice of the worker, employment
contracts prescribed by the Department 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 DOLE.
9.
Misrepresentation to Secure License – 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 LC, 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
Er whether registered or not with the POEA.
Involvement in Travel Agency – 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
insurance or to be engaged directly or indirectly
in the management of a travel agency or
insurance agency.
10. Withholding of Documents – 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 LC and its IRR.
prescribed by the SOLE, or to make a worker
pay or acknowledge any amount greater than
that actually received by him as a loan or
advance.
2.
3.
4.
5.
11. Failure to Deploy – To fail to actually deploy a
contracted worker without valid reason as
determined by the DOLE.
Inducing Worker to Quit – 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.
12. Failure to Reimburse – To fail to reimburse
expenses incurred by the worker in connection
with his/her documentation and processing for
purposes of deployment, in cases where the
deployment does not actually take place
without the worker’s fault.
Inducement Not to Employ – 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.
6.
Recruitment for Harmful Jobs – 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.
7.
Failure to submit reports - 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 SOLE.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
13. Non-Filipino Manager – To allow a nonFilipino citizen to head or manage a recruitment
agency;
14. Imposition of Excessive Interest – To grant a
loan to an OFW with interest exceeding 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.
15. Specifying a Loan Entity – To impose a
compulsory and exclusive arrangement
whereby an OFW is required to avail of a loan
only from specifically designated institutions,
entities, or persons.
10
Recruitment and Placement of Workers
in Egypt, and subsequently at the Makati
Medical Center. The medical certificate was
issued describing his disability as "permanent
in nature." He demanded payment for his claim
for total disability, as provided for in the
contract of employment, but his claim was
denied. Can the second contract of employment
be enforced against Philimare despite the
absence of NSB verification or approval?
16. Non-Renegotiation of Loan – To refuse to
condone or renegotiate a loan incurred by an
OFW after his employment contract has been
prematurely terminated through no fault of his
or her own;
17. Specifying a Medical Entity – To impose a
compulsory and exclusive arrangement
whereby an OFW is required to undergo health
examinations only from specifically designated
medical clinics, institutions, entities or persons,
except in the case of a worker whose medical
examination cost is shouldered by the principal;
A: YES. The supplementary contract of employment
was entered into between petitioner and private
respondent to modify the original contract of
employment. The reason why the law requires that
the POEA should approve and verify a contract
under Art. 34(i) of the Labor Code is to ensure that
the employee shall not be placed in a
disadvantageous position and that the same are
within the minimum standards of the terms and
conditions of such employment contract set by the
POEA.
18. Specifying a Training Entity – To impose a
compulsory and exclusive arrangement
whereby an OFW 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 where the latter shoulder the cost of
such trainings;
However, there is no prohibition against stipulating
in a contract more benefits to the employee than
those required by law. Thus, in this case wherein a
“supplementary contract” was entered into
affording greater benefits to the employee than the
previous one, and although the same was not
submitted for the approval of the POEA, the same
should still be considered to be valid and
enforceable. (Seagull Maritime Corp. v. Balatongan,
G.R. No. 82252, Feb. 28, 1989)
19. Violation of Suspension – For a suspended
recruitment/manning agency to engage in any
kind of recruitment activity including the
processing of pending workers' applications;
and
20. Collection of Insurance Premium – For a
recruitment/manning agency or a foreign
principal/ Er to pass on the OFW 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)
a. ELEMENTS OF ILLEGAL RECRUITMENT
Q: A crew agreement was entered into by Nerry
Balatongan and Philimare Shipping and
Equipment Supply for the employment of the
former as a seaman on board the vessel "Santa
Cruz” which was approved by the National
Seaman's Board (NSB). While on board vessel,
the parties entered into a supplementary
contract of employment providing for accident
and death benefits. Balatongan met an accident
11
1.
The offender undertakes any of the activities
within the meaning of “recruitment and
placement” under Art. 13(b) of the LC, or any
of the prohibited practices enumerated under
Art. 34 of the LC; and
2.
The offender has no valid license or authority
required by law to enable him to lawfully
engage in recruitment and placement of
workers. (People v Chua, G.R. No. 187052, 13
Sept. 2012)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
3.
4.
If committed by a syndicate - carried out by
a group of three or more persons conspiring
and/or confederating with one another; or
c. ILLEGAL RECRUITMENT vs. ESTAFA
ILLEGAL
RECRUITMENT
Malum prohibitum
It is not required that it
be shown that the
recruiter wrongfully
represented himself as
a licensed recruiter.
If committed by large scale - if committed
against three or more persons individually or
as a group.
b. TYPES OF ILLEGAL RECRUITMENT
1.
Simple – It is committed where a licensee/nonlicensee or holder/non-holder of authority
undertakes either any recruitment activities
defined under Art. 13(b), or any prohibited
practices enumerated under Sec. 6 of R.A. No.
8042, as amended by R.A. No. 10022.
NOTE: It is enough that
the
victims
were
deceived as they relied
on
the
misrepresentation and
scheme that caused
them to entrust their
money in exchange of
what
they
later
discovered was a vain
hope of obtaining
employment abroad.
Prescription of action: Five (5) years. (Sec. 12, R.A.
No. 8042, as amended by R.A. No. 10022)
Where the illegal recruitment is proved, but the
elements of large scale and syndicate are absent, the
accused can be only convicted of simple illegal
recruitment. (People v. Sagun, G.R. No. 119076, 25
Mar. 2002)
2.
Syndicated – committed by a syndicate if
carried out by a group of three (3) or more
persons in conspiracy or confederation
with one another;
b.
Large Scale or qualified – committed
against three (3) or more persons
individually or as a group despite the lack
of necessary license from POEA. (People v.
Alzona, G.R. No. 132029, 30 July 2004)
Accused
defrauded
another by abuse of
confidence
or
by
means of deceit.
NOTE: It is essential
that the false statement
or
fraudulent
representation
constitutes the very
cause or the only
motive which induces
the complainant to
part with the thing of
value.
A: YES. Illegal recruitment and estafa cases may be
filed simultaneously or separately. The filing of
charges for illegal recruitment does not bar the
filing of estafa, and vice versa. Bugo’s acquittal in the
illegal recruitment case does not prove that she is
not guilty of estafa.
Prescription of action: 20 years. (Sec. 12, R.A. No.
8042, as amended by R.A. No. 10022)
Illegal recruitment and estafa are entirely different
offenses and neither one necessarily includes or is
necessarily included in the other. A person who is
convicted of illegal recruitment may, in addition, be
convicted of estafa under Art. 315, par. 2(a) of the
Revised Penal Code (RPC). In the same manner, a
person acquitted of illegal recruitment may be held
liable for estafa. Double jeopardy will not set in
NOTE: “Illegal recruitment in large scale” pertains
to the number of victims, while “syndicated illegal
recruitment” pertains to the number of recruiters.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Malum in se
Q: Bugo, by means of false pretenses and
fraudulent representation, convinced Dado to
give the amount of P120,000.00 for processing
the latter’s papers so that he can be deployed to
Japan. Dado later on found out that Bugo had
misappropriated, misapplied and converted the
money for her own personal use and benefit.
Can Dado file the cases of illegal recruitment and
estafa simultaneously?
Illegal Recruitment as Economic Sabotage –
It is economic sabotage when complex illegal
recruitment is committed.
a.
ESTAFA
12
Recruitment and Placement of Workers
and deployed for overseas employment. (Royal
Crown Internationale v. NLRC, G.R. No. 78085, 16 Oct.
1989)
because illegal recruitment is malum prohibitum, in
which there is no necessity to prove criminal intent,
whereas estafa is malum in se, in the prosecution of
which, proof of criminal intent is necessary. (Sy v.
People, G.R. No. 183879, 14 Apr. 2010)
XPN: Where the workers themselves insisted for
the recruitment agency to send them back to their
foreign Er despite their knowledge of its inability to
pay their wages, the agency is absolved from
liability. (Feagle Construction Corp. v. Gayda, G.R. No.
82310, 18 June 1990)
Q: Toston was charged with illegal recruitment
and estafa. Records reveal that Mary Ann dealt
with Toston in the latter's capacity as an
employee of Steadfast. The records reveal that
Mary Ann was found to be medically unfit for
overseas deployment, contrary to the
representations made to Mary Ann by Gutierrez.
However, the prosecution did not present proof
that Toston knew about the result of Mary Ann's
medical examination or that he was privy to
Gutierrez' concealment of this fact from Mary
Ann. Will the charges prosper?
Q: Santosa Datuman was deployed to Bahrain
after paying the required placement fee.
However, her employer took her passport and
instead of working as a saleslady, she was forced
to work as a domestic helper contrary to the
agreed salary approved by POEA. She worked
without compensation for two years because of
her employers’ continued failure and refusal to
pay her salary despite demand. When she finally
returned to the Philippines, she filed a
complaint against the local agency that
recruited her. Should the suit prosper?
A: YES. Under Sec. 1 (f), Rule II, Book II of the 1991
POEA Rules and Regulations, the local agency shall
assume joint and solidary 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 payment of
wages, health and disability compensation and
repatriation. Private employment agencies are held
jointly and severally liable with the foreign-based
employer for any violation of the recruitment
agreement or contract of employment, to assure the
aggrieved worker of immediate and sufficient
payment of what is due him. This is in line with the
policy of the state to protect and alleviate the plight
of the working class. (Datuman v. First Cosmopolitan
Manpower, G.R. No. 156029, 14 Nov. 2008)
A: NO, with respect to both charges. As to the
charge of illegal recruitment, Toston did not
personally represent himself as a licensee or holder
of authority but only as an employee.
As to estafa, the element of fraud by abuse of
confidence or deceit with respect to Toston is
negated by the fact that, at the time of the act
complained of, Toston was an employee of a validly
licensed recruitment agency. (Toston y Hular v.
People, G.R. No. 23204, 3 Mar. 2021)
2. LIABILITY OF LOCAL RECRUITMENT AGENCY
AND FOREIGN EMPLOYER
Liability of the Local Recruitment Agency
GR: A Local Recruitment Agency shall be jointly and
solidarily liable with its principal or foreign-based
Er for any violation of the recruitment agreement
and violation of contracts of employment. (Sec.
10(a)(2), Rule V, Book I, IRR)
Liability if the Recruitment or Placement Agency
is a Juridical Being
In applying for a license to operate a private
employment agency for overseas recruitment and
placement, an applicant is required to submit a
verified undertaking. In that document, the agency
assumed all responsibilities for the proper use of its
license and the proper implementation of the
employment contracts with the workers it recruited
If the recruitment/placement agency is a juridical
being, the corporate officers, directors or partners
as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership
for the claims and damages. (Becmen Service
13
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
the assistance of a Taiwanese broker, Edmund
Wang, President of Jet Crown International Co.,
Ltd. After her 12-month contract expired on Feb.
1, 1998, Montehermozo continued working for
her Taiwanese employer for two more years,
after which she returned to the Philippines on
Feb. 4, 2000.
Exporter and Promotion v. Cuaresma, G.R. Nos.
182978-79, 07 Apr. 2009)
Liability of the Foreign Employer
A foreign corporation which, through unlicensed
agents, recruits workers in the country, may be sued
in and found liable by Philippine courts; e.g., direct
hiring by a foreign firm without participation of
POEA. (Azucena, 2016)
a. SOLIDARY LIABILITY
Shortly after her return she filed a complaint
before the NLRC against Sunace, one Perez, the
Taiwanese broker, and the employer-foreign
principal alleging that she was jailed for three
months and that she was underpaid. Should
Sunace be held liable for the underpayment for
the additional two years that she worked for her
Taiwanese employer under the theory of
imputed knowledge?
Liability of the Private Employment Agency and
the Principal or Foreign-based Employer
They are jointly and solidarily liable for any
violation of the recruitment agreement and the
contracts of employment.
A: NO. The Theory of Imputed Knowledge ascribes
the knowledge of the agent, Sunace, to the principal
Taiwanese Er, not the other way around. The
knowledge of the principal-foreign Er cannot,
therefore, be imputed to its agent Sunace. There
being no substantial proof that Sunace knew of and
consented to be bound under the two-year
employment contract extension, it cannot be said to
be privy thereto. As such, it and its owner cannot be
held solidarily liable for and of Montehermozo’s
claims arising from the two-year employment
extension. (Sunace v. NLRC, G.R. No. 161757, 25 Jan.
2006)
This joint and solidary liability imposed by law
against recruitment agencies and foreign employers
is meant to assure the aggrieved worker of
immediate and sufficient payment of what is due
him. (Becmen Service Exporter and Promotion v.
Cuaresma, G.R. Nos. 182978-79, 07 Apr. 2009)
b. THEORY OF IMPUTED KNOWLEDGE
A rule in insurance law that any information
material to the transaction, either possessed by the
agent at the time of the transaction or acquired by
him before its completion, is deemed to be the
knowledge of the principal, at least so far as the
transaction is concerned, even though in fact, the
knowledge is not communicated to the principal at
all. (Leonor v. Filipinas Compania, 48 O.G. 243, 10 Jan.
1950; Rovels Enterprises, Inc. v. Ocampo, G.R. No.
136821, 17 Oct. 2002)
3. ENTITIES PROHIBITED FROM RECRUITING
Persons and Entities DISQUALIFIED to Engage in
the Business of Recruitment and Placement of
Workers
The Theory of Imputed Knowledge teaches that the
knowledge of the agent is knowledge of the
principal. (Sunace International Management
Services, Inc. v. NLRC, et al., G.R. No. 161757, 25 Jan.
2006)
Q: Sunace International Management Services
(Sunace), deployed to Taiwan Montehermozo as
a domestic helper under a 12-month contract
effective Feb. 1, 1997. The deployment was with
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
14
1.
Travel agencies and sales agencies of airline
companies; (Art. 26, LC)
2.
Officers or members of the board of any
corporation or members in a partnership
engaged in the business of a travel agency;
3.
Corporations and partnerships, when any of
its officers, members of the board or partners,
is also an officer, member of the board, or
Recruitment and Placement of Workers
partner of a corporation or partnership
engaged in the business of a travel agency;
4.
5.
6.
Purpose for Prohibiting Travel Agencies
This is because travel agencies are under the
supervisory powers of the Department of Tourism,
not the DOLE. Otherwise, confusion may arise to the
detriment and disadvantage of an overseas
applicant-worker or may lead to exploitation of the
applicant-worker who will be at the economic
mercy of the travel agency or sales agencies of
airline company from the time his papers are
processed to the time he departs.
Persons, partnerships or corporations which
have derogatory records, such as but not
limited to those:
a.
Certified to have derogatory record or
information by the NBI or by the AntiIllegal Recruitment Branch of the POEA;
b.
Against whom probable cause or prima
facie finding of guilt for illegal
recruitment or other related cases
exists;
c.
Convicted for illegal recruitment or
other related cases and/or crimes
involving moral turpitude; and
d.
Agencies whose licenses have been
previously revoked or cancelled by the
POEA for violation of R.A. No. 8042, as
amended by R.A. No. 10022, P.D. 442 as
amended, and their IRRs.
It cannot be discounted that travel agencies can
facilitate with the airlines the issuance of the
worker's plane ticket. Moreover, illegal recruitment
activities can be traced to travel agencies that
facilitate papers of job-seekers for overseas. They
could do a dirty job of legalizing the travel on
tourist-visas with the assurance that the same could
be converted into work-visas in the country of
employment.
Q: WTTA is a well-known travel agency and an
authorized sales agent of PAL. Since majority of
its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities.
Any official or employee of the DOLE, POEA,
OWWA, DFA, and other government agencies
directly involved in the implementation of R.A.
No. 8042, as amended by R.A. No. 10022
and/or any of his/her relatives within the 4th
civil degree of consanguinity or affinity; and
It stated in its application that its purpose is not
for profit but to help Filipinos find employment
abroad. Should the application be approved?
(2006 BAR)
A: NO. The application should be disapproved,
because it is prohibited by Art. 26 of the LC, which
provides that travel agencies and sales agencies of
airline companies are prohibited from engaging in
the business of recruitment and placement of
workers for overseas employment, whether for
profit or not.
Persons or partners, officers, and directors of
corporations whose licenses have been
previously cancelled or revoked for violation
of recruitment laws. (Sec. 2, Rule I, 2002 Rules
and Regulations on the Recruitment and
Employment of Land-Based Workers)
Prohibition on Travel Agencies and Sales
Agencies of Airline Companies to Recruit
Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of
Land-Based Workers also disqualifies any entity
having a common director or owner of travel
agencies and sales agencies of airlines, including
any business entity, from the recruitment and
placement of Filipino workers overseas, whether
they derive profit or not.
They are prohibited from engaging in the business
of recruitment and placement of workers for
overseas employment, whether for profit or not,
due to conflict of interest.
15
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Grounds for Revocation of License
4. CANCELLATION OF LICENSE OR AUTHORITY
1.
Two Kinds of Illegal Recruiter
1.
2.
May be a licensee – performs any of the
prohibited practices enumerated under Sec. 6
of R.A. 8042, as amended by R.A. No. 10022.
2.
3.
May be a non-licensee – any person,
corporation, or entity:
a.
b.
4.
Which has not been issued a valid
license or authority to engage in
recruitment and placement by the SOLE;
or
Whose license or authority has been
suspended, revoked, or cancelled by the
POEA or the SOLE.
Grounds for Suspension or Cancellation of
License
1.
Commission of prohibited acts under Art. 34 of
LC;
2.
Publishing job announcements
POEA’s approval;
3.
Charging a fee which may be in excess of the
authorized amount before a worker is
employed;
4.
Deploying workers
through POEA; and
5.
Recruitment in places outside its authorized
area. (Sec. 4, Rule II, Book IV, POEA Rules)
Jurisdiction
The SOLE and the POEA Administrator are vested
with power to suspend or cancel any license or
authority to recruit employees for overseas
employment. (Art. 35, LC)
The SOLE has the power under Art. 35 of the LC to
apply the penalties of suspension and cancellation
of license and authority. The SOLE also has the
authority, under Art. 36 of the LC, not only to restrict
and regulate the recruitment and placement
activities of all agencies, but also to promulgate
rules and regulations to carry out the objectives and
implement the provisions governing said activities.
without
without
processing
Q: Concerned Filipino contract workers in the
Middle East reported to the DFA that XYZ, a
private recruitment and placement agency, is
covertly transporting extremists to terrorist
training camps abroad. Upon being alerted by
the DFA, the DOLE issued orders cancelling the
licenses of XYZ, and imposing an immediate
travel ban on its recruits for the Middle East. XYZ
appealed to the Office of the President to reverse
and set aside the DOLE orders, citing damages
from loss of employment of its recruits, and
violations of due process including lack of notice
and hearing by the DOLE.
Pursuant to this rule-making power, the SOLE
authorized the POEA to conduct the necessary
proceedings for the suspension or cancellation of
license or authority of any agency or entity for
certain enumerated offenses. (Trans Action Overseas
Corporation v. Secretary of Labor, G.R. No. 109583, 05
Sept. 1997)
Thus, the Court concludes that the power to
suspend or cancel any license or authority to recruit
employees
for
overseas
employment
is
concurrently vested with the POEA and the SOLE.
(Ibid.)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Incurring an accumulated three (3) counts of
suspension by an agency based on final and
executory orders within the period of validity
of its license;
Violations of the conditions of license;
Engaging in acts of misrepresentation for the
purpose of securing a license or renewal; and
Engaging in the recruitment or placement of
workers to jobs harmful to the public health or
morality or to the dignity of the country. (Sec.
3, Rule I, Book VI, Rules and Regulations
Governing Overseas Employment)
16
Recruitment and Placement of Workers
Pacific, Inc. v. Doza, et. al, G.R. No. 175558, 08 Feb.
2012)
The DOLE in its answer claimed the existence of
an emergency in the Middle East which required
prompt measures to protect the life and limb of
OFWs from a clear and present danger posed by
the ongoing war against terrorism. Should the
DOLE orders be upheld or set aside? (2004 BAR)
However, Sec. 7 of RA 10022 amended Sec. 10 of the
Migrant Workers Act, and once again reiterated the
provision as above quoted. Nonetheless, the Court
in the en banc case of Sameer Overseas Placement
Agency, Inc. v. Joy C. Cabiles still declared such as
unconstitutional despite its replication. (G.R. No.
170139, 05 Aug. 2014)
A: The DOLE order cancelling the licenses of XYZ
shall be set aside. A report that an agency is
covertly transporting extremists is not a valid
ground for cancellation of a Certificate of
Registration (Art. 247, LC). There is also failure of
due process as no hearing was conducted prior to
the cancellation. (Art. 245, LC)
Q: Serrano, a seafarer, was hired by Gallant
Maritime and Marlow Navigation Co. for 12
months as Chief Officer. On the date of his
departure, he was constrained to accept a
downgraded employment contract for the
position of Second Officer, upon the assurance
that he would be made Chief Officer after a
month. It was not done; hence, he refused to stay
on as Second Officer and was repatriated to the
Phils. He had served only 2 months & 7 days of
his contract, leaving an unexpired portion of 9
months & 23 days.
The DOLE order imposing the travel ban should
be upheld because it is a valid exercise of police
power to protect the national interest (Sec. 3, Art.
XIII, 1987 Constitution) and on the rule making
authority of the SOLE. (Art. 5, LC; Phil. Ass’n. of
Service Exporters v. Drilon, G.R. No. 81958, 30 June
1988)
5. TERMINATION OF CONTRACT OF MIGRANT
WORKER WITHOUT JUST OR VALID CAUSE
Serrano filed with the LA a Complaint against
Gallant Maritime and Marlow for constructive
dismissal and for payment of his money claims.
The LA rendered a favorable decision to Serrano
awarding him $8,770.00, representing his
salary for 3 months of the unexpired portion of
his contract of employment applying RA 8042,
Sec 10, par. 5:
Relief of a Worker When Terminated Without
Valid Cause
1.
Full reimbursement of his placement fee with
12% interest per annum; and
2.
Salaries for the unexpired portion of his
employment contract. (R.A. No. 8042, as
amended by R.A. No. 10022)
Money Claims. - In case of termination of
overseas employment without just, valid
or authorized cause as defined by law or
contract, the workers shall be entitled to
the full reimbursement of his placement
fee with interest of 12% per annum, plus
his salaries for the unexpired portion of
his employment contract or for 3 months
for every year of the unexpired term,
whichever is less.
NOTE: The three-month option is declared
unconstitutional for violating the equal protection
clause and the substantive due process rule in the
Constitution. (Serrano v. Gallant Maritime Services
Inc. and Marlow Navigation Company, Inc., G.R. No.
167614, 24 Mar. 2009)
This shall be given retroactive effect, because an
unconstitutional clause in the law confers no rights,
imposes no duties, and affords no protection. The
unconstitutional provision is inoperative, as if it
were not passed into law at all. (Skippers United
Is the subject clause constitutional?
A: NO. The subject clause contains a “suspect
classification” in that, in the computation of the
monetary benefits of fixed-term Ees who are
17
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
illegally discharged, it imposes a three-month cap
on the claim of OFWs with an unexpired portion of
one year or more in their contracts, but none on the
claims of other OFWs or local workers with fixedterm employment. The subject clause singles out
one classification of OFWs and burdens it with a
peculiar disadvantage. The clause is a violation of
the right of Serrano to equal protection and right to
substantive due process, for it deprives him of
property, consisting of monetary benefits, without
any existing valid governmental purpose.
Furthermore, there is an implied stipulation in
contracts between the placement agency and the
overseas worker that in case the overseas worker is
adjudged as entitled to reimbursement of his or her
placement fees, the amount shall be subject to a
12% interest per annum. This implied stipulation
has the effect of removing awards for
reimbursement of placement fees from Circular No.
799’s coverage.
However, if judgment did not become final and
executory before 01 July 2013 and there was no
stipulation in the contract providing for a different
interest rate, other money claims under Sec. 10 of
R.A. No. 8042 shall be subject to the six percent
(6%) interest per annum in accordance with
Circular No. 799. (Sameer Overseas Placement
Agency v. Cabiles, G.R. No. 170139, 05 Aug. 2014)
Thus, Serrano is entitled to his salaries for the entire
unexpired period of nine months and 23 days of his
employment contract, pursuant to law and
jurisprudence prior to the enactment of R.A. No.
8042. (Serrano v. Gallant Maritime Services &
Marlow Navigation Co., Inc., G.R. No. 167614, 24 Mar.
2009)
Q: Joy was deployed to work for Taiwan Wacoal,
Co. Ltd. on 26 June 1997 for 1 year. She alleged
that Sameer Overseas Agency required her to
pay a placement fee of P70,000.00. On 14 July
1997, Mr. Huwang of Wacoal informed Joy,
without prior notice, that she was terminated
and was given a salary from 26 June to 14 July
1997 only.
6. BAN ON DIRECT HIRING
Direct Hiring
It occurs when an employer hires a Filipino worker
for overseas employment without going through the
POEA or entities authorized by the SOLE.
Ban on Direct Hiring
Joy filed a complaint for illegal dismissal with
the NLRC. She asked for the return of her
placement fee, the withheld amount for
repatriation costs, payment of her salary for 23
months as well as moral and exemplary
damages.
GR: An employer may only hire Filipino workers for
overseas employment through POEA or entities
authorized by DOLE. (Art. 18, LC)
XPNs: Direct hiring by:
The NLRC ruled that Joy was illegally dismissed
and awarded her three months’ worth of salary,
the reimbursement of the cost of her
repatriation, and attorney’s fees. Should Joy be
awarded three months’ worth of salary and
reimbursement of the cost of her repatriation?
A: NO. Joy is entitled to her salary for the unexpired
portion of her contract, in accordance with Sec. 10
of R.A. No. 8042. Since she started working on 26
June 1997 and was terminated from employment on
14 July 1997, Joy is entitled to her salary from 15
July 1997 to 25 June 1998.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
18
1.
International organizations (e.g., World Bank)
2.
Name Hires – individual workers who were
able to secure contracts for overseas
employment on their own efforts and
representations without the assistance or
participation of any agency. Their hiring,
nonetheless, must be processed through the
POEA.
3.
Members of the diplomatic organizations (e.g.,
those employed by an embassy)
Recruitment and Placement of Workers
4.
Other Employers as may be allowed by DOLE
such as workers hired by a relative/family
member who is a permanent resident of the
host country.
Purposes of the Prohibition on Direct Hiring
1.
2.
3.
To ensure the best possible terms and
conditions of employment for the worker;
To assure the foreign employer that he hires
only qualified Filipino workers; and
To ensure full regulation of employment to
avoid exploitation.
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 nationals who come 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 and
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 and
probationary or temporary resident visa
holders under Sec. 13(a-f) of the Philippine
Immigration Act of 1940 and Sec. 3 of the Alien
Social Integration Act of 1995 (R.A. 9717);
6.
Refugees and stateless persons recognized by
the DOJ; and
7.
All foreign nationals granted exemption by law.
(Sec. 2, D.O. 186-17)
B. EMPLOYMENT OF NON-RESIDENT ALIENS
An employment permit may be issued to:
1.
2.
A non-resident alien; or
The
applicant
employer,
after
a
determination of the non-availability of a
person in the Philippines who is competent
and able and willing at the time of application
to perform the services for which the alien is
desired.
NOTE: For an enterprise registered in preferred
areas of investments, said permit may be issued
upon recommendation of the Government agency
charged with the supervision of said registered
enterprise. (Art. 40, LC)
Persons Required to Obtain Alien Employment
Permit
Persons Excluded from Coverage
The following are excluded from securing an Alien
Employment Permit:
GR: All foreign nationals who intend to engage in
gainful employment in the Philippine shall apply for
Alien Employment Permit (AEP).
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 part- owner of
the company;
XPN: The following categories of foreign nationals
are exempt from securing an employment permit:
1.
All members of the diplomatic service and
foreign government officials accredited by and
with reciprocity arrangement with the
Philippines;
19
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
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 and an employee of a
foreign service
supplier which has no
commercial presence in the Philippines; and
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. (Sec. 3, D.O. 186-17)
NOTE: All foreign nationals excluded from securing
AEP shall secure a Certificate of Exclusion from
the Regional Office. (Sec. 4, D.O. 186-17)
2.
In the case of foreign nationals to be assigned in
related companies, applications may be filed in
the Regional Office or Field Office having
jurisdiction over any of the applicant's intended
places of work.
3.
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.
4.
At any given time, only one AEP shall be issued
to a foreign national. (Sec. 5, D.O. 186-17)
Documentary Requirements
A duly accomplished application form with the
following complete documentary requirements
must be submitted:
Validity of AEP
GR: The AEP shall be valid for the position and the
company for which it was issued for a period of one
(1) year.
XPN: The employment contract, or other modes of
engagement provide otherwise, which in no case
shall exceed three (3) years. (Sec. 10, D.O. 186-17)
1.
Photocopy of Passport with valid visa, except
for temporary visitor's visa in case of renewal
or Certificate of Recognition for Refugees or
Stateless Persons;
2.
Original copy of notarized appointment or
contract of Employment enumerating the
duties and responsibilities, annual salary, and
other benefits of the foreign national;
3.
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 DO 174-17 Registration should be
submitted in lieu of Mayor's Permit; and
4.
Business Name Registration and Application
Form with DTI or SEC Registration and GIS;
5.
If the position title of the foreign national is
included in the list of regulated professions, a
Special Temporary Permit (STP) from the PRC;
and
Renewal of AEP
An application for renewal of AEP shall be filed not
earlier than 60 days before its expiration. In case the
foreign national needs to leave the country or in
other similar circumstances that will hinder the
filing of renewal within this prescribed period, the
application may be filed earlier. (Sec. 11, D.O. 18617)
Procedure in the Processing of Applications for
AEP
1.
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.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
20
Recruitment and Placement of Workers
6.
System (PEIS), the PRC Registry of Professionals,
and the Technical Education and Skills
Development Authority (TESDA) registry of
certified workers to establish availability or non
availability of able and qualified Filipino worker.
If the employer is covered by the Anti-Dummy
Law, an Authority to Employ Foreign National
(ATEFN) from the DOJ or from the DENR in case
of mining.
Processing Periods
1.
2.
Grounds for Denial of Application for New or
Renewal of AEP
Applications for new AEP - within three
(3) working days after publication and
payment of required fees and fines, if there
are any.
An application for AEP or the renewal thereof may
be denied by the RD based on any of the following
grounds:
Applications for renewal of AEP – within
one (1) day after receipt. (Sec. 8, D.O. 18617)
1.
Misrepresentation of facts in the application
including fraudulent misrepresentation (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);
2.
Submission of falsified documents;
3.
Conviction to a criminal offense or a fugitive
from justice in the country or abroad;
4.
Grave misconduct in dealing with or ill
treatment of workers;
5.
Availability of a Filipino who is competent, able
and willing to do the job intended for or being
performed by the foreign national based on
data in the PEIS, PRC Registry of Professional
and TESDA Registry of Certified Workers;
6.
Worked without valid AEP for more than a year;
or
7.
Application for renewal with an expired visa or
with a temporary visitor's visa. (Sec. 12, D.O.
186-17)
Publication Requirement
The DOLE Regional Office shall publish in a
newspaper of general circulation all applications for
new AEPs, change or additional position in the same
company or subsequent assignment in related
companies within two (2) working days from
receipt of application.
The same shall be published in the DOLE website
and posted in the PESO. Such publication and
posting shall be for a period of 30 days and shall
contain the name, position, employer and address, a
brief description of the functions to be performed by
the foreign national, qualifications, monthly salary
range and other benefits, if there are any.
It shall also indicate in the same notice of
publication that any person in the Philippines who
is competent, able and willing at the time of
application to perform the services for which the
foreign national is desired may file an objection at
the DOLE Regional Office. (Sec. 7, D.O. 186-17)
Objection
NOTE: The Regional Director shall issue an Order
denying the application for new or renewal of AEP
which shall have the effect of forfeiture of the fees
paid by the applicant.
Any objection or information against the
employment of the foreign national relative to labor
market test must be filed with the Regional Office
within 30 days after publication.
The DOLE Regional Office shall refer to the DOLE's
Philjobnet and PESO Employment Information
21
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
application for a period of five (5) years after due
process. (Sec. 15, D.O. 186-17)
Grounds for Cancellation or Revocation of AEP
1.
2.
3.
4.
5.
6.
7.
Non-compliance with any of the requirements
or conditions for which the AEP was issued;
Misrepresentation of facts in the application
including fraudulent misrepresentation (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);
Submission of falsified or tampered documents;
Meritorious objection or information against
the employment of the foreign national;
Foreign national has been convicted of a
criminal offense or a fugitive from justice;
Employer terminated the employment of
foreign national; and
Grave misconduct in dealing with or ill
treatment of workers. (Sec. 13, D.O. 186-17)
Appeal
The aggrieved foreign national or his authorized
representative may file an appeal with the SOLE
within ten (10) days after receipt of the copy of
denial/ cancellation/ revocation order.
The decision of the SOLE shall be final and executory
unless a motion for reconsideration is filed within
ten (10) days after receipt of the decision. No second
motion for reconsideration shall be allowed. (Sec.
16, D.O. 186-17)
Q: The DOLE issued an alien employment permit
for Earl Cone, a U.S. citizen, as sports consultant
and assistant coach for GMC. Later, the Board of
Special Inquiry of the Commission on
Immigration and Deportation approved Cone’s
application for a change of admission status
from temporary visitor to pre-arranged
employee. A month later, GMC requested that it
be allowed to employ Cone as full-fledged coach.
The DOLE Regional Director granted the
request.
The Basketball Association of the Phils.
appealed the issuance of said permit to the SOLE
who cancelled Cone’s employment permit
because GMC failed to show that there is no
person in the Philippines who is competent and
willing to do the services nor that the hiring of
Cone would redound to the national interest. Is
the act of the SOLE valid?
Q: What is the effect of denial, cancellation, or
revocation of AEP?
A: A foreign national whose AEP has been denied or
cancelled is disqualified to reapply within a period
of ten (10) years in case the grounds for denial or
cancellation is any of the following:
a.
b.
Conviction of criminal offense or fugitive
from justice in the country or abroad; or
Grave misconduct in dealing with or ill
treatment of workers.
A foreign national whose AEP has been denied or
cancelled due to misrepresentation of facts or
submission of falsified documents with the intent to
deceive, conceal or omit to state material facts and,
by reason of such omission or concealment, the
Department was prompted to approve/issue the
AEP that would not otherwise have been
approved/issued, shall be disqualified to reapply
within a period of five (5) years. (Sec. 14, D.O. 18617)
A: YES. GMC’s claim that hiring a foreign coach is an
Er’s prerogative has no legal basis. Under Art. 40 of
the LC, an Er seeking employment of an alien must
first obtain an employment permit from the DOLE.
GMC’s right to choose who to employ is limited by
the statutory requirement of an employment
permit. (GMC v. Torres, G.R. No. 93666, 22 Apr. 1991)
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
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Prohibition Against Transfer of Employment
After the issuance of an employment permit, the
alien shall not transfer to another job or change his
22
Recruitment and Placement of Workers
employer without prior approval of the SOLE. (Art.
41(a), LC)
Any non-resident alien who shall take up
employment in violation of the provisions of the
Code and its IRR shall be punished. (Art. 41(b), LC)
Alien workers shall be subject to deportation after
service of his sentence. (Ibid.)
23
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Existence of an Employment Relationship
III. LABOR STANDARDS
Employment relationship is determined by law and
not by contract. (Insular Life Assurance Co. Ltd. v.
NLRC, G.R. No. 119930, 12 Mar. 1998)
1. EMPLOYER-EMPLOYEE RELATIONSHIP
NOTE: Taxi or jeepney drivers under the
“boundary” system are Ees of the taxi or jeepney
owners/operators; also the passenger bus drivers
and conductors. (Jardin v. NLRC and Goodman Taxi,
G.R. No. 119268, Feb. 23, 2000)
Employer is any person, natural or juridical,
domestic or foreign, who carries on in the
Philippines any trade, business, industry,
undertaking or activity of any kind and uses the
services of another person, who is under his orders
as regards the employment, except the Government
and any of its political subdivisions, branches or
instrumentalities, including corporations owned or
controlled by the Government.
Employer-Employee Relation as a Question of
Law (Stipulation that No Er-Ee Relationship
Exists)
The existence of an employer-employees relation is
a question of law and being such, it cannot be made
the subject of agreement. (Tabas v. California
Manufacturing Co., Inc., G.R. No. 80680, 26 Jan. 1989)
The employer may be a natural or juridical person.
It may be a single proprietor, a partnership or a
corporation.
Employer includes any person acting in the interest
of an employer, directly or indirectly. The term shall
not include any labor organization or any of its
officers or agents except when acting as employer.
(Art. 219(e), LC)
It is axiomatic that the existence of an Er-Ee
relationship cannot be negated by expressly
repudiating it in the management contract and
providing therein that the Ee is an independent
contractor when the terms of the agreement clearly
show otherwise. For, the employment status of a
person is defined and prescribed by law and not
by what the parties say it should be. In determining
the status of the management contract, the FourFold Test on employment has to be applied. (Insular
Life Assurance Co. Ltd. v. NLRC, G.R. No. 119930, 12
Mar. 1998)
Employee is 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. (R.A. No. 8282,
Social Security Law)
Only a natural person can qualify as an employee.
Natural persons may include Filipino citizens and
foreigners.
Employer-Employee Relation as a Question of
Fact
The existence of an employer-employee
relationship depends upon the facts of each case.
(Social Security System v. CA, G.R. No. 100388, 14 Dec.
2000)
Employee includes any person in the employ of an
employer. The term shall not be limited to the
employees of a particular employer, unless the Code
so explicitly states. It 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), LC)
Q: Romel is working as a pianist in the
restaurant of a hotel for almost 7 years. During
his employment, he was given a time for his
performance fixed at 7-10pm for 3-6x a week;
the manager requires him to conform with the
venue’s motif and is subjected to the rules and
regulations of the employees of the hotel. His
NOTE: A self-employed person shall be both an
employee and employer at the same time.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
24
Labor Law and Social Legislation
for illegal dismissal and payment of money
claims should be directed against ASIA.
Nevertheless, Baron filed a Third Party
Complaint against ASIA.
salary was given every night. His services were
terminated as a cost-cutting measure. He filed
for illegal dismissal. As a defense, the hotel
management alleged that there can be no illegal
dismissal as Er-Ee relationship is absent. Is the
defense of the hotel tenable?
Is there an Er-Ee relationship between the
Baron, on one hand, and the ASIA security
guards, on the other hand? Explain briefly.
(1999 BAR)
A: NO. Romel is an employee of the hotel. The issue
of whether or not an employer-employee
relationship existed between petitioner and
respondent is essentially a question of fact. The
factors that determine the issue include who has the
power to select the employee, who pays the
employee’s wages, who has the power to dismiss
the employee, and who exercises control of the
methods and results by which the work of the
employee is accomplished. (Legend Hotel v. Realuyo,
G.R. No. 153511, 18 July 2012)
A: YES. As a general rule, the security guards of a
private security guard agency are the Ees of the
latter and not of the establishment that has entered
into a contract with the private security guard
agency for security services. But under the facts in
the question, Baron Hotel appears to have hired the
security guards, paid their wages, had the power to
promote, suspend or dismiss the security guards
and the power of control over them. In other words,
the security guards were under orders of Baron
Hotel as regard to their employment. Because of the
above-mentioned circumstances, Baron Hotel is the
Er of the security guards.
Q: ASIA executed a 1-year contract with the
Baron Hotel for the former to provide the latter
with 20 security guards to safeguard the
persons and belongings of hotel guests, among
others. The security guards filled up Baron
application form and submitted the executed
forms directly to the Security Department of
Baron. The pay slips of the security guards bore
Baron's logo and showed that Baron deducted
the amounts for SSS premiums, medicare
contributions and withholding taxes from the
wages of the security guards. The assignments of
security guards, who should be on duty or on
call, promotions, suspensions, dismissals and
award citations for meritorious services were
all done upon approval by Baron's chief security
officer. After the expiration of the contract with
ASIA, Baron did not renew the same and instead
executed another contract for security services
with another agency. ASIA placed the affected
security guards on "floating status" on "no work
no pay" basis.
Q: Assuming that ASIA is the Er, is the act of ASIA
in placing the security guards on "floating
status" lawful? Why?
A: YES. It is lawful for a private security guard
agency to place its security guard on a "floating
status" if it has no assignment to give to said
security guards. But if the security guards are placed
on a "floating status" for more than six (6) months,
the security guards may consider themselves as
having been dismissed.
Q: What property right is conferred upon an
employee once there is an employer-employee
relationship? Discuss briefly. (2006 BAR)
A: Once an employer-employee relationship is
established, such employment is treated, under our
constitutional framework, as a property right. When
a person has no property, his job may possibly be
his only possession or means of livelihood and those
of his dependents. When a person loses his job, his
dependents suffer as well. The worker should,
therefore, be protected and insulated against any
arbitrary deprivation of his job. (Philips
Having been displaced from work, the ASIA
security guards filed a case against Baron for
illegal dismissal, OT pay, minimum wage
differentials, vacation leave and sick leave
benefits, and 13th month pay. Baron denied
liability alleging that ASIA is the Er of the
security guards and therefore, their complaint
25
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
escaping the conclusion that one is an Ee of the
insurance company. (Insular Assurance Co., Ltd., v.
NLRC, G.R. No. 119930, 12 Mar. 1998)
Semiconductors, Inc. v. Fadriquela, G.R. No. 141717,
14 Apr. 2004)
2. TEST TO DETERMINE EXISTENCE
The control test calls merely for the existence of the
right to control the manner of doing the work, not
the actual exercise of the right. (Zanotte Shoes v.
NLRC, G.R. No. 100665, 13 Feb. 1995)
Four-Fold Test
Factors determining the existence of an employeremployee relationship:
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and
4. Power of control, or the Control Test.
(Azucena, 2016)
Kinds of Control Exercised by an Er
Not every form of control will have the effect of
establishing an Er-Ee relationship. Thus, a line
should be drawn between:
It is the so-called “control test” that is the most
important element.
Absent the power to control the Ee with respect to
the means and methods by which his work was to
be accomplished, there is no Er-Ee relationship
between the parties. (Continental Marble Corp., et.al
v. NLRC, G.R. No. 43825, 09 May 1988)
Control Test
The control test assumes primacy in the overall
consideration. There is an Er-Ee relationship when
the person for whom the services are performed
reserves the right to control not only the end
achieved but also the manner and means used to
achieve that end. (Television and Production
Exponents, Inc. v. Servaña, G.R. No. 167648, 28 Jan.
2008)
Rules that merely serve as guidelines, which
aims ONLY to promote the result. In such
case, no Er-Ee relationship exists.
b.
Rules that fix the methodology and bind or
restrict the party hired to the use of such
means or methods. These addresses both the
result AND the means employed to achieve it
and hence, Er-Ee relationship exists. (Insular
Life Assurance Co. v. NLRC, G.R. 84484, 15 Nov.
1989)
The main determinant therefore is whether the
rules set by the employer are meant to control not
just the results but also the means and methods.
(Orozco v. CA, G.R. 155207, 13 Aug. 2008)
NOTE: However, in certain cases the control test is
not sufficient to give a complete picture of the
relationship between the parties, owing to the
complexity of such a relationship where several
positions have been held by the worker. The better
approach is to adopt the two-tiered test. (Francisco
v. NLRC, G.R. No. 170087, 31 Aug. 2006)
The power of control refers to the existence of
power and not necessarily to the actual exercise
thereof. It is not essential for the employer to
actually supervise the performance of duties of the
Ee; it is enough that the employer has the right to
wield that power. (Republic v. Asiapro Cooperative,
G.R. No. 172,101, 23 Nov. 2007)
Q: Genesis entered into a Career’s Agent
Agreement with EmoLife Insurance Company, a
domestic corporation engaged in insurance
business. The Agreement provides that the
agent is an independent contractor and nothing
therein shall be construed or interpreted as
creating an Er-Ee relationship. It further
provides that the agent must comply with three
requirements: (1) compliance with the
Exclusivity of service, control of assignments and
removal of agents under private respondents’ unit,
collection of premiums, furnishing of company
facilities and materials as well as capital described
as Unit Development Fund are but hallmarks of the
management system where there can be no
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
a.
26
Labor Law and Social Legislation
regulations and requirements of the company;
(2) maintenance of a level of knowledge of the
company's products that is satisfactory to the
company; and (3) compliance with a quota of
new businesses. However, EmoLife insurance
company terminated Genesis’ services. Genesis
filed an illegal dismissal complaint alleging
therein that an Er-Ee relationship exists and that
he was illegally dismissed. Is he an employee of
the Insurance Company?
Economic Dependence (Two-Tiered Test)
This two-tiered test provides us with a framework
of analysis, which would take into consideration the
totality of circumstances surrounding the true
nature of the relationship between the parties. This
is especially appropriate in this case where there is
no written agreement or terms of reference to base
the relationship on and due to the complexity of the
relationship based on the various positions and
responsibilities given to the worker over the period
of the latter’s employment. (Francisco v. NLRC, G.R.
No. 170087, 31 Aug. 2006)
A: NO. Genesis is not an Ee of EmoLife Insurance
Company. Generally, the determinative element is
the control exercised over the one rendering the
service. The concept of “control” in LC has to be
compared and distinguished with “control” that
must necessarily exist in a principal-agent
relationship. The Er controls the Ee both in the
results and in the means and manner of achieving
this result. The principal in an agency relationship,
e.g., insurance agent, on the other hand, also has the
prerogative to exercise control over the agent in
undertaking the assigned task based on the
parameters outlined in the pertinent laws.
Elements
In the present case, the Agreement fully serves as
grant of authority to Genesis as EmoLife’s insurance
agent. This agreement is supplemented by the
company’s agency practices and usages, duly
accepted by the agent in carrying out the agency.
Foremost among these are the directives that the
principal may impose on the agent to achieve the
assigned tasks, to the extent that they do not involve
the means and manner of undertaking these tasks.
1.
The putative Er’s power to control the Ee
with respect to the means and methods by
which the work is to be accomplished (Fourfold Test); and
2.
The underlying economic realities of the
activity or relationship. (Economic Reality
Test).
Proper Standard for Economic Dependence
The proper standard is whether the worker is
dependent on the alleged Er for his continued
employment in that line of business.
The determination of the nature of the relationship
between Er and Ee depends upon the circumstances
of the whole economic activity, such as:
The law likewise obligates the agent to render an
account; in this sense, the principal may impose on
the agent specific instructions on how an account
shall be made, particularly on the matter of
expenses and reimbursements. To these extents,
control can be imposed through rules and
regulations without intruding into the labor law
concept of control for purposes of employment.
(Gregorio Tongko v. ManuLife Insurance Company,
G.R. No. 167622, 29 June 2010)
1.
2.
3.
4.
5.
6.
27
The extent to which the services performed
are an integral part of the Er’s business;
The extent of the worker’s investment in
equipment and facilities;
The nature and degree of control exercised by
the Er;
The worker’s opportunity for profit and loss;
The amount of initiative, skill, judgment, or
foresight required for the success of the
claimed independent enterprise;
The permanency and duration of the
relationship between the worker and Er; and
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
The degree of dependency of the worker
upon the Er for his continued employment in
that line of business.
Piece-rate, boundary, and pakyaw are merely
methods of pay computation and do not prove
whether the payee is an Ee or not. (Azucena, 2016)
Evidence of Employment: ID, Voucher, SSS
Registration, Memorandum
Q: Africa, et al. are engaged as garbage truck
drivers to collect garbage from different cities
and transport the same to the designated
dumping site. They filed separate cases against
Expedition for illegal dismissal for having been
prevented from entering the premises of
Expedition without cause or due process. They
claimed that they were regular employees; were
required to work a minimum of 12 hours a day,
seven days a week, even on holidays, and were
not paid the minimum wage, holiday or
premium pay, overtime pay, SIL pay and 13th
month pay.
7.
No particular form of evidence is required to prove
the existence of such relationship. Any competent
and relevant evidence to prove the relationship may
be admitted. (Domasig vs. NLRC, G.R. No. 118101, 16
Sept. 1996)
Absence of Name in the Payroll
In Opulencia Ice Plant v. NLRC (G.R. No. 98368, 15
Dec. 1993), the Supreme Court disagreed with the
employer’s argument that the absence of the
complainant’s name in the payroll disapproved his
being an employee.
Expedition denied that respondents were its
employees claiming that respondents were not
part of the company’s payroll but were being
paid on a per-trip basis. They claimed that
respondents were not under their direct control
and supervision as they worked on their own.
Are the respondents employees of Expedition?
It held that, “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 illegality he has authored considering
that it should take much weightier proof to
invalidate a written instrument.”
A: YES. Applying the four-fold test, Africa, et al. were
engaged/hired by Expedition as garbage truck
drivers. It is undeniable that they receive
compensation from Expedition for the services that
they rendered to the latter. The fact that they were
paid on a per trip basis is irrelevant because this
was merely the method of computing the proper
compensation due to them. Also, Expedition’s
power to dismiss was apparent when work was
withheld from the respondent. Finally, Expedition
has the power of control over respondents in the
performance of their work. (Expedition Construction
Corp., et. al v. Africa, G.R. No. 228671, 14 Dec. 2017)
Thus, since the Er-Ee relationship in this case was
sufficiently proven by testimonial evidence, the
absence of time sheet, time record or payroll
became inconsequential. (Azucena, 2016)
Mode of Compensation: Not Determinative of ErEe Relationship
The presence or absence of Er-Ee relationship is not
determined by the basis of the Ee’s compensation.
The compensation, whether called wage, salary,
commission or other name, may be computed on the
basis of time spent on the job or it may be based on
the quality and/or quantity of the work done. It may
further be dependent on skills possessed, seniority
earned, or performance and initiative shown by the
Ee.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Boundary-Hulog System
Under the boundary-hulog scheme, a dual juridical
relationship was created: that of Er-Ee and vendorvendee. The boundary system is a scheme by an
owner/operator
engaged
in
transporting
passengers as a common carrier to primarily govern
the compensation of the driver, that is, the latter’s
daily earnings are remitted to the owner/operator
28
Labor Law and Social Legislation
less the excess of the boundary which represents
the driver’s compensation. Under this system, the
owner/operator exercises control and supervision
over the driver. (Villamaria v. CA and Bustamante,
G.R. No. 165881, 19 Apr. 2006)
Labor Union and Unregistered Association as Er
The mere fact that the respondent is a labor union
does not mean that it cannot be considered an Er of
the persons who work for it. Much less should it be
exempted from the very labor laws which it
espouses as labor organization. (Bautista v. Inciong,
G.R. No. L-52824, 16 Mar. 1988)
The boundary-hulog contract between the jeepney
owner and the jeepney driver does not negate the
Er-Ee relationship between them. (Azucena, 2016)
Application of the four-fold test and the twotiered test
Q: To ensure road safety and address the risktaking behavior of bus drivers, the LTFRB issued
Memorandum Circular 2012-001 requiring all
Public Utility Bus (PUB) operators to secure
Labor Standards Compliance Certificates under
pain of revocation of their existing certificates of
public convenience or denial of an application
for a new certificate. The DOLE likewise issued
Department Order (D.O.) No. 118-12 elaborating
on
the
part-fixed-part-performance-based
compensation system referred to in the said
memorandum circular. Petitioners assail the
constitutionality of the department order and
memorandum circular, arguing that these
issuances violate petitioners' rights to nonimpairment of obligation of contracts, due
process of law, and equal protection of the laws.
Respondents counter that the department order
and memorandum circular are valid issuances
promulgated by the DOLE and the LTFRB in the
exercise of their quasi-legislative powers. Are
the department order and memorandum
circular constitutional?
Present Philippine law recognizes a two-tiered test.
The first tier of the test is the Four-fold Test. The
second tier is the Economics of the Relationship
Test. But the latter test is used if and only if there is
going to be harshness in the results because of the
strict application of the four-fold test. (Francisco v.
NLRC, G.R. No. 170087, 31 Aug. 2006)
Art. 295 Presupposes Employment Relationship
Art. 295 applies where the existence of Er-Ee
relationship is not the issue of the dispute. If the
issue is whether or not the claimant is an employee,
the tests of employment relationship shall be
resorted to.
Art. 295 limits itself to differentiating four kinds of
employment arrangement: regular, project,
seasonal, and casual. The article presupposes that
employment relationship exists between the
parties. (Azucena, 2016)
A: YES. D.O. 118-12 and M.C. 2012-001 are in the
nature of social legislations to enhance the
economic status of bus drivers and conductors, and
to promote the general welfare of the riding public.
D.O. 118-12 was issued to grant bus drivers and
conductors minimum wages and social welfare
benefits. Further, petitioners repeatedly admitted
that in paying their bus drivers and conductors, they
employ the boundary system or commission basis,
payment schemes which cause drivers to drive
recklessly. Not only does D.O. 118-12 aim to uplift
the economic status of bus drivers and conductors;
it also promotes road and traffic safety. (Provincial
Bus Operators Association of the Philippines v. DOLE
and LTFRB, G.R. No. 202275, 17 July 2018)
3. EMPLOYEE vs. INDEPENDENT CONTRACTOR
Independent Contractor
Those who undertake “job-contracting.” They
exercise independent employment, contracting to
do a piece of work according to their own methods
and without being subject to control of their Er
except as to the result of their work. (Villuga v.
NLRC, G.R. No. 75038, 23 Aug. 1993)
NOTE: Independent contractors often present
themselves to possess unique skills, expertise or
talent to distinguish them from ordinary Ees.
(Sonza v. ABS-CBN, G.R. No. 138051, 10 June 2004)
29
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Employee vs. Independent Contractor
Indirect or Statutory Employer is one who enters
into a contract with an independent contractor for
the performance of any work, task, job, or project
not directly related to the employer’s business.
(Baguio v. NLRC, G.R. Nos. 79004-08, 04 Oct 1991)
As to their Existence
NOTE: No Er-Ee relationship exists between the
owner of the project and the Ees of the independent
contractor. (Ibid.)
Existence of an Er-Ee
relationship is
determined by law.
The principal employer is considered only an
indirect employer. (PCI Automation Center, Inc. v.
NLRC, G.R. No. 115920, 29 Jan. 1996)
Er exercises the right
to control not only the
end achieved, but also
the manner and means
used to achieve that
end.
Major Laws Applicable to Work Relationship
2.
Existence of an
Independent
Contractorship is
determined by the
contract.
As to the Exercise of Control
What is contracted is the performance and
completion of a designated job, and not just the
supplying of people to do the job.
1.
INDEPENDENT
CONTRACTOR
EMPLOYEE
Only the result of their
work is subject to the
Er’s control.
As to Wages
Between the Principal and Contractor – The
Civil Code and pertinent Commercial Laws
Between Contractor and his Employees –
the Labor Code and Special Labor Laws.
Wages should comply
with the minimum
wage established by
law.
NOTE: Between the principal and the contractor’s
Ees, no Er-Ee relationship exists; the contractor,
being himself a businessman, is the Er. But the
contractor may in turn become a contractee if he
contracts with a contractor.
Payment given to an
independent
contractor is
compensation that is
agreed upon in the
contract.
As to Payment of Contributions
Er is required to pay
for Ee’s contributions,
such as Pag-IBIG,
PhilHealth, SSS.
Er-Ee relationship may be declared to exist between
the principal and the contractor’s workers where
the contracting arrangement is not legitimate.
The independent
contractor pays for his
own contribution.
As to Termination
Ee may be terminated
only due to reasons
stated in the LC.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
30
Other valid grouds
may be indicated in
the contract.
Labor Law and Social Legislation
Managerial Employees
A. CONDITIONS OF EMPLOYMENT
A managerial employee is one who is vested with
powers or prerogatives to lay down or execute
management policies and or to hire, transfer,
suspend, lay off, recall, discharge, assign or
discipline employees, or to effectively recommend
such managerial actions. All employees not falling
within this definition are considered rank and file
employees. (PMTI-ULGWF v. Ferrer-Calleja, G.R. No.
85915, 17 Jan. 1990)
1. COVERED EMPLOYEES/WORKERS
GR: Title I, Book III of the Labor Code deals with
hours of work, weekly rest periods, holidays, service
incentive leaves and service charges. It covers all
employees in all establishments, whether for profit
or not. (Art. 82, LC)
XPNs: (GF-MOM-WPD)
1. Government employees;
2. Field personnel;
3. Managerial employees;
4. Officers and members of the managerial staff;
5. Members of the family of the Er who are
dependent on him for support;
6. Workers paid by results; (Secs. 1 and 2, Rule I,
Book III, IRR)
7. Persons in the personal service of another; and
8. Domestic helpers.
The aforementioned employees are not entitled to
overtime pay, premium pay for rest days and
holidays, night shift differential pay, holiday pay,
service incentive leave and service charges. (Poquiz,
2012)
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. (Sec. 2(b), Rule I, Book III, IRR)
They are employed as such by virtue of their special
training or expertise, experience or knowledge and
for positions which require the exercise of
independent judgment and discretion. They are not
subject to the rigid observance of regular office
hours, as the true worth of their services do not
depend so much on the time they spend in office, but
more on the results of their accomplishments. For
these types of workers, it is not feasible to provide
fixed hourly rate of pay or maximum hours of labor.
(UPSU v. Laguesma, G.R. No. 122226, 25 Mar. 1998)
Government Employees
The terms and conditions of their employment are
governed by the Civil Service Law.
In case of government-owned or controlled
corporations with original charters, terms and
conditions of employment may be governed by such
legislated charters.
Officers or Members of Managerial Staff
Government-owned or controlled corporations
without original charters and created under the
Corporation Code are governed by the Labor Code.
(Poquiz, 2012)
31
1.
Their primary duty consists of the
performance of work directly related to
management policies of their Er;
2.
They customarily and regularly exercise
discretion and independent judgment;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
3.
They 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 execute under general
supervision work along specialized or
technical lines requiring special training,
experience, or knowledge; or execute, under
general supervision, special assignments and
tasks; and
Test of Supervisory or Managerial Status
It depends on whether a person possesses authority
that is not merely routinary or clerical in nature but
one that requires use of independent judgement.
MANAGERIAL EMPLOYEES
Book III, Art. 82
Labor Standards
Book V. Art. 219 (M)
Labor Relations
Definition
4.
They 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 above.
(Sec. 2 (c), Rule I, Book III, IRR)
Refer to those whose
primary duty consists
of the management of
the establishment in
which
they
are
employed or of a
department
or
subdivision
thereof,
and to the other
officers or members of
the managerial staff.
Officers and members of a managerial staff (such as
project engineers) are considered managerial
employees for they customarily and regularly
exercise discretion and independent judgment, that
is, their powers are not subject to evaluation, review
and final action by the department heads and other
higher executives of the company. (Franklin Baker
Co. of the Philippines v. Trajano, G.R. No. 75039, 28
Jan. 1988)
Vested
with
the
powers or prerogative
to lay down and
execute management
policies, and/or to hire,
transfer, suspend, layoff, recall, discharge,
assign, or discipline
employees.
Application
Used only for purposes
of Book III (i.e.,
working
conditions,
rest
periods,
and
benefits)
Used only for purposes
of Book V (i.e., forming,
joining and assisting of
unions,
certification
election, and, collective
bargaining)
Inclusion of Supervisors
Supervisors
are
members
of
the
managerial staff. In
effect, supervisor is a
manager for purposes
of Book III.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
32
Supervisors are not
managerial employees
under
Book
V.
(Azucena, 2016)
Labor Law and Social Legislation
Domestic Servants/Persons in The Personal
Service of Another
regularly performs his duties but also with the fact
that the employee’s performance is unsupervised
by the Er. In order to conclude whether an employee
is a field Ee, it is also necessary to ascertain if actual
hours of work in the field can be determined with
reasonable certainty by the Er. In so doing, an
inquiry must be made as to whether or not the Ee’s
time and performance are constantly supervised by
the Er. (Autobus Transport Systems Inc. v. Antonio
Bautista, G.R. No. 156367, 16 May 2005)
These are those who:
a.
Perform such services in the Er'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 Er as well as the members of
his Er's household. (Sec. 2(d), Rule I, Book III,
IRR)
e.g., Outside sales personnel, agents on commission
basis, or insurance field agents (San Miguel Brewery
v. Democratic Labor Union, G.R. No. L-18353, 31 July
1963); meter readers, medical representatives.
(Duka, 2016)
NOTE: They are not covered by this Title because
terms and conditions of employment are governed
by the provisions of R.A. No. 10361, otherwise
known as the Batas Kasambahay Law.
Rule in case of Drivers/Bus Conductors
A laundrywoman in staff houses of a company or
within the premises of the business of the employer,
not actually serving the family of the employer, is a
regular employee. She is not included in the
definition of domestic servants. (Apex Mining Co. Inc.
v. NLRC, G.R. No. 94951, 22 Apr. 1991)
It is of judicial notice that along the routes that are
plied by these bus companies, there are its
inspectors assigned at strategic places who board
the bus and inspect the passengers, the punched
tickets, and the conductor's reports. There is also
the mandatory once-a-week car barn or shop day,
where the bus is regularly checked as to its
mechanical, electrical, and hydraulic aspects,
whether or not there are problems thereon as
reported by the driver and/or conductor. They too,
must be at specific places at specified times, as they
generally observe prompt departure and arrival
from their point of origin to their point of
destination. In each and every depot, there is always
the dispatcher whose function is precisely to see to
it that the bus and its crew leave the premises at
specific times and arrive at the estimated proper
time. He cannot be considered field personnel.
(Autobus Transport System, Inc. v. Bautista, G.R No.
156367, 16 May 2005)
Field Personnel
Field personnel
employees who:
1.
2.
refers
to
non-agricultural
Regularly perform their duties away from the
principal place of business or branch office of
the Er; and
Whose actual hours of work in the field cannot
be determined with reasonable certainty. (Sec.
27, Rule II, Book III, IRR)
They are exempted from the coverage due to the
nature of their functions which requires
performance of service away from the principal
place of business. Hence, they are free from the
personal supervision of the Er and the latter cannot
determine with reasonable certainty the actual
number of hours of work expended for the Er's
interest.
Members of the Family
They are exempted from the coverage, for the
support given by the Er may exceed the benefit for
which an employee is entitled under appropriate
labor provisions. To cover them under Art. 82 may
create labor problems that would eventually breakup the family, which is the evil sought to be
prevented. (Poquiz, 2012)
The definition of a "field personnel" is not merely
concerned with the location where the employee
33
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Workers Paid by Results
2. HOURS OF WORK
There are two categories of employees paid by
results:
a. NORMAL HOURS OF WORK, HOURS WORKED
GR: The normal hours of work of any employee shall
not exceed eight (8) hours a day. (Art. 83, LC)
(1) Those whose time and performance are
supervised by the Er.
NOTE: There is no hard limit on the maximum hours
of work that may be rendered by an employee.
However, work rendered beyond the eight-hour
limit would not be considered normal. It would be
overtime, and thus subject to additional pay to
entitled employees.
NOTE: Here, there is an element of control and
supervision over the manner as to how the work is
to be performed. A piece-rate worker belongs to this
category especially if he performs his work in the
company premises.
(2) Those whose time and performance are
unsupervised.
XPNs:
1. Health personnel – include resident
physicians, nurses, nutritionists, dietitians,
pharmacists, social workers, laboratory
technicians,
paramedical
technicians,
psychologists, midwives, attendants and all
other hospital or clinic personnel. (Art. 83,
LC); and
NOTE: Here, the Er control is over the result of the
work. Workers on “pakyao” and “takay” basis belong
to this group. (Lambo v. NLRC, G.R. No. 111042, 26
Oct. 1999)
Payment of this type of worker is determined by the
results of the work performed or the number of
units produced, not the number of hours used in the
completion of the job or the time spent in
production. (Poquiz, 2012)
2.
Tailors and similar workers hired in the tailoring
establishment, although paid weekly wages on
piece-work basis, are employees and not
independent contractors, and accordingly, as
regular employees paid on piece-rate basis, they are
not entitled to overtime pay, holiday pay, premium
pay for holiday/rest day and service incentive leave
pay. (Villaga v. NLRC, G.R. No. 75038, 23 Aug. 1993)
NOTE: Department Orders providing for maximum
hours of work for bus drivers, movie workers, sea
farers, where there is a compressed work week
arrangement in place, and children employees are
also subjected to a maximum number of work hours
per day.
An employee who is engaged on a task or contract
basis, purely commission basis, or those paid by
results, is not automatically excluded by that fact
alone. To be excluded, the employee must also fall
under the classification of field personnel.
Rationale of the 8-Hour Labor
1.
2.
3.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Compressed workweek – an alternative
arrangement whereby the normal workweek
is reduced to less than six (6) days but the
total number of normal work hours per week
shall remain at 48 hours. The normal
workday is increased to more than eight (8)
hours without corresponding overtime
premium. (D.A. No. 02-04)
34
To safeguard the health and welfare of the
laborer;
To minimize unemployment by utilizing
different shifts; (Manila Terminal Co., Inc. v.
CIR, G.R. No. L-4148, 16 July 1952) and
To afford the employees adequate time to lead
richer and more fruitful, meaningful lives and
Labor Law and Social Legislation
to be able to participate intelligently in public
concerns.
Illustration: If the worker starts to work 8 am
today, the work day is from 8 am today up to 8 am
tomorrow. (Azucena, 2016)
Normal hours of work may be shortened or
compressed. Neither does it follow that a person
who does not observe normal hours of work cannot
be deemed an employee.
Part-Time Work
It is not prohibited to have normal hours of work
of less than eight hours a day. What the law
regulates is work hours exceeding eight – it
prescribes the maximum but not the minimum.
In Cosmopolitan Funeral Homes, Inc. v. Maalat (G.R.
No. 86693, 2 July 1990), the Er similarly denied the
existence of an Er-Ee relationship, as the claimant
according to it, was a "supervisor on commission
basis" who did not observe normal hours of work.
The Supreme Court declared that there was an ErEe relationship, noting that "the supervisor,
although compensated on a commission basis, [is]
exempt from the observance of normal hours of
work for his compensation is measured by the
number of sales he makes." (Lazaro v. SSS, G.R. No.
138254, 30 July 2004)
NOTE: Under Art. 124, as amended by RA 6727,
wage proportionate to part-time work is
recognized. The wage and benefits of a part-time
worker are in proportion to the number of hours
worked. E.g., If an Ee earns P300.00 for an eighthour work, he shall then get P150.00 for work done
in four (4) hours.
Broken Hours
The eight-hour work requirement does not,
however, preclude the Er in the exercise of its
management prerogatives to reduce the number of
working hours, provided that there is no diminution
of existing benefits. (Poquiz, 2012)
Minimum normal eight (8) working hours fixed by
law need not be continuous to constitute the legal
working day. It may mean broken hours of say, four
(4) hours in the morning and four (4) hours in the
evening or variation thereof provided the total of
eight (8) hours is accomplished within the work
day. (Chan, 2017)
The right to fix the work schedules of the Ee rests
principally on their Er. (Sime Darby Pilipinas, Inc. v.
NLRC, G.R. 119205, 15 Apr. 1998)
Hours Worked
Working time is one during which an employee is
actually working. It may include an instance when
an employee is not actually working but he is
required to be present in the Er’s premises. Thus,
the fact that he is required to be present although
not actually doing any work, is still deemed working
time. (Poquiz, 2012)
Management is free to regulate, according to its own
discretion and judgment, all aspects of employment,
including hiring, work assignments, working
methods, time, place and manner of work, processes
to be followed, supervision of workers, working
regulations, transfer of employees, work
supervision, layoff of workers and discipline,
dismissal, and recall of workers. (Manila Jockey Club
Employees Labor Union v. MJCI, G.R. No. 167760, 07
Mar. 2007)
When Hours Worked are Compensable
1.
Work Day
2.
3.
Work day is the 24-hour period which commences
from the time the employee regularly starts to work.
4.
35
Ee is required to be on duty or to be at a
prescribed workplace;
Ee is suffered or permitted to work;
Rest periods of short duration during working
hours which shall not be more than 20
minutes; and
Meal periods of less than 20 minutes. (Sec. 7,
Rule I, Book III, IRR)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
NOTE: Travel time, when beneficial to the Er, is
compensable. (Rada v. NLRC, G.R. No. 96078, 09 Jan.
1992)
RULES ON HOURS WORKED
A. WAITING TIME
It shall be considered as working time if:
Principles in Determining Hours Worked
1.
All hours which the Ee is required to give to his
Er regardless of whether or not such hours are
spent in productive labor or involve physical
or mental exertion.
2.
Rest period is excluded from hours worked,
even if Ee does not leave his workplace, it
being enough that:
a.
b.
c.
3.
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)
He stops working;
May rest completely; or
May leave his workplace, to go
elsewhere, whether within or outside
the premises of the workplace.
The controlling factor is whether waiting time
spent in idleness is so spent predominantly for the
Er’s benefit or for the Ee’s.
All time spent for work is considered hours
worked if:
a.
b.
c.
d.
4.
1. Waiting is an integral part of this work;
2. The Ee is required or engaged by the Er to
wait; or
3. When Ee is required to remain on call in the
Er’s premises or so close thereto that he
cannot use the time effectively and gainfully
for his own purpose. (Sec. 5, Rule I, Book III,
IRR)
The work performed was necessary;
If it benefited the Er; or
The Ee could not abandon his work at
the end of his normal working hours
because he had no replacement;
Provided, the work was with the
knowledge of his Er or immediate
supervisor.
Engaged to Wait vs. Waiting to be Engaged
In engaged to wait, waiting is an integral part of
the job; the time spent waiting is compensable,
while in waiting to be engaged, idle time is not
working time; it is not compensable.
B. PRELIMINARY
ACTIVITIES
The time during which an Ee is inactive by
reason of interruptions in his work beyond his
control shall be considered working time:
a.
b.
AND
POSTLIMINARY
Preliminary (before work) and postliminary
(after actual work) activities deemed performed
during working hours and compensable:
If the imminence of the resumption of
the work requires the Ees presence at
the place of work; or
If the interval is too brief to be utilized
effectively and gainfully in the Ees own
interest. (Sec. 4, Rule I, Book III, IRR)
1.
Where such activities are controlled by the Er
or required by the Er; and
2.
Pursued necessarily and primarily for the Er's
benefit. (31 Am. Jur. 882-883)
Ees are the entitled to portal pay for time spent on
incidental activities before or after the regular
working period. (CCHI, Labor Law Course, 318)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
36
Labor Law and Social Legislation
e.g., Travel from job site to job site during the
work day, must be counted as working hours.
Travel from main workplace (5pm) to jobsite
A (6pm) to jobsite B (7pm) to jobsite C (8pm)
to main workplace (9pm) is compensable.
Thirty-minute assembly time - long practiced
and institutionalized by mutual consent of the
parties under the collective bargaining agreement
cannot be considered waiting time of the
employees if they are not subject to the absolute
control of the company during this period. (Arica v.
NLRC, G.R. No. 78210, 28 Feb. 1989)
The 30-minute assembly time is
compensable, given the following reasons:
NOT
1.
non-
The assembly
complicated;
is
routinary
and
2.
The employees’ houses are situated on the
same area as the workplace; and
3.
The employees were not subjected to
disciplinary action should they fail to report in
the assembly time.
But, if instead of travelling back to the main
workplace, employee decides to go home from
jobsite C, travel time from 8pm is no longer
compensable, because it would already fall
under the category of work to home travel.
3.
GR:
1. Travel that requires an overnight stay on
the part of the Ee when it cuts across the
Ees workday is clearly working time.
2.
Therefore, the 30-minute assembly time was not
primarily intended for the interest of the Er, but
ultimately for the employees to indicate their
availability or unavailability for work during
workdays. (Ibid.)
The time is not only hours worked on
regular workdays but also during
corresponding working hours on nonworking days. Outside of these regular
working hours, travel away from home is
not considered working time.
XPN: During meal period or when Ee is
permitted to sleep in adequate facilities
furnished by the Er.
C. TRAVEL TIME
1.
Travel away from home
Travel from home to work
D. SLEEPING TIME
GR: Normal travel from home to work is not
working time.
A worker sleeping may be working. Whether
sleeping time allowed an employee will be
considered as part of his working time will depend
upon the express or implied agreement of the
parties. In the absence of an agreement, it will
depend upon the nature of the service and its
relation to the working time.
XPNs:
a. Emergency call outside his regular
working hours where he is required to
travel to his regular place of business or
some other work site;
b. Done through a conveyance provided by
the Er;
c. Done under the supervision and control of
the Er; and
d. Done under vexing and dangerous
circumstance.
2.
The rule is that sleeping time may be considered:
a) Working time if:
i.
it
is
subject
to
serious
interruption; or
ii.
takes place under conditions
substantially less desirable than
would be likely to exist at the
employee’s home.
Travel that is all in a day’s work – time spent
in travel as part of the Ees principal activity.
37
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
are unable to continue because of emergencies such
as typhoons, flood, earthquake and transportation
strike shall also mean to include brownout or power
outage because the key element of the provision is
that employees who have reported for work are
unable to continue working because of the incident.
Hence, employees who were prevented to continue
their work due to brownout should also be
remunerated. (Supreme Steel Corporation v.
Nagkakaisang
Manggagawa
ng
Supreme
Independent Union, G.R. 185556, 28 March 2011)
b) Not working time if there is an opportunity
for comparatively uninterrupted sleep
under fairly desirable conditions. (Azucena,
2010)
E. POWER INTERRUPTIONS
1.
Brownouts of short duration but not
exceeding 20 minutes shall be treated as
worked or compensable hours whether
used productively by the employees or not;
(DOLE P.I. 36, 22 May 1978)
2.
Brownouts running for more than 20
minutes may not be treated as hours
worked provided that any of the following
conditions are present:
i.
ii.
Time spent during which an employee is inactive by
reason of interruptions beyond his control is
working time, such as twenty-minute electric power
failure or machine breakdowns. The pay for this
non-productive time is known as idle-time pay.
Where the work is broken or is not continuous, the
idle time that an employee may spend for rest is not
counted as working time. (NDC v. CIR, G.R. No. L53961, 30 June 1987)
The employees can leave their
workplace or go elsewhere whether
within or without the work premises;
or
The employees can use the time
effectively for their own interest.
(Durabuilt Recapping Plant v. NLRC,
G.R. No. 76746, 27 July 1987)
F.
LECTURES,
PROGRAMS
TRAINING
Attendance at lectures, meetings, training programs
and similar activities need not be counted as
working time if the following criteria are met:
NOTE: In each case, the Er may extend the working
hours of his employees outside the regular
schedules to compensate for the loss of productive
man-hours without being liable for overtime pay.
(Chan, 2017)
1.
2.
3.
Industrial enterprises with one or two workshifts
may adopt any of the workshifts prescribed for
enterprises with three workshifts to prevent
serious loss or damage to materials, machineries, or
equipment that may result in case of power
interruption. (DOLE P.I. 36, 22 May 1978)
Attendance is outside of the employee's
regular working hours;
Attendance is in fact voluntary;
The employee does not perform any
productive work during such attendance.
(Sec. 6, Rule I, Book III, IRR)
G. ATTENDANCE
ACTIVITIES
1.
The days when work was not required and no work
could be done because of shutdown due to electrical
power interruptions, lack of raw materials and
repair of machines, are not deemed hours worked.
(Durabit Recapping Plant Company v. NLRC, G.R. No.
L-76746, 27 July 1987)
When a CBA contains a reporting time-off provision
wherein employees who have reported for work but
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
MEETINGS,
38
IN
LABOR
RELATIONS
CBA Negotiations - compensable if:
a. There is an agreement for the
compensability in the parties’ ground
rules;
b. There is an established policy allowing
compensability; and
c. When it is done during regular work
hours with the agreement of the Er.
Labor Law and Social Legislation
Health Personnel Covered by the 40-Hour
Workweek
2. Grievance Meeting
GR: Time spent in adjusting grievance between
Er and Ees during the time Ees are required by
the Er to be on the premises is compensable.
XPN: When a bona fide union is involved and
there is a CBA, policy, practice to contrary.
1.
Those in cities and municipalities with a
population of at least one (1) million; or
2.
Those in hospitals and clinics with a bed
capacity of at least 100.
3. Strikes
NOTE: Art. 83(2) of the LC does not require
hospitals to pay the Ees a full weekly salary with
paid two days off. (San Juan de Dios Ees Assoc.-AFW
et al. v. NLRC, G.R. No. 126383, 28 Nov. 1997)
GR: Not compensable.
XPN: If there is an agreement to allow “strike
duration pay” provided under the company
policy, practice or CBA.
Resident physicians to be on duty beyond the
40-hour workweek limitation
4. Hearing, Arbitration, Conciliation
GR: The customary practice of requiring resident
physicians beyond the 40 hours of work per week is
not permissible and violates the limitation under
Art. 83.
Not compensable because it is hardly fair for
an Ee or laborer to fight or litigate against his Er
and eventually consider it as hours worked. (JP
Heilbronn Co. v. National Labor Union, G.R. No. L5121, 30 Jan. 1953)
XPN: If there is a training agreement between the
resident physician and the hospital and the training
program is duly accredited or approved by
appropriate government agency.
H. SEMESTRAL BREAK OF TEACHERS
Semestral break of teachers are considered as
compensable hours worked for it is a form of an
interruption beyond their control. (University of
Pangasinan Faculty Union v. University of
Pangasinan, G.R. Nos. 64821-23, 29, Jan. 1993)
Work Hours of Seaman
Seamen are required to stay on board their vessels
by the very nature of their duties, and it is for this
reason that, in addition to their regular
compensation, they are given free living quarters
and subsistence allowances when required to be on
board.
NOTE: Payment compensation is given only to
regular full-time teachers. (Duka, 2016)
Hours of Work of Health Personnel
It could not have been the purpose of the law to
require their Ers to pay them overtime even when
they are not actually working; otherwise, every
sailor on board a vessel would be entitled to
overtime for sixteen hours each day, even if he had
spent all those hours resting or sleeping in his bunk,
after his regular tour of duty.
GR: Eight (8) hours for five (5) days (40-hour
workweek), exclusive of time for meals.
XPN: Where the exigencies of the service require
that such personnel work for six (6) days or 48
hours, they shall be entitled to an additional
compensation of at least 30% of their regular wage
for work on the 6th day. (Art. 83, LC)
The correct criterion in determining whether or not
sailors are entitled to overtime pay is not, therefore,
whether they were on board and cannot leave ship
beyond the regular eight working hours a day, but
39
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
would suffer a reduction in pay if their work hours
are unilaterally reduced by the Er. (Linton
Commercial Co., Inc. v. Heller, G.R. No. 163147, 10 Oct.
2007)
whether they actually rendered service in excess of
said number of hours.
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, 29 April
1975)
b. MEAL PERIODS
Duration
Every Er shall give his Ees not less than 60 minutes
or one (1) hour time-off for regular meals. (Art. 85,
LC)
As a general rule, employees are entitled to at least
one hour time-off for regular meals which can be
taken inside or outside company premises.
Maximum Hours of Work
Non-Compensability of the Meal Period
Certain workers may not be required to work
beyond a certain number of work hours a day.
1.
Public Utility Bus drivers and conductors –
12 hours per 24-hour period. (D.O. 118- 12)
2.
Movie and television industry worker/
talent – shall not exceed eight (8) hours in a
day.
For a full one-hour undisturbed lunch break, the
employees can freely and effectively use this hour
not only for eating, but also for their rest and
comfort which are conducive to more efficiency and
better performance in their work. Since the
employees are no longer required to work during
this one-hour lunch break, there is no more need for
them to be compensated for this period. (Sime Darby
Pilipinas, Inc. v. NLRC, G.R. No. 119205, 15 Apr. 1998)
If required to work beyond eight (8) hours,
the maximum actual hours of work shall
not exceed 12 hours in any 24-hour period;
Compensable Meal Period
If aged 60 years old and above – shall not
exceed eight (8) hours per day;
It is compensable where the lunch period or meal
time:
1. Is predominantly spent for the Er’s benefit; or
2. When it is less than 60 minutes.
The hours of work of children in the
industry must be in accordance with R.A.
No. 9231 and its IRR. (D.O. 65-04)
3.
NOTE: Where during a meal period, the laborers are
required to stand by for emergency work, or where
the meal hour is not one of complete rest, such is
considered overtime. (Pan American World Airways
System v. Pan American Employees Association, G.R.
No. L-16275, 23 Feb. 1961) Rest periods or coffee
breaks running from five (5) to 20 minutes shall be
considered as compensable working time. (Sec. 7,
Rule I, Book III, IRR)
Seafarers onboard ships engaged in
domestic shipping – 14 hours per 24-hour
period or 77 hours per seven (7) days. (D.O.
129- 13)
Q: Can the number of hours of work be reduced
by an Er?
A: YES. However, financial losses must be shown
before a company can validly opt to reduce the work
hours of its employees because the employees
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
40
Labor Law and Social Legislation
Compensability
overtime work
of
Meal
Periods
during
Meal periods provided during overtime work are
compensable; since the one (1)-hour meal period
(non-compensable) is not given during OT work
because the latter is usually for a short period and
to deduct from the same would reduce to nothing
the Ees’ OT work. Thus, the one-hour break for
meals during OT should be treated as compensable.
Where
Meal
Periods
are
Compensable or Not Compensable
1.
b.
Ees voluntarily Agree in writing and are
willing to waive OT pay for the shortened
meal period;
c.
No Diminution in the salary and other
fringe benefits of the Ees which are
existing before the effectivity of the
shortened meal period;
d.
Value of the Benefits derived by the Ees
from the proposed work arrangements is
equal to or commensurate with the
compensation due them for the
shortened meal period as well as the OT
pay for 30 min. as determined by the Ees
concerned;
e.
Overtime pay will become due and
demandable after the new time schedule;
and
f.
Arrangement is of Temporary duration.
Shortened:
Compensable – At the instance of Er, when:
(N-O-P-E)
a.
Work is Non-manual in nature or does
not involve strenuous physical exertion;
b.
Establishment regularly Operates less
than 16 hours a day;
c.
Work is necessary to prevent serious loss
of Perishable goods; and
d.
Actual or impending Emergency or there
is urgent work to be performed on
machineries and equipment to avoid
serious loss which the Er would
otherwise suffer. (Sec. 7, Rule I, Book III,
IRR)
NOTE: The implementing rules allow the mealtime
to be less than 60 minutes, under specified cases but
in no case shorter than 20 minutes. (Sec. 7, Rule 1,
Book III, IRR)
If the so called “mealtime” is less than 20 minutes, it
becomes only a rest period and is considered
working time. (Azucena, 2016)
c. NIGHT SHIFT DIFFERENTIAL
NOTE: The meal hour was not one of complete rest
but a work hour because for its duration, the
laborers had to be on ready call. (Pan American
World Airways System v. Pan American Employees
Association, G.R. No. L-16275, 23 Feb. 1961)
2.
Every employee shall be paid a night shift
differential of not less than t10%) of his regular
wage for each hour of work performed between
10:00 PM and 6:00 AM. (Art. 86, LC)
GR: All employees are entitled to Night Shift
Differential (NSD).
Not Compensable – Ee requested for the
shorter meal time so that he can leave work
earlier than the previously established
schedule.
XPNs: (Go-Re-Do-Ma-Fi)
1. Those of the Government and any of its
political subdivisions, including GOCCs;
Requisites: (S-A-D-B-O-T)
a. Work of the Ees does not involve
Strenuous physical exertion and they are
provided with adequate coffee breaks in
the morning and afternoon;
2.
41
Those of Retail and service establishments
regularly employing not more than five (5)
workers;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
3.
Domestic helpers and persons in the personal
service of another;
4.
Managerial employees as defined in Book
Three of the Labor Code; and
5.
Field personnel and other employees whose
time and performance are unsupervised by
the Er 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 II, IRR, LC)
Burden of Proof of Payment
The burden of proving that payment of NSD has
been made rests upon the party who will suffer if no
evidence at all is presented by either party.
(National Semiconductor (HK) Distribution, Ltd. v.
NLRC and Santos, G.R. No. 123520, 26 June 1998)
Night Differential in Overtime Pay
If work done between 10PM and 6AM is overtime
work, then the ten percent (10%) NSD should be
based on the overtime rate.
When the tour of duty of an employee falls at night
time, the receipt of overtime pay will not preclude
the right to night differential pay. The latter is
payment for work done during the night and the
other is payment for the excess of the regular eighthour work. (NARIC v. NARIC Workers Union, G.R. No.
L-12075, 29 May 1959)
Where the night-time work of an employee overlaps
with overtime work, the receipt of overtime pay
does not preclude the receipt of night differential
pay. The latter is night pay; the former is payment
beyond eight-hour work. (Poquiz, 2012)
Purpose
d. OVERTIME WORK
The philosophy behind the provision is to give
premium to night work when an employee is
supposed to be sleeping. Working at night is
violative of the law of nature for it is the period for
rest and sleep. An employee who works at night has
less stamina and vigor; thus, he can easily contract a
disease.
Overtime work is the service rendered in excess of
and in addition to eight hours on ordinary working
days. (Caltex Regular Employees at Manila Office v.
Caltex Philippines, G.R. No. 111359, 15 Aug. 1995)
NOTE: It is not enough that the hours worked fall on
disagreeable or inconvenient hours. The hours
worked must be in excess of eight (8) hours worked
during the prescribe daily work period, or the forty
(40) hours worked during the regular work week
Monday thru Friday.
Work done at night places has a greater burden on
the worker. It is more strenuous and onerous than
work done during the day; therefore, it deserves
greater or extra compensation. (Shell Co. v. NLU, G.R.
No. L-1309, 26 July 1948)
Overtime pay is the additional compensation of at
least 25% on the regular wage for the service or
work rendered or performed in excess of eight (8)
hours a day by employees or laborers in
employment covered by the Eight-hour Labor Law.
(Art. 87, LC)
Non-Waivability
GR: Waiver of NSD is against public policy. (Mercury
Drug Co., Inc. v. Dayao, et al., G.R. No. L-30452, 30
Sept. 1982)
XPN: Waiver is allowed if it will result in higher or
better benefits to Ees.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Overtime pay is based on regular base pay excluding
money received by employee in different concepts
such as Christmas bonus and other fringe benefits.
42
Labor Law and Social Legislation
contract. (Pesala v. NLRC, G.R. No. 105963, 22 Aug.
1996)
It is computed by multiplying the overtime hourly
rate by the number of hours in excess of eight.
(Azucena, 2016)
Overtime Pay vs. Premium Pay
NOTE: Express instruction from the Er to the Ee to
render OT work is not required for the Ee to be
entitled to OT pay; it is sufficient that the Ee is
permitted or suffered to work. (Azucena, 2016)
However, written authority after office hours
during rest days and holidays are required for
entitlement to compensation.
Rationale for Overtime Pay
Ee is made to work longer than what is
commensurate with his agreed compensation for
the statutory fixed or voluntarily agreed hours of
labor he is supposed to do. (PNB v. PEMA and CIR,
G.R. No. L-30279, 30 July 1982)
OVERTIME PAY
PREMIUM PAY
Additional
compensation for
work performed
beyond eight (8)
hours on ordinary
days (within the
worker’s 24-hour
workday).
Additional compensation
for work performed within
eight (8) hours on days
when normally he should
not be working (on nonworking days, such as rest
days and special days). But
additional compensation
for work rendered in
excess of eight (8) hours
during these days is also
considered OT pay.
Overtime Pay Rates
The reason the law requires additional
compensation for work beyond the normal working
day is to encourage Ers to dispense with such work,
thus providing employees an opportunity to satisfy
their mental, moral, and spiritual needs. They may
have more hours to devote to reading, amusement,
and other recreational activities necessary for their
well-being. Moreover, they could share longer hours
in the company of their family, attending to spiritual
or religious needs. Law on overtime will surely ease
unemployment problem, for Ers will be constrained
to employ additional employees to work in other
shifts necessary for the operation of the business.
(Shell Co. v. NLU, G.R. No. L-1309, 26 July 1948)
OVERTIME
During a
regular
working day
PAY RATES
Additional compensation
25% of the regular wage
of
Rate of the first eight (8) hours
worked on plus at least 30% of
the regular wage (RW):
During a
holiday or
rest day
Condition for Entitlement to Overtime Pay
Entitlement to overtime pay must first be supported
by sufficient proof that said overtime work was
actually performed before an employee may avail of
said benefit. (Cagampan v. NLRC, G.R. Nos. 85122-24,
22 March 1991)
A. If done on a special
holiday OR rest day:
30% of 130% of RW
B. If done on a special
holiday AND rest day:
30% of 150% of RW
C.
If done on a regular
holiday:
30% of 200% of RW
Basis of Computation of Overtime Pay
An employee is entitled to overtime pay for work
rendered in excess of eight hours, despite the fact
that his employment contract specifies a 12-hour
workday at a fixed monthly salary rate that is above
the legal minimum rate. The provisions of the
pertinent labor laws prevail over the terms of the
Regular wage which includes the cash wage only,
without deduction on account of the facilities
provided by the Er. (Art. 90, LC)
43
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Prima Facie Evidence of Overtime Pay
presumption that either they do not have them, or if
they do, their presentation is prejudicial to their
cause. (Reggie Orbista Zonio v. 1st Quantum Leap
Security Agency, Inc. and Romulo Q. Par, G.R. No.
224944, 05 May 2021)
Q: Respondent security agency did not pay Zonio
for overtime work, work rendered on holidays
and rest days, as well as 13th month pay, service
incentive leave, and night shift differential.
Zonio, along with some of his colleagues,
received a memorandum suspending them for
sleeping while on duty. Zonio filed a complaint
against respondents for illegal suspension and
nonpayment of overtime pay, holiday and rest
day premiums pay, and night shift differentials
pay. To support his allegations. Zonio submitted
in evidence photocopies of the entries in the
logbook, signed by incoming and outgoing
security guards and were not countersigned by
their
supervisor
or
any
authorized
representative. His claim was denied because
the evidence Zonio adduced raises serious
doubt as to whether he actually rendered work
on a given date and time.
Waiver of Overtime Pay
GR: The right to overtime pay cannot be waived.
The right is intended for the benefit of the laborers
and employees. Any stipulation in the contract that
the laborer shall work beyond eight hours without
additional compensation for the extra hours is
contrary to law and null and void. (Azucena, 2016)
The right of the laborer to overtime compensation
cannot be waived expressly or impliedly. Where the
contract of employment requires work for more
than eight hours at a specified wage per day,
without providing for a fixed hourly rate or that the
daily wages include overtime pay, said wages
cannot be considered as including overtime
compensation required under the Eight-hour Labor
Law. (Manila Terminal Co. v. CIR, G.R. No. L-9265, 29
Apr. 1957)
Did Zonio sufficiently prove his entitlement to
monetary claims?
A: YES. Admittedly, the logbook is only a personal
record of Zonio and other security guards. It is not
verified or countersigned by respondents. Anyway,
the fact that the entries are not verified or
countersigned will not militate against Zonio. The
entries in the logbook are prima facie evidence of
Zonio's claim. Prima facie evidence is such evidence
as, in the judgment of the law, is sufficient to
establish a given fact, or the group, or chain of facts
constituting the party's claim or defense, and which
if not rebutted or contradicted, will remain
sufficient. Evidence which, if unexplained or
uncontradicted, is sufficient to sustain a judgment in
favor of the issue it supports, but which may be
contradicted by other evidence. Respondents
dispute the veracity of the entries in the logbook,
yet, they did not proffer evidence to rebut them, or
show that they paid Zonio for the services he
rendered on the dates and the hours indicated in the
logbook. The best evidence for respondents would
have been the payrolls, vouchers, payslips, daily
time records, and the like, which are in their custody
and absolute control. However, respondents did not
present any of these. This failure gives rise to the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
XPNs: (BP-CW)
1.
When the alleged waiver of overtime pay is in
consideration of Benefits and Privileges which
may be more than what will accrue to them in
overtime pay, the waiver may be permitted.
(Azucena, 2016)
2.
Compressed Workweek (CWW) arrangement.
Q: Socorro is a clerk-typist in Hospicio de San
Jose, a charitable institution dependent for its
existence on contributions and donations from
well-wishers. She renders work 11 hours a day
but has not been given OT pay since her place of
work is a charitable institution. Is Socorro
entitled to overtime pay? Explain briefly. (2002
BAR)
A: YES. Socorro is entitled to OT pay. She does not
fall under any of the exceptions to the coverage of
Art. 82, under the provisions of hours of work. The
LC is equally applicable to non-profit institutions. A
44
Labor Law and Social Legislation
by the Er is valid. (Engineering Equipment v.
Minister of Labor, G.R. No. L-64967, 23 Sept.
1985)
covered employee who works beyond eight (8)
hours is entitled to OT compensation.
Q: Danilo Flores applied for the position of
driver in the motor-pool of Gold Company, a
multinational corporation. Danilo was informed
that he would frequently be working overtime
as he would have to drive for the company's
executives even beyond the ordinary 8-hour
work day. He was provided with a contract of
employment wherein he would be paid a
monthly rate equivalent to 35 times his daily
wage, regular sick and vacation leaves, 5 dayleave with pay every month and time off with
pay when the company's executives using the
cars do not need Danilo's service for more than
eight hours a day, in lieu of overtime. Are the
above provisions of the contract of employment
in conformity with, or violative of, the law?
Overtime Rate Subject to Stipulation
GR: The premium for work performed on the
employee’s rest days or on special days or regular
holidays are included as part of the regular rate of
the employee in the computation of OT pay for any
OT work rendered on said days, especially if the Er
pays only the minimum OT rates prescribed by law.
XPN: Ees and Er may stipulate in their collective
agreement the payment of OT rates higher than
those provided by law and exclude the premium
rates in the computation of OT pay. Such agreement
may be considered valid only if the stipulated OT
pay rates will yield to the Ees not less than the
minimum prescribed by law.
A: Except for the provision that Danilo shall have
time off with pay when the company's executives
using the cars do not need Danilo's service for more
than eight hours a day, in lieu of OT, the provisions
of the contract of employment of Danilo are not
violative of any labor law because they instead
improve upon the present provisions of pertinent
labor laws.
Overtime Pay in a Compressed Workweek
Scheme
Any work performed beyond 12 hours a day or 48
hours a week shall be subject to OT premium. (D.A.
02-04)
Overtime Pay Integrated in Basic Salary
Q: The employment contract requires work for
more than 8 hours a day with a fixed wage
inclusive of OT pay. Is that valid?
Built-in Overtime Pay or Composite/Package
Pay
It is not per se illegal, but there should have been
express agreement to that effect. Such arrangement,
if there be any, must appear in the manner required
by law on how overtime compensation must be
determined. (Damasco v. NLRC, et al., G.R. No.
115755, 04 Dec. 2000)
A: It depends.
1.
2.
When the contract of employment requires
work for more than eight hours at specific
wages per day, without providing for a fixed
hourly rate or that the daily wages include OT
pay, said wages cannot be considered as
including OT compensation. (Manila Terminal
Co. v. CIR, et al., G.R. No. L-4148, 16 July 1952)
Requisites for a Valid Built-in Overtime Pay
(Base pay with Integrated Overtime Pay):
(A-M)
In cases of built-in OT pay in GovernmentApproved Contracts. When the OT pay was
already provided in the written contract with
a built-in OT pay and signed by the director of
the bureau of employment services and
enforced by the Er. Non-payment of OT pay
45
1.
A clear written Agreement knowingly and
freely entered into by the employee;
2.
The Mathematical result shows that the
agreed legal wage rate and the overtime pay,
computed separately are equal or higher than
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
the separate amounts legally due. (Azucena,
2016)
Overload
Work
Distinguished
and
Overtime
Work
Where a teacher is engaged to undertake actual
additional teaching work after completing his
regular teaching load, such additional work is
referred to as overload.
When the overload is performed within eight hours
normal working day, such overload pay is
considered part of the basic pay for the purpose of
computing 13th month pay. "Overload work" is
sometimes misunderstood as synonymous to
"overtime work." The two terms are not the same.
Overtime work is work rendered in excess of the
normal working hours of eight in a day. On the other
hand, since overload work may be performed
either within or outside eight hours in a day,
overload work may or may not be overtime work.
(DOLE's Explanatory Bulletin on Inclusion of
Teacher's Overload in Computing 13th Month Pay)
3.
When the work is necessary to prevent loss or
damage to Perishable goods;
4.
When overtime work is necessary to avail of
Favorable
weather
or
environmental
conditions where performance or quality of
work is dependent thereon; or
5.
When the Completion or continuation of work
started before the 8th hour is necessary to
prevent serious obstruction or prejudice to the
business or operations of the Er.
NOTE: The employee may still refuse to render
overtime even if compelled, although not without
disciplinary consequence for his refusal that could
constitute insubordination, a potential ground for
termination of employment.
Q: Is the foregoing enumeration exclusive?
Emergency Overtime Work
A: YES. In cases not falling within any of these
enumerated in this Section, no employee may be
made to work beyond eight (8) hours a day against
his will. (Sec. 10, Rule I, Book III, IRR)
GR: The employee may not be compelled to work
more than eight hours a day.
Q: Is mandatory
servitude?
XPN: Compulsory Overtime. (Wa-D-U-P-Fa-C)
A: NO. The employee may still refuse to render
overtime even if compelled, although not without
disciplinary consequence for his refusal that could
constitute insubordination, a potential ground for
termination of employment.
1.
When the country is at War or when any other
national or local emergency has been declared
by Congress or the Chief Executive;
2.
When overtime work is necessary to prevent
loss of life or property, or in case of imminent
Danger to public safety due to actual or
impending emergency in the locality caused by
serious accident, fire, floods, typhoons,
earthquake, epidemic or other disaster or
calamities;
2.
When there is Urgent work to be performed on
machines, installations, or equipment, in order
to avoid serious loss or damage to the Er or
some other causes of similar nature;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
overtime
involuntary
Petitioner’s attempt to brush aside his refusal to
render overtime work as inconsequential when
Graphics, Inc.’s order for him to do so is justified by
Graphics, Inc.’s contractual commitments to its
clients. Such an order is legal under Art. 89 of the
Labor Code and the petitioner’s unexplained refusal
to obey is insubordination that merits dismissal
from service. (Billy Realda v. New Age Graphics Inc.,
G.R. No. 192190, 25 Apr. 2012)
Q: LKG Garments Inc. makes baby clothes for
export. As part of its measures to meet its
orders, LKG requires its employees to work
beyond eight (8) hours everyday, from Monday
46
Labor Law and Social Legislation
to Saturday. It pays its employees an additional
35% of their regular hourly wage for work
rendered in excess of eight (8) hours per day.
Because of additional orders, LKG now requires
two (2) shifts of workers with both shifts
working beyond eight (8) hours but only up to a
maximum of four (4) hours. Carding is an
employee who used to render up to six (6) hours
of overtime work before the change in schedule.
He complains that the change adversely affected
him because now he can only earn up to a
maximum of four (4) hours’ worth of overtime
pay. Does Carding have a cause of action against
the company? (2015 BAR)
In firms using substances, or operating in
conditions that are hazardous to health, a
Certification is needed from an accredited
safety organization or the firm’s safety
committee that work beyond 8 hours is within
the limit or levels of exposure set by DOLE’s
occupational safety and health standards.
3.
The DOLE Regional Office is duly Notified.
(Ibid.)
Valid Compressed Work Week
The validity of the reduction of working hours can
be upheld when the arrangement is:
A: NO. A change in work schedule is a management
prerogative of LKG. Thus, Carding has no cause of
action against LKG if, as a result of its change to two
(2) shifts, he now can only expect a maximum of
four (4) hours overtime work. Besides, Art. 87 of the
Labor Code does not guarantee Carding a certain
number of hours of overtime work. In Manila Jockey
Employees’ Union v. Manila Jockey Club (G.R. No
167760, 07 Mar. 2007), the Supreme Court held that
the basis of overtime claim is an employee’s having
been “permitted to work.” Otherwise, as in this case,
such is not demandable.
1.
2.
3.
4.
5.
Temporary;
It is a more humane solution instead of a
retrenchment of personnel;
There is notice and consultations with the
workers and supervisors;
A consensus is reached on how to deal with
deteriorating economic conditions; and
It is sufficiently proven that the company was
suffering from losses.
NOTE: Under the Bureau of Working Conditions’
bulletin, a reduction of the number of regular
working days (RWD) is valid where the
arrangement is resorted to by the Er to prevent
serious losses due to causes beyond his control,
such as when there is a substantial slump in the
demand for his goods or services or when there is a
lack of raw materials. (Linton Commercial v. Hellera,
G.R. No. 163147, 10 Oct. 2007)
e. COMPRESSED WORK WEEK, FLEXIBLE WORK
ARRRANGEMENT, ALTERNATIVE WORK
ARRANGEMENTS, TELECOMMUTING PROGRAM
Compressed Work Week
It is a scheme where the normal workweek is
reduced to less than six (6) days but the total
number of 48 work-hours per week shall remain.
Conditions where a "compressed workweek"
schedule may be legally authorized as an
exception to the "8-hour a day" requirement
under the LC (2005 BAR)
The normal workday is increased to more than
eight hours, but not to exceed 12 hours, without
corresponding overtime premium. The concept can
be adjusted accordingly depending on the normal
workweek of the company. (D.A. No. 02-04)
1.
2.
Requisites: (S-C-N)
1.
2.
3.
The Scheme is expressly and voluntarily
supported by majority of the Ees.
4.
47
The Ee voluntarily agrees to it;
There is no diminution in their weekly or
monthly take home pay or fringe benefits;
The benefits are more than or at least
commensurate or equal to what is due to the
Ees without the compressed work week;
OT pay will be due and demandable when they
are required to work on those days which
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
5.
6.
should have ceased to be working days
because of the compressed work week
schedule;
No strenuous physical exertion or that they are
given adequate rest periods; and
It must be for a temporary duration as
determined by the DOLE.
Administration of Flexible Work Arrangements
The parties in the flexible work schemes shall be
primarily responsible for its administration.
In case of differences of interpretation, D.A. 02-09
provides the following guidelines:
Flexible Work Arrangements
1.
Flexible Work Arrangements are alternative
schedules or arrangements other than the standard
and traditional workweeks.
The differences shall be treated as
grievances under the applicable grievance
mechanism of the company.
2.
If there is no grievance mechanism or if this
mechanism is inadequate, the grievance
shall be referred to the Regional Office
which has jurisdiction over the workplace
for appropriate conciliation.
Flexible Work Arrangements are recommended
over the outright closure of the business or the
termination of the services of its Ees. (D.A. 02-09)
Types of Flexible Work Arrangements (FWAs)
Notice Requirement
1.
Compressed Workweek - as discussed above;
2.
Reduction of Workdays - refers to one where
the normal workdays per week are reduced but
should not last for more than six months;
Prior to its implementation, the Er shall notify the
DOLE through the Regional Office which has
jurisdiction over the workplace, of the adoption of a
FWA. The notice shall be in the Report Form
attached to D.A. 02-09.
3.
Rotation of Workers - refers to one where the
Ees are rotated or alternately provided work
within the workweek;
4.
Forced Leave - refers to one where the Ees are
required to go on leave for several days or
weeks utilizing their leave credits, if there are
any;
5.
Broken-time schedule - refers to one where
the work schedule is not continuous but the
work-hours within the day or week remain; and
6.
Flexi-holidays schedule - refers to one where
the Ees agree to avail the holidays at some other
days provided there is no diminution of existing
benefits as a result of such arrangement.
Alternative Work Arrangements
D.A. 17-B-20 was issued in order to to assist Ers to
resume their business operations while preserving
the employment of their workers under the
enhanced
community
quarantine,
general
community quarantine or other quarantine
arrangements.
Alternative Work Schemes mentioned in D.A.
17-B-20
Under these FWAs, the Ers and the Ees are
encouraged to explore alternative schemes under
any agreement and company policy or practice in
order to cushion and mitigate the effect of the loss
of income of the employees. (D.A. 02-09)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
48
1.
Transfer - Ees are transferred to another
branch or outlet of the same Er.
2.
Assignment - Ees are assigned to another
function or position in the same or other branch
or outlet of the same Er.
3.
Job rotation - Ees are alternately required to
work within the workweek.
Labor Law and Social Legislation
4.
Reduction of workdays - Normal workdays
per week are reduced.
5.
Partial closure - Some units or departments of
the establishment are continued while other
units or departments are closed.
6.
Other work arrangements, including
adjustment of wage and wage-related benefits
of the Ees.
Telecommuting Agreement
The Er and Ees shall adhere to and be guided by the
mutually agreed policy or telecommuting
agreement, which stipulates for the following
provisions, including but not limited to:
1.
2.
Eligibility;
Applicable code of
conduct and
performance evaluation and assessment;
3. Appropriate alternative workplace/s;
4. Use and cost of equipment;
5. Work days and/or hours;
6. Conditions of employment, compensation,
and benefits particularly those unique to
telecommuting Ees;
7. Non-diminution of benefits;
8. Occupational safety and health;
9. Observance of data privacy policy;
10. Dispute settlement; and
11. Termination
or change
of work
arrangement.
Wages and Wage-Related Benefits
Employers and employees may agree voluntarily
to temporarily adjust employees’ wage and wagerelated benefits as provided for in existing
employment contract, company policy or CBA.
The adjustments in wages and/or wage-related
benefits shall not exceed six (6) months or the
period agreed upon in the CBA, if any. After such
period, employers and employees shall review
their agreement and may renew the same. (Sec. 5,
D.A. 17-20)
Termination of Telecommuting Arrangement
Reporting Requirement
The Er or Ees may terminate or change the
telecommuting work arrangement, in accordance
with the telecommuting policy or agreement,
without prejudice to employment relationship and
working conditions of the Ee, at no cost to the latter.
Ers shall report the adopted alternative working
schemes and other work arrangements including
the adjustment of wage and wage-related benefits of
the employees, if any, and submit a duly certified
copy of all agreements to the DOLE Regional Office
having jurisdiction over their principal place of
business. (Sec. 6, D.A. 17-B-20)
Fair Treatment
The Er shall ensure that telecommuting Ees are
given the same treatment as that of comparable Ees
working at the Er's premises. All telecommuting Ees
shall be covered by the same set of applicable rules
and existing CBA, if any. They shall also:
Telecommuting Program
An Er in the private sector may offer a
telecommuting program to its Es on a voluntary
basis or as a result of collective bargaining, if any,
and upon such terms and conditions as they may
mutually agree upon. (Sec. 3, D.O. 202-19)
NOTE: 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,
entitlement to leave benefits, social welfare
benefits, and security of tenure.
49
1.
Receive a rate of pay, including overtime and
night shift differential, and other similar
monetary benefits not lower than those
provided in applicable laws, and/or CBA;
2.
Have the right to rest days, regular holidays,
and special nonworking days;
3.
Have the same or equivalent workload and
performance standards as those of comparable
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
workers at the Er's premises; provided that the
parties may mutually agree to different
performance standards that may be more
appropriate given the location of the Ee is not at
the premises of the Er;
4.
5.
6.
Notice and Monitoring
The Er shall notify the DOLE on the adoption of a
telecommuting
work
arrangement,
by
accomplishing the DOLE prescribed report form
and submitting the same in print or digital copy, to
the nearest DOLE Field or Provincial Office having
jurisdiction over the area where the principal office
is located.
Without additional cost, have the same access
to training and career development
opportunities as those of comparable workers
at the Er's premises, and be subject to the same
appraisal policies covering these workers,
including the qualification provided on the
preceding item;
If the Er has branches or operational units outside
the region of its principal office, each branch or
operational unit shall also submit its respective
report to the nearest DOLE Field or Provincial Office
having jurisdiction over the branch or operational
unit. (Sec. 7, D.O. 202-19)
Without additional cost, receive appropriate
training on the technical equipment at their
disposal, and the characteristics and conditions
of telecommuting; and
3. REST PERIODS
Have the same collective rights as the workers
at the Er's premises, including access to safety
and health services when necessary, and shall
not be barred from communicating with
worker's representatives. (Sec. 4, D.O. 202-19)
Right to Weekly Rest Day (WRD)
Every Er shall give his Ees a rest period of not less
than 24 consecutive hours after every six (6)
consecutive normal work-days. (Sec. 3, Rule III, Book
III, IRR)
The Er shall also ensure that measures are taken to
prevent the telecommuting Ee from being isolated
from the rest of the working community in the
company by giving the telecommuting Ee the
opportunity to meet with colleagues on a regular
basis and allowing access to the regular workplace
and company information.
Rest day not necessarily Sunday or Holiday
All establishments and enterprises may operate or
open for business on Sundays and holidays
provided that the Ees are given the weekly rest day
and the benefits provided under the law. (Sec. 2,
Rule III, Book III, IRR)
Data Protection
Scope of WRD
To ensure the protection of data used and processed
by the telecommuting Ee for professional purposes,
the Er shall be responsible for strictly taking the
appropriate measures, which are not limited to:
1.
2.
3.
It shall apply to all Ers whether operating for profit
or not, including public utilities operated by private
persons. (Sec. 1, Rule III, Book III, IRR)
Disabling of hardware,
Universal Serial Bus (USB) access, and
External cloud-based storage can be taken
by the Er.
Person who determines the WRD
GR: Er shall determine and schedule the WRD of his
Ee.
For this purpose, the provisions of the Data Privacy
Act of 2012 shall have suppletory effect. (Sec. 5, D.O.
202-19)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
XPNs:
1. Collective Bargaining Agreement;
2. Rules and regulations as the SOLE may
provide; and
50
Labor Law and Social Legislation
3.
ordinarily be expected to resort to other
measures;
Preference of Ee based on religious grounds –
Ee shall make known his preference in
writing at least seven (7) days before the
desired effectivity of the initial rest day so
preferred. (Sec. 4(1), Rule III, Book III, IRR)
4.
NOTE: Instead of ordinary loss, it must be
serious. There must be loss and not just
damage.
XPNs to XPN no. 3: Er may schedule the WRD of his
choice for at least two (2) days in a month if the
preference of the Ee will inevitably result in:
a.
b.
To prevent loss or damage to perishable goods;
Serious prejudice to the operations of
the undertaking; and
The Er cannot normally be expected to
resort to other remedial measures.
(Sec. 4(2), Rule III, Book III, IRR)
The Er is mandated to respect the choice of its
employee as to their rest day based on religion.
5.
Where the nature of the work requires
continuous operations and the stoppage of
work may result in irreparable injury or loss to
the Er; and
6.
Under other circumstances analogous or
similar to the foregoing as determined by the
SOLE. (Art. 92, LC)
Q: Is the list exclusive?
Right of the Ee to Know the Schedule of their
WRDs
A: YES. No Ee shall be required against his will to
work on his scheduled rest day except under
circumstances provided in this Section. Where an Ee
volunteers to work on his rest day under other
circumstances, he shall express such desire in
writing, subject to the rule regarding additional
compensation.
Er shall make known the rest period by means of:
1.
2.
3.
Written notice;
Posted conspicuously in the workplace; and
At least one week before it becomes effective.
(Sec. 5, Rule III, Book III, IRR)
Employee volunteers to work on his rest day
under other circumstances
Emergency Rest Day Work
GR: The Ee cannot be compelled by the Er to work
on his rest day.
He may be allowed to do so, provided he shall
express it in writing subject to additional
compensation. (Sec. 6(2), Rule III, Book III, IRR)
XPNs:
1.
2.
3.
4. HOLIDAY
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;
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. (Azucena, 2016)
In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid
serious loss which the Er would otherwise
suffer;
The payment of the regular daily wage for any
unworked regular holiday. (Handbook on Workers’
Statutory Monetary Benefits, Bureau of Working
Conditions, 2016)
In the event of abnormal pressure of work due
to special circumstances, where the Er cannot
51
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Service Establishments
It is a premium given to Ees pursuant to the law
even if he has not been suffered to work on a regular
holiday. It is limited to the 12 regular holidays, also
called legal holidays listed by law. The Ee should not
have been absent without pay on the working day
proceeding the regular holiday.
They are engaged in the sale of services to
individuals for their own or household use. (e.g., TV
repair shop).
Exemption of Retail/Service Establishments
Persons entitled to Holiday Pay
GR: All Ees are entitled. (Sec. 1, Rule IV, Book III, IRR)
XPNs:
1.
Government Ees and any of its political
subdivisions, including GOCCs (with original
charter);
2.
Retail and service establishments regularly
employing less than ten (10) workers;
3.
Domestic helpers and persons in the personal
service of another;
MINIMUM WAGE
HOLIDAY PAY/SIL
Applies
to
establishments
employing not more
than ten employees (110 employees).
Applies
to
establishments
employing less than
ten employees (1-9
employees).
Has to be obtained by
applying for it with the
Regional Wage Board.
Granted by the LC. May
be availed of without
the need of a prior
application
for
exemption.
Purpose of Holiday Pay
4.
Ee engaged on task or contract basis or purely
commission basis;
5.
Members of the family of the Er who are
dependent on him for support;
6.
Managerial Ees and other members of the
managerial staff;
7.
Field personnel and other Ees whose time
and performance are unsupervised by the Er;
and
8.
Ees paid Fixed amount for performing work
irrespective of the time consumed in the
performance thereof. (Ibid.)
To secure the payment of undiminished monthly
income undisturbed by any work interruption. In
other words, although the worker is forced to take a
rest, he earns what he should earn, that is, his
holiday pay. (JRC v. NLRC, G.R. No. 65482, 01 Dec.
1987)
Holiday pay is primarily aimed at benefiting the
daily-paid workers whose income is circumscribed
by the principle of "no-work, no pay." Prior to the
enactment of the Labor Code, daily paid workers
were not paid for unworked regular holidays.
On the other hand, monthly-paid employees do not
suffer any reductions in pay for not working during
such holidays. The law on holiday pay is thus
conceived to be the countervailing measure to
partially offset the disadvantages inherent in the
daily compensation system of employment. (Poquiz,
2012)
Retail Establishments
They are engaged in the sale of goods to end users
for personal or household use. (e.g., Grocery)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
52
Labor Law and Social Legislation
Legal Holiday
NOTE: RH falling within temporary or periodic
shutdown and temporary cessation of work are
compensable. However, if the temporary or periodic
shutdown and cessation of work is due to business
reverses, the Er may not pay the Ees during such
period.
It is a day designated or set apart by the legislature,
for a purpose within the meaning of the term
"holiday" to commemorate an important event.
Regular Holidays (RH)
Muslim Holidays (MH)
GR: They are compensable whether worked or
unworked subject to certain conditions. They are
also called legal holidays.
1. Amun Jadid (New Year) – falls on the first day
of the first lunar month of Muharram;
XPN: A legal holiday falling on a Sunday creates no
legal obligation for the Er to pay extra, aside from
the usual holiday pay, to its monthly-paid
employees.
(Wellington
Investment
and
Manufacturing Corporation v. Trajano et al., G.R. No.
114698, 03 July 1995)
HOLIDAY
2. Maulid-un-Nabi (Birthday of the Prophet
Muhammad) falls on the 12th day of the third
lunar month of Rabi-ul-Awwal; and
3. Lailatul Isra Wal Mi'raj (Nocturnal Journey
and Ascension of the Prophet Muhammad) –
falls on the 27th day of the seventh lunar month
of Rajab. (Art. 169, P.D. 1083)
DATE
REGULAR HOLIDAYS
1.
New Year’s Day
2.
Araw ng Kagitingan
3.
Maundy Thursday
Movable date
4.
Good Friday
Movable date
5.
Labor Day
6.
Independence Day
7.
National Heroes Day
8.
Eid’l Fitr
Movable date
9.
Eid’l Adha
Movable date
10. Bonifacio Day
November 30
11. Christmas Day
December 25
12. Rizal Day
December 30
NOTE: Muslim holidays shall be officially observed
in the Provinces of Basilan, Lanao del Norte, Lanao
del Sur, Maguindanao, North Cotabato, Sultan
Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and
Zamboanga del Sur, and in the Cities of Cotabato,
Iligan, Marawi, Pagadian, and Zamboanga and in
such other Muslim provinces and cities as may
hereafter be created. Upon proclamation by the
President of the Philippines, Muslim holidays may
also be officially observed in other provinces and
cities.
January 1
Monday nearest
April 9
May 1
June 12
Last Monday of
August
Determination of Eid’l Fitr and/or Eid’l Adha
The proclamation declaring a national holiday for
the observance of Eid’l Fitr and/or Eid’l Adha shall
be issued:
1.
SPECIAL (NON-WORKING) HOLIDAYS
1.
Ninoy Aquino Day
2.
All Saints Day
3.
Feast of Immaculate
Conception of Mary
(R.A. No. 10966)
December 8
Last day of the year
December 31
4.
August 21
After the approximate date of the Islamic
holiday has been determined in accordance
with the:
November 1
a.
b.
c.
Islamic Calendar (Hijra); or
Lunar Calendar; or
Upon astronomical calculations,
Whichever is possible or convenient.
5. Other holidays declared by law and ordinance
53
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
2.
The Office of Muslim Affairs shall inform the
Office of the President on which day the
holiday shall fall. (Proclamation 295, Series of
2011 by President Benigno Aquino III)
Regular Holiday vs. Special Holiday
REGULAR HOLIDAY
SPECIAL HOLIDAY
If unworked
Compensable, subject
to certain conditions
A Christian Ee working within the Muslim area
cannot be compelled to work during Muslim
holiday
Not compensable
If worked
All workers, Muslims and Christians, working
within the Muslim area are entitled to holiday pay
on Muslim holidays. (SMC v. CA, G.R. No. 146775, 30
Jan. 2002)
Muslim Ee working outside the Muslim area
cannot be compelled to work during the
observance of the MH
Rate is 200% of the
regular rate
Additional 30%
premium pay of 100%
RW
Limited to the 12
holidays provided in
the Labor Code
Not exclusive; law or
ordinance may
provide for other
special holidays
Formula to Compute Wage on Holidays (M.C. No.
01, Series of 2004)
GR: Muslim Ees shall be excused from work during
MH without diminution of salary or wages.
1.
XPN: Those who are permitted or suffered to work
on MH are entitled to at least 100% basic pay +
100% as premium of their basic pay. (SMC v. CA, G.R.
No. 146775, 30 Jan. 2002)
Rule as to payment of regular Muslim holidays
There is no distinction between Muslims and non–
Muslims as regards payment of benefits for Muslim
holidays. Muslims throughout the Philippines are
also entitled to holiday pay on Christian holidays
declared by law as regular holidays. Wages and
other emoluments granted by law are determined
on the basis of the criteria laid down by laws and
certainly not on the basis of the worker's faith or
religion. The law on holiday pay knows no religion.
(SMC v. C.A., G.R. No. 146775, 30 Jan. 2002)
Regular Holiday
a. If it is employee’s regular workday
i. Unworked – 100%
ii. Worked
1. First Eight hours – 200%
2. Excess of Eight hours – plus
30% of hourly rate on said day.
b. If it is employee’s rest day
i. Unworked – 100%
ii. Worked
1. First Eight hours – plus 30% of
200%
2. Excess of Eight hours –plus
30% of hourly rate on said day
Regular Holiday
Unworked
100%
Regular
Workday
Worked
First 8 hrs
Excess of 8 hrs
200%
plus 30% of
hourly rate on
said day
Unworked
Rest Day
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
54
100%
Labor Law and Social Legislation
Worked
First 8 hrs
First 8 hrs
plus 30% of
200%
2.
Unworked
None
plus 30% of
hourly rate on
said day
Rest Day
plus 50% of the
daily rate of
100%
For declared Special Holidays, such as Special
Non-Working Day, Special Public Holiday,
Special National Holiday in addition to the 3
nationwide special non-working days:
a.
a.
b.
ii. Worked
1. First Eight hours – plus 30% of
daily wage rate of 100%
2. Excess of Eight hours – plus
30% of hourly rate on said day
The Ee should not have been absent without pay on
the working day immediately preceding the RH.
Monthly Paid vs. Daily Paid Employees
i. First Eight hours – plus 50% of the
daily rate of 100%
ii. Excess of Eight hours - plus 30% of
hourly rate on said day
MONTHLY PAID EEs
One whose wage or
salary is being paid
every day of the month,
including rest days,
Sundays, regular or
special days, although
he does not regularly
work on these days.
Special Holiday
Unworked
GR: No Pay.
XPN: favorable
1. company policy
2. practice
3. CBA
Not excluded from
benefit of holiday pay.
granting payment of wages on
special days even if unworked
Worked
First 8 hrs
Excess of 8 hrs
plus 30% of
daily wage rate
of 100%
For work performed, an employee is
entitled only to his basic rate.
No premium pay is required since work
performed on said days is considered
work on ordinary working days.
Important condition that should be met in order
to avail/receive the Single Holiday Pay
If it is employee’s rest day and worked:
Regular
Workday
plus 30% of
hourly rate on
said day
3. For those declared as special working
holidays, the following rules shall apply:
If it is employee’s regular workday:
i. Unworked – no pay unless there is a
favorable company policy, practice
or CBA granting payment of wages
on special days even if unworked.
b.
Worked
First 8 hrs
First 8 hrs
DAILY PAID EEs
One whose wage or
salary is being paid
only on those days he
actually
worked,
except in cases of
regular or special days,
although he does not
regularly work on
these days.
(In Re: United South Dock handlers, Inc., Opinion of
the Bureau of Working Conditions, 23 Nov. 1987)
plus 30% of
hourly rate on
said day
55
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
The amount of holiday pay of a part-timer is to be
determined on a case-to-case basis. The basis is
any of the following, whichever yields the highest
amount:
HOLIDAY PAY OF CERTAIN EMPLOYEES
Private School Teachers (Faculty Members of
Colleges and Universities)
1.
RH during semestral vacations – not
entitled to holiday pay.
RH during Christmas vacation – entitled to
holiday pay.
1.
2.
Christmas breaks do not represent a break in the
academic calendar. It is something that falls within
the semester; while a semestral break is a break in
the middle of the academic calendar.
3.
2.
4.
Hourly-Paid Teachers
1.
No pay on regular holidays including
Christmas and semestral vacations; but,
The regular wage per day;
The basic wage on the working day preceding
the regular holiday if the employee is present
or on leave with pay on the last working day
immediately prior to the regular holiday;
The average of his basic wages for the last
seven working days for employees who are
paid by results; or
The basic wage on the particular holiday, if
worked. (DOLE Explanatory Bulletin on PartTime Employment, 02 Jan. 1996)
Piece-Rate Workers
A piece-rate employee is entitled to holiday pay.
2.
With pay on special public holidays and other
no-class days when classes are called off or
shortened on account of floods, typhoons,
rallies and the like, whether extension days
be ordered or not. (Jose Rizal College v. NLRC,
G.R. No. 65482, 01 Dec. 1987)
Where a covered employee is paid by results or
output, his holiday pay shall not be less than his
average daily earnings for the last seven actual work
days immediately preceding the regular holiday.
Provided, Holiday pay shall not be less than the
statutory minimum wage rate. (Sec. 8, Rule IV, Book
III, IRR)
In case of extensions, said faculty teachers shall
likewise be paid their hourly rates should they teach
during said extensions. (ibid.)
Seasonal Workers
In the event extensions are called for, they are also
entitled to their pay for the extended days.
Seasonal workers may not be paid the required
Holiday pay during off-season where they are not at
work. (Sec. 8, Rule IV, Book III, IRR)
Field Personnel
The employment relationship is deemed to be
suspended during the off-season for seasonal
workers.
Field personnel are not entitled to holiday pay.
The law requires that the actual hours of work in the
field be reasonably ascertained. Field Personnel’s
actual hours of work in the field cannot be
determined with reasonable certainty. (Union of
Filipro Employees v. Vivar, Jr., et al., G.R. No. 79255,
20 Jan. 1992)
Workers having No Regular Work Days
They shall be entitled to holiday pay. (Sec. 8, Rule IV,
Book III, IRR)
Q: Are the school faculty who according to their
contracts are paid per lecture hour entitled to
unworked holiday pay?
Part-Time Worker
If the work is partial, the pay should also be partial.
(Azucena, 2016)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
56
Labor Law and Social Legislation
A:
1. If during RH – NO. Art. 94 of the LC is silent
with respect to faculty members paid by the
hour who because of their teaching contracts
are obliged to work and consent to be paid only
for work actually done (except when an
emergency or a fortuitous event or a national
need calls for the declaration of special
holidays). (Jose Rizal College v. NLRC, G.R. No.
65482, 01 Dec. 1987)
2.
Double Holiday Pay
When two RHs fall on the same day, the following
rates apply:
If during special public holidays – YES. The
law and the IRR governing holiday pay are
silent as to payment on special public holidays.
Be it noted that 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.
WEDNESDAY
MAUNDY
THURSDAY &
ARAW NG
KAGITINGAN
RATE
Present
Unworked
200%
LOA w/pay
Unworked
200%
LOA w/ pay
Worked
Authorized
absence
Worked
Authorized
absence
Worked and day
is Rest Day
300%
(at least)
300%
(at least)
390%
(+30% of each
3 100%)
Concept of Successive Regular Holidays
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. (Ibid.)
Rule when Two Regular Holidays fall on the
same day (Double Holiday Pay)
If two regular holidays fall on the same day (such as
Maundy Thursday or Good Friday falling on
Araw ng Kagitingan [April 9]), the employees
should be paid 400% of the basic wage for both
holidays, provided he worked on that day or was on
leave of absence with pay or was on authorized
absence on the day prior to the regular holiday.
WEDNESDAY
MAUNDY
THURS
GOOD
FRIDAY
Worked
LOA
w/pay
LOA w/o
pay
RH
RH
ENTITLED
TO
HOLIDAY
PAY
Yes. Both
RH
RH
Yes. Both
RH
RH
No. Both
RH
Yes. Only to
holiday pay
on Friday.
LOA w/o
pay
Worked
Conditions for an Employee to be Entitled to
Two (2) Successive Holiday Pays
On the day immediately preceding the first RH, he
must be:
Holiday pay is a statutory benefit demandable
under the law. Since a worker is entitled to the
enjoyment of 10 paid regular holidays (Art. 94, LC),
the fact that two holidays fall on the same date
should not operate to reduce to nine the ten-holiday
pay benefits a worker is entitled to receive. (Asian
Transmission Corp v. CA, G.R. No 144664, 25 Mar.
2004)
57
1.
Present (worked); or,
2.
On LOA with pay. (Sec. 10, Rule IV, Book III,
IRR)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
establishment, as when a yearly inventory or
when the repair or cleaning of machineries
and equipment is undertaken, the regular
holidays falling within the period shall be
compensated.
If the above stated conditions are not met
He must work on the first RH to be entitled to
holiday pay on the second RH. (ibid.)
CONCEPT OF ABSENCES: Effects of absences on
holiday pay; successive regular holiday
1.
2.
2.
All covered employees shall be entitled to
holiday pay when they are on leave of absence
with pay on the workday immediately
preceding the regular holiday. Employees who
are on leave of absence without pay on the day
immediately preceding a regular holiday may
not be paid the required holiday pay if they do
not work on such regular holiday.
The regular holiday during the cessation of
operation of an enterprise due to business
reverses as authorized by the SOLE may not be
paid by the Er. (Sec. 7, Rule IV, Book III)
Deferment of Holiday Pay (for year 2020)
In various labor advisories issued by the DOLE in
2020, namely, Advisories 13A, 15, 20, 22, 25, 27, and
29, the DOLE authorized the deferment, not
exemption, of the payment of holiday pay on
account of the national emergency arising from the
COVID-19 situation.
Ers shall grant the same percentage of the
holiday pay as the benefit granted by
competent authority in the form of employee’s
compensation or social security payment,
whichever is higher, if the employees are not
reporting for work while on such leave
benefits.
In Advisory 31, the DOLE has ordered the Ers who
chose to defer holiday payment to make payment of
those holiday pay on or before 31 Dec. 2020.
5. SERVICE CHARGES
3.
4.
Where the day immediately preceding the
holiday is a non-work day in the establishment
or the scheduled rest day of the employee,
he/she shall not be deemed to be on leave of
absence on that day, in which case he/she shall
be entitled to the holiday pay if he/she worked
on the day immediately preceding the nonwork day or rest day.
These are charges collected by hotels, restaurants
and similar establishments distributed completely
and equally among the covered workers except
managerial employees. (Art. 96, LC as amended by
Sec. 1, R.A. No. 11360)
Covered Employees
Where there are two (2) successive regular
holidays, like Maundy Thursday and Good
Friday, an employee may not be paid for both
holidays if he/she absents himself/herself
from work on the day immediately preceding
the first holiday, unless he/she works on the
first holiday, in which case he/she is entitled to
his/her holiday pay on the second holiday.
(Handbook on Workers’ Statutory Monetary
Benefits, Bureau of Working Conditions, 2016)
GR: All Ees are covered, regardless of their position,
designation, and employment status, irrespective of
the method by which their wages are paid.
NOTE: Applies only to hotels, restaurants and
similar establishment collecting service charges.
XPN: Managerial Ees (Sec. 2, Rule IV, Book III, IRR)
Distribution
Previously, all service charges collected by covered
Ers are required to be distributed at the rate of 85%
for all covered employees and 15% for
management.
Effects of Business Closure on Holiday Pay
1.
In case of temporary or periodic shutdown and
temporary cessation of work of an
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
58
Labor Law and Social Legislation
R.A. No. 11360 amended Art. 96 of the LC wherein
the former provides that all service charges
collected by hotels, restaurants and similar
establishments shall be distributed completely and
equally among the covered workers except
managerial employees.
6. 13th MONTH PAY
13th Month Pay or its Equivalent
It is a form of monetary benefit equivalent to the
monthly basic compensation received by an
employee, computed pro-rata according to the
number of months within a year that the employee
has rendered service to the Er. (DOLE’s BWC issues
Q & A on 13th month pay)
Frequency of Distribution
The period is not less than once every two weeks or
twice a month at intervals not exceeding 16 days.
(Sec. 4, Rule VI, Book III, R.A. No. 11360, IRR)
The term “and its equivalent”
Jurisprudence has interpreted the term “its
equivalent” to approximate the legal requirement
in all respects. If the grant is at variance with the
law, it is regarded as a contractual obligation
distinct from the legal obligation.
Service Charge vs. Tips
SERVICE CHARGE
TIPS
Collected
by
the
management from the
customers.
Voluntary payments
made by the customers
to the Ees for excellent
service.
The grant must reflect the same intent as the law,
namely, magnanimity. If the bonus is provided in
graduated amounts depending on the length of
service of employees, its purpose is to give bigger
awards to long-service employees, which is a
purpose not found in the law. Hence the provision is
meant to be in addition to the legal requirement.
(United CNC Textile Workers Union vs. Valenzuela,
G.R. No. 70763, 30 Apr. 1987; Universal Corn Products
vs. NLRC, G.R. No. L-60337, 21 Aug. 1987)
Tips
Tips are handled similarly as service charges.
Pooled tips should be monitored, accounted, and
distributed in the same manner as the service
charges.
A waiter must drop in a tip box the tips he received.
Otherwise, he commits “tip pocketing”, a serious
offense of dishonesty that may cost him his job.
Formula and Computation of 13th Month Pay
Total basic salary
earned during the year
= 13th month pay
12
Rule if Service Charge Is Abolished
If it is abolished, the share of the covered Ees shall
be considered integrated in their wages on the basis
of the average monthly share of each Ees for the past
12 months immediately preceding the abolition.
(Sec. 5, Rule V, Book III, IRR)
Illustration:
Using the basic wage in the National Capital Region
at P502.00 (from January 1, 2018 to November 21,
2018) and P537.00 (from November 22, 2018 to
December 31, 2018) per day and a six-day
workweek or an equivalent Monthly Basic Salary of
P12,466.33 and P13,290.75, respectively, to wit:
NOTE: Service charges form part of the award in
illegal dismissal cases.
Compliance with Minimum Wage
January
February
Service charges paid to the covered Ees shall not be
considered in determining the Er’s compliance with
the increased minimum wage. (Art. 96, LC as
amended by Sec. 1, R.A. No. 11360)
March
59
no absence
no absence
1
day
leave
w/pay
P12,466.33
P12,466.33
P12,466.33
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
April
no absence
5 days leave w/o
May
pay
2 days leave
June
w/pay
July
no absence
2days
leave
August
w/pay
September no absence
October
on leave w/o pay
November on leave w/o pay
December no absence
Total basic salary earned for
the year
Time of payment of 13th month pay
P12,466.33
Under PD 851, all Ers are required to pay all their
rank-and-file employees, a 13th month pay not later
than Dec. 24 of every year.
P12,466.33
P12,466.33
Absence of CBA provision not a bar in giving 13th
month pay
P12,466.33
P12,466.33
no salary
no salary
P13,290.75
The absence of an express provision in the CBA
obligating the Er to pay the members of a union 13th
month pay is immaterial. Notwithstanding
therefore the absence of any contractual agreement,
the payment of a 13th month pay, being a statutory
grant, is mandatory and is deemed incorporated in
the CBA.
P122,977.72
P122,977.72/12 months = P10,248.14 is the
proportionate 13th month pay.
Nature of 13th Month Pay
(2020 Handbook on Worker’s Statutory Monetary
Benefits)
Such is in the nature of additional income granted to
employees who are not receiving the same. (Agabon
v. NLRC, G.R. No. 158693, 17 Nov. 2004)
Basic Salary
It is based on wage but not part of wage. (Central
Azucarera de Tarlac v. Central Azucarera de Tarlac
Labor Union-NLU, G.R. No. 188949, 26 July 2010)
Includes all remunerations or earnings paid by the
Er to an employee for services rendered including
cost-of-living allowances.
Minimum Period of Service Required
It does not include all allowances and monetary
benefits which are not considered or integrated as
part of the regular or basic salary such as:
1.
2.
3.
4.
5.
6.
It is imposed as a ‘minimum service requirement’
that the employee should have worked for at least
one (1) month during a calendar year. (No. X[A],
DOLE Handbook on Workers Statutory Monetary
Benefits)
Cash equivalent of unused vacation and sick
leave credits;
Overtime pay;
Premium pay;
Night Shift Differential;
Holiday pay; and
Commissions
Persons Covered by PD 851
1.
GR: All rank-and-file Ees are covered by PD 851
regardless of the amount of basic salary that they
receive in a month, if their Ers are not otherwise
exempted from paying the 13th month pay. Such
Ees are entitled to the 13th month pay regardless
of said designation of employment status, and
irrespective of the method by which their wages
are paid.
XPN: If it is an integral part of the basic salary.
(Philippine Duplicators, Inc. v. NLRC, G.R. No.
110068, 15 Feb. 1995)
These salary-related benefits should be included in
the computation of the 13th moth pay if by
individual or collective agreement, company
practice or policy, the same are treated as part of the
basic salary of the employees.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Employees
60
Labor Law and Social Legislation
Provided, that they have worked for at least one
month, during a calendar year. (Revised Guidelines
on the Implementation of the 13th Month Pay Law)
iv. Fixed amount for performing a specific
work irrespective of the time
consumed in the performance thereof.
XPNs:
a. Government Ees;
b. Ees paid purely on commission basis;
c. Ees already receiving 13th month pay;
d. Managers; and
e. Seafarers
XPN: Where the workers are paid on a
piece-rate basis, in which case, the Er shall
be covered by the Revised Guidelines
insofar as the workers are concerned.
NOTE: Piece-Rate Workers refer to those
who are paid a standard amount for every
piece or unit of work produced that is more
or less regularly replicated without regard
to the time spent in producing the same.
NOTE: Managerial employees may receive 13th
month pay if they are granted under an
employment contract or a company policy or
practice. (Chan, 2019)
2.
d.
Employers
GR: All Ers are covered by PD 581.
XPNs:
a. The Government and any of its political
subdivisions, including GOCCs;
XPN to this XPN: Corporations operating
essentially as private subsidiaries of the
Government.
b.
c.
Ers already paying their Ees 13th month pay
or more in a calendar year in its equivalent
at the time of the issuance of the Revised
Guidelines;
Distressed Ers:
i. Currently incurring substantial losses;
or
ii. In the case of non-profit institutions
and organizations, where their income,
whether
from
donations,
contributions, grants and other
earnings from any source, has
consistently declined by more than
40% of their normal income for the last
two (2) years, subject to the provision
of Sec. 7 of P.D. 851.
Domestic workers or kasambahays
Previously, not covered by 13th month pay law are
Ers of household helpers and persons in the
personal service of another in relation to such
workers. However, R.A. No. 10361 is now explicit in
its commandment that a domestic worker or
kasambahay is entitled to 13th month pay as
provided by law. (Sec. 25, Art. IV, R.A. No. 10361,
otherwise known as the “Domestic Workers Act”)
Ers of those who are paid on purely basis of:
i. Commission;
NOTE: Bus drivers and conductors who are
paid a fixed or guaranteed minimum wage,
in case their commission be less than the
statutory minimum, are entitled to a 13thmonth pay equivalent to one-twelfth of
their total earnings during the calendar
year. (Philippine Agricultural Commercial
and Industrial Workers Union v. NLRC, G.R.
No. 107994, 14 Aug. 1995)
Options of covered Ers
ii. Boundary; or
iii. Task; and
61
1.
Pay 1/2 of the 13th month pay required before
the opening of the regular school year and the
other half on or before the 24th day of
December of every year.
2.
In any establishment where a union has been
recognized or certified as the CB agent of the
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
3.
4.
Ee, the periodicity or frequency of payment of
the 13th month pay may be the subject of
agreement.
Other types of employment entitled to
month pay
1.
2.
3.
4.
Q: Concepcion Textile Co. included the OT pay,
night-shift differential pay, and the like in the
computation of its Ees’ 13th month pay.
Subsequently, with the promulgation of the
decision of the SC in the case of SMC v. Inciong
(G.R. No. L-49774, 24 Feb. 1981) holding that
these other monetary claims should not be
included in the computation of the 13th Month
Pay, Concepcion Textile Co. sought to recover
under the principle of solutio indebiti the
overpayment of the Ees’ 13th month pay, by
debiting against future 13th month payments
whatever excess amounts it had previously
made.
13th
Part-time Employee; (Item 5[b], Revised
Guidelines of PD 851)
Extras;
Casual Employee; and
Seasonal Employee. (BWC Opinion, 19 Dec.
1987)
Q: What would be your advice to your client, a
manufacturing company, who asks for your
legal opinion on whether or not the 13th Month
Pay Law covers a casual Ee who is paid a daily
wage? (1998 BAR)
a.
A: I will advise the manufacturing company to pay
the casual Ee 13th Month Pay if such casual Ee has
worked for at least one month in a calendar year.
The law on 13th Month Pay provides that Ees are
entitled to the benefit of said law regardless of their
designation or employment status.
A:
1.
Equivalent forms of the 13th month pay
Christmas Bonus;
Midyear Bonus;
Profit Sharing Scheme; and
Other Cash bonuses amounting to not less than
1/12 of its basic salary
NOTE: It must always be in the form of a legal
tender.
2.
Things Not Proper Substitutes For 13th Month
Pay
1.
2.
Free rice;
Electricity;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Is the Company's action tenable?
b. With respect to the payment of the 13th
month pay after the SMC ruling, what
arrangement, if any, must the Company
make in order to exclude from the 13th
month
pay
all
earnings
and
remunerations other than the basic pay?
(1994 BAR)
NOTE: Ees are entitled to the 13th month pay
benefits regardless of their designation and
irrespective of the method by which their wages are
paid. (Jackson Building-Condominium Corp. v. NLRC,
G.R. No. 112546, 14 Mar. 1996)
1.
2.
3.
4.
Cash and stock dividends; and
Cost-of-living Allowance. (Sec. 3, P.D. 85)
62
NO. The Company's action is not tenable. The
principle of solutio indebiti which is a civil law
concept is not applicable in labor law. (Davao
Fruits Corp. v. NLRC, et al., G.R. No. 85073, 24
Aug. 1993) After the 1981 SMC ruling, the
Supreme Court decided the case of Philippine
Duplicators Inc. v. NLRC, G.R. No. 110068, Nov.
15, 1995. Accordingly, management may
undertake to exclude sick leave, vacation
leave, maternity leave, premium pay for
regular holiday, night differential pay and
cost of living allowance.
The company should include sales
commissions based on the settled rule.
(Songco v. NLRC, G.R. No. L-50999, 23 Mar.
1990)
Labor Law and Social Legislation
pay). (Sec. 6, DOLE Revised Guidelines on 13th
Month Pay)
Adjudicated Claims
Non-payment of the 13th month pay provided by
P.D. 851 and the rules of NLRC shall be treated as
money claims cases.
5.
NOTE: Difference of opinion on how to compute the
13th month pay is non-strikeable and a strike held
on that ground is illegal. (Isalama Machine Works
Corp. v. NLRC, G.R. No. 10016, 02 Mar. 1995)
NOTE: In the consolidated cases of Boie Takeda
Chemicals, Inc. v. Dionisio de la Serna, (G.R. No.
92174, 10 Dec. 1993), and Philippine Fuji Xerox
Corporation v. Cresenciano Trajano and Philippine
Fuji Xerox Employees Union, (G.R. No. 102552 10 Dec.
1993), the Supreme Court ruled that commissions,
while included in the generic term wage, are not
part of "basic salary/wage" and therefore, should
not be included in computing the 13th month pay.
Thus:
The following Ees may or may not be entitled to
13th month pay
1.
Ee paid by results - Entitled to 13th month
pay.
NOTE: Ees paid a fixed or guaranteed wage
plus commission are also entitled to the
mandated 13thmonth pay, based on their total
earnings during the calendar year, i.e., on both
their fixed or guaranteed wage and
commission.
2.
Those with Multiple Ers - Government Ees
working part time in a private enterprise,
including private educational institutions, as
well as Ees working in two or more private
firms, whether full or part time basis, are
entitled to the required 13th month pay from
all their private Ers regardless of their total
earnings from each or all their Ers. (Revised
Guidelines on the Implementation of 13th Month
Pay Law)
3.
Private School Teachers, including faculty
members of universities and colleges Entitled 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.
4.
Employees who are paid a fixed or
guaranteed wage plus commission are also
entitled to the 13th-month pay, based on their
earnings during the calendar year (i.e., on both
their fixed or guaranteed wage and
commission).
In remunerative schemes consisting of a fixed
or guaranteed wage plus commission, the fixed
or guaranteed wage is patently the "basic
salary" for this is what the employee receives
for a standard work period. Commissions are
given for extra efforts exerted in
consummating sales or other related
transactions. They are, as such, additional pay,
which this Court has made clear do not form
part of the "basic salary." (Boie-Takeda
Chemicals Inc v. Dela Serna, 10 Dec. 1993)
(Handbook on Workers’ Statutory Monetary
Benefits, Bureau of Working Conditions, 2016)
Application of Pro-Ration of 13th Month Pay
GR: Pro-ration of 13th month pay applies only in
cases of resignation or separation from work;
computation should be based on length of service
and not on the actual wage earned by the worker.
(Honda Phils. v. Samahan ng Manggagawa sa Honda,
G.R. No. 145561, 15 June 2005)
Resigned or Separated Ees – If resigned or
separated from work before the time of
payment of 13th month pay, entitled to
monetary benefits in proportion to the length
of time he started working during the calendar
year up to the time of resignation or
termination of service (Pro-rated 13th month
XPN: Ees who are paid a guaranteed minimum wage
or commissions earned are entitled to 13th Month
Pay based on total earnings. (Philippine Agricultural
Commercial and Industrial Workers Union v. NLRC,
G.R. No. 107994, 14 Aug. 1995)
63
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Agreements, the grant of 14th, 15th and 16th month
bonuses has become more than just an act of
generosity on the part of ETPI, but a contractual
obligation it has undertaken. (ETPI v. ETEU, G.R. No.
185665, 08 Feb. 2012)
14th Month Pay Not Legally Demandable
GR: The granting of 14th month pay is a
management prerogative and is not legally
demandable. It is basically a bonus and is gratuitous
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
75289, 31 Aug. 1989)
Commission in relation to 13th month pay
XPN: A bonus, however, becomes a demandable or
enforceable obligation when it is made part of the
wage or salary or compensation of the employee. If
it is additional compensation which the Er promised
and agreed to give without any conditions imposed
for its payment, such as success of business or
greater production or output, then it is part of the
wage. But if it is paid only if profits are realized or if
a certain level of productivity is achieved, it cannot
be considered part of the wage.
XPN to the XPN: Where it is not payable to all but
only to some employees and only when their labor
becomes more efficient or more productive, it is
only an inducement for efficiency, a prize therefore,
not a part of the wage. (Metro Transit Organization,
Inc. v. NLRC, G.R. No. 116008, 11 July 1995)
Q: ETPI (company) entered into a collective
bargaining agreement with ETEU (union). A side
agreement of the said CBA provided that
company confirms that the 14th, 15th and
16th month bonuses (other than 13th month pay)
are granted. The company then planned to defer
the payment of the 14th, 15th and 16th month
bonuses due continuing deterioration of
company’s financial position. The union
opposed and filed a preventive mediation
complaint before the NCMB. May the company
validly postpone the payment of said bonuses?
The salesman’s commissions, comprising a predetermined percent of the selling price of the
goods sold by each salesman, were properly
included in the term basic salary for purposes of
computing their 13th month pay. These
commissions are not overtime payments, nor
profit-sharing payments nor any other fringe
benefit. Thus, the salesmen's commissions,
comprising a pre-determined percent of the
selling price of the goods sold by each salesman,
were properly included in the term "basic salary"
for purposes of computing their 13th -month
pay. (Philippine Duplicators, Inc. v. NLRC, G.R. No.
110068, 15 Feb. 1995)
b.
The so-called commission received by medical
representatives of BoieTakeda Chemicals or by
the rank-and-file Ees of Phil. Fuji Xerox were
excluded from the term basic salary because
these were paid as productivity bonuses. Such
bonuses closely resemble profit sharing,
payments and have no clear, direct, necessary
relation to the amount of work actually done by
each individual Ee. (Boie-Takeda Chemicals, Inc.
v. Dela Serna, G.R. No. 92174, 10 Dec. 1993)
Productivity Bonus v. Sales Commissions
A productivity bonus is something extra for which
no specific additional services are rendered by any
particular employee and hence not legally
demandable, absent a contractual undertaking to
pay it.
A: NO. A reading of the provision reveals that the
same provides for the giving of 14th, 15th and
16th month bonuses without qualification. There
were no conditions specified in the CBA Side
Agreements for the grant of the benefits contrary to
the claim of ETPI that the same is justified only
when there are profits earned by the company. In
fine, the payment of these bonuses was not related
to the profitability of business operations. Verily, by
virtue of its incorporation in the CBA Side
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
a.
Sales commissions, on the other hand, such as
those paid in Duplicators, are intimately related to
or directly proportional to the extent or energy of an
employee's endeavors. Commissions are paid upon
the specific results achieved by a salesmanemployee. It is a percentage of the sales closed by a
salesman and operates as an integral part of such
64
Labor Law and Social Legislation
raising of livestock or poultry, the culture of fish and
other aquatic products in farms or ponds, and any
activities performed by a farmer or on a farm as an
incident to or in conjunction with such farming
operations, but does not include the manufacturing
and/or processing of sugar, coconut, abaca, tobacco,
pineapple, aquatic or other farm products. (Art. 97
(d), LC)
salesman's basic pay. (Philippine Duplicators, Inc. v.
NLRC, G.R, 110068, 15 Feb. 1995)
B. WAGES
It is the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of
calculating the same, payable by an Er to an Ee
under a written or unwritten contract of
employment:
1.
2.
Wage vs. Salary
The term "wages" as distinguished from "salary",
applies to the compensation for manual labor,
skilled or unskilled, paid at stated times, and
measured by the day, week, month, or season, while
"salary" denotes a higher degree of employment, or
a superior grade of services, and implies a position
of office: by contrast, the term “wages" indicates
considerable pay for a lower and less responsible
character of employment, while "salary" is
suggestive of a larger and more important service.
(Gaa v. Court pf Appeals, G.R. No. L-44169, 03 Dec.
1985)
For work done or to be done, or for services
rendered or to be rendered; and
Includes fair and reasonable value of board,
lodging, or other facilities customarily
furnished by the Er to the Ee as determined by
SOLE.
“Fair and reasonable value” shall not include any
profit to the Er or to any person affiliated with the
Er. (Art. 97(f), LC)
“No Work, No Pay” Principle (Fair Day’s Wage
for a Fair Day’s Labor)
Twin Attributes of Wages
1.
Cash wage takes the form of ready money paid
by the Er for services rendered by the
employee.
2.
Facilities are articles or services customarily
given for the benefit of the employee and are
voluntarily accepted by him.
GR: If there is no work performed by the employee,
without the fault of the Er, there can be no wage or
pay. Burden of economic loss suffered by employee
shall not be shifted to the Er.
XPNs: When the laborer was able, willing and ready
to work but was:
1.
2.
3.
4.
5.
NOTE: The term "wages" also covers all benefits of
the employee under the CBA such as severance pay,
educational allowance, accrued vacation leave
earned but not enjoyed, as well as workmen's
compensation awards and unpaid salaries for
services rendered. (PNB v. Cruz, G.R. No. 80593, 18
Dec. 1989)
Prevented by management;
Illegally locked out;
Illegally suspended;
Illegally dismissed; and
Illegally prevented from working. (Aklan
Electric Coop. v. NLRC, G.R. No. 129246, 10 Jan.
2000)
“Equal Pay for Equal Work” Principle
Agricultural Work refers to all farming activities in
all its branches and includes among others, the
cultivation and tillage of the soil, production,
cultivation, growing and harvesting of any
agricultural or horticultural commodities, dairying,
Persons who work with substantially equal
qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries.
65
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Employees holding the same position and rank are
presumed to be performing equal work. The rule
equal pay for equal work applies whether the
employee is hired locally or abroad. (International
School Alliance of Educators v. Quisumbing, G.R. No.
128845, 01 June 2000)
No Er shall pay the wages of an employee by
means of:
1.
2.
3.
4.
5.
6.
7.
Application of Title
GR: The Title on Wages of the Labor Code applies to
all employees.
NOTE: This prohibition applies even when
expressly requested by the employee.
XPNs:
1. Farm tenancy or leasehold;
2. Household or domestic helpers, including
family drivers and persons working in the
personal service of another;
3. Home workers engaged in needlework or in
any cottage industry duly registered in
accordance with law; (Art. 98, LC)
4. Workers in any duly registered cooperatives
when so recommended by the Bureau of
Cooperative Development and upon approval
of the SOLE;
XPNs: Payment of wages by check or money order
shall be allowed if:
1.
2.
3.
4.
NOTE: Workers of a registered barangay micro
business enterprise are only exempted from the
Minimum Wage Law, not from the Title on Wages of
the Labor Code. (R.A. No. 9178)
Barangay Micro Business Enterprise refers to any
business entity or enterprise engaged in the
production, processing or manufacturing of
products or commodities, including agroprocessing, trading and services, whose total assets
including those arising from loans but exclusive of
the land on which the particular business entity's
office, plant and equipment are situated, shall not be
more than P3,000,000. (R.A. No. 9178)
1. PAYMENT OF WAGES
Forms of Payment
GR: As a general rule, wages shall be paid in legal
tender. (Sec. 1, Rule VIII, Book III, IRR of LC)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Promissory notes;
Vouchers;
Coupons;
Tokens;
Tickets;
Chits; or
Any object other than legal tender.
66
It is customary on the date of the effectivity of
the Code;
Necessary because of special circumstances
as specified in the regulation issued by the
SOLE;
Stipulated in the CBA; (Art. 102, LC) or
Where the following conditions are met:
a. There is a bank or other facility for
encashment within a radius of one (1)
kilometer from the workplace;
b. The Er or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly
from the arrangement;
c. The employees are given reasonable
time during banking hours to
withdraw their wages from the bank
which time shall be considered as
compensable hours worked if done
during working hours; and
d. The payment by check is with the
written consent of the employees
concerned if there is no collective
agreement authorizing the payment of
wages by bank checks. (Sec. 2, Rule VIII,
Book III, IRR of LC)
Labor Law and Social Legislation
NOTE: No Er shall pay his employees 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 employed in said places. (Sec. 4, Rule VIII,
Book III, IRR of LC)
Time of Payment
GR: Wages shall be paid:
1. At least once every two (2) weeks; or,
2. Twice a month at intervals not exceeding 16
days.
XPNs:
1. On account of force majeure or circumstances
beyond the Er’s control, payment shall be
made immediately after such force majeure or
circumstances have ceased;
2.
Requisites of Payment Through Banks
1.
2.
3.
If engaged to perform a task which cannot be
completed in two (2) weeks shall be subject to
the following conditions, in the absence of a
CBA or arbitration award:
a.
b.
That payments are made at intervals not
exceeding 16 days, in proportion to the
amount of work completed;
That final settlement is made upon
completion of the work. (Art. 103, LC)
NOTE: Payment shall be made within the period of
payment of wages fixed by the Labor Code.
Requisites of Payment Through Automated
Teller Machine (ATM)
Place of Payment
1.
GR: At or near the place of undertaking. (Art. 104,
LC)
2.
XPN: Payment in a place other than the workplace
shall be permissible only under the following
circumstances:
1.
3.
When payment cannot be effected at or near
the place of work by reason of the
deterioration of peace and order conditions, or
by reason of actual or impending emergencies
caused by fire, flood, epidemic or other
calamity
rendering
payment
thereat
impossible;
4.
5.
6.
2.
When the Er provides free transportation to
the employees back and forth; and,
7.
3.
Shall be made upon written permission of the
majority of the employees or workers
concerned;
With 25 or more employees; and,
Located within one (1) kilometer radius to a
commercial, savings or rural bank. (Sec. 7, R.A.
No. 6727)
Under any other analogous circumstances;
Provided, that the time spent by the employees
in collecting their wages shall be considered as
compensable hours worked.
67
The ATM system of payment is with the
written consent of the employees concerned;
The employees are given reasonable time to
withdraw their wages from the bank facility
which time, if done during working hours,
shall be considered compensable hours
worked;
The system shall allow workers to receive
their wages within the period or frequency
and in the amount prescribed under the Labor
Code, as amended;
There is a bank or ATM facility within a radius
of one (1) kilometer to the place of work;
Upon request of the concerned Ees, the Er shall
issue a record of payment of wages, benefits
and deductions for a particular period;
There shall be an additional expense and no
diminution of benefits and privileges as a
result of the ATM system of payment; and
The Er shall assume responsibility in case the
wage protection provisions of law and
regulations are not complied with under the
arrangement. (DOLE Labor Advisory, Series of
1996)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Direct Payment of Wages
2. PROHIBITIONS REGARDING WAGES
GR: Wages shall be paid directly to the workers to
whom they are due. (Art. 105, LC)
a. Non-Interference in Disposal of Wages
Er shall not limit or interfere with the freedom of
any employee to dispose of his wages. He shall not
force, compel or oblige his Ees to purchase
merchandise, commodities or other property from
any other person, or otherwise make use of any
store services of such Er or any other person. (Art.
112, LC)
XPNs:
1.
Payment through another person may be
made in cases of force majeure which renders
the payment impossible, provided that such
person is under written authority given by the
worker for the purpose;
2.
Where the Er is authorized in writing by the
employee to pay his wages to a member of
his family;
3.
4.
Civil Code Provisions on Non-Interference in
Disposal of Wages
Art. 1705. The laborer's wages shall be paid in legal
currency.
Where payment to another person of any part
of the employee's wages is authorized by
existing law, including payments for the
insurance premiums of the employee and
union dues where the right to check-off has
been recognized by the Er in accordance with
a collective agreement or authorized in writing
by the individual employees concerned; (Sec.
5, Rule VIII, Book III, IRR of LC; Art. 105, LC) or
Art. 1706. Withholding of the wages, except for a
debt due, shall not be made by the employer.
Art. 1707. The laborer's wages shall be a lien on the
goods manufactured or the work done.
Art. 1708. The laborer's wages shall not be subject
to execution or attachment, except for debts
incurred for food, shelter, clothing and medical
attendance.
In case of death of the employee, the Er may
pay the wages to the heirs without the
necessity of intestate proceedings. When the
heirs are of age, they shall:
a.
b.
Art. 1709. The employer shall neither seize nor
retain any tool or other articles belonging to the
laborer.
Execute an affidavit attesting to their
relationship to the deceased and the fact
that they are his heirs to the exclusion of
all
other
persons;
b. Wage Deduction
GR: No Er, in his own behalf or on behalf of any
person, shall make any deduction from the wages of
his employees. (Art. 113, LC)
In case any of the heirs is a minor, such
affidavit shall be executed in his behalf by
his natural guardian or next of kin;
XPNs:
a. Where the worker is insured with his consent
by the Er; and,
c. Upon presentation of the affidavit to the
Er, he shall make payment to the heirs as
representative of the SOLE. (Sec. 6, Rule
VIII, Book III, IRR of LC)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
b.
68
For union dues, in cases where the right of the
worker or his union to check off has been
recognized by the Er or authorized in writing
by the individual worker concerned. (Art. 113,
LC)
Labor Law and Social Legislation
NOTE: Art. 241(o) of the LC provides that
special assessments may be validly checkedoff provided that there is an individual written
authorization duly signed by every employee.
c.
against wage deduction for absences or tardiness
incurred by the employee.
Check-off
In cases where the Er is authorized by law or
regulations issued by the SOLE:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
Check-off is a system by which union dues and other
assessments are deducted from the employee's
wage by the Er upon authorization from the worker
or by mandate of the law. (Poquiz, 2012)
Deductions for value of meals and
facilities freely agreed upon; (Azucena,
2016)
In case where the employee is indebted
to the Er where such indebtedness has
become due and demandable; (Art. 1706)
In court awards, wages may be subject of
execution or attachment, but only for
debts incurred for food, shelter, clothing,
and medical attendance; (Art. 1703)
Taxes withheld pursuant to the Tax Code;
Salary deduction of a member of a legally
established cooperative; (Sec. 59, R.A. No.
6938)
Deductions for SSS, PhilHealth and PagIBIG premiums;
Deductions for loss or damage; (Art. 114,
LC)
Deductions made with the written
authorization of the Ee for payment to a
third person; (Sec. 13, Rule VIII, Book III,
IRR of LC)
Deductions as disciplinary measures for
habitual tardiness; (Opinion dated 10
Mar. 1975 of the Labor Secretary)
Agency fees. (Art. 259(e), LC)
Duration of Check-Off
The Ees' check-off authorization even if declared
irrevocable, is good only as the employees remain
members of the union concerned, because as such
members they were obliged to pay the
corresponding dues and assessments to their union.
The moment they are separated from and left the
union and joined another labor organization, they
were no longer obliged to pay said dues and
assessments. There would be no longer any reason
or occasion for the company to continue making
deductions. (Phil. Federation of Petroleum Workers
v. CIR, G.R. No. L-26346, 27 Feb. 1971)
Compulsory Check-Off
Check-off may be enforced with the consent of the
Er or by authority in writing by the employees.
When the union and the Er agree, the attitude of the
Ees is immaterial. When the Ees duly authorize the
check-off, the Er's consent is unnecessary and its
recognition of the right is obligatory. (A.L. Ammen
Trans. Co. v. BITEMAA, 91 Phil 649)
The law prohibits the Er from making deductions
from the wages of an employee. The evil sought to
be prevented is to forestall the commission of
unwarranted practices of Ers by making
unnecessary deductions without employee's
knowledge or authorization. (Galvadores v. Trajano,
G.R. No. 70067, 15 Sept. 1986)
Deductions for Absences and
(Principle of No-Work No-Pay)
Agency Fees
It is an amount equivalent to the union dues, which
a non-union member pays to the union because he
benefits from the CBA negotiated by the union.
(See discussion on agency fees under Legitimate
Labor Organizations – page 187)
Tardiness
Deductions for unpaid absences are allowed. An Er
will not be liable for violation of the prohibition
69
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
deductions from the salaries is authorized by law, or
regulations issued by the SOLE. Further, the posting
of cash bonds should be proven as a recognized
practice in the jewelry manufacturing business, or
alternatively, the petitioners should seek for the
determination by the SOLE through the issuance of
appropriate rules and regulations that the policy the
former seeks to implement is necessary or desirable
in the conduct of business.
Deduction to Ensure Employment
The employment contract provides for 25%
deduction from employee's salary representing the
Er's share in procuring job placement for him. The
provision in the contract was contested, but the Er
argued that the employee was already estopped in
complaining about the deduction. The Supreme
Court declared the employment contract illegal and
iniquitous; thus, null and void. (Commando Security
Agency v. NLRC, G.R. No. 95844, 20 July 1992)
d. Prohibition on withholding of wages
Reduction of Workdays; Effect on Wages
It shall be unlawful for any person, directly or
indirectly, to withhold any amount from the wages
of a worker. (Art. 116, LC)
In situations where the Er has to reduce the number
of regular working days to prevent serious losses,
such as when there is a substantial slump in the
demand for his goods or services or when there is
lack of raw materials, the Er may deduct the wages
corresponding to the days taken off from the
workweek, consistent with the principle of “no
work, no pay.” This is without prejudice to an
agreement or company policy which provides
otherwise. (Handbook on Workers’ Statutory
Monetary Benefits, 2016)
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 Er. To sanction such an interpretation
would be contrary to Art. 166 of the Labor Code.
(SHS Perforated Materials, Inc. v. Diaz, G.R. No.
185814, 13 Oct. 2010)
As an exception, Ers usually withhold the release of
the last salary and benefits of terminated or
resigning employees prior to or pending their
compliance with certain clearance procedure.
c. Prohibition against Deposit Requirement
GR: While deductions from the employees’ wages
may be made for cash bonds or deposits, the Er,
however, is not allowed to unilaterally impose upon
its employees the giving of cash bonds or deposits.
Clearance procedure are instituted to ensure that
the properties, real or personal, belonging to the Er
but are in the possession of the separated employee,
are returned to the Er before the employee’s
departure. (Milan v. NLRC and Solid Mills, Inc., G.R.
No. 202961, 04 Feb. 2015)
XPN: If the Er proved and established that it falls
under any of the following:
a.
b.
That it is engaged in such trades, occupations
or business were the practice of making
deductions or requiring deposits is a
recognized one; or
Other Prohibitions
That the cash bond or deposit is necessary or
desirable as determined by the DOLE
Secretary in appropriate rules and
regulations.
In the case of Nina Jewelry v. Montecillo (G.R. No.
188169, 28 Nov. 2011), the court ruled that the
petitioners should first establish that the making of
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
70
1.
Inducing a worker to give up any part of his
wages by force, stealth, intimidation, threat or
by any other means whatsoever without his
consent. (Art. 116, LC)
2.
To make deductions from wages for the benefit
of the Er or his representative as consideration
of a promise of Employment or retention in
employment; (Art. 117, LC)
Labor Law and Social Legislation
3.
4.
Refusal by Er to pay or reduce wages or benefits
in discrimination of any Ee who has filed any
complaint or instituted any proceedings under
the code or has testified or about to testify; (Art.
118, LC) or
3. FACILITIES vs. SUPPLEMENTS
FACILITIES
SUPPLEMENT
As to their Nature
Extra remuneration or
Items of expense
benefits
As to their Inclusion to Wage
Forms part of the wage
Independent of wage
As to their Deductibility
Deductible from the
Not wage deductible
wage
To whose Benefit
For the benefit of the
Granted for the
worker and his family
convenience of the Er
Unlawful for any person to make any statement,
report, or record filed or kept pursuant to the
Code knowing such statement, report or record
to be false in any material aspect. (Art. 119, LC)
Deposit for Loss or Damage
GR: Er shall not 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 Er. (Art.
114, LC)
Facilities as Part of Wages
“Facilities” shall include articles or services for the
benefit of the employee or his family but shall not
include tools of the trade or articles or service
primarily for the benefit of the Er or necessary to the
conduct of the Er’s business. (Sec. 5, Rule VII-A, Book
III, IRR)
XPN: Er is engaged in such trade or business where
the practice of making deductions or requiring
deposits is a recognized one or is necessary or
desirable as determined by the SOLE in appropriate
rules and regulations.
Facilities are items of expense necessary for the
laborer's and his family's existence and subsistence
so that by express provision of law, they form part
of the wage and when furnished by the Er are
deductible therefrom, since if they are not so
furnished, the laborer would spend and pay for
them just the same. (Our Haus Realty Development
Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014)
Requisites for Payment of Loss and Damage
1.
It is clearly shown that the employee is
responsible for the loss or damage;
2.
The employee is given reasonable opportunity
to show cause why deduction should not be
made;
3.
The total amount of such deductions is fair and
reasonable and shall not exceed the actual loss
or damage; and
4.
The deduction from the wages of the employee
does not exceed 20% of his wages in a week.
(Sec. 11, Rule VIII, Book III, IRR of LC)
E.g., Rice ration, housing, recreational facilities,
medical treatment to dependents, school facilities,
cost of light, water, fuel, meals or snacks (Atok Big
Wedge Mutual Benefit Assn. v. Atok Big Wedge
Mining Co., G.R. No. L-7349, 19 July 1955; Mayon
Hotel v. Adana, G.R. No. 157634, 16 May 2005)
Facilities Exclude Profit
The value of facilities should not be more than the
actual cost to the Er of the board, lodging, or other
facilities customarily furnished by him to his Ees.
The "fair and reasonable value" does not include
any profit to the Er or to any persons affiliated with
the Er.
71
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Significance of Determination of Facilities
Beneficial to Er or Ee
Voluntary Acceptance of Facilities
Acceptance of facilities is voluntary, for to compel
the Ee to accept such facilities against his will would
be violative of the fundamental right of Ee to the free
disposal of his wage guaranteed under Art. 112.
(Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997)
It is significant to determine when articles or
services are beneficial to an employee because
those articles or services which are advantageous to
the employee cannot be charged against the cash
wage of an employee. Articles or tools of the trade
that are primarily for the benefit of the Er or
necessary to the conduct of his business cannot be
deducted from the Er's wages because they are not
considered as facilities.
Requirements
Facilities
1.
for
Deducting
Values
Supplements Not Part of Wages
“Supplements” are extra remunerations or
benefits given to or received by laborers over and
above their ordinary earnings or wages.
for
Since they are not considered as part of wages, their
value cannot be deducted from the cash wage of an
Ee.
Proof must be shown that such facilities are
customarily furnished by the trade;
E.g., Vacation leave pay, overtime pay in excess of
the legal rate, profit-sharing benefits, sick pension,
retirement and death benefits, family allowances,
Christmas bonus, war-risk or cost-of-living bonuses
or other bonuses other than those paid as reward
for extra output or time spent on the jobs. (Atok Big
Wedge Mining Co. v. Atok Big Wedge Mutual Benefit
Assoc., G.R. No. L-7349, 19 July 1955)
NOTE: It is important to determine when
facilities are customarily furnished or not, for
the fair and reasonable value of facilities not
customarily furnished cannot be charged
against the cash wage.
For example, a messenger who slept in the
office cannot be charged by the Er for housing
allowance because the office is not a regular
sleeping quarter. On the other hand, housing
quarters are common in a mining industry;
hence, the latter can charge its Ees for housing
quarter. (Mabeza v. NLRC, G.R. No. 118506, 18
Apr. 1997)
2.
3.
Criterion in Determining Whether an Item is a
Supplement or Facility
The criterion is not so much with the kind of the
benefit or item (food, lodging, bonus or sick leave)
given, but its purpose. (State Marine v. Cebu
Seamen’s Assn., G.R. No. L-12444, 28 Feb. 1963)
The provision of deductible facilities must be
voluntarily accepted in writing by the
employee; and,
If it is primarily for the Ee’s gain, then the benefit is
a facility; if its provision is mainly for the Er’s
advantage, then it is a supplement. Again, this is to
ensure that Ees are protected in circumstances
where the Er designates a benefit as deductible from
the wages even though it clearly works to the Er’s
greater convenience or advantage.
The facilities must be charged at fair and
reasonable value. (ibid.)
NOTE: Where the facilities are given free of charge
by the Er and there is no prior agreement to deduct
the cost of said facilities from the wages of the Ees,
the Er cannot subsequently charge the cost of the
facilities or otherwise avail of the order. (Sec. 2(g),
Rule IV, DO 126-13)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Under the purpose test, substantial consideration
must be given to the nature of the Er’s business in
relation to the character or type of work performed
by the Ees involved. (Our Haus Realty Development
Corp. v. Parian, G.R. No. 204651, 06 Aug. 2014)
72
Labor Law and Social Legislation
salary and have long accepted the arrangement.
Is the company's position legally correct? (2013
BAR)
Tips Not Part of Wages; Element of Compulsion
in Tipping
Wage is the remuneration directly paid by the Er to
an Ee. On the other hand, tips are paid directly to an
Ee by the customer; hence, they fall short of the
definition provided in Art. 97.
A: NO. The following requisites were not complied
with:
1.
Although a tip denotes a voluntary act, it lacks the
essential element of a gift, that is, the free bestowing
of a gratuity without consideration. Despite its
apparent voluntariness, there is an element of
compulsion in tipping. (Ace Navigation Co., Inc. v.
C.A., G.R. No. 140364. 15 Aug. 2000)
2.
3.
Status of Food and Lodging, or the Electricity and
Water Consumed by a Hotel Worker
Proof that such facilities are customarily
furnished by the trade;
The provision of deductible facilities is
voluntarily accepted by the Ee; and,
The facilities are charged at the fair and
reasonable value. Mere availment is not
sufficient to allow deduction from Ee’s wages.
(Mayon Hotel & Restaurant v. Adarna, G.R. No.
157634, 16 May 2005)
Gratuity
These are supplements. Considering, therefore, that
hotel workers are required to work different shifts
and are expected to be available at various odd
hours, their ready availability is a necessary matter
in the operations of a small hotel.
It is something given freely or without recompense;
a gift; something voluntarily given in return for a
favor or services.
Gratuity pay is not intended to pay a worker for
actual services rendered. It is a money benefit given
to the workers whose purpose is to reward them in
return for a satisfactory work and efficient service
to the company.
Furthermore, granting that meals and lodging were
provided and indeed constituted facilities, such
facilities could not be deducted without the Er
complying first with certain legal requirements.
(Mabeza v. NLRC, G.R. No. 118506, 18 Apr. 1997)
While it may be enforced once it forms part of a
contractual undertaking, the grant of such benefit is
not mandatory so as to be considered a part of labor
standard law unlike salary, cost-of-livingallowances, holiday pay, leave benefits, etc., which
are covered by the Labor Code. (Azucena, 2016)
Q: Gamma Company pays its regular Ees
P350.00 a day and houses them in a dormitory
inside its factory compound in Manila. Gamma
Company also provides them with three full
meals a day. In the course of a routine
inspection, a DOLE Inspector noted that the
workers' pay is below the prescribed minimum
wage of P426.00 plus P30.00 allowance, and
thus required Gamma Company to pay wage
differentials.
4. MINIMUM WAGE
Regional Minimum Wage
Regional minimum wage refers to the lowest basic
wage rates than an employer can pay his works, as
fixed by the Regional Tripartite Wages and
Productivity Boards (RTWBPs), and which shall not
be lower than the applicable statutory minimum
wage rates. (Sec. 4 (k), Rule 1, NWPC Guidelines No.
01, Series of 2007, 19 June 2007)
Gamma Company denies any liability,
explaining that after the market value of the
company-provided board and lodging are added
to the Ees' P350 cash daily wage, the Ees'
effective daily rate would be way above the
minimum pay required by law. The company
counsel further points out that the Ees are aware
that their food and lodging form part of their
73
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Statutory Minimum Wage
Minimum Wage Non-Negotiable; Non- Waivable
Statutory minimum wage is the lowest wage rate
fixed by law that an Er can pay his workers. (IRR, R.
A. No. 6727) Compensation which is less than such
minimum rate is considered an underpayment that
violates the law. (Azucena, 2016)
The minimum wage fixed by law is mandatory; thus,
it is non-waivable and non-negotiable. The
enactment is compulsory in nature in order to
ensure decent living conditions. (PAM Co. v. PAMEAFFW, G.R. No. L-35254, 29 Jan. 1973)
Purpose
XPNs to the Coverage of Minimum Wage
The purpose of minimum wage law is “to set barrier
below which wages may not fall, in order to develop
competition on a high level of efficient rather than
competition on a low level of wages.”
1.
Household or domestic helpers, including
family drivers and persons in the personal
service of another;
NOTE: Household or domestic workers are
only exempt from the minimum wage
prescribed by wage orders. RA 10361
otherwise known as “Batas Kasambahay”
prescribes the minimum wage for household
or domestic helpers.
The minimum must be fair and just. The "minimum
wage" can by no means imply only the actual
minimum. Some margin or leeway must be
provided, over and above the minimum, to take care
of contingencies, such as increase of prices of
commodities and increase in wants, and to provide
means for a desirable improvement in his mode of
living. (Atok Big Wedge Mining Co., Inc. v. Atok Big
Wedge Mutual Benefit Association, G.R. No. L-5276,
03 Mar. 1953)
2.
Homeworkers
3.
Workers employed in any establishment duly
registered with the National Cottage
Industries and Development Authority
provided that such workers perform the work
in
their
respective
homes;
4.
Workers in any duly registered cooperative
when so recommended by the Bureau of
Cooperative Development and upon approval
of the SOLE. (Sec. 3, Rule VII, Book III, IRR);
Non-Applicability of Estoppel
5.
The acceptance of by an Ee of the wages paid him
without objections does not give rise to estoppel
precluding him from suing for the difference
between the amount received and the amount he
should have received pursuant to a valid minimum
wage law.
Ees of retail and service establishments
regularly employing not more than ten Ees;
(Sec. 4, R.A. No. 6727)
6.
Workers in a duly registered cooperative
when so recommended by the Bureau of
Cooperative Development and upon approval
of the SOLE; (Sec. 2, Rule VII, Book III, IRR)
7.
Workers of a barangay micro business
enterprise. (R.A. No. 7138)
Ability to Pay Immaterial
The Er cannot exempt himself from liability to pay
minimum wages because of poor financial condition
of the company, the payment of minimum wages not
being dependent on the Er’s ability to pay. (Azucena,
2016)
In other words, the law gives the Ee the right to be
paid at least the minimum wage. Such legal right
cannot be waived or given away even if he does not
complain at the time he receives a wage below the
minimum. (Azucena, 2016)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
74
engaged
in
needle-work;
Labor Law and Social Legislation
NOTE: Retail and service establishments must file
an application for exemption with the duly
appropriate Regional Board.
Elements of Wage Distortion
1.
Additional Exemptions
2.
The NWPC Guidelines on Exemption from wage
orders adds categories of exemptible enterprises
such as distressed establishments, new business
enterprises, and establishments adversely affected
by natural calamities.
3.
4.
Wage Orders issued by the wage boards under Arts.
99 and 122 may provide for other exemptions from
the Minimum Wage Law. (Azucena, 2016)
An existing hierarchy of positions with
corresponding salary rates;
A significant change or increase in the salary
rate of a lower pay class without a
corresponding increase in the salary rate of a
higher one;
The elimination of the distinction between the
two (2) groups or classes; and
The WD exists in the same region of the
country. (Alliance Trade Unions v. NLRC, G.R.
No. 140689, 17 Feb. 2004)
In mandating an adjustment, the law did not require
that there be an elimination or total abrogation of
quantitative wage or salary differences; a severe
contraction is enough. (Metrobank v. NLRC, G.R. No.
102636, 10 Sept. 1993)
5. WAGE DISTORTION
Concept
Wage distortion does not arise when a wage order
gives Ees in one branch of a bank higher
compensation than that given to their counterparts
in other regions occupying the same pay scale who
are not covered by said wage order. In short, the
implementation of wage orders in one region but
not in others does not in itself necessarily result in
wage distortion. (Prubankers Association v.
Prudential Bank & Trust Company, G.R. No. 131247,
25 Jan. 1999)
A situation where an increase in prescribed wage
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, LC)
It is the disappearance or virtual disappearance of
pay differentials between lower and higher
positions in an enterprise because of compliance
with a wage order. (P.I. Manufacturing v. P.I.
Manufacturing Supervisors and Foreman, G.R. No.
167217, 04 Feb. 2008)
Wage distortion is applied to voluntary and
unilateral increases by the Er in fixing hiring rates
which is inherently a business judgment
prerogative, then the hands of the Er would be
completely tied even in cases where an increase in
wage of a particular group is justified due to a reevaluation of the high productivity of a particular
group, or as in the present case, the need to increase
the competitiveness of Bankard’s hiring rate. An Er
would be discouraged from adjusting the salary
rates of a particular group of Ees for fear that it
would result to a demand by all Ees for a similar
increase, especially if the financial conditions of the
business cannot address an across-the-board
increase. (Bankard Employees Union-Workers
Alliance Trade Unions v. NLRC, G.R. No. 140689, 17
Feb. 2004)
NOTE: Wage distortion presupposes an increase in
the compensation of the lower pay class in an office
hierarchy without a corresponding raise for high
level Ees in the same region of the country,
resulting in the elimination or severe diminution of
the distinction between the two groups or classes.
(Prubankers Association v. Prudential Bank & Trust
Company, G.R. No. 131247, 25 Jan. 1999)
75
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Q: Bankard, Inc. approved a New Salary Scale
which increased the hiring rates of new
employees. The Bankard Employees Union
pressed the company for the increase in the
salary of its old, regular employees. The
company refused to do so.
Causes
Wage distortions have often been the result of:
1.
2.
3.
Government decreed increases in minimum
wages;
Merger of two companies (with differing
classifications of Ees and different wage rates)
where the surviving company absorbs all the
Ees of the dissolved corporation; or
Wage distortion arose because the effectivity
dates of wage increases given to each of the two
classes of Ees (rank-and-file and supervisory)
had not been synchronized in their respective
CBAs. (Metro Transit Org., Inc. v. NLRC, G.R. No.
116008, 11 July 1995)
The union filed a Notice of Strike on the ground
of discrimination for it claimed that a wage
distortion exists and the company refused to
negotiate to correct the distortions. Is there a
wage distortion brought about by the New
Salary Scale?
A: NO. The union cannot legally obligate Bankard to
correct the alleged “wage distortion” as the increase
in the wages and salaries of the newly -hired was
not due to a prescribed law or wage order. If the
compulsory mandate under Art. 124 to correct wage
distortion is applied to voluntary and unilateral
increases by the employer in fixing hiring rates
which is inherently a business judgment
prerogative, then the hands of the employer would
be completely tied even in cases where an increase
in wages of a particular group is justified due to a reevaluation of the high productivity of a particular
group or the need to increase the competitiveness
of Bankard’s hiring rate.
Where a significant change occurs at the lowest
level of positions in terms of basic wage without a
corresponding change in the other level in the
hierarchy of positions, negating as a result thereof
the distinction between one level of position from
the next higher level, and resulting in a parity
between the lowest level and the next higher level
or rank, between new entrants and old hires, there
exists a wage distortion. (Prubankers Association v.
Prudential Bank & Trust Company, G.R. No. 131247,
25 Jan. 1999)
An employer would be discouraged from adjusting
the salary rates of a particular group of employees
for fear that it would result to a demand by all
employees for a similar increase, especially if the
financial conditions of the business cannot address
an across-the-board increase. (Bankard Employees
Union- Workers Alliance Trade Unions v. NLRC, G.R.
No. 140689, 17 Feb. 2004)
Cases NOT Representative of Wage Distortion
1.
2.
3.
4.
5.
6.
Where the hierarchy of positions based on
skills, length of service and other logical bases
of differentiation was preserved; (Ibid.)
A disparity in wages between Ees holding
similar positions but in different regions;
Where the disparity was simply due to the fact
that the Ees had been hired on different dates
and were thus receiving different salaries;
(Manila Mandarin Employees Union v. NLRC,
G.R. No. 108556, 19 Nov. 1996)
That an Ee was initially hired at a position level
carrying a hiring rate higher than the rates of
others;
That an Ee failed to meet the cut-off date in the
grant of yearly CBA increase; or
That the Ee had been promoted while the
others were not.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Negotiated Wage Increases to Correct Wage
Distortion; Its Interest and Validity
The law recognizes the validity of negotiated wage
increases to correct wage distortion. The legislative
intent is to encourage the parties to solve the
problem of wage distortion through voluntary
negotiations or arbitration, rather than strikes,
lockouts, or other concerted activities of the
employees or the management.
76
Labor Law and Social Legislation
Unilateral grant of wage increase on the part of an
employer is recognized as a means of correcting
wage distortions including wage adjustments under
a collective bargaining agreement. Recognition and
validation of wage increases given by employers
after unilaterally or as a result of collective
bargaining negotiations for the purpose of
correcting wage distortions are in keeping with the
public policy of encouraging employers to grant
wage and allowance increases to their employees
which are higher than the minimum rates of
increases prescribed by statute or administrative
regulation. (Associated Labor Unions - TUCP vs.
NLRC, et al., G.R. No. 109328, 16 Aug. 1994)
The dispute will be
resolved within 10
days from the time the
dispute was referred
to
voluntary
arbitration.
The pendency of the dispute arising from a wage
distortion shall not in any way delay the
applicability of any wage increase prescribed
pursuant to the provisions of law or Wage order.
(Sec. 7, Chapter III, IRR of R.A. No. 6727)
NOTE: Correction of wage distortion may be done
by re-establishing a substantial or significant gap
(not precisely the same amount) between the wage
rates of the differing classes of Ees. (Azucena, 2016)
To compel employers simply to add on legislated
increases in salaries or allowances without regard
to what is already being paid would be to penalize
employers who grant their workers more than the
statutory prescribed minimum rates of increases.
Clearly, this would be counter-productive so far as
securing the interest of labor is concerned. (Metro
Bank & Trust Co. Employees Union v. NLRC, G.R. No.
102636, 10 Sept. 1993)
Non-Strikeablity of Wage Distortion
Wage Distortion is non-strikeable. The legislative
intent that solution of the problem of wage
distortions shall be sought by voluntary negotiation
or arbitration, and not by strikes, lockouts or other
concerted activities of the Ees or management, is
made clear in R.A. No. 6727 issued on July 7, 1989.
(Ilaw at Buklod ng Manggagawa v. NLRC, G.R. No.
91980, 27 June 1991)
Settlement of Wage Distortion
The application of wage increases brought about by
Wage Orders issued by the Board may result in
distortions in the wage structure within the
establishment. The employer and the workers are
mandated by law to resolve such wage distortion
problems in the following manner:
ORGANIZED
ESTABLISHMENT
(with union)
UNORGANIZED
ESTABLISHMENT
(without union)
The Er and the union
shall negotiate to
correct distortion.
The Er and the workers
shall
endeavor
to
correct the distortion.
Any dispute shall be
resolved through a
grievance procedure
under the CBA.
If
it
remains
unresolved, it shall be
dealt with through
voluntary arbitration.
The NLRC shall conduct
continuous
hearings
and decide the dispute
within 20 days from the
time the same was
referred.
6. NON-DIMINUTION OF BENEFITS
GR: Nothing in the Labor Code shall be construed to
eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time
of the promulgation of the Code. (Art. 100, LC)
Benefits being given to Ees cannot be taken back or
reduced unilaterally by the Er because the benefit
has become part of the employment contract,
whether written or unwritten.
XPNs:
1. Correction of error;
2. Contingent benefit or conditional bonus;
3. Wage order compliance;
4. Benefits on reimbursement basis;
5. Reclassification of position;
6. Negotiated benefits; and
Any dispute shall be
settled through the
NCMB.
If
it
remains
unresolved within 10
days it shall be referred
to the NLRC.
77
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
carried out within less than a year would certainly
not qualify as such.”
NOTE: Benefits initiated through negotiation
between Er and Ees, such as those contained in
a CBA are not within the prohibition of Art. 100
because, as products of bilateral contract, they
can only be eliminated or diminished
bilaterally. (Azucena, 2016)
7.
Purpose of Non-Diminution of Benefits
The philosophy behind the law is to prohibit
employers from reducing benefits already enjoyed
by Ees. A contrary rule will corrupt the employer's
mind to abuse and exploit Ees, prostituting the
social justice and protection to labor clauses
enshrined in the fundamental charter.
Productivity incentives
NOTE: If the error is not corrected in a
reasonable time, it ripens into a company
policy and Ees can demand it as a matter of
right.
Thus, a change of method of payment of wages from
monthly to daily will not be allowed if it would
result in reduction of pay. However, if the method
introduced would augment the worker's pay it will
be valid. Reclassification of position of Ees pursuant
to reorganization, without affecting their
compensation is not covered by the proscription.
(Opinion of the SOLE, 07 Oct. 1975)
Applicability of the Rule on Non-Diminution of
Benefits
It is applicable if it is shown that:
1.
2.
3.
4.
Grant of benefit is based on a policy or has
ripened into a practice over a long period;
Practice is consistent and deliberate;
Practice is not due to an error in the
construction or application of a doubtful or
difficult question of law; and
It is done unilaterally by the employer.
An agreement reducing certain labor standards
benefits such as overtime and premium pay violates
Art. 100. Provisions of existing laws are deemed
part of a contract. (Republic Planters Bank v. NLRC,
G.R. No. 117460, 06 Jan. 1997)
However, if there is an impelling reasonable
justification of the diminution or reduction because
of an emergency or exigency, or business losses,
such diminution or reduction would be valid,
provided, it is duly approved by the SOLE or his
duly authorized representative pursuant to Art.
233. (Poquiz, 2012)
The Non-Diminution Rule, however, applies only if
the benefit is based on an express policy, a written
contract, or has ripened into a practice. To be
considered a practice, it must be consistently and
deliberately made by the employer over a long
period of time. (Wesleyan University-Philippines v.
Wesleyan University-Faculty and Staff Assn., G.R. No.
181806, 12 Mar. 2014)
Bonus
NOTE: With regard to the length of time, the
Supreme Court held that jurisprudence has not laid
down any rule requiring a specific minimum
number of years. (Sevilla Trading Co. v. Semana, G.R.
No. 152456, 28 Apr. 2004)
Refers to the payment in excess of regular or
guaranteed wages. It is granted to an Ee for his
tangible contribution to the success of the
employer’s business, without which the employer
may not realize bigger profits. The contribution may
be in the form of an Ee’s commitment to the job, his
industry and loyalty. (Metro Transit Org., Inc. v.
NLRC, G.R. No. 116008, 11 July 1995)
However, in Supreme Steel Corp. v. NMS-IND-APL
(G.R. No. 185556, 28 Mar. 2011), the Court held that,
“While it is true that jurisprudence has not laid
down any rule requiring a specific minimum
number of years in order for a practice to be
considered as a voluntary act of the employer,
under existing jurisprudence on this matter, an act
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
GR: The payment of bonus is a management
function, not a demandable and enforceable
obligation, which cannot be enforced upon the
78
Labor Law and Social Legislation
Any allowance/wage granted under the collective
bargaining agreement cannot be credited to similar
form of benefit that may thereafter be ordained by
the government through legislation. Such portion of
the contract is the "stoplock" gate or known in its
technical term as the "non-chargeability" clause.
(Marcopper Mining Corp. v. NLRC, G.R. No. 103525, 29
Mar. 1996)
employer who may not be obliged to assume the
onerous burden of granting bonuses or other
benefits aside from the Ee’s basic salaries or wages.
(Philippine National Construction Corporation v.
NLRC, G.R. No. 128345, 18 May 1999)
XPN: Bonuses can be demanded as a matter of right
if:
1.
2.
3.
4.
This doctrine was resounded in this manner: the
CBA provides, "It is hereby agreed that these salary
increases shall be exclusive of any wage increase
that may be provided by the law as a result of any
economic change."
Given without any condition; hence, part of
the wage or salary; (Atok Big Wedge Mining
Co., Inc. v. Atok Big Wedge Mutual Benefit
Assn., G.R. No. L-5276, 03 Mar. 1953)
Grant thereof is a result of an agreement such
as the CBA; (Grey v. Insular Lumber, GR No. L535, 28 Sept. 1953)
Given on account of company policy or
practice; (Claparols v. CIR, G.R. No. L-30822, 31
July 1975) or
Grant is mandated by law.
The Supreme Court ruled that the above provision
in the CBA is clear that the salary increases shall not
include any wage increase that may be provided by
law as a result of economic change. The CBA needs
no interpretation as it is not ambiguous. Thus, the
wage increase granted by the petitioner to its Ees
under the CBA cannot be considered as creditable
benefit. (Mindanao Steel Corp. v. Minsteel Free
Workers Organization, G.R. No. 130693, 04 Mar.
2004; UKCEU-PTGWO v. Kimberly Clark Phils, G.R. No.
162957, 06 Mar. 2006)
Bonus Treated as Not Part of Wages
Bonus is not considered part of wages if it is paid
only upon realization of profits or amount of
production or output. (Atok Big Wedge Mining Co.,
Inc. v. Atok Big Wedge Mutual Benefit Assn., G.R. No.
L-5276, 03 Mar. 1953)
Benefit Acquired Through Company Practice
Where the bonus is not payable to all but only to
some Ees and only when their labor becomes more
efficient or more productive, it is only an
inducement for efficiency, a prize therefore, not a
part of the wage. (Poquiz, 2012)
An Ee can demand as a matter of right benefits
granted by the employer for a considerable and long
period of time, as the same may ripen into a
company practice.
If it is a past error that is being corrected, no vested
right may be said arisen nor any diminution of
benefit under Art. 100 of the Labor Code may be said
to have resulted by virtue of the correction. (Globe
Mackay v. NLRC, G.R. No. 74156, 29 June 1988)
Stoplock Gate or Non-chargeability Clause
Having entered into an agreement with its Ees, an
employer may not be allowed to renege on its
obligation under a collective bargaining agreement
should, at the same time, the law grants the Ees the
same or better terms and conditions of
employment. Ee benefits derived from law are
exclusive of benefits arrived at through negotiation
and agreement unless otherwise provided by the
agreement itself or by law. (Meycauayan College v.
Hon. Drilon G.R. No. 81144, 07 May 1990)
Instances of Violation of the Rule on NonDiminution of Benefits
Withdrawal of the following would amount to
diminution of Ee’s existing benefits:
1.
79
Enjoyment of the privilege of commutation of
sick leave benefits into cash equivalent as a
company practice; (Davao Integrated Port
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
2.
3.
days with pay. Leave pay means an Ee gets paid
despite absence from work. (Azucena, 2016)
Stevedoring Services v. Abarquez, G.R. No.
102132, 19 Mar. 1993)
Grant of resignation benefits to a Branch
Manager on the basis of company practice of
applying expired CBA concluded by the
supervisory union; (Republic Planters Bank, v.
NLRC, G.R. No. 79488, 30 Sept. 1988) and
Giving of special bonus as the company's long
and regular practice. (Meralco v. Quisumbing,
G.R. No. 127598, 27 Jan. 1999)
XPNs:
1. Government Ees, whether employed by the
National Government or and any of its
political subdivisions, including those
employed in GOCCs with original charters
or created under special laws;
C. LEAVES
2.
Domestic helpers and persons in the
personal service of another;
3.
Managerial Ees, if they meet all of the
following conditions:
1. SERVICE INCENTIVE LEAVE (SIL)
a.
Their primary duty is to manage the
establishment in which they are
employed or of a department or
subdivision thereof;
b.
They customarily and regularly direct the
work of two or more Ees therein; and
c.
They have the authority to hire or fire
other Ees of lower rank; or their
suggestions and recommendations as to
hiring, firing, and promotion, or any
other change of status of other Ees are
given particular weight.
It is a five-day leave with pay for every Ee who has
rendered at least one year of service whether
continuous or broken. (Art. 95, LC)
Purpose of the law
The stipulation in the contract for the allowance of
a vacation to Ees is merely a recognition by
management and labor that a short interval of
complete rest and relaxation from daily routine
with the benefit of full pay is essential to the mental
and physical well-being of the workmen. (Bencio v.
Joseph Bouder, Inc., 24 So. 2d 398; A.L.R. 2d 352;
Sunripe Coconut Products v. NLU, 97 Phil. 691)
4.
“At least 1 year of service”
Service for not less than 12 months, whether
continuous or broken, reckoned from the date the
Ee started working, including authorized absences
and paid regular holidays unless the working days
in the establishment as a matter of practice or
policy, or that provided in the employment contract
is less than 12 months, in which case said period
shall be considered as one year. (Sec. 3, Rule V, Book
III, IRR)
a.
b.
c.
Right to SIL
GR: Every Ee who has rendered at least one (1) year
of service shall be entitled to a yearly SIL of five (5)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Field personnel and those whose time and
performance is unsupervised by the Er,
including those who are engaged on:
80
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;
5.
Those who are already enjoying this
benefit;
6.
Those enjoying vacation leave with pay of
at least five (5) days; and
Labor Law and Social Legislation
7.
commission basis is only with respect to field
personnel. Ees engaged on task or contract basis
or paid on purely commission basis are not
automatically exempted from the grant of SIL,
unless, they fall under the classification of field
personnel. (Serrano v. Severino Santos, G.R. No.
187698, 09 Aug. 2010)
Those employed in establishments
regularly employing less than 10 Ees. (Sec.
1, Rule V, Book III, IRR)
NOTE: Ees engaged on task or contract basis or paid
on purely commission basis are not automatically
exempted from the grant of service incentive leave,
unless they fall under the classification of field
personnel.
Entitlement of Ees With
Minimum Wage To SIL
If required to be at specific places at specific times,
Ees including drivers cannot be said to be field
personnel despite the fact that they are performing
work away from the principal office of the Ee; as
such they are entitled to SIL. (Autobus Transport
Systems v. Bautista, G.R. No. 156367, 16 May 2005)
Salaries
Above
Ees with salaries above minimum wage are entitled
to service incentive leave. The difference between
the minimum wage and the actual salary received
by the Ees cannot be deemed as their 13th month
pay and SIL pay as such difference is not equivalent
to or of the same import as the said benefits
contemplated by law. (JPL Marketing Promotions v.
CA, G.R. No. 151966, 08 July 2005)
Teachers of Private Schools on Contract Basis
are Entitled to Service Incentive Leave
Excluded Er; Burden of Proof
The Cebu Institute of Technology teaching
personnel cannot be deemed as field personnel
which refers to “non-agricultural Ees who regularly
perform their duties away from the principal place
of business or branch office of the Er and whose
actual hours of work in the field cannot be
determined with reasonable certainty.” (Par. 3, Art.
82, LC); (CIT v. Ople, G.R. No. 70203, 18 Dec. 1987)
One of those excluded from the obligation to grant
SIL are “establishments regularly employing less
than ten workers.” When an Er claims that it falls
within the exception, it is the Er’s duty, not of the
Ees, to prove that there are less than ten Ees in the
company. If it fails to discharge its task, the Er must
be deemed to be covered by the rule,
notwithstanding the Ees’ failure to allege the exact
number of Ees in the corporation. (Murillo, et al. v.
Sun Valley Realty, Inc., G.R. No. 67272, 30 June 1988)
Part-time Workers are Entitled to the Full
Benefit of the Yearly 5-Day Service Incentive
Leave
A part-time worker is entitled to service incentive
leave whether the service within 12 months is
continuous or broken or where the working days in
the employment contract as a matter of practice or
policy is less than 12 months. The availment and
commutation of the same can be proportionate to
the daily work rendered and the regular daily
salary. (DOLE’s Explanatory Bulletin on Part-time
Employment, 02 Jan. 1996)
Entitlement of Terminated Ees to SIL
Entitlement of Piece-Rate Workers To SIL
Piece-rate workers are entitled to the full benefit of
the yearly five-day service incentive leave. Under
P.D. 851 or the SIL Law, the exclusion from its
coverage of workers who are paid on a purely
81
1.
Illegally dismissed Ees – Entitled to SIL until
actual reinstatement. (Integrated Contractor
and Plumbing Works, Inc. v. NLRC, G.R. No.
152427, 09 Aug. 2005)
2.
Legally dismissed Ees – The Ee who had not
been paid SIL from the outset of employment
is entitled only to such pay after a year from
commencement of service until termination of
employment or contract. (JPL Marketing
Promotions v. CA, G.R. No. 151966, 08 July 2005)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Commutability of SIL to monetary equivalent
Who are covered
It is commutable if not used or exhausted at the end
of the year. (Sec. 5, Rule V, IRR) It is aimed primarily
at encouraging workers to work continuously and
with dedication to the company.
Under the new law, maternity leave applies to all
qualified female workers in the:
1.
2.
3.
XPN: R.A. No. 10361 grants SIL to domestic
workers. Their SIL need not be converted to cash or
carried over to succeeding years. (Art. 139, LC)
Public sector;
Private sector; and
Informal economy;
NOTE: Informal economy refers to the selfemployed, occasionally or personally hired,
subcontracted, paid and unpaid family
workers in household, incorporated, and
unincorporated enterprises, including home
workers, micro-entrepreneurs and producers,
and operators of sari-sari store (Sec. 3, R.A. No.
11210);
Basis for cash conversion
The basis shall be the salary rate at the date of
commutation. The availment and commutation of
the SIL may be on a pro-rata basis.
4.
5.
Prescription of SIL
Applying Art. 306 of the Labor Code in light of the
peculiarity of SIL, the three (3)-year prescriptive
period commences, not at the end of the year when
the Ee becomes entitled to the commutation of his
SIL, but from the time when the Er refuses to pay its
monetary equivalent after demand of commutation
or upon termination of the Ees’ services, as the case
may be. (Autobus Transport Systems v. Bautista, G.R.
No. 156367, 16 May 2005)
Voluntary contributors to the SSS; and
National athletes.
Benefits under the EMLL
The benefits under the new law are as follows:
1.
Paid leave benefit granted to a qualified female
worker in the public sector, for the duration
of:
a.
2. EXPANDED MATERNITY LEAVE
R.A. NO. 11210
Date of Effectivity
The Expanded Maternity Leave Law (EMLL) was
signed into law on February 20, 2019 and took
effect on March 11, 2019.
b.
Applicability
2.
The expanded maternity leave applies to all
qualified female workers regardless of civil status,
employment status, and the legitimacy of her
child. (Sec. 3, R.A. No. 11210)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
105 days with full pay for live
childbirth, regardless of the mode of
delivery, and an additional 15 days
paid leave if the female worker
qualifies as a solo parent under R.A. No.
8972 or the “Solo Parents’ Welfare Act
of 2000”; OR
60 days with full pay for miscarriage
and emergency termination of
pregnancy.
Paid leave benefit granted to a qualified female
worker in the private sector covered by the
SSS, including those in the informal
economy, for the duration of:
a. Same as those provided under 1(a) or
1(b);
b. Employed female workers shall receive
full pay which consists of:
82
Labor Law and Social Legislation
Manner of Enjoyment of the Benefit
i. SSS maternity benefit computed
based on their average monthly
salary credit; and
ii. Salary differential to be paid by the
employer, if any.
3.
Enjoyment of maternity leave cannot be deferred
but should be availed of either before or after the
actual period of delivery in a continuous and
uninterrupted manner, not exceeding 105 days, as
the case may be.
An “option” to extend for an additional 30
days without pay in case of live childbirth,
provided that:
a. The employer shall be given due notice;
b. The same must be in writing;
c. It must be given at least 45 days before
the end of the female worker’s maternity
leave;
d. No prior notice is necessary in the event
of a medical emergency, a subsequent
notice to the employer shall suffice.
4.
Paid maternity leave, allowances, and benefits
granted to female national athletes;
5.
Health care services for pre-natal, delivery,
postpartum,
and
pregnancy-related
conditions granted to female workers,
particularly those who are neither voluntary
nor regular members of the SSS, as governed
by the existing rules and regulations of the
PhilHealth.
The maternity leave can be credited as
combinations of prenatal and postnatal leave as
long as it does not exceed 105 days and provided
that compulsory postnatal leave shall not be less
than 60 days.
Frequency of the Grant
Maternity leave shall be granted to a qualified
female worker in every instance of pregnancy,
miscarriage, or ETP, regardless of frequency. (Sec.
4, Rule IV, IRR of R.A. No. 11210)
Grant of Maternity Leave
Termination of Employment.
Benefits
after
Maternity leave with full pay shall also be granted
even if the childbirth, miscarriage, or emergency
termination of pregnancy occurs not more than
fifteen (15) calendar days after the termination
of an Ee’s service, as her right thereto has already
accrued. However, such period is not applicable
when the employment of the pregnant woman
worker has been terminated without just cause.
(Sec. 5, Rule IV, IRR of R.A. No. 11210)
Miscarriage and Emergency Termination of
Pregnancy
"Miscarriage" refers to pregnancy loss before the
20th week of gestation. [Sec. 1(k), Rule II, IRR of R.A.
No. 11210]
Maternity Leave of a Female Worker with
Pending Administrative Case
"Emergency termination of pregnancy" (ETP)
refers to pregnancy loss on or after the 20th week of
gestation, including stillbirth. (Sec. 1(c), Rule II, IRR
of R.A. No. 11210)
The maternity leave benefits granted under RA
11210 and its IRR shall be enjoyed by a female
worker in the public sector and in the private sector
even if she has a pending administrative case. (Sec.
6, Rule IV, IRR of R.A. No. 11210)
Q: Is the option of the 30-day extension without
pay available to all qualified female workers?
Maternity Leave for Female Workers in the
Public Sector
A: NO. The 30-day extension without pay is only
available in cases of live childbirth. Hence, if a
female worker suffers miscarriage or ETP, she is not
entitled to such extension.
Eligibility: Any pregnant female worker in the
government service, regardless of employment
status and length of service
83
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
A: YES. Female contract of service and job order
workers in the government are classified as female
workers in the informal economy. They can claim
maternity leave benefits from the SSS if they have
remitted to the SSS at least three (3) monthly
contributions in the 12-month period immediately
preceding the semester of her childbirth,
miscarriage, or ETP. (Sec. 1, Rule VII, IRR of R.A. No.
11210)
Conditions:
1.
2.
She shall give prior notice to the head of
agency of her pregnancy and her availment of
maternity leave at least 30 days in advance,
whenever possible, specifying the effective
date of the leave.
She shall use the prescribed civil service form
in the filing of the maternity leave application,
supported by a medical certificate.
Consecutive
childbirths
Manner of payment: The female worker shall be
entitled to full pay during maternity leave which
shall be paid by the agency. She shall have the option
to receive full pay either through lump sum
payment or regular payment of salary through
agency payroll. A clearance from money, property
and work-related accountabilities shall be secured
by the female Ee.
and
multiple
In case of overlapping maternity benefit claims, e.g.,
one miscarriage followed by a live childbirth, the
female member shall be granted maternity benefits
for the two contingencies in a consecutive manner.
She shall be paid only one maternity benefit,
regardless of the number of offspring per childbirth
or delivery.
NOTE: In cases of live childbirth, the female worker
in the public sector has the option to use her earned
sick leave credits for extended leave with pay. In
case the sick leave credits are exhausted, the
vacation leave credits may be used. (Sec. 4, Rule V,
IRR of R.A. No. 11210)
Maternity Leave for Female Workers in the
Private Sector
Conditions:
1. She must have at least three (3) monthly
contributions in the twelve-month period
immediately preceding the semester of
childbirth, miscarriage, or ETP.
2. She shall have notified her employer of her
pregnancy and the probable date of her
childbirth, which notice shall be transmitted to
the SSS in accordance with the rules and
regulations it may provide.
Female teachers in the teaching profession may also
avail of maternity leave even during long vacations,
i.e., summer and Christmas vacations, in which case
both the maternity leave benefits and the
proportional vacation pay shall be granted. (Sec. 3,
Rule V, IRR of R.A. No. 11210)
Q: Can local elected and appointed officials, like
barangay officials, avail of the extended
maternity leave?
NOTE: The failure of the pregnant female worker to
notify the employer shall not bar her from receiving
the maternity benefits, subject to guidelines to be
prescribed by the SSS.
A: YES. The coverage of R.A. No. 11210 includes
female workers in the public sector, including the
Local Government Units (LGUs). Their entitlement
to maternity leave benefits is also granted under the
Local Government Code of 1991 and its IRR, and
CSC-DBM Joint Circular No. 1, s. 2004 (Leave Benefits
of Barangay Officials).
Manner of payment: Full payment of the benefit
shall be advanced by the employer within 30 days
from the filing of the maternity leave application.
The 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 (ADSC) for 105 days, 120
days or 60 days, as the case may be.
Q: Can contract of service and job order workers
in government avail of maternity leave under
R.A. No. 11210?
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
pregnancies
84
Labor Law and Social Legislation
Liability of the Employer
NOTE: Average daily salary credit (ADSC) is the
result obtained by dividing the sum of the six (6)
highest monthly salary credits in the twelve-month
period immediately preceding the semester of
contingency by one hundred eighty (180). (Sec. 1
(vi.), SSS Circular No. 2019-009)
The employer shall pay to the SSS damages
equivalent to the benefits which she would
otherwise have been entitled to any of the following
instances:
Salary differential
a.
GR: Employers from the private sector shall pay for
the difference between the full salary and the actual
cash benefits received from the SSS.
b.
XPNs:
1. Those operating distressed establishments;
2. Those retail/service establishments and other
enterprises employing not more than ten (10)
workers;
3. Those
considered
as
micro-business
enterprises and engaged in the production,
processing, or manufacturing of products or
commodities including agro-processing,
trading, and services, whose total assets are
not more than three million pesos; and
4. Those who are already providing similar or
more than the benefits herein provided under
an existing CBA or company policy.
Maternity Leave for Female Workers in the
Informal Economy
Condition: She must have remitted to the SSS at
least three (3) monthly contributions in the 12month period immediately preceding the semester
of her childbirth, miscarriage, or ETP.
Manner of payment: The SSS shall directly pay the
maternity benefit.
NOTE: In the case of self-employed female
members, including OFWs and voluntary SSS
members, the SSS shall directly pay the maternity
benefit.
NOTE: The payment of daily SSS maternity benefits
shall be a bar to recovery of sickness benefits
provided under R.A. No. 11199, for the same period
which daily maternity benefits have been received.
Consecutive
Childbirths
a.
b.
Pregnancies
and
Failure of the employer to remit to the SSS
the required contributions for the female
worker; or
Failure of the employer to transmit to SSS the
female worker’s notification on the fact of
pregnancy and probable date of childbirth.
(Sec. 8, Rule VI, IRR of R.A. No. 11210)
Allocation of Maternity Leave Credits
In case of live childbirth, a qualified female worker
entitled to maternity leave benefits may, at her
option, allocate up to seven (7) days of said
benefits to the child’s father, whether or not the
same is married to the female worker.
Multiple
In case of the overlapping of two (2)
maternity benefit claims, the female member
shall be granted maternity benefits for the
two contingencies in a consecutive manner.
However,
the
amount
of
benefit
corresponding to the period where there is
an overlap shall be deducted from the
current maternity benefit claim.
The female member shall be paid only one
maternity benefit, regardless of the number
of offspring per childbirth or delivery.
In case of death, absence, or incapacity of the child’s
father, the female worker may allocate to an
alternate caregiver, who may be any of the
following upon the election of the mother taking
into account the best interests of the child:
a.
85
A relative within the fourth degree of
consanguinity; or
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
b.
newly-born child.
The current partner, regardless of sexual
orientation or gender identity of the female
worker sharing the same household.
Non-commutation of benefits
The option to allocate maternity leave credits shall
not be applicable in case the female worker suffers
miscarriage or ETP. (Sec. 1, Rule VIII, IRR of R.A. No.
11210)
In the event that the paternity leave benefit is not
availed of, said leave shall not be convertible to
cash. (Sec. 7, IRR of R.A. No. 8187)
Concept of paternity leave benefits
NOTE: The allocated benefit granted to the child's
father under this law is over and above that which
is provided under R.A. No. 8187, or the "Paternity
Leave Act of 1996."
Every married male Ee in the private and public
sectors shall be entitled to a paternity leave of seven
days with full pay for the first four (4) deliveries
of the legitimate spouse with whom he is
cohabiting.
Differences between Maternity Leave under the
SSS and the Expanded Maternity Leave Law
MATERNITY
LEAVE (Sec. 14-A
of R.A. No. 8282)
EXPANDED MATERNITY
LEAVE LAW
(R.A. No, 11210)
60 days for normal
delivery;
78
days
for
caesarean delivery
Minimum of 105 days for
live childbirth, regardless
of mode of delivery
60 days for miscarriage or
ETP
Child
must
legitimate
be
Regardless of the civil
status or legitimacy of the
child
Limited
to
childbirths
4
Daily
maternity
benefit equivalent
to 100% of her
ADSC
NOTE: If the spouses are not physically living
together because of the workstation or occupation,
the male Ee is still entitled to the paternity leave
benefit. (Handbook on Workers’ Statutory Monetary
Benefits, Bureau of Working Conditions, 2020)
Conditions for Entitlement to Paternity Leave
1.
2.
3.
Regardless of frequency of
pregnancy
Full pay which consists of
basic
salary
and
allowances as may be
provided under existing
guidelines
4.
NOTE: In case of miscarriage, prior application for
leave shall not be required. (Sec. 4, IRR of R.A. No.
8187)
3. PATERNITY LEAVE
R.A. NO. 8187
Paternity leave
Crediting of Existing Benefits
It refers to the benefits granted to a married male Ee
allowing him not to report for work for seven (7)
days but continue to earn compensation on
the condition that his spouse has delivered a child
or suffered a miscarriage for purposes of enabling
him to effectively lend support to his wife in her
period of recovery and/or in the nursing of the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
He is a married male Ee at the time of the
delivery of his child;
He is cohabiting with his spouse at the time
she gives birth or suffers a miscarriage;
He has applied for paternity leave 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 or by collective bargaining
agreement; and
His wife has given birth or suffered a
miscarriage. (Sec. 3, IRR of R.A. No. 8187)
1.
86
If the existing paternity leave benefit under the
collective bargaining agreement, contract, or
company policy is greater than seven (7)
calendar days as provided for in R.A. No. 8187,
the greater benefit shall prevail.
Labor Law and Social Legislation
2.
A: Under R.A. No. 8187 or the Paternity Leave Act of
1996, Roger can claim paternity leave of seven (7)
days with full pay if he is lawfully married to Tammy
and cohabiting with her at the time of the
miscarriage.
If the existing paternity leave benefit is less
than that provided in R.A. No. 8187, the Er shall
adjust the existing benefit to cover the
difference. (Sec. 9, IRR of R.A. No. 8187)
NOTE: Where a company policy, contract, or
collective bargaining agreement provides for an
emergency or contingency leave without specific
provisions on paternity leave, the Er shall grant to
the Ee seven (7) calendar days of paternity leave.
(Handbook on Workers’ Statutory Monetary Benefits,
Bureau of Working Conditions, 2020)
Q: Mans Weto had been an Ee of Nopolt
Assurance Company for the last ten (10) years.
His wife of six (6) years died last year. They had
four (4) children. He then fell in love with Jovy,
his co-Ee, and they got married. In October this
year, Weto's new wife is expected to give birth to
her first child. He has accordingly filed his
application for paternity leave, conformably
with the provisions of the Paternity Leave Law
which took effect in 1996.
The allocated benefit granted to the child's father
under the 105-Day Expanded Maternity Leave
Law is over and above that which is provided under
R.A. No. 8187, or the "Paternity Leave Act of 1996."
The HRD manager of the assurance firm denied
his application, on the ground that Weto had
already used up his entitlement under the law.
Weto argued that he has a new wife who will be
giving birth for the first time, therefore, his
entitlement to paternity leave benefits would
begin to run anew. Whose contention is correct,
Weto or the HRD manager? (2005 BAR)
Availment of the Paternity Leave may be After
the Delivery
Paternity leave may be availed after the delivery
without prejudice to an Er’s policy of allowing the
Ee to avail of the benefit before or during the
delivery, provided that the total number of days
shall not be more than seven (7) days for each
covered delivery. (Handbook on Workers’ Statutory
Monetary Benefits, 2020)
A: The contention of Weto is correct. The law
provides that every married male is entitled to a
paternity leave of seven (7) days for the first four (4)
deliveries of the legitimate spouse with whom he is
cohabiting with. The fact that Jovy is his second wife
and that Weto had four children with his first wife is
beside the point. The important fact is that this is the
first child of Jovy with Weto. The law did not
distinguish and we should therefore not distinguish.
Q: Because of the stress in caring for her four (4)
growing
children,
Tammy
suffered
a
miscarriage late in her pregnancy and had to
undergo an operation. In the course of the
operation, her obstetrician further discovered a
suspicious-looking mass that required the
subsequent
removal
of
her
uterus
(hysterectomy). After surgery, her physician
advised Tammy to be on full bed rest for six (6)
weeks. Meanwhile, the biopsy of the sample
tissue taken from the mass in Tammy's uterus
showed a beginning malignancy that required
an immediate series of chemotherapy once a
week for four (4) weeks.
The paternity leave was intended to enable the
husband to effectively lend support to his wife in her
period of recovery and/or in the nursing of the
newly born child. (Sec. 3, RA. No. 8187) To deny
Weto this benefit would be to defeat the rationale
for the law. Moreover, the case of Weto is a gray area
and the doubt should be resolved in his favor.
What can Roger, Tammy's second husband and
the father of her two (2) younger children, claim
as benefits under the circumstances? (2013
BAR)
87
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
2.
4. PARENTAL LEAVE FOR SOLO PARENTS
R.A. No. 8972
Parent left solo or alone with the
responsibility of parenthood due to:
a.
b.
Parental Leave
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), R.A. No. 8972)
NOTE: The law applies to the spouses of
prisoners, whether or not final judgment
has been rendered, provided they are in
detention for a minimum period of one
year.
Parental leave of not more than seven (7) working
days every year shall be granted to any solo parent
Ee who has rendered service of at least one (1) year.
It should be noted that this is in addition to the
legally mandated leaves, namely, the SIL, the SSS
sick leave, the SSS maternity leave and the paternity
leave. (Sec. 8, R.A. No. 8972; Azucena, Vol. 1, 2016, p.
300)
c.
Physical and/or mental incapacity of
spouse as certified by a public medical
practitioner;
d.
Legal separation or de facto separation
from spouse for at least one year year as
long as he/she is entrusted with the
custody of the children;
e.
Nullity or annulment of marriage as
decreed by a court or by a church as long
as he/she is entrusted with the custody of
the children;
f.
Abandonment of spouse for at least one
year;
Conditions for entitlement of parental leave
A solo parent Ee shall be entitled to the parental
leave under the following conditions:
1. He/She has rendered at least one (1) year of
service, whether continuous or broken;
2. He/She has notified his/her Er of the availment
thereof within a reasonable period of time;
3. He/She has presented a Solo Parent
Identification Card to his/her Er which may be
obtained from the DSWD office of the city or
municipality where he/she resides. (Sec. 19,
Art. V, IRR of R.A. No. 8972)
3.
4.
Any individual who falls under any of the ff.
categories:
Having others care for them or
Give them up to a welfare institution;
Any other person who solely provides:
a.
b.
A woman who gives birth as a result of rape
and other crimes against chastity even
without a final conviction of the offender;
Provided, that the mother keeps and raises the
child;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Unmarried mother/father who has
preferred to keep and rear his or her
child/children instead of:
a.
b.
Persons considered a solo parent entitled to
parental leave
1.
Death of spouse;
Detention or service of sentence of
spouse for a criminal conviction for at
least one year;
Parental care; and
Support to a child or children.
Provided, that he/she is a duly licensed foster
parent by the DSWD or duly appointed legal
guardian by the court; and
88
Labor Law and Social Legislation
5.
In the case of Ees in the government service, flexible
working hours will be subject to the discretion of
the head of the agency. In no case shall the weekly
working hours be reduced in the event the agency
adopts the flexible working hours schedule format
(flexi-time). In the adoption of flexi-time, the core
working hours shall be prescribed taking into
consideration the needs of the service. (Sec. 16, Art.
V, IRR, of R.A. No. 8972)
Any family member who assumes the
responsibility of head of family as a result
of the:
a.
b.
c.
d.
Death,
Abandonment,
Disappearance or
Prolonged absence of the parents or solo
parent.
Provided,
that
such
abandonment,
disappearance, or absence lasts for at least one
(1) year. (Sec. 3(a), R.A. No. 8972)
Crediting of Existing Leave
If there is an existing or similar benefit under a
company policy, or a collective bargaining
agreement or a collective negotiation agreement,
the same shall be credited as such. If the same is
greater than the seven (7) days provided for in R.A.
No. 8972, the greater benefit shall prevail. (Sec. 21,
Art. V, IRR of R.A. No. 8972)
Non-Conversion of Parental Leave
In the event that the parental leave is not availed of,
said leave shall not be convertible to cash unless
specifically agreed upon previously. However, if
said leave were denied an Ee as a result of noncompliance with the provisions of these Rules by an
Er, the aforementioned leave may be used a basis for
the computation of damages. (Sec. 20, Art. V, IRR of
R.A. No. 8972)
5. LEAVE BENEFITS FOR WOMEN WORKERS
LEAVE BENEFITS FOR WOMEN WORKERS
UNDER R.A. NO. 9710
Termination of the Benefit
A woman Ee having rendered continuous aggregate
employment service of at least six (6) months for
the last 12 months shall be entitled to a special leave
benefit (SLB) of two (2) months with full pay based
on her gross monthly compensation following
surgery caused by gynecological disorders. (Sec. 18,
R.A. No. 9710)
A change in the status or circumstance of the parent
claiming benefits under this Act, such that he/she is
no longer left alone with the responsibility of
parenthood, shall terminate his/her eligibility for
these benefits. (Sec. 3, R.A. No. 8972)
Protection against Work Discrimination
Conditions for Entitlement
No Er shall discriminate against any solo parent Ee
with respect to terms and conditions of employment
on account of his/her being a solo parent. (Sec. 7,
R.A. No. 8972)
Any female Ee in the public and private sector
regardless of age and civil status shall be entitled to
a special leave of two (2) months with full pay based
on her gross monthly compensation subject to
existing laws, rules and regulations due to surgery
caused by gynecological disorders under such terms
and conditions:
1. She has rendered at least six (6) months
continuous aggregate employment service
for the last 12 months prior to surgery;
2. She has filed an application for special leave;
Flexible Work Schedule
The Er shall provide for a flexible work schedule for
solo parents: Provided, that the same shall not
affect individual and company productivity:
Provided, further, that any Er may request
exemption from the above requirements from the
DOLE on certain meritorious grounds.
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
3.
work and sought to resume her duties and
functions. However, the HRET directed PangaVega to consume her 2-month special leave. Is
Panga-Vega required to consume the entire 2month special leave?
She has undergone surgery due to
gynecological disorders as certified by a
competent physician. (Sec. 2, D.O. 112-A-12)
Gynecological Disorders
A: NO. She is not required to consume the entire
two-month special leave, as the rules on maternity
leave can apply suppletorily. Similar to the special
leave benefit under RA No. 9710, a maternity leave
under the Omnibus Rules on Leave seeks to protect
the health and welfare of women, specifically of
working mothers, as its primary purpose is to afford
them some measures of financial aid, and to grant
them a period of rest and recuperation in
connection with their pregnancies. Nothing in RA
No. 9710 and the CSC Guidelines bar this more
humane interpretation of the provision on special
leave benefit. (HRET v. Panga-Vega, G.R. No. 228236,
27 Jan. 2021)
Refer to disorders that would require surgical
procedures such as, but not limited to, dilatation
and curettage and 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.
For purposes of the Act and these Rules and
Regulations, gynecological surgeries shall also
include
hysterectomy,
ovariectomy,
and
mastectomy. (Sec. 7(M), IRR of R.A. No. 9710)
Gross monthly compensation
Refers to the monthly basic pay plus mandatory
allowances fixed by the regional wage boards.
SLB vs. SSS Sickness Benefit
Frequency of Availment
The former is granted in accordance with RA 9710
while the latter is granted in accordance with the
SSS law or RA 1161 as amended by RA 8282. (Sec. 7,
D.O. 112-A-12)
A female Ee can avail of the special leave benefit for
every instance of surgery due to gynecological
disorder for a maximum total period of two (2)
months per year. (Sec. 6, D.O. 112-A-12)
SLB vs. Existing Statutory Leaves
NOTE:
Special leave benefit (SLB) and SSS
maternity benefit are mutually exclusive, as such a
female Ee may avail the special leave benefit in case
she undergoes surgery caused by gynecological
disorder even on maternity leave. However, where
the woman Ee undergone surgery due to
gynecological disorder during her maternity leave,
she is entitled only to the difference between the
SLB and the maternity benefit. (Sec. 9, D.O. 112-A12)
The SLB cannot be taken from statutory leaves. (i.e.,
five-day SIL, Leave for Victims of VAWC, Parental
Leave for Solo Parents) The benefit is in addition to
the leave benefits granted by existing laws. (Sec. 8,
D.O. 112-A-12)
NOTE: If there are existing or similar benefits under
a company policy or CBA providing similar or equal
benefit to what is mandated by law, the same shall
be considered as compliance unless the company
policy, practice or CBA provides otherwise. (Sec. 10,
DO 112-A-12)
The worker is not required to consume the
entire period of special leave
Q: Atty. Panga-Vega, Secretary of the House of
Representatives Electoral Tribunal, applied for
the special leave benefit under RA9710 as she
was under going to undergo hysterectomy. A
month later, after the procedure, she presented
a medical certificate that she was already fit to
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Mode of Payment
The SLB is a leave privilege. The woman Ee shall not
report for work for the duration of the leave but she
will still receive her salary covering said period. The
Er, in its discretion, may allow said Ee to receive her
90
Labor Law and Social Legislation
LEAVE BENEFITS FOR WOMEN WORKERS
UNDER R.A. NO. 9262
pay for the period covered by the approved leave
before or during the surgery. The computation of
her pay shall be based on her prevailing salary at the
time of the surgery. (Sec. 11, D.O. 112-A-12)
Violence against women and their children
refers to any act or a series of acts committed by any
person against a woman who is his wife, former
wife, or against a woman with whom the person has
or had a sexual or dating relationship, or with whom
he has a common child, or against her child whether
legitimate or illegitimate, within or without the
family abode, which result in or is likely to result in
physical, sexual, psychological harm or suffering, or
economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary
deprivation of liberty. (Sec. 3 (a), R.A. No. 9262)
Non-Commutation of the Benefit
The SLB shall be non-cumulative and nonconvertible to cash unless otherwise provided by a
CBA. (Sec. 12, D.O. 112-A-12)
Crediting of Existing or Similar Benefits
The existing or similar benefits under a company
policy or CBA shall be considered as compliance,
unless the company policy, practice, or CBA
provides otherwise. In case the company policy,
practice or CBA provides lesser benefits, the
company shall grant the difference. (Sec. 10, D.O.
112-A-12)
Leave Entitlement
It allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the
issuance of a protection order. If such victim is an
Ee, she is entitled to a paid leave of up to ten days in
addition to other paid leaves under the Labor Code,
other laws and company policies.
Q: Because of the stress in caring for her four (4)
growing
children,
Tammy
suffered
a
miscarriage late in her pregnancy and had to
undergo an operation. In the course of the
operation, her obstetrician further discovered a
suspicious-looking mass that required the
subsequent
removal
of
her
uterus
(hysterectomy). After surgery, her physician
advised Tammy to be on full bed rest for six (6)
weeks. Meanwhile, the biopsy of the sample
tissue taken from the mass in Tammy's uterus
showed a beginning malignancy that required
an immediate series of chemotherapy once a
week for four (4) weeks. What benefits can
Tammy claim under existing social legislation?
(2013 BAR)
The Ee has to submit a certification from the Punong
Barangay or Kagawad, prosecutor, or clerk of court
that an action under RA 9262 has been filed and is
pending.
For government Ees, in addition to the certification,
the Ee concerned must file an application for leave
citing R.A. No. 9262 as basis.
NOTE: Ee can file for an extended leave from her Er
if the ten-day leave is not enough and when the
necessity arises as specified in the protection order
issued by the barangay or court.
A: Assuming she is employed, Tammy is entitled to
a special leave benefit of two months with full pay
(Gynecological Leave) pursuant to R.A. No. 9710 or
the Magna Carta of Women. She can also claim
Sickness Leave Benefit in accordance with the SSS
Law.
Penalties for Violation
Any Er who shall prejudice the right of the person
under this section shall be penalized in accordance
with the provisions of the Labor Code and Civil
Service Rules and Regulations. Likewise, an Er who
shall prejudice any person for assisting a co-Ee who
is a victim under this Act shall likewise be liable for
discrimination.
91
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Noncumulative/ Non-Conversion to Cash
4.
R.A. No. 6955 or “An Act to Declare Unlawful
the Practice of Matching Filipino Women for
Marriage to Foreign Nationals on Mail Order
Basis” – which bans the “mail-order-bride”
practice for a fee and the export of female labor
to countries that cannot guarantee protection
to the rights of women workers.
5.
R.A. No. 7192 or “Women in Development and
Nation Building Act” – affords women equal
opportunities with men to act and to enter into
contracts, and for appointment, admission,
training, graduation, and commissioning in all
military or similar schools.
6.
R.A. No. 7322 or “An Act Increasing Maternity
Benefits in Favor of Women Workers in the
Private Sector”
7.
R.A. No. 7877 or “Anti-Sexual Harassment
Act”
8.
R.A. No. 8042 or the “Migrant Workers and
Overseas Filipinos Act of 1995” – which
prescribes as a matter of policy, the
deployment of migrant workers, with
emphasis on women, only in countries where
their rights are secure. (Philippine Telegraph
and Telephone Co. v. NLRC, G.R. No. 118978, 23
May 1997)
9.
R.A. No. 9710 or “the Magna Carta of Women”
The availment of the ten-day leave shall be at the
option of the woman Ee, which shall cover the days
that she has to attend to medical and legal concerns.
Leaves not availed of are noncumulative and not
convertible to cash.
Q: Can an Ee apply for the 10-day leave from her
Er just because of a black eye or any
manifestation of abuse?
A: NO. The ten-day leave under the VAWC may only
be availed of if the victim has applied for any
protection order with the intention to file a case
against the assailant.
D. SPECIAL GROUPS OF EMPLOYEES
1. WOMEN
Laws protecting women Workers
1.
The State recognizes the role of women in
nation-building, and shall ensure the
fundamental equality before the law of women
and men. (Sec. 14, Art. II, 1987 Constitution)
2.
The State shall protect working women by
providing safe and healthful working
conditions, taking into account their maternal
functions, and such facilities and opportunities
that will enhance their welfare and enable
them to realize their full potential in the
service of the nation. (Sec. 14, Art. XIII, 1987
Constitution)
3.
10. R.A. No. 9262 or the “Anti-Violence against
Women and Children”
State Policy on Non-Discrimination Against
Women
The State condemns discrimination against women
in all its forms and 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. The State shall accord women the
rights, protection, and opportunities available to
R.A. No. 6725 or “An Act Strengthening the
Prohibition on Discrimination against Women
with Respect to Terms and Conditions of
Employment” – which explicitly prohibits
discrimination against women with respect to
terms and conditions of employment,
promotion, and training opportunities.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
92
Labor Law and Social Legislation
2.
every member of society. (Sec. 2, R.A. No. 9710 or the
Magna Carta of Women)
The State 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 this Act. (Sec. 12, R.A. No.
9710)
Standard of Reasonable Test
Under the standard reasonable test, the Er has the
burden of proof to prove the existence of a
reasonable business necessity that would justify an
employment policy. (Star Paper Corp. v. Simbol, G.R.
No. 164774, 12 Apr. 2006)
a. DISCRIMINATION
1.
2.
Discrimination with respect to the terms and
conditions of employment solely on account of
sex.
a.
Discrimination in pay – Payment of a
lesser compensation including wage,
salary or other forms of remuneration
and fringe benefits, to a female Ee as
against a male Ee;
b.
Discrimination
in
employment
opportunity – favoring a male Ee over a
female Ee with respect to promotion,
assignment,
transfer,
training
opportunities, study and scholarship
grants solely on account of their sexes
(Art. 134, LC);
Dismissing, discriminating or otherwise
prejudice a woman Ee by reason of her being
married. (Art. 134, LC)
Expanded Breastfeeding Promotion Act (R.A. No.
10028)
Sec. 12. Lactation Periods. - Nursing Ees shall be
granted break intervals in addition to the regular
time-off for meals to breastfeed or express milk.
These intervals, which shall include the time it takes
an Ee to get to and from the workplace lactation
station, shall be counted as compensable hours
worked. The Department of Labor and Employment
(DOLE) may adjust the same: Provided, That such
intervals shall not be less than a total of 40 minutes
for every eight (8)-hour working period.
c.
Discrimination in hiring – favoring a
male applicant with respect to hiring
where the particular job can equally be
handled by a woman;
Q: Can an individual, the sole proprietor of a
business enterprise, be said to have violated the
Anti-Sexual Harassment Act of 1995 if he clearly
discriminates against women in the adoption of
policy standards for employment and
promotions in the enterprise? Explain. (2003
BAR)
d.
Discrimination in dismissal – favoring
a male Ee over a female Ee with respect
to dismissal of personnel or the
application of the “last in, first out
principle” or other retrenchment policy
of the Er. (Poquiz, 2012)
A: When an Er discriminates against women in the
adoption of policy standards for employment and
promotion in his enterprise, he is not guilty of
Sexual Harassment. Instead, the Er is guilty of
discrimination against women Ees which is
declared to be unlawful by the Labor Code.
Stipulating, whether as a condition for
employment or continuation of employment:
For an Er to commit Sexual Harassment, he—as a
person of authority, influence or moral
ascendancy—should have demanded, requested or
otherwise required a sexual favor from his Ee
whether the demand, request or requirement for
submission is accepted by the object of said act.
a.
b.
That a woman Ee shall not get married;
or
That upon marriage, such woman Ee
shall be deemed resigned or separated.
(Art. 134, LC)
93
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
competitors, employed Tecson as a medical
representative. Tecson married Bettsy, a Branch
coordinator in one of Glaxo’s competitors.
Tecson was then transferred to another area but
he did not accept such transfer. Is the policy of
Glaxo valid and reasonable so as to constitute
the act of Tecson as willful disobedience?
b. STIPULATION AGAINST MARRIAGE
It shall be unlawful for the Er to:
1. Require as a condition of employment or
continuation of employment that a woman Ee
shall not get married;
2. Stipulate expressly or tacitly that upon getting
married, a woman Ee shall be deemed resigned
or separated; or
3. Actually dismiss, discharge, discriminate or
otherwise prejudice a woman Ee merely by
reason of her marriage. (Art. 134, LC)
A: YES. The prohibition against personal or marital
relationships with Ees of competitor companies
upon Glaxo’s Ees is reasonable under the
circumstances because relationships of that nature
might compromise the interest of the company.
Glaxo does not impose an absolute prohibition
against relationships between its Ees and those of
competitor companies. Its Ees are free to cultivate
relationships with and marry persons of their own
choosing. What the company merely seeks to avoid
is a conflict of interest between the Ee and the
company that may arise out of such relationships.
Furthermore, the prohibition forms part of the
employment contract and Tecson was aware of such
restrictions when he entered into a relationship
with Bettsy. (Duncan Assoc. Of Detailman-PTGWO v.
Glaxo Wellcome Phil. Inc., G.R. No. 162994, 17 Sept.
2004)
No-Spouse Employment Policy
It is a policy banning spouses from working in the
same company. Generally, spouses are allowed to
work in the same company, provided it is not in the
same department, where there is direct supervision
or control. In case spouses are in the same
department, one of them may be reassigned to
another department.
NOTE: The XPN of Bonafide Occupational
Qualification occurs when the Er can prove that
reasonable demands of the business require a
distinction based on marital status and there is no
better or acceptable policy which would better
accomplish the business purpose.
Q: May a woman worker be dismissed on the
ground of dishonesty for having written ‘’single”
on the space for civil status on the application
sheet, contrary to the fact that she was married?
There must be a finding of any BFOQ to justify an
Er’s no-spouse employment rule. There must be a
compelling business necessity for which no
alternative exists other than the discriminating
practice.
A: Art. 136 (now Art. 134) of the Labor Code
explicitly prohibits discrimination merely by reason
of marriage of a female Ee. The policy of not
accepting or disqualifying from work any woman
worker who contracts marriage is afoul of the right
against discrimination provided to all women
workers by our labor laws and by our Constitution.
(PT&T Co. v. NLRC, G.R. No. 118978, 23 May 1997)
(See discussion on BFOQ under Management
Prerogatives – page 325)
Importance of the BFOQ
To ensure that the Ee can effectively perform
his work;
So that the no-spouse employment rule will
not impose any danger to business.
Q: An international flight stewardess of PAL was
discharged from service, on account of her
marriage. PAL contends that Art. 134 of the
Labor Code applies only to women Ee in
ordinary occupations. Is the termination legal?
Q: Glaxo, a company which has a policy against
Ees having relationships with the Ees of its
A: NO. The termination is not legal and the policy of
PAL against marriage is patently illegal. Requiring
1.
2.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
94
Labor Law and Social Legislation
that prospective flight attendants must be single
and that they will be automatically separated from
the service once they marry was declared void, it
being violative of the clear mandate in Art. 134 of
the Labor Code with regard to discrimination
against married women. Art. 134 is not intended to
apply only to women employed in ordinary
occupations, or it should have categorically
expressed so. The sweeping intendment of the law
be it on special or ordinary occupations. (Zialcita et.
al., v. PAL, RO4-3-3398-76, 20 Feb. 1997)
Series of absences due to pregnancy and its
related ailments not a ground to dismiss Ee
The court agreed that in concluding that
respondent’s sickness was pregnancy-related and
therefore, the petitioner cannot terminate
respondent’s services because in doing so,
petitioner will be violating Art. 137 (now Art. 135)
of the LC. (Del Monte Philippines, Inc. v. Velasco, G.R.
No. 153477, 06 Mar. 2007)
Q: Can an Er dismiss an Ee on the ground of
deliberately concealing her pregnancy and
incurring absences without official leave?
c. PROHIBITED ACTS
It shall be unlawful for any Er to:
1.
2.
3.
4.
A: NO. Her absence was justified considering that
she had just delivered a child, which can hardly be
considered a forbidden act, a dereliction of duty;
much less does it imply wrongful intent on the part
of the Ee. (Lakpue Drug, Inc. v. Belga, G.R. No. 166379,
20 Oct. 2005)
Deny any woman Ee benefits provided by law.
Discharge any woman for the purpose of
preventing her from enjoying any of the
benefits provided by law.
Discharge such woman on account of her
pregnancy, or while on leave or in confinement
due to her pregnancy.
Discharge or refuse the admission of such
woman upon returning to her work for fear
that she may again be pregnant. (Art. 135, LC)
Penalty for commission of the prohibited acts
mentioned
Discharging a woman due to pregnancy
The offender would be subject to the penalties
provided under Art. 287 of the LC, the general
penalty clause under said code.
The following are prohibited acts in connection with
the pregnancy of a woman Ee:
Fine: Not less than P1,000 nor more than P10,000;
or
1.
2.
3.
4.
5.
6.
To discharge her on account of her pregnancy;
or
To discharge her while she is on leave due to
her pregnancy; or
To discharge her while she is confined due to
her pregnancy; or
To discharge her upon returning to work for
fear that she may again be pregnant. (Art. 135,
LC)
To refuse her admission upon returning to
work for fear that she may again be pregnant.
(Sec. 13, Rule XII, Book III, Rules to Implement
the LC)
Expulsion and non-readmission of women
faculty/female student due to pregnancy
outside of marriage. (Sec. 13(c), R.A. No. 9710)
Imprisonment: not less than three (3) months or
more than three years, or both, at the discretion of
the court.
Persons covered under the classification of
certain women workers
Any woman who is permitted or suffered to work:
1.
2.
3.
4.
95
With or without compensation;
In any night club, cocktail lounge, massage
clinic, bar or similar establishment;
Under the effective control or supervision of
the Er for a substantial period of time; and
Shall be considered as an Ee of such
establishment for purposes of labor and
social legislation. (Art. 136, LC)
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
6.
2. MINORS
(R.A. NO. 7610, AS AMENDED BY R.A. NO. 9321)
7.
a. CHILD LABOR vs. WORKING CHILD
Child Labor
Jurisdiction Over Offenses Punishable Under RA
R.A. No. 9231
Any work or economic activity performed by a child
that subjects him or her to any form of exploitation
or is harmful to his or her health and safety or
physical, mental or psychosocial development.
The Family Courts shall have original jurisdiction
over all cases involving offenses punishable under
this Act. (Sec. 16-A, R.A. No. 9231)
Working Child
b. ALLOWED WORKING HOURS AND
INDUSTRIES OF A WORKING CHILD
Any child engaged as follows:
1.
2.
When the child is below 18 years of age in a
work or economic activity that is not child
labor; or
When the child is below 15 years of age:
a. 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
b. In public entertainment or information.
Rules on Employment of Minor Workers
Instances when the state can intervene in behalf
of the child
1.
2.
Barangay chairman of the place where the
violation occurred, where the child is residing
or employed; or,
At least three concerned, responsible citizens
where the violation occurred. (Sec. 8, R.A. No.
9231)
1.
No person under 18 years of age is allowed to
be employed in an undertaking which is
hazardous or deleterious in nature.
2.
No Er shall discriminate against any person
with respect to terms and conditions of
employment on account of his age. (Art. 138,
LC)
A. Children below fifteen (15) years of age shall
not be employed except:
When the parent, guardian, teacher or person
having care or custody of the child fails or is
unable to protect the child against abuse,
exploitation and discrimination; or
1.
When such acts are committed against the
child by the said parent, guardian, teacher or
person having care and custody over the
child. (Sec. 2, Art. I, R.A. No. 7610)
a.
b.
Persons Who Can File A Complaint For Unlawful
Acts Committed Against Children
1.
2.
3.
4.
5.
c.
Offended party;
Parents or guardians;
Ascendants or collateral relatives within the
3rd degree of consanguinity;
Officer, social worker or representative of a
licensed child-caring institution;
Officer or social worker of DSWD;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
When the child works directly under the
sole responsibility of his parents or legal
guardian and where only members of the
family are employed, subject to the
following conditions:
2.
96
Employment does not endanger the
child’s safety, health and morals;
Employment does not impair the
child’s normal development; and
Er-parent or legal guardian provides
the child with the primary and/or
secondary education prescribed by
the Department of Education
When the child’s employment or
participation in public entertainment or
Labor Law and Social Legislation
4.
information through cinema, theatre,
radio or television is essential provided:
a.
b.
c.
NOTE: A working child permit is required if a
child below 15 years of age:
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 DOLE, the following
must be complied with:
1.
2.
i. The employment does not
involve
advertisement
or
commercials
promoting
alcoholic
beverages,
intoxicating drinks, tobacco
and
its
by-products
or
exhibiting violence;
ii. There is a written contract
approved by DOLE;
iii. The conditions provided in the
first instance are met. (Sec. 12,
Art. VIII, R.A. No. 7610)
3.
4.
5.
1.
2.
3.
Above 18 – No prohibition.
Employment Conditions
4.
Such conditions must be strictly followed:
5.
1.
2.
The total number of hours worked shall be in
accordance with Sec. 15 of DO No. 65-04;
The employment does not endanger the child’s
life, safety, health and morals, nor impair the
child’s normal development;
6.
7.
8.
9.
Normal Development of the child refers to
physical, emotional, mental, and spiritual growth of
a child within a safe and nurturing environment
where he/she is given adequate nourishment, care
and protection and the opportunity to perform
tasks appropriate at each stage of development.
3.
Will be engaged in public entertainment or
information regardless of his/her role in a
project. This includes projects which are nonprofit, advocacy materials or political
advertisements; or
Is a foreign national and will be engaged in
public entertainment in the PH;
Will be engaged as regular extra or as part of a
crowd and is included in the script or
storyboard;
Has been selected for a project after
undergoing auditions, workshops or VTR
screenings; or
Has been selected as semi-finalist in a singing,
dance or talent contest for a television show.
A working child permit is NOT required if a child
below 15 years of age:
B. Above 15 but below 18 – May be employed in
any non-hazardous work.
C.
The Er secures a work permit for the child.
(Secs. 8 to 12, Ibid.)
Is a spot extra or is cast outright on the day of
filming or taping of a project;
Will join auditions or VTR screenings;
Is part of the audience of a live television show
unless the child’s participation is expected;
Is picked or chosen as contestant from the
audience of a live television show;
Is a contestant for a television show but has
not yet been selected as a semi-finalist;
Is a recipient of gift-giving activities in
television;
Is a participant in school-related performance;
Is a participant in sports activities, trainings or
workshops; or
Will be featured in a documentary material.
(DOLE Circular No. 2-18)
Q: A spinster schoolteacher took pity on one of
her pupils, a robust and precocious 12-year-old
boy whose poor family could barely afford the
cost of his schooling. She lives alone at her house
near the school after her housemaid left. In the
afternoon, she lets the boy do various chores as
cleaning, fetching water and all kinds of errands
The child is provided with at least the
mandatory
elementary
or
secondary
education; and
97
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
after school hours. She gives him rice and Php
30.00 before the boy goes home at 7 every night.
The school principal learned about it and
charged her with violating the law which
prohibits the employment of children below 15
years of age. In her defense, the teacher stated
that the work performed by her pupil is not
hazardous, and she invoked the exception
provided in the Department Order of DOLE for
the engagement of persons in domestic and
household service. Is her defense tenable?
(2004 BAR)
15 years
of age but
below 18
years
Not be more
than 8 hours a
day (8hrs/day)
In no case
beyond 40 hours
a week
(40hrs/week)
Between 10pm
and 6am of the
following day
(Sec. 15,
Chapter 5,
Ibid.)
Ownership, Usage and Administration of the
Working Child’s Income
The wages, salaries, earnings and other income of
the working child shall belong to him/her in
ownership and shall be set aside primarily for
his/her support, education or skills acquisition and
secondarily to the collective needs of the family
provided, that not more than 20% of the child's
income may be used for the collective needs of the
family. (Sec. 12-B, R.A. No. 7610)
A: NO. Under Art. 137 of the LC on “minimum
employable age,” no child below 15 years of age
shall be employed except when he works directly
under the sole responsibility of his parents or
guardian, the provisions of the alleged department
order of DOLE to the contrary notwithstanding. A
mere department order cannot prevail over the
express prohibitory provisions of the LC.
Trust Fund to Preserve Part of the Working
Child’s Income
Regulation of Working Hours of a Child
The parent or legal guardian of a working child
below 18 years of age shall set up a trust fund for at
least 30% of the earnings of the child whose wages
and salaries from work and other income amount to
at least P200,000.00 annually, for which he/she
shall render a semi-annual accounting of the fund to
the DOLE. The child shall have full control over the
trust fund upon reaching the age of majority. (Sec.
12-C, R.A. No. 7610)
It includes:
1. All time during which a child is required to be
at a prescribed workplace; and
2. All time during which a child is suffered or
permitted to work.
Rest periods of short duration during working
hours shall be counted as hours worked. (Sec. 3,
Chapter 1, Ibid.)
Age
Bracket
Hours of Work
Below 15
Not more than
20 hours per
week
(20hrs/week)
Provided, the
work shall not
be more than 4
hours at any
given day
(4hrs/day)
Duty of The Er Before Engaging A Minor Into
Employment
Time NOT
allowed to
work
The Er shall first secure a work permit from the
DOLE which shall ensure observance of the
requirements. (Sec. 12, R.A. No. 7160)
Issuance Of Work Certificates/ Permits To
Children At Least 15 But Below 18 Years Of Age NOT REQUIRED
Between 8pm
and 6am of the
following day
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
The issuance of a DOLE Certificate to youth aged 15
to below 18 years of age is not required by law. No
Er shall deny opportunity to any such youth
applying for employment merely on the basis of lack
of work permit or certificate of eligibility for
98
Labor Law and Social Legislation
employment. Any young person aged 15 to below 18
years of age may present copy of this DOLE advisory
to any Er, job provider, government authority, or
his/her representative when seeking employment
or anytime during employment. (DOLE Department
Advisory No. 01-08)
c. PROHIBITED ACTS
Prohibitions on the Employment of Children in
Certain Advertisements
Employment of child models in all commercial
advertisements promoting the following shall be
prohibited:
Non-Hazardous Work
1.
2.
3.
4.
5.
6.
It is any work or activity in which the Ee is not
exposed to any risk which constitutes an imminent
danger to his safety and health.
Hazardous Workplaces
1.
2.
3.
4.
Nature of work exposes the workers to
dangerous
environmental
elements,
contaminants or work conditions;
Workers are engaged in construction work,
logging, firefighting, mining, quarrying,
blasting, stevedoring, dock work, deep-sea
fishing, and mechanized farming;
Workers are engaged in the manufacture or
handling of explosives and other pyrotechnic
products; or
Workers use or are exposed to heavy or
power-driven tools.
Alcoholic beverage;
Intoxicating drinks;
Tobacco and its by products;
Gambling; or
Violence. (Sec. 14, Art. VIII, R.A. No. 7610)
Pornography
Prohibition Against Worst Forms of Labor
Q: You were asked by a paint manufacturing
company regarding the possible employment as
a mixer of a person aged 17, who shall be
directly under the care of the section supervisor.
What advice would you give? Explain briefly.
(2002 BAR)
A: The paint manufacturing company cannot hire a
person who is aged 17. Art. 137(c) of the LC
provides that a person below 18 years of age shall
not be allowed to work in an undertaking which is
hazardous or deleterious in nature as determined
by the SOLE. Paint manufacturing has been
classified by the SOLE as a hazardous work.
1.
All forms of slavery (Anti-Trafficking of 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;
2.
The use, procuring, offering of a child for
prostitution,
for
the
production
of
pornography
or
for
pornographic
performances;
3.
The use, procuring, offering or exposing of a
child for illegal or illicit activities, including the
production and trafficking of dangerous drugs
and volatile substances prohibited under
existing laws;
4.
Work which, by its nature or 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:
a.
b.
99
Debases, degrades or demeans the
intrinsic worth and dignity of a child as
a human being; or
Exposes the child to physical,
emotional or sexual abuse, or is found
to be highly stressful psychologically or
may prejudice morals; or
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
c.
d.
e.
f.
g.
h.
i.
5.
b) Her work period exceeds the required
working hours for children aged 15 years
old;
c) To require a 15-year-old to work without
obtaining the requisite working permit is
a form of child labor;
d) Iya, who was engaged in a work that is not
child labor, is a working child.
Is
performed
underground,
underwater or at dangerous heights; or
Involves the use of dangerous
machinery, equipment and tools such
as power-driven or explosive poweractuated tools; or
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
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
Is performed under particularly
difficult conditions; or
Exposes the child to biological agents
such as bacteria, fungi, viruses,
protozoans, nematodes and other
parasites; or
Involves the manufacture or handling
of explosives and other pyrotechnic
products. (Sec. 12-D, R.A. No. 9231)
A: d). Iya, who was engaged in a work that is not
child labor, is a working child. (Sec. 12-A)
Q: Determine whether the following minors
should be prohibited from being hired and from
performing their respective duties indicated
hereunder: (2006 BAR)
a.
A: YES. He should be prohibited from being hired
and from performing the duties of a miner because
such constitutes hazardous work under D.O. No. 04
Series of 1999. Art. 137(c) of LC expressly prohibits
the employment of persons below 18 years of age in
an undertaking which is hazardous or deleterious in
nature as determined by the SOLE.
b. An 11-year-old boy who is an
accomplished singer and performer in
different parts of the country.
Employing child models in all commercials or
advertisements
promoting
alcoholic
beverages, intoxicating drinks, tobacco and its
by-products and violence. (Sec. 14, RA 7610)
A: NO. He should not be prohibited from being hired
and from performing as a singer. Under Sec. 12(2),
Art. VIII of R.A. No. 7610 as amended by R.A. No.
7658, this constitutes an exception to the general
prohibition against the employment of children
below 15 years of age, provided that the following
requirements are strictly complied with:
Q: Iya, 15 years old, signed up to model a
clothing brand. She worked from 9am to 4 pm
on weekdays and 1pm to 6pm on Saturdays for
two (2) weeks. She was issued a child working
permit under R.A. No. 9231. Which of the
following statements is the most accurate?
(2012 BAR)
1.
2.
a) Working permit for Iya’s employment is
not required because the job is not
hazardous;
3.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
A 17-year-old boy working as miner at the
Walwadi Mining Corporation.
100
The Er shall ensure the protection, health
safety and morals of the child;
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; and
The Er shall formulate and implement,
subject to the approval and supervision of
Labor Law and Social Legislation
competent authorities, a continuing program
for training and skill acquisition of the child.
Moreover, the child must be directly under
the sole responsibility of his parents or
guardian and his employment should not in
any way interfere with his schooling.
c.
3. KASAMBAHAY
(R.A. NO. 10361)
Persons covered by R.A. No. 10361 otherwise
known as “Batas Kasambahay”
All kasambahay engaged in domestic work, whether
on a live-in or live-out arrangement, such as, but not
limited to, the following:
A 15-year-old girl working as a library
assistant in a girls' high school.
A: NO. She should not be prohibited from working
as a library assistant because the prohibition in the
LC against employment of persons below 18 years
of age merely pertains to employment in an
undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by the
SOLE. Working as a library assistant is not one of
undertakings identified to be hazardous under D.O.
No 04 Series of 1999.
1.
2.
3.
4.
5.
6.
7.
d. A 16-year-old girl working as model
promoting alcoholic beverages.
A: YES. She should be prohibited from working as a
model promoting alcoholic beverages. R.A. No. 7610
categorically prohibits the employment of child
models in all commercials or advertisements
promoting alcoholic beverages and intoxicating
drinks, among other things.
e.
General househelp;
Nursemaid or Yaya;
Cook;
Gardener;
Laundry person;
Working children or domestic workers 15
years old and above but below 18 years of age;
or
Any person who regularly performs domestic
work in one household on an occupational
basis (live-out arrangement). (Sec. 4(d), R.A.
No. 10361)
Persons NOT Covered By the Batas Kasambahay
1.
2.
3.
4.
A 17-year-old boy working as a dealer in a
casino. (2006 BAR)
A: YES. He should be prohibited from working as a
dealer in casino, because Art. 137(c) of the LC
prohibits the employment of persons below 18
years of age in an undertaking which is hazardous
or deleterious in nature identified in the guidelines
issued by the SOLE. Working as a dealer in a casino
is classified as hazardous under D.O. No. 04 Series of
1999 as it exposes children to physical,
psychological or sexual abuses.
Service providers;
Family drivers;
Children under foster family arrangement; and
Any other person who performs work
occasionally or sporadically and not on an
occupational and regular basis. (Sec. 2, Rule 1,
IRR of R.A. No. 10361)
Children under Foster Family Arrangement
Children under foster family arrangement refers to
children who are living with a family or household
of relative/s and are provided access to education
and given an allowance incidental to education, i.e.,
“baon,” transportation, school projects, and school
activities; provided, that the foster family and foster
care arrangements are in compliance with the
procedures and requirements as prescribed by R.A.
No. 10165 or otherwise known as the Foster Care
Act of 2012.
Q: Soledad, a widowed schoolteacher, takes
under her wing one of her students, Kiko, 13
years old, who was abandoned by his parents
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
and has to do odd jobs in order to study. She
allows Kiko to live in her house, provides him
with clean clothes, food, and a daily allowance of
200 pesos. In exchange, Kiko does routine
housework, consisting of cleaning the house and
doing errands for Soledad.
2.
They shall not be allowed to work between 10
p.m. to 6 a.m. of the following day;
3.
One day, a representative of the DOLE and the
DSWD came to Soledad's house and charged her
with violating the law that prohibits work by
minors. Soledad objects and offers as a defense
that she was not requiring Kiko to work as the
chores were not hazardous. Further, she did not
give him chores regularly but only
intermittently as the need may arise. Is
Soledad's defense meritorious? (2015 BAR)
4.
They shall not be allowed to do hazardous
work or likely to be harmful to the health,
safety or morals of children, as defined under
existing laws and regulations; and
They shall not be denied access to education
and training. (Sec. 2, Rule VI, IRR of R.A. No.
10361)
The consent of the parent/guardian of working
children is required in the employment contract.
Er’s Household
Household refers to the immediate family members
or other occupants of the house who are directly and
regularly provided services by the kasambahay.
(Sec. 4(f), R.A. No. 10361)
A: YES, Soledad’s defense is meritorious. Sec. 4 (d)
of the Kasambahay Law (R.A. No. 10361) provides
that the term “Domestic Worker” shall not include
children who are under foster family arrangement,
and are provided access to education and given an
allowance incidental to education, i.e., “baon”,
transportation, school projects and school activities.
Modes of Hiring a Kasambahay
An Er can hire directly or indirectly through private
employment agencies (PEA) registered with the
DOLE regional offices. (Sec. 1, Rule II, IRR of R.A. No.
10361) The Er, whether the kasambahay is hired
through a PEA or a third party, shall shoulder the
expenses for hiring. The kasambahay shall not be
charged of any cost of the recruitment, placement,
or finder’s fee. (Sec. 2, Rule II, IRR of R.A. No. 10361)
Examples of Persons Performing Work
Occasionally or Sporadically and Not on an
Occupational Basis
1.
2.
3.
A janitress doing irregular laundry work for a
household during rest day;
A construction worker doing casual
gardening job for a household; or
A hospital nurse or a student doing babysitting job. (Q&A on Batas Kasambahay, DOLE)
NOTE: The Er, whether directly hired or through
PEA, shall pay the expenses that are directly used for
the transfer of the kasambahay from place of origin
to the place of work. The Er can be reimbursed of the
deployment expenses when the kasambahay
unreasonably leaves the Er within six (6) months
from the time he/she started work. (Sec. 3, Rule II,
IRR of R.A. No. 10361)
Employable Age for a Kasambahay
15 years old and above.
NOTE: The employment of children 15 years old
and above but below 18 years of age may be made
under the following conditions:
1.
If a kasambahay is hired thru a PEA, the agency is
allowed to collect Service Fee from the Er.
They shall not be allowed to work for more
than eight (8) hours a day, and in no case
beyond
40
hours
a
week;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Pre-Employment Requirements
Prior to the execution of the employment contract,
the Er may require the following from the
kasambahay:
102
Labor Law and Social Legislation
1.
2.
3.
4.
8.
9.
10.
11.
Medical certificate or health certificate issued
by a local government health officer;
Barangay and police clearance;
NBI clearance; and
Duly authenticated birth certificate or, if not
available, voter’s ID baptismal record, or
passport showing the kasambahay’s age. (Sec.
12, R.A. No. 10361)
NOTE: If the kasambahay is below 18 years old, the
employment contract shall be signed by his/her
parent or lawful guardian on his/her behalf. (Sec. 5,
Rule II, IRR of R.A. No. 10361)
NOTE: All expenses made pursuant to the availment
of pre-employment requirements, should be
shouldered by the Er. The foregoing requirements
are mandatory when the employment of the
kasambahay is facilitated through a private
employment agency.
Registration of the Kasambahay
The Er is required to register the kasambahay in the
Registry of Domestic Workers in the barangay
where the Er resides. For this purpose, the DILG, in
coordination with the DOLE, shall formulate a
registration system. (Sec. 17, R.A. No. 10361)
It is not a requirement for a kasambahay to be
trained and certified by TESDA prior to
employment. However, the kasambahay is
encouraged to undergo competency assessment
and be certified by TESDA. Training is not a
requirement for competency assessment. (Q&A on
Batas Kasambahay, DOLE)
NOTE: The registration of the kasambahay is free of
charge.
Domestic Workers Cannot Acquire Regularity of
Employment under RA 10361
Contract between the Er and Kasambahay
Should be Written and Should Contain
Conditions Set by Law
GR: All the indicia of regularity of employment
remain absent in the employment of domestic
helpers. (Chan, 2017)
The Er and the kasambahay shall enter into a
written contract of employment in a language or
dialect understood by them.
XPN: The mere fact that the househelper is working
within the premises of the business of the Er and in
relation to or in connection with the business, as in
staff houses for its guest or even for its officers and
Ees, warrants the conclusion that such househelper
is and should be considered as a regular Ee.
(Remington Industrial Sales Corp. v. Castaneda, G.R.
No. 169295-96, 20 Nov. 2006)
NOTE: The contract need not be notarized. The
Punong Barangay or his/her designated officer may
attest to the contract and serve as witness to its
execution.
Contents of the Employment Contract
1.
2.
3.
4.
5.
6.
7.
Agreements on deployment expenses, if any;
Loan agreement, if any;
Termination of employment; and
Any other lawful condition agreed upon by
both parties. (Sec. 5, Rule II, IRR of R.A. No.
10361)
NOTE: Such case must be based on its factual
antecedents.
Duties and responsibilities of the kasambahay
which include the responsibility to render
satisfactory service at all times;
Period of employment;
Compensation;
Authorized deductions;
Hours of work and proportionate additional
payment;
Rest days and allowable leaves;
Board, lodging and medical attention;
Q: Linda was employed by Sectarian University
(SU) to cook for the members of a religious order
who teach and live inside the campus. While
performing
her
assigned
task,
Linda
accidentally burned herself. Because of the
extent of her injuries, she went on medical leave.
Meanwhile, SU engaged a replacement cook.
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
10. Right to terminate employment based on just
cause; and
11. Right to exercise religious beliefs and cultural
practices. (Sec. 1, Rule IV, IRR of RA 10361)
Linda filed a complaint for illegal dismissal, but
her Er SU contended that Linda was not a regular
Ee but a domestic househelp. Decide. (2014
BAR)
A: The Er's argument that Linda was not a regular
Ee has no merit. The definition of domestic servant
or househelper contemplates one who is employed
in the Er’s home to minister exclusively to the
personal comfort and enjoyment of the Er’s family.
The Supreme Court already held that the mere fact
that the househelper is working in relation to or in
connection with its business warrants the
conclusion that such househelper or domestic
servant is and should be considered as a regular Ee.
(Apex Mining Co., Inc. v. NLRC, G.R. No. 94951, 22 Apr.
1991) Here, Linda was hired not to minister to the
personal comfort and enjoyment of her Er's family
but to attend to other Ees who teach and live inside
the campus.
Basic Necessities of a Kasambahay
1.
2.
3.
At least three (3) adequate meals a day, taking
into consideration the kasambahay’s religious
beliefs and cultural practices;
Humane sleeping condition that respects the
person’s privacy for live-in arrangement; and
Appropriate rest and basic medical
assistance, including first-aid medicine, in
case of illness and injuries sustained during
service without loss of benefits. (Sec. 12, Rule
IV, IRR of R.A. No. 10361)
NOTE: For the Kasambahay under live-out
arrangement, he/she shall be provided space for
rest and access to sanitary facility.
Mandatory Benefits of a Kasambahay
1.
2.
3.
4.
5.
6.
7.
8.
Though not part of the “basic necessities” required
to be provided by the Er to the kasambahay,
shampoo, soap, toothpaste etc. may be provided
gratuitously.
Monthly minimum wage;
Daily rest period of eight (total) hours;
Weekly rest period of 24 (uninterrupted)
hours;
Five days annual service incentive leave with
pay;
13th month pay;
SSS benefit;
PhilHealth benefit; and
Pag-IBIG benefit.
Monthly Minimum Wage of a Kasambahay
[Current Monthly Minimum Wage for Domestic
Workers (Kasambahay) as per National Wages and
Productivity Commission website]
MONTHLY MINIMUM
WAGE IN CITIES AND
OTHER
1ST CLASS
MUNICIPALITIES
MUNICIPALITIES
NCR
P5,000
CAR
P4,000
P3,000
I
P4,500
P3,500
II
P4,000
III
P4,500
P4,000
IV - A
P3,500
P3,000
Other Rights and Privileges of a Kasambahay
1.
2.
3.
4.
5.
6.
7.
8.
9.
Freedom from Er’s interference in wage
disposal;
Standard of treatment;
Board, lodging, and medical attendance;
Right to privacy;
Access to outside communication;
Access to education and training;
Right to be provided a copy of the
employment contract;
Right to Certificate of Employment;
Right to form, join, or assist labor
organization;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
104
Labor Law and Social Legislation
Daily Rest Period
IV - B
P3,500
V
P3,000
The kasambahay is entitled to a total daily rest
period of at least eight (8) hours. (Sec. 3, R.A. No.
10361)
P2,500
VI
P4,000
VII
P5,000
Prohibition of Work Beyond 16 Hours
P4,000
The Er cannot require the kasambahay to work
beyond 16 hours at any given workday in return for
an equivalent hourly rate. The eight-hour rest
period must be observed.
VIII
P4,500
P4,000
IX
P3,500
P3,000
X
P4,000
P3,500
NOTE: This provision of special law is inconsistent
with Art. 1695 of the Civil Code which prohibits
more than ten (10) hours of work of a househelper.
Nevertheless, applying the rules on statutory
construction, in case of conflict between a general
law and special law, the special law prevails.
P3,000
24 Consecutive Hours of Rest in A Week
P3,000
XI
P3,000
P2,000
XII
P4,000
CARAGA
P3,500
The law provides a mechanism for increasing the
minimum wage of the kasambahay. The Regional
Tripartite Wages and Productivity Boards (RTWPB)
may review, and if proper, determine and adjust the
minimum wage. (Sec. 24, R.A. No. 10361) The
RTWPB shall coordinate with TESDA on the wage
review and adjustment based on the kasambahay’s
competency level, in line with the thrust to
professionalize the domestic service sector.
Kasambahays are also entitled to at least 24
consecutive hours of rest in a week. The Er and the
kasambahay shall agree in writing on the schedule
of the weekly rest day. The Er shall respect the
preferred weekly rest day of the kasambahay on
religious grounds. (Sec. 21, Ibid.)
Payment of Wages
A: NO. However, the kasambahay and the Er may
agree to shorten the rest day, provided the Er pays
for the hours worked during the shortened rest day.
(Q&A on Batas Kasambahay, DOLE)
Q: Can the Er shorten the 24-hour rest day
period of the kasambahay
Wages shall be in cash and be paid at least once a
month. (Secs. 3-4, Rule IV, IRR of R.A. No. 10361)
NOTE: The Er shall, at all times, provide the
kasambahay with a copy of the pay slip every pay
day containing the amount paid and all deductions
made, if any. The copies of the pay slip shall be kept
by the Er for a period of three (3) years. (Sec. 26,
R.A. No. 10361)
Five-Day Annual SIL
The kasambahay can avail the five (5)-day annual
SIL after one (1) year of service.
NOTE: Any unused portion of the SIL shall not be
cumulative or carried over to the succeeding years.
Unused leaves shall not be convertible to cash.
Payment of wages by means of promissory,
voucher, coupon, token, ticket, chit, or anything
other than the cash wage is prohibited. (Sec. 3, Rule
IV, IRR of R.A. No. 10361)
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
Other Agreements that the Er and the
Kasambahay Can Enter into Relative to the
Latter’s Weekly Rest Day and SIL
1.
2.
3.
4.
5.
In Case Kasambahay Avails of Certain Loan
Privileges from PAG-IBIG Fund Which Require
the Payment of Additional or Upgraded
Contributions
Offsetting a day of absence with a particular
rest day;
Waiving a particular rest day in return for an
equivalent daily rate of pay;
Accumulating rest days not exceeding five (5)
days;
Adding the accumulated rest days (maximum
of 5 days) to the five-day SIL; and
Waiving a particular SIL in return for an
equivalent daily rate of pay.
Said additional or upgraded contributions shall be
shouldered solely by the kasambahay. (Sec. 9, Art. IV,
IRR of R.A. No. 10361)
Er’s Liability in Case the Kasambahay Refuses to
Be a Member of SSS, PhilHealth, and PAG-IBIG
The Er is still liable under the SSS, PhilHealth, and
PAG-IBIG laws in case the kasambahay refuses
membership with those agencies, because it is
mandatory and non-negotiable. (Q&A on Batas
Kasambahay, DOLE)
13th month pay
The kasambahay is entitled to 13th month pay after
one (1) month of service.
Person Liable to Pay the SSS premium,
PhilHealth and PAG-IBIG Contributions of the
Kasambahay
Computation of the 13thmonth Pay
In computing the 13th month pay, the total basic
wage received in a given calendar year shall be
divided by 12. The amount derived shall be paid not
later than December 24 or upon separation from
employment. (Sec. 8, Rule IV, IRR of R.A. No. 10361)
GR: The Er shall pay the SSS premium, and
PhilHealth and PAG-IBIG contributions of the
kasambahay
XPN: If the wage of the kasambahay is P5,000.00 or
more, the kasambahay will pay his/her share in the
premiums/contributions. (Sec. 9, Rule IV, IRR of R.A.
No. 10361)
SSS, PhilHealth, and PAG-IBIG
The kasambahay is covered by SSS, PhilHealth and
Pag-IBIG after one (1) month of service.
Provisions Protecting Ers of a Kasambahay
Q: Supposing that in exchange for nonmembership, the kasambahay agrees with the Er
to receive the premiums and contributions in
addition to his/her salary. Is this allowed?
1.
2.
3.
A: NO. Under the SSS, PhilHealth, and PAG-IBIG
laws, the Er has the obligation to register the
kasambahay and deduct and remit the required
premiums and contributions. The Er shall incur
certain liabilities, including criminal prosecution, if
he fails or refuses to comply with his/her
obligations. (Q&A on Batas Kasambahay, DOLE)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
4.
5.
106
Prohibition against privileged information;
Er may require certain pre-employment
documents prior to engagement;
Ers are assured of quality services through
DOLE-TESDA training, assessment, and
certification of kasambahay;
Forfeiture of 15-day unpaid salary should the
kasambahay leave the residence of the Er
without any justifiable reason; and
Right to terminate the employment on
justifiable
grounds.
(Q&A
on
Batas
Kasambahay, DOLE)
Labor Law and Social Legislation
contract of employment to end the employment
relationship. (Sec. 32, Ibid.)
Grounds for Termination of Contract by the
Kasambahay (VIC-VDO)
1.
2.
3.
4.
5.
6.
Verbal or emotional abuse of the kasambahay
by the Er or any member of the household;
Inhuman treatment including physical abuse
of the kasambahay by the Er or any member of
the household;
Commission of a Crime or offense against the
kasambahay by the Er or any member of the
household;
Violation by the Er of the terms and conditions
of the employment contract and other
standards set forth under the law;
Any Disease prejudicial to the health of the
kasambahay, the Er, or member/s of the
household; and
Other causes analogous to the foregoing. (Sec.
33, R.A. No. 10361)
Termination of Contract If the Duration of
Service Is Not Determined In the Contract
The kasambahay or the Er may terminate the
contract any time if the duration of service is not
determined in the contract. Either the Er or the
kasambahay may give notice to end the working
relationship five (5) days before the intended date
of the termination of service. (Sec. 32, R.A. No.
10361)
Effect of Unjust Dismissal by the Er
The kasambahay shall receive the following if
he/she is unjustly dismissed by the Er:
1.
2.
Grounds for Termination of Contract by the
Employer (MGFC-VDO)
1.
2.
3.
4.
5.
6.
7.
Misconduct or willful disobedience by the
kasambahay of the lawful order of the Er in
connection with the former’s work;
Gross or habitual neglect or inefficiency by
the kasambahay in the performance of duties;
Fraud or willful breach of the trust reposed by
the Er on the kasambahay;
Commission of a Crime or offense by the
kasambahay against the person of the Er or
any immediate member of the Er’s family;
Violation by the kasambahay of the terms and
conditions of the employment contract and
other standards set forth under the law;
Any Disease prejudicial to the health of the
kasambahay, the Er, or member/s of the
household; and
Other causes analogous to the foregoing. (Sec.
34, R.A. No. 10361)
Outright payment of earned wage; and
Indemnity benefit in the form of wage
equivalent to 15 days work. (Q&A on Batas
Kasambahay, DOLE)
Liabilities of a Kasambahay Who Leaves
His/Her Er without Justifiable Reason
1.
2.
Forfeiture of wage equivalent to 15 days
work; and
Reimbursement of the deployment expenses,
if the employment contract is terminated
within 6 months from employment. (Sec. 32,
R.A. No. 10361)
Q: Can the Er inspect the belongings of the
kasambahay before he/she leaves the
household in case of termination of
employment?
A: NO. The Er cannot inspect the belongings of the
kasambahay. However, the Er and the kasambahay
can agree in their employment contract that an
inspection can be made before he/she leaves the
household. (Q&A on Batas Kasambahay, DOLE)
NOTE: Neither the domestic worker nor the Er may
terminate the contract before the expiration of the
term except for grounds provided for in Secs. 33
and 34 of the Batas Kasambahay.
Q: If there is non-payment or underpayment of
wage and other labor-related concerns, where
can the kasambahay seek assistance?
The domestic worker and the Er may mutually
agree upon written notice to pre-terminate the
107
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
5.
A: The kasambahay can go to a Kasambahay Desk
Officer situated in their respective barangays or the
nearest DOLE field/provincial/ regional office.
(Q&A on Batas Kasambahay, DOLE)
6.
Replacement of Kasambahay Hired through
PEAs
7.
Within one (1) month from the day the
Kasambahay reported for work, the Er shall be
entitled to a qualified replacement at no additional
cost of any if the ff. grounds occurred:
a.
b.
c.
8.
9.
The kasambahay is found to be suffering from
an incurable or contagious disease, or mental
illness as certified by a competent or
government physician;
The kasambahay abandons the job without
justifiable cause, voluntarily resigns, commits
theft or any other analogous acts prejudicial
to the Er or his/her family; or
The kasambahay is physically or mentally
incapable of discharging the minimum
requirements of the job, as specified in the
employment contract. (Sec. 4, Rule III, IRR of
R.A. No. 10361)
Ensure that the kasambahay is not charged or
required to pay any recruitment or placement
fees;
Keep copies of employment contracts and
agreements
pertaining
to
recruited
kasambahay, which shall be made available
during inspections or whenever required by
the DOLE or local government officials;
Assist the kasambahay in filing his/her
complaints or grievances against the Ers;
Cooperate with government agencies in
rescue operations involving abused or
exploited kasambahay; and
Assume joint and solidary liability with the Er
for payment of wages, wage-related and other
benefits, including monthly contribution for
SSS, PhilHealth, and Pag-IBIG membership.
(Sec. 3, Rule III, IRR of R.A. No. 10361)
Unlawful Acts under the Batas Kasambahay
1.
2.
3.
4.
NOTE: The Er shall be entitled to a refund of 75%
of the deployment expenses or fees paid to the PEA,
if the latter failed to provide a qualified
replacement after a lapse of one (1) month from
receipt of the request for replacement.
5.
6.
Employment of children below 15 years of
age;
Withholding of the kasambahay’s wages;
Interference in the disposal of the
kasambahay’s wages;
Requiring kasambahay to make deposits for
loss or damage;
Placing the kasambahay under debt bondage;
and
Charging another household for temporarily
performed tasks. (Sec. 1, Rule XII, IRR of R.A. No.
10361)
Responsibilities of the PEA under the Law
1.
2.
3.
4.
NOTE: Unlawful acts are punishable with an
administrative fine ranging from P10,000 to
P40,000 to be imposed by the DOLE Regional
Offices.
Ensure that the kasambahay is qualified as
required by the Er;
Secure the best terms and conditions of
employment for the kasambahay;
Ensure that the employment agreement
between the kasambahay and the Er
stipulates the terms and conditions of
employment and all the benefits in
accordance with the IRR;
Provide a pre-employment orientation
briefing to the kasambahay and the Er about
their rights and responsibilities in accordance
with the IRR;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Other Remedies for Unlawful Acts
The aggrieved party may file the appropriate civil or
criminal action before the regular courts.
Remedy for Abused or Exploited Kasambahay
The law mandates the conduct of immediate rescue
of abused or exploited kasambahay by the municipal
or city social welfare officer or a social welfare
108
Labor Law and Social Legislation
officer from DSWD, in coordination with the
concerned barangay officials. (Sec. 1, Rule X, IRR of
R.A. No. 10361)
4. HOMEWORKERS
Homeworkers
The law sets out that crimes or offenses committed
under the Revised Penal Code and other criminal
laws shall be filed with the regular courts. (Sec. 3,
Rule X, IRR of R.A. No. 10361)
They are those who perform in or about his own
home any processing or fabrication of goods or
materials, in whole or in part, which have been
furnished directly or indirectly, by an Er and sold
thereafter to the latter.
Q: Albert, a 40-year-old Er, asked his domestic
helper, Inday, to give him a private massage.
When Inday refused, Albert showed her Art. 141
of the Labor Code, which says that one of the
duties of a domestic helper is to minister to the
Er’s personal comfort and convenience. Is
Inday’s refusal tenable? (2009 BAR)
NOTE: D.O. No. 05-92, DOLE (04 Feb. 1992)
amended Rule XIV of the IRR.
Industrial Homework
It is a system of production under which work for an
Er or contractor is carried out by a homeworker at
his/her home. Materials may or may not be
furnished by the Er or contractor.
A: YES. Inday’s refusal to give her Er a “private
massage” is in accordance with law because the
nature of the work of a domestic worker must be in
connection with household chores. Massaging is not
a domestic work.
It differs from regular factory production
principally in that, it is a decentralized form of
production where there is ordinarily very little
supervision or regulation of methods of work.
(Sec. 2(a), DO No. 05-92)
Q: NBC has a rest house and recreational facility
in the highlands of Tagaytay City for the use of
its top executives and corporate clients. The rest
house staff includes a caretaker, two cooks and
a laundrywoman. All of them are reported to the
SSS as domestic or household Ees of the
resthouse and recreational facility and not of
NBC. Can NBC legally consider the caretaker,
cooks and laundrywoman as domestic Ees of the
rest house and not of NBC? (2000 BAR)
Househelpers vs. Homeworkers (2017 BAR)
A: NO, they are not domestic Ees. They are the Ees
of NBC because the rest house and recreational
facility are business facilities which are for use of
NBC’s top executives and clients. (Traders Royal
Bank v. NLRC, G.R. No. 127864, 22 Dec. 1999)
NOTE: A househelp, a laundrywoman, a driver,
houseboy or gardener working in staff houses of a
company who attends to the needs of the company’s
guests is not a househelper or domestic servant. He
is an industrial worker who must be paid the
industrial rate.
HOUSEHELPERS
HOMEWORKERS
Ministers
to
the
personal needs and
comfort of his Er in the
latter’s home
Performs in or about his
own
home
any
processing
or
fabrication of goods or
materials, in whole or in
part, which have been
furnished directly or
indirectly, by an Er and
sold thereafter to the
latter.
Er of a Homeworker
Includes any person, natural or artificial who, for his
account or benefit, or on behalf of any person
residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor or
any other person:
109
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
1.
2.
Payment for Homework
Delivers or causes to be delivered, any
goods, articles or materials to be processed or
fabricated in or about a home and thereafter to
be returned or to be disposed of or distributed
in accordance with his directions; or
Immediately upon receipt of the finished goods and
articles, the Er is required to pay the homeworker
for the work performed less corresponding
homeworkers’ share of SSS, MEDICARE, and ECC
premium contributions, which shall be remitted by
the contract/subcontractor or Er to the SSS with the
Ers’ share.
Sells any goods, articles or materials to be
processed or fabricated in or abut a home and
then rebuys them after such processing or
fabrication, either by himself or through some
other person. [Sec. 2(d), DO No. 05-92]
However, where payment is made to a contractor or
subcontractor, the homeworker shall likewise be
paid immediately after the goods or articles have
been collected from the workers. (Sec. 6, DO No. 0592)
Sells any goods, articles or materials to be
processed or fabricated in or abut a home and
then repurchases them after such processing
or fabrication, either by himself or through
some other person. (Sec. 2(d), D.O. No. 05-92)
Conditions for Payment Of Work
Duty of the Er in Case He Contracts With Another
in the Performance of His Work
The Er may require the homeworker to redo the
work which has been improperly executed without
having to pay the stipulated rate again.
It shall be the duty of the Er to provide in such
contract that the Ees or homeworkers of the
contractor and the latter’s subcontractor shall be
paid in accordance with the LC. (Sec. 11, D.O. No. 0592)
An Er, contractor, or subcontractor need not pay the
homeworker for any work which has been done on
goods and articles which have been returned for
reasons attributable to the fault of the homeworker.
(Sec. 9, D.O. No. 05-92)
Liability of the Er if the Contractor or
Subcontractor Fails to Pay the Wages or
Earnings of his Ees
Prohibitions for Homework
The following shall be prohibited as homework:
Er shall be jointly and severally liable with the
contractor or subcontractor to the workers of the
latter to the extent that such work is performed
under such contract, in the same manner as if the
Ees or homeworkers were directly engaged by the
Er. (Sec. 11, D.O. No. 05-92)
1.
2.
3.
Explosives, fireworks and similar articles;
Drugs and poisons; and
Other articles, the processing of which
requires exposure to toxic substances. (Sec. 13,
D.O. No. 05-92)
Right of Industrial Homeworkers to Form Labor
Organizations
Conditions for Deduction from Homeworker’s
Earnings
D.O. No. 05-92 (04 Feb. 1992), replacing Rule XIV of
the IRR Book III of the LC, authorizes the formation
and registration of labor organization of industrial
homeworkers. It also makes explicit the Ers duty to
pay and remit SSS, PhilHealth and ECC premiums.
(Sec. 3, DO No. 05-92) (Secs. 3 and 6, D.O. No. 05-92)
GR: The Er, contractor or subcontractor shall not
make any deduction from the homeworker’s
earnings for the value of materials which have been
lost, destroyed, soiled or otherwise damage.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
XPN: Unless the following conditions are met:
1. The homeworker is clearly shown to be
responsible for the loss or damage;
110
Labor Law and Social Legislation
2.
3.
4.
Persons Covered by the Provisions on Night
Work
The homeworker is given reasonable
opportunity to show cause why deductions
should not be made;
The amount of such deduction is fair and
reasonable and shall not exceed the actual loss
or damages; and
The deduction is made at such rate that the
amount deducted does not exceed 20% of the
homeworker’s earnings in a week. (Sec. 8, D.O.
No. 05-92)
GR: All persons who shall be employed or permitted
or suffered to work at night.
XPN: Those employed in agriculture, stock
raising, fishing, maritime transport and inland
navigation, during a period of not less than seven
(7) consecutive hours, including the interval from
midnight (12am) to five o’clock in the morning
(5am), to be determined by the SOLE after
consulting the workers’ representatives/ labor
organizations and Ers. (Art. 154, LC as added by RA
10151 approved on June 21, 2011) (Art. 154, LC as
added by R.A. No. 10151 approved on 21 June 2011)
Q: Josie is the confidential secretary of the
Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
where the Chairman of the Board can still have
access to her services, the bank allows her to
work in her residence during her leave. For this
purpose, the bank installed a fax machine in her
residence, and gave her a cellphone and a
beeper. Is Josie a homeworker under the law?
Explain. (2000 BAR)
Right of the Workers to Health Assessment
GR: At their request, workers shall have the right to
undergo health assessment without charge and to
receive advice on how to reduce or avoid health
problems associated with their work:
A: NO. She is actually an office worker. She is not an
industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
which work, when finished, will be returned to or
repurchased by said contractor. (Art. 155, LC)
1.
2.
3.
5. NIGHT WORKERS
Night Work
Night work is at least seven (7) consecutive hours of
work between 10:00 PM and 6:00 AM. (Sec. 2, D.O.
No. 119-12)
Before taking up an assignment as a night
worker;
At regular intervals during such an
assignment; and
If they experience health problems during
such an assignment which are not caused by
factors other than the performance of night
work. (Art. 155, LC)
NOTE: Findings of such assessments shall not be
transmitted to others without the workers’ consent
and shall not be used to their detriment.
Night Worker
XPN: Finding of unfitness for night work. (Art. 155,
LC)
Any employed person whose work covers the
period from ten o’clock in the evening to six o’clock
the following morning, provided that the worker
performs no less than seven (7) consecutive hours
of work. (Sec. 2, D.O. No. 119-12)
Worker Found to be Medically Unfit for Night
Work
Night workers who are certified by competent
physician as unfit for night work, due to health
reasons, shall be transferred, whenever practicable,
to a similar job for which they are fit to work.
NOTE: R.A. No. 10151 inserted Chapter V (Arts.
154-161) under Book 3, Title III of the LC.
111
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
to number 1, the length of which shall be
determined by the DOLE after consulting
the labor organizations and Ers. (Art.
158, LC)
If such transfer to a similar job is not practicable, or
the workers are unable to render night work for a
continuous period of not less than six (6) months
upon the certification of a competent public health
authority, these workers shall be granted the same
company benefits as other workers who are unable
to work, or to secure employment during such
period. (Sec. 5, D.O. No. 119-12)
During the periods referred in Art. 158:
1.
A woman worker shall not be dismissed or
given notice of dismissal, except for just or
authorized causes provided for in the Code
that are not connected with pregnancy,
childbirth and childcare responsibilities.
2.
A woman worker shall not lose the benefits
regarding her status, seniority, and access to
promotion which may attach to her regular
night work position. (Ibid.)
Separation from Employment of a Worker
Found Medically Unfit for Night Work
The provisions of D.O. No. 119-12 allow the
application of Art. 298 to a worker who is found
unfit for night work if his transfer to another (day
time) job is not practicable. Art. 298 authorizes the
separation of an Ee suffering from a disease. For an
Ee found unfit for night work, the Er’s ultimate
recourse, therefore, may be employment
termination based on an authorized cause.
(Azucena, 2016)
Pregnant Women and Nursing Mothers May Be
Allowed To Work at Night
They are allowed only if a competent physician,
other than the company physician, shall certify their
fitness to render night work, and specify, in the case
of pregnant Ees, the period of the pregnancy that
they can safely work. (Ibid.)
Temporarily Unfit for Night Work
A night worker certified as temporarily unfit for
night work for a period of not less than six (6)
months shall be given the same protection against
dismissal or notice of dismissal as other workers
who are prevented from working for health reasons.
(Sec. 5, D.O. No. 119-12)
Protection of Night Workers
The law protects the night workers by requiring:
1.
Employability of Women for Night Work
Measures shall be taken to ensure that an
alternative to night work is available to women
workers who would otherwise be called upon to
perform such work:
1.
2.
2.
3.
Before and after childbirth, for a period of at
least 16 weeks, which shall be divided
between the time before and after childbirth;
For additional periods, in respect of which a
medical certificate is produced stating that
said additional periods are necessary for the
health of the mother or child:
Mandatory Facilities
1.
a.
b.
During pregnancy;
During a specified time beyond the
period, after childbirth is fixed pursuant
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
The provision of certain facilities such as
sleeping or lactation quarters and means of
transport;
Conduct of medical examination to determine
fitness for night work; and,
Observance of legal process to decide
appropriate action where a worker is found
unfit for night work. Such process includes
transfer of worker to day work, if practicable,
and, only as a last recourse separation from
employment.
112
Suitable
first-aid
facilities,
including
arrangements where such workers, where
necessary, can be taken immediately to a place
for appropriate treatment.
Labor Law and Social Legislation
2.
Employment of PWD
Safe and healthful working conditions and
adequate or reasonable facilities, i.e., sleeping
or resting quarters in the establishment, and
transportation from the work premises to the
nearest point of their residence subject to
exceptions and guidelines to be provided by
the DOLE. (Art. 156, LC)
1.
2.
6. PERSONS WITH DISABILITIES
When their employment is necessary to
prevent
curtailment
of
employment
opportunities; and
When it will not create unfair competition in
labor costs or lower working standards. (Art.
79, LC)
Employment Period of PWD
The Magna Carta for Disabled Persons ensures
equal opportunities for disabled persons and
prohibits discrimination against them.
There is no minimum or maximum duration. It
depends on the agreement but it is necessary that
there is a specific duration stated.
Persons with Disability (PWD)
Persons with Disability Can Be a Regular Ee
Those whose earning capacity is impaired by:
1. Physical deficiency;
2. Age;
3. Injury;
4. Disease;
5. Mental deficiency; or
6. Illness.
Persons with disability can be a regular Ee if work is
usually necessary or desirable in the usual business
of the employer. (Bernardo v. NLRC, G.R No. 122917,
12 July, 1999)
Persons Who
Disability
Qualified Disabled Ee
May Employ Persons
with
Ers in all industries, provided, the disability is not
such as to effectively impede the performance of job
operations in the particular occupation for which
they are hired. (Sec. 7, R.A. No. 7277)
It provides for Equal Opportunity for
Employment by stating that no disabled person
shall be denied access to opportunities for
suitable employment.
Not All Workers with a Disability are Considered
Disabled Workers
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, R.A. No. 7277)
The mere fact that a worker has a disability does not
make him a disabled worker because his disability
may not impair his efficiency or the quality of his
work. If despite his disability he can still efficiently
perform his work, he would be considered a
qualified disabled worker entitled to the same
treatment as qualified able-bodied workers.
(Bernardo v. NLRC, G.R No. 122917, 12 July, 1999)
A qualified individual with disability is an
individual with disability who, with or without
reasonable accommodation, can perform the
essential functions of the employment position that
such individual holds or desires. (Sec. 4 (l), R.A. No.
7277)
Rights and Privileges of PWD
1.
NOTE: Consideration shall be given to the Er’s
judgment as to what functions of job are essential,
and if an Er has prepared a written description
before advertising or interviewing applicants for
the job. (Sec. 4 (l), R.A. No. 7277)
113
Equal opportunity for employment - No
PWD shall be denied access to opportunities
for suitable employment. Five percent (5%) of
all casual emergency and contractual positions
in the DSWD, Health, Education, Culture and
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
2.
3.
4.
Sports, and other government agencies, offices
or
corporations
engaged
in
social
development shall be reserved for PWDs (Sec.
5, R.A. No. 7277);
training period, he shall be paid 100% of the
applicable minimum wage. (Chan, 2017)
XPN: Bona Fide Occupational Qualification
The following constitutes acts of discrimination:
a. DISCRIMINATION
Sheltered employment - The Government
shall endeavor to provide them work if
suitable employment for disabled persons
cannot be found through open employment;
(Sec. 6, R.A. No. 7277)
1.
Limiting, segregating, or classifying a job
applicant with disability in such a manner that
adversely affects his work opportunities;
GR:
Using
qualification
standards,
employment tests or other selection criteria
that screen out or tend to screen out a PWD;
Apprenticeship - PWD may be hired as
apprentices or learners if their disability is not
such as to effectively impede the performance
of job operations in the particular occupations
for which they are hired (Art. 81, LC);
XPN: Such standards, tests or other selection
criteria are shown to be job-related for the
position in question and are consistent with
business necessity
Vocational rehabilitation - To develop the
skills and potentials of disabled workers and
enable them to compete in the labor market;
(Sec. 9, R.A. No. 7277);
2.
Utilizing standards, criteria, or methods of
administration that:
a.
5.
Vocational guidance and counselling – The
DSWD shall implement measures providing
and evaluating vocational guidance and
counselling to enable disabled persons to
secure, retain and advance in employment.
(Sec. 10, R.A. No. 7277);
b.
3.
Providing less compensation, by reason of his
disability, that the amount to which a nondisabled person performing the same work is
entitled;
4.
Favoring a non-disabled Ee over a qualified Ee
with disability with respect to promotion,
training opportunities, study and scholarship
grants, solely on account of the latter’s
disability;
Wage Rate (2013 BAR)
GR: Handicapped workers are entitled to not less
than 75% of the applicable adjusted minimum
wage. (Art. 80, LC)
XPN: All qualified handicapped workers shall
receive the full amount of the minimum wage rate
prescribed herein pursuant to R.A. No. 7277. (Wage
Order No. NCR-18, Effective 04 Oct. 2013)
GR: Dismissing or terminating the services of
an Ee with disability by reason of his disability
NOTE: Generally, if a PWD is hired as an apprentice
or learner, he shall be paid not less than 75% of the
applicable minimum wage.
XPN: The Er can prove that he impairs the
satisfactory performance of the work involved
to the prejudice of the business entity;
provided, however, that the Er first sought to
provide reasonable accommodations for
persons with disability;
XPN: If the PWD, however is hired as a learner and
employed in piece or incentive-rate jobs during the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Have the effect of discrimination on the
basis of disability; or
Perpetuate the discrimination of others
who
are
subject
to
common
administrative control.
114
Labor Law and Social Legislation
5.
6.
Persons with Disability vs. Differently Abled
Failing to select or administer in the most
effective manner employment tests which
accurately reflect the skills, aptitude or other
factor of the applicant or Ee with disability that
such test purports to measure, rather than the
impaired sensory manual or speaking skills of
such applicant or Ee, in any; and
Excluding PWD from membership in labor
unions or similar organizations. (Sec. 32, R.A.
No. 7277)
b. INCENTIVES FOR EMPLOYERS
PERSONS WITH
DISABILITY
DIFFERENTLY ABLED
Covers only workers.
Covers all activities or
endeavors.
Earning capacity is
impaired by age or
physical,
mental
deficiency or injury
Refers to all suffering
from
restriction
of
different abilities as a
result
of
mental,
physical,
sensory
impairment to perform
an activity in the manner
or
within
range
considered for human
being.
Basis:
Loss/
impairment
of
earning capacity.
Basis: Range of activity
which is normal for a
human being.
Loss due to injury or
physical or mental
defect or age.
Restriction
due
to
impairment of mental/
physical
/
sensory
defect.
Incentives of Er Who Are Employing Disabled
Workers
1.
Entitled to an additional deduction, from their
gross income, equivalent to 25% of the total
amount paid as salaries and wages to disabled
persons;
Provided, however, that such entities present
proof as certified by the DOLE that disabled
persons are under their employ
Provided further, that the disabled Ee is
accredited with the DOLE and the Department
of Health as to his disability, skills and
qualifications.
2.
Private entities that improve or modify their
physical facilities in order to provide
reasonable accommodation for disabled
persons shall also be entitled to an additional
deduction from their net taxable income,
equivalent to 50% of the direct costs of the
improvements or modifications. (Sec. 8, R.A.
No. 7277)
If hired, entitled to
75% of minimum
wage.
Subject to definite
periods
of
employment.
Employable
only
when necessary to
prevent curtailment
of
employment
opportunity.
The financial incentive, if any, granted by law
to SPQ Garments whose cutters and sewers in
its garments-for-export operations are 80%
staffed by deaf and deaf-mute workers is
additional deduction from its gross income
equivalent to 25% of amount paid as salaries
to persons with disability (2013 BAR).
If qualified, entitled to
all terms and conditions
as qualified able-bodied
person.
No
restrictions
employment.
on
Must
get
equal
opportunity and no
unfair competition.
Q: Ana Cruz has a low IQ. She has to be told at
least three times before she understands her
daily work assignment. However, her work
output is at least equal to the output of the least
Basis: Magna Carta for Disabled Persons
115
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
individual favorable compensation, terms,
conditions, promotions, or privileges; or
the refusal to grant the sexual favor results
in limiting, segregating or classifying the Ee
which in a way would discriminate, deprive
or diminish employment opportunities or
otherwise adversely affect said Ee (Quid
Pro Quo Sexual Harassment);
efficient worker in her work section. Is Mr. Cruz
a handicapped worker? Explain. (2000 BAR)
A: NO. Low IQ does not make the worker
“handicapped” in the contemplation of law.
Handicap means such physical or mental infirmity
that impairs capacity to work. The deficiency may
also be due to age or injury. (Article 78, LC)
E. SEXUAL HARRASSMENT IN THE WORK
ENVIRONMENT
b.
The above acts would impair the Ees’ rights
or privileges under existing labor laws; or
c.
The above acts would result in an
intimidating,
hostile,
or
offensive
environment for the Ee. (Hostile
Environment Harassment).
1. ANTI-SEXUAL HARASSMENT ACT
R.A. No. 7877
2.
Requisites
1.
Elements:
Act is committed in a work, education, or
training-related environment;
The doer, the harasser, is any person who has
authority, influence or moral ascendancy
over another;
Doer demands or requests, or requires a
sexual favor from the victim;
It does not matter whether such demand is
accepted or not. (RA 7877, Sec. 3)
2.
3.
4.
In an education or training environment
a.
i. Against one who is under the care,
custody or supervision of the
offender;
ii. Against one whose education,
training, apprenticeship or tutorship
is entrusted to the offender;
NOTE: Based on the Congressional deliberations,
Anti-Sexual Harassment Law aims to punish the
harasser without regard to gender. (Azucena, 2016)
b.
When sexual favor is made a condition to
the giving of a passing grade, or the
granting of honors and scholarships, or
the payment of a stipend, allowance or
other
benefits,
privileges,
or
considerations; or
c.
When sexual advances result in an
intimidating,
hostile
or
offensive
environment for the student, trainee or
apprentice.
Kinds
1.
2.
Quid Pro Quo (“This for that”) – doer asks for
something in exchange for something.
Hostile Environment
Places where sexual harassment is committed
1.
Sexual harassment is employed:
In a work-related or employment environment
NOTE: While the provision states that there must be
a “demand, request or requirement of a sexual
favor”, it is not necessary that it be articulated in a
categorical manner. It may be discerned, with equal
certitude, from the acts of the offender.
Elements:
a.
The sexual favor is made as a condition in
the hiring or in the employment, reemployment or continued employment of
said individual, or in granting said
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
116
Labor Law and Social Legislation
prosecution in the proper courts for unlawful
acts of Sexual Harassment.
Likewise, it is not essential that the demand, request
or requirement be made as a condition for
continued employment or for promotion to a higher
position. It is enough that the respondent’s acts
result in creating an intimidating, hostile or
offensive environment for the Ee. (Domingo v.
Rayala, G.R. No. 155831, 18 Feb. 2008)
The said rules and regulations issued shall
include, among others, guidelines on proper
decorum in the workplace and educational or
training institutions;
Beso-beso Fashion
In the case of Aquino v. Acosta (A.M. No. CTA-01-1),
the Supreme Court absolved Judge Acosta of liability
under sexual harassment law in greeting
complainant with A kiss on the cheek in a ‘beso-beso’
fashion, where most of the kissing incidents were
done on festive and special occasions. The Court
held that what respondent judge committed were
casual gestures of friendship and camaraderie,
nothing more, nothing less, and that there is no
indication that respondent was motivated by malice
or lewd design. However, the Court admonished
Judge Acosta not to commit similar acts against
complainant or other female Ees of the CTA,
otherwise, his conduct may be construed as tainted
with impropriety.
2.
Create a committee on decorum and
investigation of cases on Sexual Harassment;
and
c.
The Er or head of office, education or training
institution shall disseminate, or post a copy of
this RA 7877 for the information of all
concerned. (Sec. 4, R.A. No. 7877)
Extent of Liability of the Employer or Head of
Office in a Case of Sexual Harassment
Er shall may be solidarily liable for damages
arising from the acts of Sexual Harassment
committed in the employment, education or
training environment, provided that:
1.
Duties of the Er or head of office in a workrelated, education or training environment
2.
a.
b.
Prevent or deter the commission of acts of
Sexual Harassment; and
Provide the procedures for the resolution,
settlement or prosecution of acts of Sexual
Harassment. (Sec. 4, R.A. No. 7877)
An Independent Action for Damages May Be
Filed
Nothing under this Act shall preclude the victim of
work, education or training-related sexual
harassment from instituting a separate and
independent action for damages and other
affirmative relief. (Sec. 6, R.A. No. 7877)
Duty of the Er or Head of Office towards these
end
1.
The Er or head of office, educational or
training institution is informed of such acts
by the offended party; and
No immediate action is taken thereon. (Sec. 5,
R.A. No. 7877)
Promulgate appropriate rules and regulations
in consultation with and jointly approved by
the Ee or students or trainees, through their
duly designated representatives, prescribing
the procedure for the investigation or Sexual
Harassment cases and the administrative
sanctions therefore.
Three-Fold Liability Rule In Sexual Harassment
Cases
An act of sexual harassment may give rise to civil,
criminal, and administrative liability on the part of
the offender, each proceeding independently of the
others.
NOTE: Administrative sanctions taken against
the alleged harasser shall not be a bar to
117
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
for probationary employment for 6 months.
Being well-built and physically attractive, his
supervisor, Mr. Hercules Barak, took special
interest to befriend him.
Prescription of Action
Any action arising from the violation of the
provisions of this act shall prescribe in three (3)
years. (Sec. 7, R.A. No. 7877)
When his probationary period was about to
expire, he was surprised when one afternoon
after working hours, Mr. Barak followed him to
the men’s comfort room. After seeing that no one
else was around, Mr. Barak placed his arm over
Pedrito’s shoulder and softly said: “You have
great potential to become a regular Ee and I
think
I
can
give
you
a
favorable
recommendation. Can you come over to my
condo unit on Saturday evening so we can have
a little drink? I’m alone, and I’m sure you want
to stay longer with the company.”
Q: A Personnel Manager, while interviewing an
attractive female applicant for employment,
stared directly at her for prolonged periods,
albeit in a friendly manner. After the interview,
the manager accompanied the applicant to the
door, shook her hand and patted her on the
shoulder. He also asked the applicant if he could
invite her for dinner and dancing at some future
time. Did the Personnel Manager, by the above
acts, commit Sexual Harassment? Reason. (2000
BAR)
Is Mr. Barak liable for Sexual Harassment
committed in a work-related or employment
environment? (2000 BAR)
A: YES. The Personnel Manager is in a position to
grant or not to grant a favor (a job) to the applicant.
Under the circumstances, inviting the applicant for
dinner or dancing creates a situation hostile or
unfriendly to the applicant's chances for a job if she
turns down the invitation. (Sec. 3(a3), R.A. No. 7877)
A: YES. The elements of Sexual Harassment are all
present. The act of Mr. Barak was committed in a
workplace. Mr. Barak, as supervisor of Pedrito
Masculado, has authority, influence and moral
ascendancy over Masculado.
Q: In the course of an interview, another female
applicant inquired from the same Personnel
Manager if she had the physical attributes
required for the position she applied for.
Given the specific circumstances mentioned in the
question, like Mr. Barak following Masculado to the
comfort room, etc. Mr. Barak was requesting a
sexual favor from Masculado for a favorable
recommendation
regarding
the
latter's
employment. It is not impossible for a male, who is
a homosexual, to ask for a sexual favor from
another male.
The Personnel Manager replied: "You will be
more attractive if you will wear micro-mini
dresses without the undergarments that ladies
normally wear." Did the Personnel Manager, by
the above reply, commit an act of sexual
harassment?
A: YES. The remarks would result in an offensive or
hostile environment for the Ee. Moreover, the
remarks did not give due regard to the applicant’s
feelings and it is a chauvinistic disdain of her honor,
justifying the finding of Sexual Harassment.
(Villarama v. NLRC, G.R. No. 106341, 02 Sept. 1994)
2. SAFE SPACES ACT
R.A. No. 11313
Definition of Terms
1.
Q: Pedrito Masculado, a college graduate from
the province, tried his luck in the city and landed
a job as a utility/maintenance man at the
warehouse of a big shopping mall. After working
as a casual Ee for 6 months, he signed a contract
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
118
Catcalling - refers to unwanted remarks
directed towards a person, commonly done in
the form of wolf-whistling and misogynistic,
transphobic, homophobic, and sexist slurs;
(Sec. 3(a), R.A. No. 11313)
Labor Law and Social Legislation
2.
communication, or a combination thereof that
cause or will likely cause a person to fear for
one’s own safety or the safety of others, or to
suffer emotional distress. (Sec. 3(h), R.A. No.
11313)
Employee - refers to a person, who in
exchange for remuneration, agrees to perform
specified services for another person, whether
natural or juridical, and whether private or
public, who exercises fundamental control
over the work, regardless of the term or
duration of agreement: Provided, That for the
purposes of this law, a person who is detailed
to an entity under a subcontracting or second
agreement shall be considered an employee;
(Sec. 3(b), R.A. No. 11313)
3.
Employer - refers to a person who exercises
control over an employee: Provided, That for
the purpose of this Act, the status or conditions
of the latter’s employment or engagement
shall be disregarded; (Sec. 3(c), R.A. No. 11313)
4.
Gender - refers to a set of socially ascribed
characteristics, norms, roles, attitudes, values
and expectations identifying the social
behavior of men and women, and the relations
between them; (Sec. 3(d), R.A. No. 11313)
5.
Gender-based online sexual harassment refers to an online conduct targeted at a
particular person that causes or likely to cause
another mental, emotional or psychological
distress, and fear of personal safety, sexual
harassment acts including unwanted sexual
remarks and comments, threats, uploading or
sharing of one’s photos without consent, video
and audio recordings, cyberstalking and online
identity theft; (Sec. 3(e), R.A. No. 11313)
6.
Gender identity and/or expression - refers
to the personal sense of identity as
characterized, among others, by manner of
clothing, inclinations, and behavior in relation
to masculine or feminine conventions. A
person may have a male or female identity
with physiological characteristics of the
opposite sex in which case this person is
considered transgender; (Sec. 3(f), R.A. No.
11313)
7.
Stalking - refers to a conduct directed at a
person involving the repeated visual or
physical
proximity,
non-consensual
8.
Cyberstalking - is a form of stalking that is
committed through an electronic medium in
which online communication takes place. (Sec.
4(c), IRR of R.A. No. 11313)
9.
Homophobic remarks or slurs - are any
statements in whatever form or however
delivered, which are indicative of fear, hatred
or aversion towards persons who are
perceived to be or actually identify as lesbian,
gay, bisexual, queer, pansexual and such other
persons of diverse sexual orientation, gender
identity or expression, or towards any person
perceived to or actually have experienced
same-sex attraction (Sec. 4(i), IRR of R.A. No.
11313)
10. Misogynistic remarks or slurs - are any
statements in whatever form or however
delivered, that are indicative of the feeling of
hating women or the belief that men are
inherently better than women. (Sec. 4(i), IRR of
R.A. No. 11313)
11. Public spaces - refer to streets and alleys,
roads, sidewalks, public parks, buildings,
schools, churches, public washrooms, malls,
internet shops, restaurants and cafes,
transportation terminals, public markets,
spaces used as evacuation centers,
government offices, common carriers, public
utility vehicles (PUVs) as well as private
vehicles covered by app-based transport
network services, other recreational spaces
such as, but not limited to, cinema halls,
theaters and spas, bars and clubs, resorts and
water parks, hotels and casinos, and all other
areas, regardless of ownership, openly
accessible or offered to be accessed by the
public. Sec. 4(m), IRR of R.A. No. 11313)
12. Sexist remarks or slurs - are statements in
whatever form or however delivered, that are
119
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Standards
NOTE: GBSH in the workplace may also be
committed between peers and by a
subordinate to a superior officer. 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, IRR of R.A.
No. 11313)
indicative of prejudice, stereotyping, or
discrimination on the basis of sex, typically
against women. (Sec. 4(n), IRR of R.A. No.
11313)
13. Transphobic remarks or slurs - are any
statements in whatever form or however
delivered, that are indicative of fear, hatred or
aversion towards persons whose gender
identity and/or expression do not conform
with their sex assigned at birth. (Sec. 4(i), IRR
of R.A. No. 11313)
Gender-based
Workplace
Sexual
Harassment
in
Duties of Employers
Employers or other persons of authority,
influence or moral ascendancy in a workplace
shall have the duty to prevent, deter, or punish the
performance of acts of gender-based sexual
harassment in the workplace. Towards this end,
the employer or person of authority, influence or
moral ascendancy shall:
the
The crime of gender-based sexual harassment
(GBSH) in the workplace includes the following:
1.
2.
An act or series of acts involving any
unwelcome sexual advances, requests or
demand for sexual favors or any act of sexual
nature, 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, that has or could
have a detrimental effect on the conditions of
an individual’s employment or education, job
performance or opportunities;
A conduct of sexual nature and other conductbased on sex affecting the dignity of a person,
which is unwelcome, unreasonable, and
offensive to the recipient, 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;
1.
Disseminate or post in a conspicuous place a
copy of this Act to all persons in the workplace;
2.
Provide measures to prevent gender-based
sexual harassment in the workplace, such as
the conduct of anti-sexual harassment
seminars;
3.
Create an independent internal mechanism or
a Committee on Decorum and Investigation
(CODI) to investigate and address complaints
of gender-based sexual harassment which
shall:
a.
b.
c.
3.
A conduct that is unwelcome and pervasive
and creates an intimidating, hostile or
humiliating
environment
for
the
recipient: Provided, That the crime of
gender-based sexual harassment may also be
committed between peers and those
committed to a superior officer by a
subordinate, or to a teacher by a student, or to
a trainer by a trainee. (Sec. 16, R.A. No. 11313)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
d.
e.
f.
120
Adequately represent the management,
the Ees from the supervisory rank, the
rank-and-file Ees, and the union, if any;
Designate a woman as its head and not
less than half of its members should be
women;
Be composed of members who should be
impartial and not connected or related to
the alleged perpetrator;
Investigate and decide on the complaints
within ten (10) days or less upon receipt
thereof;
Observe due process;
Protect the complainant from retaliation;
and
Labor Law and Social Legislation
g.
4.
Guarantee confidentiality to the greatest
extent possible;
1.
Provide and disseminate, in consultation with
all persons in the workplace, a code of conduct
or workplace policy which shall:
2.
a.
b.
c.
Expressly reiterate the prohibition on
gender-based sexual harassment;
Describe the procedures of the internal
mechanism created under Sec. 17(c) of
this Act; and
Set administrative penalties. (Sec. 17, R.A.
No. 11313)
Non-implementation of their duties under
Sec. 17 of the law, as provided in the penal
provisions; or
Not taking action on reported acts of
gender-based
sexual
harassment
committed in the workplace. (Sec. 19, IRR
of R.A. No. 11313)
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. (Sec. 23, IRR of R.A. No. 11313)
NOTE: In case of non-compliance in the
public sector by the employer of their duties
herein provided, an Ee may file an
administrative complaint with the Civil
Service Commission (CSC).
In case the employer is a presidential
appointee, elective official or official of the
AFP, an administrative complaint may be
filed with appropriate offices with such
jurisdictions, such as the Office of the
President or Office of the Ombudsman. (Sec.
19, IRR of R.A. No. 11313)
Duties of Ees and Co-workers
Ees and co-workers shall have the duty to:
1. Refrain from committing acts of genderbased sexual harassment;
2. Discourage the conduct of gender-based
sexual harassment in the workplace;
3. Provide emotional or social support to
fellow Ees, co-workers, colleagues or
peers who are victims of gender-based
sexual harassment; and
4. Report acts of gender-based sexual
harassment witnessed in the workplace.
(Sec. 18, R.A. No. 11313)
Liability of Employers
In addition to liabilities for committing acts of
gender-based sexual harassment, employers
may also be held responsible for:
121
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
people throughout the Philippines which shall
promote social justice through savings, and ensure
meaningful social security protection to members
and their beneficiaries against the hazards of
disability, sickness, maternity, old age, death, and
other contingencies resulting in loss of income or
financial burden. Towards this end, the State shall
endeavor to extend social security protection to
Filipino workers, local or overseas, and their
beneficiaries. (Sec. 2, R.A. No. 11199)
IV. SOCIAL WELFARE LEGISLATION
Social Legislation
Social legislations are laws, rules, and regulations
that promote welfare of all sectors of society. Social
Legislation includes laws that provide particular
kinds of protection or benefits to the society, in
furtherance of social justice. Not all social
legislations are labor laws. (Duka, 2019)
NOTE: The enactment of the SSS law is a legitimate
exercise of police power. It affords protection to
labor and is in full accord with the constitutional
mandate on the promotion of social justice. The
funds contributed to the System created by the law
are not public funds, but funds belonging to the
members which are merely held in trust by the
Government. (Roman Catholic Archbishop of Manila
v. SSS, G.R. No. L-15045, 20 Jan. 1961)
Q: Is there any distinction between labor
legislation and social legislation? Explain. (1995
BAR)
A: YES. Labor Legislation is limited in scope and
deals with the rights and duties of employees and
employers. Social Legislation is more encompassing
as it includes subjects such as agrarian relations,
housing and human settlement, protection of
women and children, etc. All labor laws are social
legislation, but not all social legislation is labor law.
SSS premiums are not taxes
The funds contributed to the System belong to the
members who will receive benefits, as a matter of
right, whenever the hazards provided by the law
occur. (CMS Estate, Inc. v. SSS, G.R. No. 26298, 28 Sept.
1984)
In other words, labor legislation focuses on the
rights of a worker in the workplace; it refers to labor
statutes like Labor Relations Law and Labor
Standards. On the other hand, social legislation
refers to Social Security Laws.
Benefits received under SSS law are not part of
the estate of a member
Social legislation is a broad term and may include
not only laws that give social security protection,
but also those that help the worker secure housing
and basic necessities. The Comprehensive Agrarian
Reform Law could also be considered a social
legislation.
Benefits receivable under the SSS Law are in the
nature of a special privilege or an arrangement
secured by the law pursuant to the policy of the
State to provide social security to the workingman.
The benefits are specifically declared not
transferable and exempt from tax, legal processes,
and liens. (SSS v. Davac, et al., G.R. No. 21642, 30 July
1966)
A. SOCIAL SECURITY ACT OF 2018
(R.A. No. 11199)
1. COVERAGE AND EXCLUSIONS
COVERAGE
Declaration of Policy
1. Compulsory Coverage
a. All Ees not over 60 years of age and their
Ers;
b. Domestic helpers whose income is not
It is the policy of the State to establish, develop,
promote, and perfect a sound and viable tax-exempt
social security system suitable to the needs of the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
122
Labor Law and Social Legislation
plan shall be subject to agreements
between the employers and employees
concerned;
less than P1,000/month and not over 60
years of age and their Ers;
The minimum wage of domestic workers is now
P1,500 to P2,500 pursuant to Sec. 24 of RA No.
10361 or Batas Kasambahay Law.
Per R.A. No. 10361, 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.
iv.
The private benefit plan which the
employer shall continue for his
employees shall remain under the
employer's management and control
unless there is an existing agreement
to the contrary; and
v.
Nothing in the SSS Act shall be
construed as a limitation to the right of
employers and employees to agree on
and adopt benefits which are over and
above those provided under the SSS
Act. (Sec. 9, R.A. No. 11199; Sec. 2, Rule
13, IRR of R.A. No. 11199)
The following rules shall govern the covered
employees with private benefit plans:
i.
ii.
c.
The benefit already earned by the
employees under private benefit plans
existing at the time of the approval of
the SSS Act shall not be discontinued,
reduced or otherwise impaired;
1.
2.
3.
He shall pay to the SSS only the
contribution required of him;
4.
2.
iii.
be
NOTE: A self-employed person is one whose
income is not derived from employment, as well as
those mentioned in Sec. 9-A of the law (Sec. 8(s), R.A.
No. 11199):
Private benefit plans which are existing
and in force at the time of compulsory
coverage shall be integrated with the
plan of the SSS, and if the employer's
contribution to his private plan is
more than that required of him in the
SSS Act:
1.
Self–employed persons as may
determined by the Commission.
He shall continue his contribution
to such private plan less his
contribution to the SSS 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.
5.
d.
All self-employed professionals;
Partners and single proprietors of
business;
Actors and actresses, directors,
scriptwriters,
and
news
correspondents who do not fall
within the definition of the term
“Ee”;
Professional
athletes,
coaches,
trainers, and jockeys;
Individual farmers and fisherman.
(Sec. 9-A, R.A. No. 11199)
All sea-based and land-based Overseas
Filipino Workers (OFWs) not over 60 years
of age.
NOTE: Land-based OFWs are compulsory members
of the SSS and are considered in the same manner as
self-employed persons, until a Bilateral Labor
Agreement (BLA) shall have been entered into. (Sec.
9-B (c), R.A. No. 11199)
Any
changes,
adjustments,
modifications,
eliminations
or
improvements in the benefits to be
available under the remaining private
123
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
NOTE: Manning agencies are agents of their
principals and are considered as employers of seabased OFWs. (Sec. 9-B (b), R.A. No. 11199)
Land-based OFW
NOT covered under
BLAs
Voluntary coverage
of land-based
overseas Filipinos
2. Voluntary Coverage
a.
b.
c.
d.
e.
Spouses who devote full time to managing
the household and family affairs;
XPN: They are also engaged in other
vocation or employment which is subject to
mandatory coverage. (Sec. 9(b), R.A. No.
11199)
Q: What is the effect of separation of employee
on the obligation to contribute and remit?
A: The effects are as follows:
An OFW upon the termination of his/her
employment overseas (Sec. 9-B (f), R.A. No.
11199);
A covered employee who was separated
from employment who continues to pay
his/her contributions;
Self-employed who realizes no income for a
certain month; and
Filipino permanent migrants, including
Filipino immigrants, permanent residents
and naturalized citizens of their host
countries. (Sec. 9-B (g), R.A. No. 11199)
1.
His Er’s obligation to contribute arising from
that employment shall cease at the end of the
month of separation.
2.
The separated employee shall be credited
with all contributions paid on his/her behalf
and is entitled to the social security benefits
in accordance with issued guidelines and the
provisions of the Social Security Act of 2018.
3.
The separated employee may continue to pay
his/her contributions voluntarily to maintain
his/her right to full benefit. (Sec. 11, R.A. No.
11199)
4.
Any contribution paid in advance by the
employer but not due shall be credited or
refunded to said employer. (Sec. 22, R.A. No.
11199)
3. By agreement
Any
foreign
government,
international
organization, or their wholly owned instrumentality
employing workers in the Philippines or employing
Filipinos outside of the Philippines.
The above rule recognizes the “once a member,
always a member” principle.
XPN: Those already covered by their respective civil
service retirement systems.
Effect of the interruption of business or
professional income
Effective Date of SSS Coverage
(Rule 15, IRR, R.A. No. 11199)
On the first day of
Employer
operation
On the first day of
Employee
employment
Upon registration with
Self-employed
the SSS
Sea-based OFW
First day of employment
Based on the provisions
Land-based OFW
of the Agreement and its
implementing
covered under BLAs
arrangement
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Applicable month and
year of the first
Contribution payment
Applicable month and
year of the first
contribution payment.
1.
If the self-employed member realizes no
income in any given month, he/she shall not be
required to pay his/her contributions for that
month.
NOTE: No self-employment
obligation to pay.
2.
124
income,
no
A self-employed member may be allowed to
continue paying contributions under the same
rules and regulations applicable to a separated
Labor Law and Social Legislation
who immediately attended to Don Luis’ garden
and finished the job in three days. (2014 BAR)
employee member.
3.
No retroactive payment of contributions shall
be allowed. (Sec. 22, R.A. No. 11199)
a.
Is
there
an
employer-employee
relationship between Don Luis and Lando?
EXCLUSIONS FROM COVERAGE
b. Does Don Luis need to register Lando with
the Social Security System (SSS)?
The following are excluded from compulsory
coverage under the SSS Act:
A:
1.
Services where there is no employeremployee relationship in accordance with
existing labor laws, rules, regulations, and
jurisprudence;
2.
Services performed in the employ of the
Philippine Government or instrumentality or
agency thereof;
3.
Services performed in the employ of a foreign
government or international organization, or
their wholly-owned instrumentality; and
4.
Such other services performed by temporary
and other employees which may be excluded
by regulation of the Commission. (Sec. 8, (j),
R.A. No. 11199)
a.
YES. There is an employeremployee relationship between Don Luis and
Lando. Firstly, Lando, who was looking for
work finally rendered personal services for
Don Luis. Secondly, Lando could not have been
the master of his time, means and methods
under the circumstances.
b. NO. Don Luis does not need to register Lando
with the SSS because he is a purely casual
employee, hence outside SSS coverage. Neither
should he report Lando for SSS coverage under
the Batas Kasambahay Law because, although
a gardener, he is an occasional or sporadic
employee. Therefore, he is not a kasambahay
who is entitled to SSS coverage. (R.A. No.
10361)
Q: The owners of FALCON Factory, a company
engaged in the assembling of automotive
components, decided to have their building
renovated. Fifty (50) persons, composed of
engineers, architects, and other construction
workers, were hired by the company for this
purpose. The work was estimated to be
completed in 3 years. The workers contended
that since the work would be completed after
more than 1 year, they should be subject to
compulsory coverage under the Social Security
Law. Do you agree with their contention?
Explain your answer fully. (2002 BAR)
NOTE: Employees of bona fide independent
contractors shall not be deemed employees of the
employer engaging the service of said contractors.
Q: A textile company hires 10 carpenters to
repair the roof of its factory which was
destroyed by typhoon “Bening.” Are the
carpenters subject to compulsory coverage
under the SSS Law? Why?
A: NO. The employment is purely casual and not for
the purpose of the occupation or business of the Er.
Their engagement is occasioned by the passage of
the typhoon; they are not hired on a regular basis.
A: NO. Under Sec. 8 (j) of R.A. No. 1161, as amended,
employment of purely casual and not for the
purpose of the occupation or business of the Er is
excepted from compulsory coverage. An
employment is purely casual if it is not for the
purpose of occupation or business of the Er.
Q: Don Luis, a widower, lived alone in a house
with a large garden. One day, he noticed that the
plants in his garden needed trimming. He
remembered that Lando, a 17-year-old out-ofschool youth, had contacted him in church the
other day looking for work. He contacted Lando
125
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
In the problem given, Falcon Factory is a company
engaged in the assembly of automotive components.
The 50 persons (engineers, architects, and
construction workers) were hired by Falcon Factory
to renovate its building. The work to be performed
by these 50 people is not in connection with the
purpose of the business of the factory. Hence, the
employment of these 50 persons is purely casual.
They are, therefore, excepted from the compulsory
coverage of the SSS law.
legally adopted children of the member, his/her
dependent illegitimate children shall be entitled to
100% of the benefits.
2. DEPENDENTS AND BENEFICIARIES
NOTE: The dependent parents will be considered
as beneficiaries only when there are no primary
beneficiaries. The member can also designate any
person as secondary beneficiary only when there
are no primary or secondary beneficiaries.
II.
1.
2.
DEPENDENTS
The dependents shall be the following:
1.
The legal spouse entitled by law to receive
support from the member;
2.
The legitimate, legitimated or legally adopted,
and illegitimate child who is unmarried, not
gainfully employed, and has not reached
twenty-one (21) years of age, or if over twentyone (21) years of age, he is congenitally or while
still a minor has been permanently
incapacitated and incapable of self-support,
physically or mentally;
3.
The parent who is receiving regular support
from the member. (Sec. 8(e), R.A. No. 11199)
A: NO. The term "parents" in the phrase "dependent
parents" ought to be taken in its general sense and
cannot be unduly limited to "legitimate parents.”
The phrase "dependent parents" should, therefore,
include all parents, whether legitimate or
illegitimate and whether by nature or by adoption.
When the law does not distinguish, one should not
distinguish. Plainly, "dependent parents" are
parents, whether legitimate or illegitimate,
biological or by adoption, who are in need of
support or assistance.
Primary Beneficiaries
The primary beneficiaries of the member are the
following:
1.
2.
The dependent spouse, until he or she
remarries; and
The dependent legitimate, legitimated, or
legally adopted children and the
illegitimate children.
The biological parent has the right to the benefits
stemming from John’s death as a dependent parent
given the adoptive parent’s untimely demise during
John’s minority. It is true that the adoption decree
severed the relation between John and his biological
parent, effectively divesting the latter’s status of a
legitimate parent, and consequently, that of being a
secondary beneficiary. However, it should be noted
NOTE: The dependent illegitimate children shall be
entitled to 50% of the share of the legitimate,
legitimated, or legally adopted children. In the
absence of dependent legitimate, legitimated, or
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Dependent parents; or
Any person designated by the member as
his/her secondary beneficiary. (Sec. 8(k),
R.A. No. 11199)
Q: John died in an accident while performing his
duties as an electrician on board a vessel. At the
time of his demise, he was childless and
unmarried, predeceased by his adoptive parent
Cornelio during his minority, and survived only
by his biological parent Bernardina. Bernardina
filed a claim for death benefits, but the SSS
rejected her claim because she is no longer
considered a primary beneficiary, because she
is no longer John’s legitimate parent due to his
legal adoption by Cornelio. Is the SSS correct?
BENEFICIARIES
I.
Secondary Beneficiaries
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Labor Law and Social Legislation
the SSS Law, the primary beneficiaries who are
entitled to survivor’s pension are those who
qualify as such as of the date of retirement of the
deceased member. Hence, Elena, who was not
then the legitimate spouse of Bonifacio as of the
date of his retirement, could not be considered
his primary beneficiary. Is Elena entitled to
claim survivor’s pension?
that parental authority should be deemed to have
reverted in favor of the biological parent upon death
of the adoptive parent during the adoptee’s
minority.
Thus, the death benefits under the Employees’
Compensation Program shall accrue solely to the
surviving biological parent, John’s sole remaining
beneficiary. (Bartolome v. SSS, G.R. No. 192531, 12
Nov. 2014)
A: YES. The proviso as of the date of his retirement
in Sec. 12-B (d) of RA 8282, which qualifies the term
primary beneficiaries, is unconstitutional for it
violates the due process and equal protection
clauses of the Constitution. The classification of
dependent spouses on the basis of whether their
respective marriages to the SSS member were
contracted prior to or after the latter’s retirement
for the purpose of entitlement to survivor’s pension
does not rest on real and substantial distinctions. It
is too sweeping because the proviso effectively
disqualifies the dependent spouses—whose
respective marriages to the retired SSS member
were contracted after the latter’s retirement—as
primary beneficiaries and unfairly lumps all these
marriages as sham relationships or were contracted
solely for the purpose of acquiring benefits accruing
upon the death of the other spouse.
Dependent for support
The entitlement to benefits as a primary beneficiary
requires not only legitimacy but also dependence
upon the member Ee. (SSS v. Favila, G.R. No. 170195,
28 Mar. 2011)
NOTE: The Court defined a “dependent” as one
who derives his/her main support from
another. Meaning, relying on, or subject to, someone
else for support; not able to exist or sustain oneself,
or to perform anything without the will, power, or
aid of someone else.
It should be noted that the GSIS law likewise defines
a “dependent spouse” as the legitimate spouse
dependent for support upon the member or
pensioner. If a wife is already separated de facto
from her husband, she cannot be said to be
"dependent for support" upon the husband, absent
any showing to the contrary. Conversely, if it is
proved that the husband and wife were still living
together at the time of his death, it would be safe to
presume that she was dependent on the husband for
support, unless it is shown that she is capable of
providing for herself. (SSS v. Aguas, G.R. No. 165546,
27 Feb. 2006)
The proviso runs afoul of the due process clause as
it outrightly deprives the surviving spouses, whose
respective marriages to the retired SSS members
were contracted after the latter’s retirement, of
their survivor’s benefits. There is outright
confiscation of benefits due such surviving spouses
without giving them an opportunity to be heard.
(Dycaico v. SSS, G.R. No. 161357, 30 Nov. 2005)
NOTE: The reckoning point in determining the
beneficiaries of the deceased should be the time of
the latter’s death. (SSS v. De Los Santos, G.R. No.
164790, 29 Aug. 2008)
Q: Bonifacio and Elena Dycaico lived together as
husband and wife without the benefit of
marriage. In June 1989, Bonifacio was
considered retired and began receiving his
monthly pension from the SSS. Bonifacio
married Elena on Jan. 6, 1997. He continued to
receive the monthly pension until he passed
away on June 19, 1997. Elena filed with the SSS
an application for survivor’s pension, but it was
denied on the ground that under Sec. 12-B(d) of
Qualification of Spouse-Beneficiary
To ensure a uniform implementation of the Dycaico
v. SSS case, the SSS issued the following guidelines:
1.
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The spouse must have been legally married to
the retiree-pensioner at the time of death.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
2.
a.
The spouses were living together as
husband and wife without legal
impediment to marry each other prior to
the retirement of the member; or
b.
The surviving spouse was reported as
beneficiary-spouse in the SSS Forms prior
to the retirement of the member; or
c.
A child was born during the existence of the
marriage between the retiree-pensioner
and the surviving spouse; or
d.
Before marriage, a child was born during
the time the spouses were living together
as husband and wife without legal
impediment to marry each other; or
e.
3.
Antonio’s death benefits with the SSS. Her claim
was denied on the ground that she was not a
qualified beneficiary of Antonio. She contended
that her marriage to Larry Constant was not the
subsequent marriage contemplated under SSS
Law that would disqualify her as a beneficiary;
that the decree of divorce issued by a foreign
state involving Filipino citizens has no validity
and effect under Philippine law. Is Gloria still
qualified as a primary beneficiary of Antonio
under the SSS Law?
If the marriage was celebrated after the
retirement of the member, any of the following
circumstances is present:
A: NO. Although Gloria was the legal spouse of the
deceased, she is still disqualified to be his primary
beneficiary under the SSS Law for she fails to fulfill
the requirement of dependency upon her deceased
husband Antonio. (SSS v. De Los Santos, G.R. No.
164790, 29 Aug. 2008)
Q: Rodolfo, an SSS member, was survived by the
following: his legal wife Editha, who was now
cohabiting with another man; another wife
Yolanda, whom Rodolfo married and with whom
he had four illegitimate children, who are now
over 21 years old; and another common-law
wife, Gina, with whom he had two illegitimate
minor children. All wives filed a claim before the
SSS for death benefits. Who among the claimants
are
qualified
and/or
disqualified
as
beneficiaries?
The marriage between the surviving
spouse
and
retiree-pensioner
is
established to have been contracted not for
any fraudulent purpose. In this regard, the
SSS Branch concerned shall conduct an
appropriate investigation to satisfy this
requirement.
The spouse must have been dependent for
support upon the retiree-pensioner during the
existence of marriage. (SSS Office Order No.
2010-02)
A: Yolanda is disqualified because the marriage
between her and Rodolfo was null and void because
of a prior subsisting marriage contracted with
Editha.
Q: Antonio and Gloria de los Santos, both
Filipinos, got married in 1964. In 1983, Gloria
left Antonio and went to the United
States. In 1986, she filed for divorce against
Antonio in California. The divorce was granted.
Editha is disqualified, because even if she was the
legal wife, she was not qualified to the death
benefits since she herself admitted that she was not
dependent on her deceased husband for support
inasmuch as she was cohabiting with another man.
In 1987,
Antonio
married
Cirila
de
los Santos. For her part, Gloria married Larry
Thomas Constant, an American citizen, in the US.
In 1999, Antonio died of respiratory
failure. Cirila applied for and began receiving
his SSS pension benefit.
Gina is disqualified, being a common-law wife.
Since the wives are disqualified and because the
deceased has no legitimate child, it follows that the
dependent illegitimate minor children of the
deceased shall be entitled to the death benefits as
primary beneficiaries. The SSS Law is clear that for
On Dec. 21, 1999, Gloria filed a claim for
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
128
Labor Law and Social Legislation
a minor child to qualify as a “dependent,” the only
requirements are that he/she must be below 21
years of age, not married nor gainfully employed.
filed a claim for benefits under the law, it was
denied on the ground that her injury is not
work-connected. Is the denial legal? Why?
Yolanda’s children are disqualified for being over 21
years old.
A: NO. It is not necessary for the enjoyment of
benefits under the SSS Law that the injury be workconnected. What is important is membership in the
SSS and not the causal connection of the work of the
Ee to his injury or sickness.
In this case, the minor illegitimate children of Gina
are the only qualified beneficiaries of Rodolfo.
(Signey v. SSS, G.R. No. 173582, 28 Jan. 2008)
NOTE: Claims based on work-connected injuries or
occupational diseases are covered by the State
Insurance Fund.
Social Security Law is not a law on succession
The Social Security System is not a law on
succession. It is not the heirs of the employee but
the designated beneficiaries who are to receive the
social security benefits. It is only when the
beneficiary is the estate, or when there is no
designated beneficiary, or if the designation of
beneficiary is void, that the Social Security System is
required to pay the employee’s heirs. (Ungos, 2013)
a. SICKNESS BENEFITS
Sickness benefit
It is a daily cash allowance paid by the employer to
the member who is unable to work due to sickness
or injury for each day of compensable confinement
or a fraction thereof, or by the SSS, if such person is
unemployed or is self-employed (SE), an Overseas
Filipino Worker (OFW), or Voluntary Member (VM)
who has been previously covered either as
employed/SE/OFW and non-working (NW) spouse.
(Rule 25, IRR, R.A. No. 11199)
3. BENEFITS
Benefits under the SSS Act
a.
b.
c.
d.
e.
f.
g.
Sickness Benefits
Permanent Disability Benefits
Maternity Leave Benefits
Retirement Benefits
Death Benefits
Funeral Benefits
Unemployment Insurance or Involuntary
Separation Benefits
Qualifying conditions
(U-P-U-N)
1.
The member is Unable to work due to sickness
or injury and is confined either in a hospital or
at home for at least four (4) days.
Non-transferability of Benefits
2.
Benefits payable are not transferable and no power
of attorney or other document executed by those
entitled thereto in favor of any agent, attorney or
any other person for the collection thereof on their
behalf shall be recognized, except when the payees
are physically unable to collect personally such
benefits. (Sec. 15, R.A. No. 11199)
The member has Paid at least three (3) months
of contributions within the 12-month period
immediately before the semester of sickness
or injury.
3.
The member has Used all company sick leaves
with pay for the current year and has duly
notified his employer.
4.
The member must Notify the SSS by filing a
sickness benefit application if he is separated
from employment, a self-employed or
voluntary member, including OFW-member.
(Sec. 14, R.A. No. 11199)
Q: On her way home from work, Mikaela, a
machine operator in a sash factory, decided to
watch a movie in a movie house. However, she
was stabbed by an unknown assailant. When she
129
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
NOTE: No contributions paid retroactively by
SE/VM/OFWs shall be used in determining his/her
eligibility to sickness benefit wherein the date of
payment is within or after the semester of
contingency.
Rule on Notification of Self-employed Member
GR: The unemployed or SE member, land-based
OFW, or VM including NW spouse, shall directly
notify the SSS of the confinement in the prescribed
manner within five (5) calendar days after the start
of confinement.
Notification Requirement
Hospital
Confinement
Confinement
elsewhere,
as may be
defined by
the SSS
XPN: When such confinement is in a hospital,
notification to the SSS in the prescribed manner
shall be within one (1) year from date of discharge.
(Sec. 14, R.A. No. 11199)
Sickness/injury
that occurred
while working
or within the
premises of the
employer
OFWs are given 35 calendar days in filing sickness
benefits. This applies only for confinement
elsewhere as defined by the SSS. (Sec. 3, Rule 25, IRR,
R.A. No. 11199)
Notification by Employee to Employer
Not
necessary
The
employee
shall notify
the employer
of the
sickness or
injury in the
prescribed
manner
within five
(5) calendar
days after the
start of
confinement
Amount of Benefit
The amount of the member’s daily Sickness Benefit
allowance is equivalent to 90% of his Average Daily
Salary Credit. (ADSC). (Sec. 14, R.A. No. 11199)
Not necessary
NOTE: The Sickness Benefit is granted up to
maximum of 120 days in one (1) calendar year.
Limitations on the Grant of Sickness Benefit
1.
A member may be granted a maximum
sickness benefit of 120 days in one (1)
calendar year.
2.
The sickness benefit shall be paid for not more
than 240 days on account of the same illness or
confinement.
3.
An unused portion of the allowable 120 days
sickness benefit cannot be carried forward nor
added to the total number of compensable
days allowable in the following year.
4.
Compensable confinement shall begin only
after all sick leaves of absence with full pay to
the credit of employee-member shall have
been exhausted, if applicable. (Sec. 14, R. A. No.
11199; Sec. 6, Rule 25, IRR, R. A. No. 11199)
Notification by Employer to SSS
The employer
shall inform
the SSS of
such
confinement
in the
prescribed
manner
within one
(1) year from
date of
discharge
The employer
shall in turn
notify the SSS
within five
(5) calendar
days after
receipt of
notice from
employee.
The employer
shall notify the
SSS of such
sickness/injury
in the prescribed
manner within
five (5) calendar
days after onset
of
sickness/injury
(Sec. 3 and 4, Rule 25, IRR, R.A. No. 11199)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
130
Labor Law and Social Legislation
Compensable Confinement
1.
2.
Instances when the Er or the unemployed
member is not entitled to reimbursement
It begins on the 1st day of sickness; and
Payment of such allowances shall be promptly
made by the Er:
a. Every regular payday or on the 15th and
last day of each month; and
b. In case of direct payment by the SSS - as
long as such allowances are due and
payable. (Sec. 14, R. A. No. 11199)
1.
2.
3.
Requirements for an Er to claim
reimbursement of the sickness benefit
1.
b.
2.
NOTE: Sickness and disability benefits may be
availed of simultaneously.
100% of daily benefits shall be reimbursed by
SSS if the following requirements are satisfied:
a.
Where the Er failed to notify the SSS of the
confinement;
In the case of the unemployed, where he failed
to send the notice directly to the SSS except
when the confinement is in a hospital; and
Where the claim for reimbursement is made
after one year from the date of confinement.
(Sec. 14, R.A. No. 11199)
Requisites
Receipt of SSS of satisfactory proof of such
payment and legality thereof; and
The Er has notified the SSS of the
confinement within five (5) calendar days
after receipt of the notification from the
Ee member.
1.
2.
Sickness/injury and disability are not related.
Member meets all the qualifying conditions for
the grant of sickness and disability benefits.
(Sec. 6, Rule 25, IRR of R. A. No. 11199)
Q: Because of the stress in caring for her four (4)
growing
children,
Tammy
suffered
a
miscarriage late in her pregnancy and had to
undergo an operation. In the course of the
operation, her obstetrician further discovered a
suspicious-looking mass that required the
subsequent removal of her
uterus
(hysterectomy). After surgery, her physician
advised Tammy to be on full bed rest for six (6)
weeks.
Er shall be reimbursed only for each day of
confinement starting from the 10th calendar
day immediately preceding the date of
notification to the SSS if the notification to the
SSS is made beyond five (5) calendar days after
receipt of the notification from the Ee member.
(Sec. 14, R.A. No. 11199)
Reimbursement by SSS
Meanwhile, the biopsy of the sample tissue
taken from the mass in Tammy's uterus showed
a beginning malignancy that required an
immediate series of chemotherapy once a week
for four (4) weeks. What benefits can Tammy
claim under existing social legislation? (2013
BAR)
GR: SSS shall reimburse the Er or pay the
unemployed member only for confinement within
one year immediately preceding the date the claim
for benefit or reimbursement is received by the SSS.
XPN: Confinement in a hospital, in which case the
claim for benefit or reimbursement must be filed
within one year from the last day of confinement.
(Sec. 14, RA No. 11199)
A: Assuming she is employed, Tammy is entitled to
a special leave benefit of two months with full pay
(Gynecological Leave) pursuant to R.A. No. 9710 or
the Magna Carta of Women. She can also claim
Sickness Leave benefit in accordance with the SSS
Act.
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
contributions, payable in accordance with the
schedule. (Sec. 13-A, R. A. No. 11199)
b. PERMANENT DISABILITY BENEFITS
Permanent disability benefit
NOTE: The monthly pension benefit for permanent
partial disability will be given in lump sum if it is
payable in less than 12 months. (Ungos, 2013)
It is a cash benefit granted to a member who
becomes permanently disabled, either partially or
totally. (Sec. 1, Rule 23, IRR, R.A. No. 11199)
Types of Disability Benefit
Permanent Total Disability
1.
2.
The following are deemed permanent total
disabilities:
1.
2.
3.
4.
5.
Qualifying Conditions
Complete loss of sight of both eyes;
Loss of two limbs at or above the ankle or
wrists;
Permanent complete paralysis of two limbs;
Brain injury resulting to incurable imbecility
or insanity; and
Such cases as determined and approved by
the SSS. (Sec. 13-A, R.A. No. 11199)
1.
2.
3.
Permanent Partial Disability
1.
b.
c.
Monthly pension – available if the permanent
partial
disability
occurs
after
36
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
P1,000 if the member has less than ten
Credited Years of Service (CYS);
P1,200 if with at least 10 CYS; and
P2,400 with at least 20 CYS.
2.
If qualified, the member is granted a monthly
Disability Pension, plus P5,000 monthly
Supplemental Allowance. (Sec. 7, Rule 23, IRR,
R. A. No. 11199)
3.
Dependent’s Pension (for total disability),
which is 10% of the member’s basic monthly
pension, or P250, whichever is higher. (Sec. 12A, R.A. No. 11199)
The permanent partial disability benefits are as
follows:
2.
The minimum monthly Disability Pension is:
a.
NOTE: For the purpose of adjudicating retirement,
death and permanent total disability pension
benefits, contributions shall be deemed paid for the
months during which the member received partial
disability pension.
Percentage of the lump sum benefit –
available if the permanent partial disability
occurs before 36 monthly contributions have
been paid prior to the semester of disability;
The member has paid at least one month
contribution before the semester of disability.
To qualify for a monthly disability pension, the
member must have paid at least 36 monthly
contributions prior to the semester of
disability.
If less than 36 monthly contributions, he is
granted a lump sum amount. (Sec. 13-A, R.A.
No. 11199)
Amount of Benefits
If disability occurs after 36 monthly contributions
have been paid prior to the semester of disability,
the benefit shall be the monthly pension for
permanent total disability payable not longer than
the period designated in the schedule in Section 3,
Rule 23 of the IRR of R.A. No. 11199. The monthly
pension benefit shall be given in lump sum if it is
payable for less than 12 months.
1.
Monthly pension
Lump sum
NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to
dependent’s pension. No substitution is
allowed.
4.
132
Plus P1,000 additional benefit effective
Labor Law and Social Legislation
January 2017. (Sec. 12 (c), R.A. No. 11199)
5.
13th month pension, which is payable every
December to total disability pensioners; for
partial disability pensioners, 13th month
pension shall be paid provided that pension
duration is at least 12 months. (Sec. 8, Rule 23,
IRR, R. A. No. 11199)
2.
If employed, she must have notified her Er of
her pregnancy and the probable date of her
childbirth.
3.
She must directly notify the SSS if she is
unemployed, a self-employed or voluntary
member, non-working spouse, including OFWmember. (Sec. 14-A, R.A. No. 11199)
Effect of the Death of a Pensioner with
Permanent Total Disability
1.
Amount of Benefit
The amount of daily allowance is equivalent to
100% of the member’s ADSC for a compensable
period of:
Primary beneficiaries are entitled to receive
monthly pension as of the date of disability.
2. If there are no primary beneficiaries and
the pensioner dies within 60 months from
the start of his monthly pension – secondary
beneficiaries shall be entitled to a lump sum
benefit equivalent to the total monthly
pensions corresponding to the balance of the
five-year guaranteed period excluding the
dependents’ pension. (Sec. 13-A, R.A. No.
11199)
1.
2.
3.
NOTE: The Maternity Benefit is granted regardless
of member’s civil status and frequency of
pregnancy.
Effect of Retirement or Death of a Pensioner
with a Partial Disability
Q: A, single, has been an active member of the
Social Security System for the past 20 months.
She became pregnant out of wedlock and on her
7th month of pregnancy, she was informed that
she would have to deliver the baby through
caesarean
section
because
of
some
complications. Can A claim maternity benefits?
If yes, how many days can she go on maternity
leave? If not, why is she not entitled? (2010 BAR)
If the pensioner with partial disability retires or
dies, the disability pension shall cease upon his
retirement or death. (Sec. 13-A, R.A. No. 11199)
c. MATERNITY LEAVE BENEFITS
Maternity benefit
Maternity Leave Benefit is a daily cash allowance
granted to female members who gave birth via
normal delivery or caesarean section or suffered
miscarriage, regardless of civil status or legitimacy
of the child. (Sec. 1, Rule 26, IRR, R.A. No. 11199)
A: YES. The Expanded Maternity Leave Act applies
to all female workers regardless of civil status, as
long as the requirements under the law on notices
and payment, among others, have been satisfied.
Since there is no indication that A is a solo parent,
she is entitled to 100% of her average salary credit
for 105 days.
Qualifying conditions
1.
105 days for normal or caesarian section
delivery;
120 days for solo parents under R.A. No. 8972
or Solo Parents’ Welfare Act; or
60 days for miscarriage or emergency. (R.A.
No. 11210 or the Expanded Maternity Leave
Law)
The member has paid at least three (3)
monthly contributions within the 12-month
period immediately preceding the semester of
her childbirth or miscarriage.
NOTE: The suggested answer is updated to conform
with prevailing law.
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UNIVERSITY OF SANTO TOMAS
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Social Welfare Legislation
Q: Luisa is an unwed mother with 3 children
from different fathers. In 2004, she became a
member of the Social Security System (SSS). That
same year, she suffered a miscarriage of a baby
out of wedlock from the father of her third child.
She wants to claim maternity benefits under the
SSS Act. Is she entitled to claim? (2015 BAR)
a.
A: YES. Provided that Luisa has reported to her
employer her pregnancy and date of expected
delivery and paid at least 3 monthly contributions
during the 12-month period immediately preceding
her miscarriage, then she is entitled to maternity
benefits under the Expanded Maternity Leave Act,
regardless of frequency. As to the fact that she got
pregnant outside wedlock, as in her past three
pregnancies, this will not bar her claim because the
SSS is non-discriminatory.
b.
Optional Retirement – Has reached 60
years old and separated from employment
or has ceased to be self-employed, except:
i.
An underground mineworker whose
date of actual retirement is not earlier
than 13 March 1998 but not later than
27 April 2016 – at least 55 years old;
ii.
An underground or a surface
mineworker whose date of actual
retirement in not earlier than 27 April
2016 – 50 years old
Technical Retirement – At least 65 years
old, except:
i.
An underground mineworker or
surface mineworker – At least 60 years
old
ii.
In the case of a racehorse jockey – At
least 55 years old. (Sec. 2, Rule 21, IRR
of R. A. No. 11199)
NOTE: The suggested answer is updated to conform
with prevailing law.
d. RETIREMENT BENEFITS
Retirement benefit
Requisites for entitlement to lump sum benefit
The Retirement Benefit is a monthly pension or
lump sum granted to a member who can no longer
work due to old age. (Sec. 1, Rule 21, IRR, of R. A. No.
11199)
1.
2.
3.
4.
Types of retirement benefit
1.
2.
Monthly Pension– Lifetime cash benefit paid
to a retiree who has paid at least 120 monthly
contributions to the SSS prior to the semester
of retirement.
Amount of Benefit
Lump Sum Amount – Granted to a retiree
who has not paid the required 120 monthly
contributions.
Qualifying conditions
1.
A member must have at least 120 monthly
contributions prior to semester of retirement;
and
2.
Age Requirement:
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
At least 60 years old at the time of retirement;
Does not qualify for pension benefits under
paragraph a of Sec. 12-B;
Must be separated from employment; and
Is not continuing payment of contribution to
the SSS on his own. (Sec. 5, Rule 21, IRR, R. A. No.
11199)
134
1.
If qualified, the member is granted a monthly
Retirement
Plan
Pension.
2.
The retiree has the option to receive the first
18th months pension in lump sum, discounted
at a preferential rate to be determined by the
SSS. This option can be exercised only upon
application of the first retirement claim, and
the Dependent’s Pension is excluded from the
advanced 18 months pension. (Sec. 3, Rule 21,
IRR of R. A. No. 11199)
Labor Law and Social Legislation
3.
3.
The minimum monthly Retirement Pension is:
a.
b.
P1,200 if the member has 120 months
contribution or at least ten (10) CYS; or
P2,400 if with at least 20 CYS.
4.
Plus P1,000 additional benefit effective
January 2017. (Sec. 12(c), R. A. No. 11199)
5.
Dependent’s Pension (for total disability),
which is 10% of the member’s basic monthly
pension, or P250, whichever is higher. (Sec. 12A, R. A. No. 11199)
If there are no primary and secondary
beneficiaries, the lump sum payment in the
amount specified in the preceding paragraph
shall form part of his/her estate and shall be
paid to his/her legal heirs in accordance with
the law of succession. (Sec. 8, Rule 21, IRR, R. A.
No. 11199)
e. DEATH BENEFITS
Death Benefit
It is a cash benefit either in monthly pension or lump
sum paid to the beneficiaries of a deceased member.
(Sec. 1, Rule 22, IRR, R. A. No. 11199)
NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to
dependent’s pension. No substitution is
allowed.
6.
Entitlement to Death Benefits
1.
13th month pension, which is payable every
December plus additional benefits. (Sec. 4, Rule
21, IRR, R. A. No. 11199)
a.
Consequence of the re-employment or
resumption to work of a retired pensioner
b.
The monthly pension of a retired member who
resumes employment and is less than 65 years old
will be suspended. He and his Er will again be
subject to compulsory coverage. (Sec. 13-A, R.A. No.
11199)
2.
Death of a Retired Member
Upon the death of a retired member:
1. His/her primary beneficiaries, as of the date of
his/her retirement, shall be entitled to receive
100% of the monthly pension.
2.
Upon death of a member who has paid at least
36 monthly contributions prior to the
semester of death:
Upon death of a member who has not paid the
required 36 monthly contributions prior to the
semester of death, the primary or secondary
beneficiaries shall receive lump sum benefit,
whichever is higher between the equivalent of:
a.
b.
If the retired member has no primary
beneficiaries and 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 pension corresponding to the balance
of the five-year guaranteed period, excluding
the dependent’s pension and additional
benefit allowance.
Primary beneficiaries shall be entitled to
the monthly pension; or
If there are no primary beneficiaries,
secondary beneficiaries shall be entitled
to a lump sum benefit equivalent to 36
times the monthly pension.
The monthly pension multiplied by the
number of monthly contributions paid to
the SSS; or
12 times the monthly pension. (Sec. 13,
R.A. No. 11199)
Amount of Benefit
135
1.
Monthly death pension to the member’s
primary beneficiary is granted a monthly
death pension.
2.
Lump sum amount to secondary beneficiaries
in the absence of primary beneficiaries, or to
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
legal heirs in the absence of secondary
beneficiaries.
3.
Qualifying Conditions
Dependent’s Pension (for total disability) is
10% of the member’s basic monthly pension,
or P250, whichever is higher. (Sec. 12-A, R.A.
No. 11199)
NOTE: Only five dependent minor children,
beginning from the youngest, are entitled to
dependent’s pension. No substitution is
allowed.
4.
5.
Plus P1,000 additional benefit effective
January 2017. (Sec. 12(c), R.A. No. 11199)
1.
The EE-member was reported for coverage by
his ER.
2.
A self-employed member/ OFW / nonworking spouse who had at least one
contribution payment.
3.
A voluntary member who was previously
covered either as employed / self- employed /
OFW and has at least one contribution
payment.
4.
The EE-member was subject to compulsory
coverage but was not reported for coverage by
ER.
The minimum monthly Death Pension is
P1,000 if the member had less than ten CYS;
P1,200 if with at least ten CYS; and P2,400 with
at least 20 CYS.
g. UNEMPLOYMENT BENEFITS
Unemployment Benefit
Cause of Death must be an
Occupational Disease
Also known as unemployment insurance or
involuntary separation benefit, it is a cash benefit
granted to covered employees, including
kasambahays and OFWs (sea-based or land-based)
who are involuntarily separated from employment.
(Sec. 14-B, R.A. No. 11199)
In order for the beneficiary of an Ee to be entitled to
death benefits under the SSS, the cause of death
must be a sickness listed as an occupational disease
by ECC; or any other illness caused by employment,
subject to proof that the risk of contracting the same
is increased by the working conditions. (Bañez v.
SSS, G.R. No. 189574, 18 July 2014)
Qualifying Conditions
1.
f. FUNERAL BENEFITS
Funeral Benefit
A funeral grant equivalent to P12,000.00 shall be
paid, in cash or in kind, to help defray the cost of
funeral expenses upon the death of a member or
retiree. (Sec. 13-B, R.A. No. 11199)
NOTE: Starting 01 Aug. 2015, the amount of the
funeral grant was increased to a variable amount
ranging from a minimum of P20,000 to a maximum
of P40,000, depending on the member’s paid
contributions and CYS. (Sec. 2, Rule 24, IRR, R. A. No.
11199)
UNIVERSITY OF SANTO TOMAS
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136
Not over 60 years old at the time of
involuntary separation, except;
a.
In the case of underground mineworker
or surface mineworker which must not
be over 50 years old; or
b.
In the case of racehorse jockey, not over
55 years old.
2.
Has paid at least 36 monthly contributions, 12
months of which should be in the eighteen (18)
month period immediately preceding the
unemployment or involuntary separation;
3.
Involuntarily separated from employment
provided that such separation did not arise
from fault or negligence of the employee and
Labor Law and Social Legislation
which may be attributed to any of, but not
limited to, the following:
a.
b.
c.
d.
e.
c.
d.
Installation of labor-saving devices;
Redundancy;
Retrenchment to prevent loss;
Closure or cessation of operation; or
Disease/illness. (Sec. 2, Rule 27, IRR, R. A.
No. 11199)
2.
Employee or member – Any person, receiving
compensation while in the service of an Er,
whether by election or appointment,
irrespective of status of appointment, including
barangay and sanggunian officials. (Sec. 2(d),
R.A. No. 8291)
3.
Compensation – The basic pay or salary
received by an Ee, pursuant to his or her
election or appointment, excluding per diems,
bonuses, OT pay, honoraria, allowances, and
any other emoluments received in addition to
the basic pay which are not integrated into the
basic pay under existing laws. (Sec. 2(i), R.A. No.
8291)
Amount of Benefit
The benefit is granted through a one- time payment,
and the claim must be filed within a year from the
date of involuntary separation.
The unemployment insurance or involuntary
separation benefit is a monthly cash payment
equivalent to 50% of the AMSC for a maximum of
two (2) months, subject to the rules and regulations
that the Commission may prescribe. (Rule 27, IRR, R.
A. No. 11199)
Government-owned
or
controlled
corporations (GOCCs) and financial
institutions with original charters; or
Constitutional Commissions and the
Judiciary. (Sec. 2(c), R.A. No. 8291)
Reportorial Requirements of the Er
Er must report to GSIS the names, employment
status, positions, salaries of the Ee and such other
matter as determined by the GSIS. (Sec. 6(a), R.A. No.
8291)
B. GOVERNMENT SERVICE INSURANCE SYSTEM
(GSIS) LAW (R.A. No. 8291)
Purpose for the Enactment of the GSIS Law
Penalty in case of Delayed Remittance or NonRemittance of Contributions
To provide and administer the following social
security benefits for government Ees:
1.
2.
3.
4.
5.
The unremitted contributions shall be charged
interests as prescribed by the GSIS Board of
Trustees but shall not be less than 2% simple
interest per month from due date to the date of
payment by the employers concerned. (Sec. 7, R.A.
No. 8291)
Compulsory Life Insurance;
Optional Life Insurance;
Retirement Benefits;
Disability Benefits due to work-related
contingencies; and
Death Benefits.
Q: May a member enjoy the benefits provided for
in the Revised GSIS Act simultaneous with
similar benefits provided under other laws for
the same contingency?
Definitions
1.
Employer
a. National Government;
b. Its political subdivisions,
agencies, instrumentalities;
A: Whenever other laws provide similar benefits for
the same contingencies covered by this Act, the
member who qualifies to the benefits shall have the
option to choose which benefits will be paid to him.
However, if the benefits provided by the law chosen
branches,
137
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
are less than the benefits provided under this Act,
the GSIS shall pay only the difference. (Sec. 55, R.A.
No. 8291)
1.
An elective official who, at the time of election
to public office is below 65 years of age will be
more than 65 at the end of his term of office,
including the period/s of his re-election to
public office thereafter without interruption.
2.
Appointive officials who, before reaching the
mandatory age of 65, are appointed to
government position by the President of the
Republic of the Philippines and shall remain in
government service at an age beyond 65.
3.
Contractual employees, including casuals and
other employees with an employeegovernment agency relationship are also
compulsorily covered, provided they are
receiving fixed monthly compensation and
rendering the required number of working
hours for the month. (Chan, 2014)
1. COVERAGE AND EXCLUSIONS
COVERAGE
The GSIS covers all employees irrespective of
employment status, who are employed with:
1) The national government, its political
subdivisions,
branches,
agencies
or
instrumentalities;
2) Government-owned
or
controlled
corporations;
3) Government financial institutions with original
charters;
4) Constitutional commissions; and
5) The judiciary.
Classification of Members for the Purpose of
Benefit Entitlement
Coverage of Life Insurance, Retirement and
Other Social Security Protection
1.
GR: All members of the GSIS shall have life
insurance, retirement, and all other social security
protections such as disability, survivorship,
separation, and unemployment benefits. (Sec. 3, R.A.
No. 8291)
a.
2.
XPNs: The members of the following shall have life
insurance only:
1.
2.
Active Members
Policyholders
a.
b.
c.
d.
The Judiciary; and
The Constitutional Commissions.
Compulsory Coverage of Life Insurance
3.
GR: All Ees receiving compensation who have not
reached the compulsory retirement age,
irrespective of employment status.
b.
XPNs: All members of the AFP and the PNP.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
c.
138
Covered for life insurance only;
Can avail of policy loan privilege only; and
May also apply for housing loans.
Judiciary and Constitutional Commissions
Separated Members
a.
NOTE: An employee who is already beyond the
mandatory retirement age of 65 shall be
compulsorily covered and be required to pay both
the life and retirement premiums under the
following situations:
Still in the service and are paying
integrated premiums; covered for the
entire package benefits and privileges
being extended by GSIS.
Former active members who have been
separated from the service;
Still covered by the GSIS under the
principle of “once a member, always a
member”;
Entitled to receive future benefits under
P.D. 1146 in the event of compensable
contingency such as old age (attainment of
age 60 years), disability, survivorship and
death; and
Labor Law and Social Legislation
d.
4.
illegitimate child, or over the age of majority but
incapacitated or incapable of self-support due
to mental or physical defect acquired prior to
age of majority; and
Not entitled to any loan privilege.
Retired Members
a.
b.
Former active members who have retired
from the service and are already enjoying
the corresponding retirement benefits
applied for; and
Not entitled to any loan privilege, except
stock purchase loan. (Sec. 2.2, Rule II, IRR of
R.A. No. 8291)
3.
BENEFICIARIES
1.
Primary beneficiaries
a. Legal dependent spouse, until he/she
remarries; and
b. Dependent children. (Sec. 2(g), R.A. No.
8291)
2.
Secondary beneficiaries
a. Dependent parents; and
b. Legitimate descendants, subject to
restrictions on dependent children. (Sec.
2(h), R.A. No. 8291)
EXCLUSIONS
The following are not considered Members of the
GSIS for purposes of this Act:
1) Employees who have separate retirement
schemes under special laws and are therefore
covered by their respective retirement laws,
such as the members of the Judiciary,
Constitutional Commissions, and other
similarly situated government officials;
2) Contractual employees who
employer-employee relationship
agencies they serve;
Parents dependent upon the member for
support. (Sec. 2(f), R.A. No. 8291)
3. BENEFITS
have no
with the
Benefits under the GSIS Act
a.
b.
3) Uniformed members of the Armed Forces of
the Philippines (AFP), the Bureau of Fire
Protection, and the Bureau of Jail
Management and Penology (BJMP) whose
coverage by the GSIS has ceased effective June
24, 1997; and
c.
d.
e.
f.
g.
h.
i.
4) Uniformed members of the Philippine
National Police (PNP) whose coverage by the
GSIS has ceased effective February 1, 1996. (Sec.
2.4, IRR of R. A. No. 8291)
Separation benefits;
Unemployment or involuntary separation
benefits;
Retirement benefits;
Permanent disability benefits;
Temporary disability benefits;
Survivorship benefits;
Funeral benefits;
Life insurance; and
Such other benefits and protection as may
be extended to them by the GSIS such as
loans.
a. SEPARATION BENEFITS
2. DEPENDENTS AND BENEFICIARIES
Entitlement of a Member to Separation Benefits
DEPENDENTS
1.
Legitimate spouse dependent for support upon
the member or pensioner;
2.
Unmarried and not gainfully employed
legitimate, legitimated, legally adopted, or
A member who has rendered a minimum of three
(3) years of creditable service shall be entitled to
separation benefits upon resignation or separation
under the following terms:
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
1.
Conditions for Entitlement to Unemployment
Benefits
A member with at least three (3) years of
service but less than 15 years – Cash
payment equivalent to 100% of the average
monthly compensation for every year of
service the member has paid contributions:
1.
2.
a.
b.
2.
Not less than P12, 000.00; and
Payable upon reaching 60 years of age or
upon separation, whichever comes later.
(Sec. 11(a), R.A. No. 8291)
3.
A member with at least 15 years of service
and less than 60 years of age at the time of
resignation or separation:
The recipient must be a permanent Ee at the
time of separation;
His separation was involuntary due to the
abolition of his office or position resulting
from reorganization; and
He has been paying the contribution for at
least one (1) year prior to separation. (Sec. 12,
R.A. No. 8291)
c. RETIREMENT BENEFITS
Reason for Compulsory Retirement
a.
b.
Cash payment equivalent to 18 times the
Basic Monthly Pension (BMP), payable at
the time of resignation or separation; and
An old-age pension benefit equals to the
BMP, payable monthly for life upon
reaching the age of 60. (Sec. 11(b), R.A. No.
8291)
The compulsory retirement of government officials
and Ees upon reaching the age of 65 years is
founded on public policy which aims to maintain
efficiency in the government service and at the same
time, give the retiring public servants the
opportunity to enjoy during the remainder of their
lives the recompense, for their long service and
devotion to the government, in the form of a
comparatively easier life, freed from the rigors of
civil service discipline and the exacting demands
that the nature of their work and their relations
with their superiors as well as the public would
impose upon them. (Beronilla v. GSIS, G.R. No. L21723, 26 Nov.1970)
Effects of Separation from Service with regard to
Membership
A member separated from the service shall continue
to be a member and shall be entitled to whatever
benefits he/she qualifies for. (Once a member,
always a member)
NOTE: A member separated for a valid cause shall
automatically forfeit his benefits, unless the terms
of resignation or separation provide otherwise. In
case of forfeiture, the separated employee shall be
entitled to receive only one-half (1/2) of the cash
surrender value of his insurance.
Conditions to be Entitled to Retirement Benefits
1.
2.
3.
b. UNEMPLOYMENT BENEFITS
A member has rendered at least 15 years of
service;
He is at least 60 years of age at the time of
retirement; and
He is not receiving a monthly pension benefit
from permanent total disability. (Sec. 13-A, R.A.
No. 8291)
Unemployment benefits
NOTE: Where the employee retires and meets the
eligibility requirements, he acquires a vested right
to benefits that is protected by the due process
clause. Retirees enjoy a protected property interest
whenever they acquire a right to immediate
payment under pre-existing law. Thus, a pensioner
acquires a vested right to benefits that have become
due as provided under the terms of the public
It will consist of monthly cash payments equivalent
to 50% of the average monthly compensation.
A member who has rendered at least 15 years of
service will be entitled to separation benefits
instead of unemployment benefits.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
140
Labor Law and Social Legislation
employees’ pension statute. No law can deprive
such person of his pension rights without due
process of law, that is, without notice and
opportunity to be heard. (GSIS v. De Leon, G.R. No.
186560, 17 Nov. 2010)
Total Disability
Complete incapacity to continue with present
employment or engage in any gainful occupation
due to the loss or impairment of the normal
functions of the physical and/or mental faculties of
the member. (Sec. 2(r), R.A. No. 8291)
Options of the Retiree with regard to his or her
Retirement Benefits
Types of Permanent Disability
The retiree may get either of the following:
1.
Lump sum payment equivalent to 60 months
of the BMP payable at the time of retirement
and an old-age pension benefit equal to BMP
payable for life, starting upon the expiration of
the five (5) years covered by the lump sum; or
2.
Cash payment equivalent to 18 times his BMP
and monthly pension for life payable
immediately. (Sec. 13(a), R.A. No. 8291)
1.
Permanent Total Disability (PTD) – Accrues
or arises when recovery from any loss or
impairment of the normal functions of the
physical and/or mental faculty of a member
which reduces or eliminates his capacity to
continue with his current gainful occupation or
engage in any other gainful occupation is
medically remote. (Sec. 2(q) and (s), R.A. No.
8291)
2.
Permanent Partial Disability (PPD) –
Accrues or arises upon the irrevocable loss or
impairment of certain portion/s of the physical
faculties, despite which the member is able to
pursue a gainful occupation. (Sec. 2(u), R.A. No.
8291)
Rule in case of Extension of Service in order to
be Entitled for Retirement Benefits
The Supreme Court held that the head of the
government agency concerned is vested with
discretionary authority to allow or disallow
extension of the service of an official or Ee who has
reached 65 years old without completing the 15
years of government service. However, this
discretion is to be exercised conformably with the
provisions of Civil Service Memorandum Circular
No. 27, series of 1990 which provides that the
extension shall not exceed one (1) year. (Rabor v.
CSC, G.R. No. 111812, 31 May 1995)
Benefits for PTD
1.
A member is entitled to the monthly income
benefit for life equivalent to the BMP effective
from the date of disability when:
a.
He is in the service at the time of the
disability; or
NOTE: If at the time of disability, he was in the
service and has paid a total of at least 180 monthly
contributions, in addition to the monthly income
benefit, he shall receive a cash payment equivalent
to 18 times his BMP. (Sec. 16(a), R.A. No. 8291)
d. PERMANENT DISABILITY BENEFITS
Disability
Any loss or impairment of the normal functions of
the physical and/or mental faculty of a member,
which reduces or eliminates his/her capacity to
continue with his/her current gainful occupation or
engage in any other gainful occupation. (Sec. 2(q),
R.A. No. 8291)
b.
If separated from service:
i. He has paid at least 36 monthly
contributions within five (5) years
immediately preceding his disability;
or
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
i.
ii. He has paid a total of at least 180
monthly contributions prior his
disability. (Sec. 16(a), R.A. No. 8291)
2.
NOTE: A member cannot enjoy the monthly income
benefit for permanent disability and the old-age
retirement simultaneously.
2.
3.
4.
5.
1.
2.
If the member does not satisfy the conditions
above but has rendered at least three (3) years
of service, he shall be advanced the cash
payment equivalent to 100% of his average
monthly compensation for each year of service
he has paid contributions, but not less than
P12,000.00, which should have been his
separation benefit. (Sec. 16(b), R.A. No. 8291)
3.
If the permanent disability was due to the following
acts of the subject Ee:
a.
b.
c.
d.
Complete loss of sight of both eyes;
Loss of two (2) limbs at or above the ankle or
wrist;
Permanent complete paralysis of two (2)
limbs;
Brain injury resulting in incurable imbecility
or insanity; and
Such other cases as may be determined by the
GSIS. (Sec. 16(d), R.A. No. 8291)
Grave misconduct;
Notorious negligence;
Habitual intoxication; or
Willful intention to kill himself or another.
(Sec. 15, R.A. No. 8291)
e. TEMPORARY DISABILITY BENEFITS
Temporary Total Disability (TTD)
It accrues or arises when the impaired physical
and/or mental faculties can be rehabilitated and/or
restored to their normal functions. (Sec. 2(t), R.A. No.
8291)
A member is entitled to cash payment in accordance
with the schedule of disabilities to be prescribed by
GSIS, if he satisfies the given conditions of either (1)
or (2) of Sec. 16(a) of R.A. No. 8291.
NOTE: A member cannot enjoy TTD benefit and sick
leave pay simultaneously.
The following Disabilities shall be deemed
Permanent and Partial
Benefits for Temporary Disability
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 or both ears
h. Hearing of one or both ears
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
In case a member is re-employed;
Member recovers from disability as
determined by the GSIS; or
Fails to present himself for medical
examination when required by the GSIS. (Sec.
16(c), R.A. No. 8291)
Instances when Recovery is Precluded
Benefits for PPD
1.
Such other cases as may be determined by the
GSIS. (Sec. 17(b), R.A. No. 8291)
Suspension of Payment of Benefits
The following Disabilities shall be deemed Total
and Permanent
1.
2.
Sight of one eye
142
Member is entitled to 75% of his current daily
compensation for each day or fraction thereof
of total disability benefit, to start not earlier
than the 4th day but not exceeding 120 days in
one calendar year after exhausting all his sick
leave credits and collective bargaining
agreement (CBA) sick leave benefits, if any.
Provided, that:
Labor Law and Social Legislation
2.
a.
He was in the service at time of
disability; or
b.
If separated, he has rendered at least three
(3) years of service and has paid at least
six (6) monthly contributions in the year
preceding his disability. (Sec. 18(a), R.A.
No. 8291)
b.
2. The survivorship pension plus a cash
payment equivalent to 100% of his average
monthly compensation for every year of
service – Provided, that the deceased was in
the service at the time of his death with at least
three (3) years of service; or
TTD benefits shall in no case be less than P70.00
a day. (Sec. 18(b), R.A. No. 8291)
NOTE: An application for disability must be filed
with the GSIS within four (4) years from the date of
the occurrence of the contingency.
3. A cash payment equivalent to 100% of his
average monthly compensation for each
year of service he paid contributions, but
not less than P12,000.00 – Provided, that the
deceased has rendered at least three (3) years
of service prior to his death but does not qualify
for the benefits under item (1) or (2) of this
paragraph. (Sec. 21(a), R.A. No. 8291)
f. SURVIVORSHIP BENEFITS
Persons Entitled to Survivorship Benefits
Upon the death of a member or pensioner, his
beneficiaries shall be entitled to survivorship
benefits. Such benefit shall consist of:
1.
2.
The basic survivorship pension which is 50%
of the BMP; and
Secondary Beneficiaries
The dependent children’s pension not
exceeding 50% of the BMP. (Sec. 20, R.A. No.
8291)
In the absence of primary beneficiaries, the
secondary beneficiaries shall be entitled to:
1.
NOTE: The dependent children shall be entitled to
the survivorship pension as long as there are
dependent children and, thereafter, the surviving
spouse shall receive the basic survivorship pension
for life or until he or she remarries.
2.
Conditions for the Primary Beneficiaries to be
Entitled to BMP
Upon the death of a member, the primary
beneficiaries shall be entitled to:
The cash payment equivalent to 100% of his
average monthly compensation for each year
of service he paid contributions, but not less
than P12,000.00 – Provided, That the member
is in the service at the time of his death and has
at least three (3) years of service; or
In the absence of secondary beneficiaries, the
benefits under this paragraph shall be paid to
his legal heir. (Sec. 21(c), R.A. No. 8291)
Payment of Survivorship Pension
1. Survivorship pension – Provided, that the
deceased:
a.
If separated from the service, has
rendered at least three (3) years of
service at the time of his death and has
paid 36 monthly contributions within the
five-year period immediately preceding
his death; or has paid a total of at least
180 monthly contributions prior to his
death.
After the end of the guaranteed 30 months, the
beneficiaries are still entitled to survivorship
benefits. The survivorship pension shall be paid as
follows:
Was in the service at the time of his
death; or
143
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
1.
When the dependent spouse is the only
survivor, he/she shall receive the basic
survivorship pension for life or until he or she
remarries;
2.
When only dependent children are the
survivors, they shall be entitled to the basic
survivorship pension for as long as they are
qualified, plus the dependent children’s
pension equivalent to 10% of the BMP for every
dependent child not exceeding five (5), counted
from the youngest and without substitution; or
3.
Bella (Gary’s common-law wife) and Jobo (his
only son) filed a claim for death benefits with the
GSIS, which was denied on the ground that Gary’s
death did not arise out of and in the course of
employment, and therefore not compensable
because the accident occurred in his house and
not in the school premises. Is Bella entitled to file
a claim for death benefits with the GSIS? Why?
(1991 BAR)
A: NO. Bella is not entitled to receive survivorship
benefits because she is not considered as a
beneficiary. Bella is a common-law wife and not a
legal dependent spouse. The beneficiaries of a
member of the GSIS are entitled to the benefits
arising from the death of said member. Death
benefits are called survivorship benefits under the
GSIS Law.
When the survivors are the dependent spouse
and the dependent children, the dependent
spouse shall receive the basic survivorship
pension for life or until he/she remarries, and
the dependent children shall receive the
dependent children’s pension. (Sec. 21(b), R.A.
No. 8291)
Q: Is the cause of death of Gary (cardiac arrest
due to accidental electrocution in his house)
compensable? Why?
Benefits that the Beneficiaries are Entitled to
upon the Death of the Pensioner
1.
Upon the death of an old-age pensioner or a
member receiving the monthly income benefit
for permanent disability, the qualified
beneficiaries shall be entitled to the
survivorship pension; and
2.
When the pensioner dies within the period
covered by the lump sum, the survivorship
pension shall be paid only after the expiration
of such period. (Sec. 22, R.A. No. 8291)
A: YES. To be compensable under the GSIS Law, the
death need not be work-connected. In the case
presented, although the accident happened in Gary’s
house, it is still considered work-connected since
Gary only heeded to the memorandum issued by the
school principal and complied with the instruction of
his superior to work on the model dam project.
Q: Odeck, a policeman, was on leave for a month.
While resting in their house, he heard two of his
neighbors fighting with each other. Odeck
rushed to the scene intending to pacify the
protagonists. However, he was shot to death by
one of the protagonists. Zhop, a housemaid, was
Odeck's surviving spouse whom he had
abandoned for another woman years back.
When she learned of Odeck's death, Zhop filed a
claim with the GSIS for death benefits. However,
her claim was denied because: (a) when Odeck
was killed, he was on leave; and (b) she was not
the dependent spouse of Odeck when he died.
Q: Gary Leseng was employed as a public school
teacher at the Marinduque High School. On April
27, 1997, a memorandum was issued by the
school principal designating Gary to prepare the
model dam project, which will be the official
entry of the school in the search for Outstanding
Improvised Secondary Science Equipment for
Teachers. Gary complied with his superior's
instruction and took home the project to enable
him to finish before the deadline. While working
on the model dam project, he came to contact
with a live wire and was electrocuted. The death
certificate showed that he died of cardiac arrest
due to accidental electrocution.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Resolve with reasons whether GSIS is correct in
denying the claim. (2005 BAR)
A: YES. GSIS is correct in denying the claim. Under
144
Labor Law and Social Legislation
leave and he died in the performance of a
peacekeeping mission. Therefore, his death is
compensable.
the law, a dependent is one who is a legitimate
spouse living with the employee [Art. 173(i), LC]. In
the problem given, Zhop had been abandoned by
Odeck who was then living already with another
woman at the time of his death. Moreover, Odeck
was on leave when he was killed. The 24-hour duty
rule does not apply when the policeman is on
vacation leave. (Employees’ Compensation
Commission v. CA, G.R. No. 121545, 14 Nov. 1996)
No Presumption of Sham Marriages
The present GSIS law does not presume that
marriages contracted within three (3) years before
retirement or death of a member are sham
marriages contracted to avail of survivorship
benefits. The law acknowledges that whether the
surviving spouse contracted the marriage mainly to
receive survivorship benefits is a matter of
evidence. It no longer prescribes a sweeping
classification that unduly prejudices the legitimate
surviving spouse and defeats the purpose for which
Congress enacted the social legislation. (Alcantara,
Book II; GSIS v. Montesclaros, G.R. No. 146494, 14 July
2004)
Taking together jurisprudence and the pertinent
guidelines of the ECC with respect to claim for death
benefits, namely: (a) That the employee must be at
the place where his work requires him to be; (b)
That the employee must have been performing his
official functions; and (c) That the injury is
sustained elsewhere, the employee must have been
executing an order for the employer, it is not
difficult to understand then why Zhop’s claim was
denied by the GSIS. (Tancinco v. GSIS, G.R. No.
132916, 16 Nov. 2001)
h. FUNERAL BENEFITS
In the present case, Odeck was resting at his house
when the incident happened; thus, he was not at a
place where his work requires him to be. Although
at the time of his death Odeck was performing a
police function, it cannot be said that his death
occurred elsewhere other than the place where he
was supposed to be because he was executing an
order for his employer.
Funeral Benefits
The funeral benefit is in the amount of P18,000. It is
intended to defray the expenses incident to the
burial and funeral of the deceased member,
pensioner, or retiree under R.A. No. 660, R.A. No.
1616, P.D. 1146, and R.A. No. 8291. It is payable to
the members of the family of the deceased, in the
order which they appear:
Q: Luis, a PNP officer, was off duty and resting at
home when he heard a scuffle outside his house.
He saw two of his neighbors fighting and he
rushed out to pacify them. One of the neighbors
shot Luis by mistake, which resulted in Luis'
death. Marian, Luis' widow, filed a claim with the
GSIS seeking death benefits. The GSIS denied the
claim on the ground that the death of Luis was
not service related as he was off duty when the
incident happened. Is the GSIS correct? (2015
BAR)
1.
2.
3.
Legitimate spouse;
Legitimate child who spent for the funeral
services; or
Any other person who can show
unquestionable proof that he has borne the
funeral expenses of the deceased.
Payment of Funeral Benefits
Funeral benefits will be paid upon the death of:
A: NO. The GSIS is not correct. Luis, a policeman, just
like a soldier, is covered by the 24-Hour Duty Rule.
He is deemed on round-the-clock duty unless on
official leave, in which case his death outside
performance of official peace-keeping mission will
bar death claim. In this case, Luis was not on official
1.
2.
3.
145
An active member;
A member who has been separated from the
service but is entitled to future separation or
retirement benefits;
A member who is a pensioner (excluding
survivorship pensioners); or
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
4.
A retiree who is at the time of his retirement
was of pensionable age, at least 60 years old,
who opted to retire under R.A. No. 1616. (An
act further amending Sec. 12, C.A. 186, as
amended, by prescribing two other modes of
retirement and for other purposes).
b.
c.
d.
e.
f.
2.
i. LIFE INSURANCE
Classes of Life Insurance Coverage under the
GSIS Law
Memorial plans;
Health;
Education;
Hospitalization; or
Other plans as maybe designed by GSIS
Any Er may apply for group insurance
coverage for its Ees. (Sec. 26, R.A. No. 8291)
Prescriptive Period to Claim the Benefits
GR: Four (4) years from the date of contingency.
1.
2.
Compulsory Life Insurance; and
Optional Life Insurance.
XPNs: Life insurance and retirement (Sec. 28, R.A.
No. 8291)
NOTE: The plans may be endowment or ordinary
life.
C. LIMITED PORTABILITY LAW
R.A. No. 7699
Compulsory Life Insurance Coverage
All Ees including the members of the Judiciary and
the Constitutional Commissioners, but excluding
Members of the AFP, the PNP, BFP and BJMP, shall,
under such terms and conditions as may be
promulgated by the GSIS, be compulsorily covered
with life insurance, which shall automatically take
effect as follows:
1.
Those employed after the effectivity of this Act,
their insurance shall take effect on the date of
their employment;
2.
For those whose insurance will mature after the
effectivity of this Act, their insurance shall be
deemed renewed on the day following the
maturity or expiry date of their insurance; and
3.
Purpose
R.A. No. 7699 was enacted to enable those from the
private sector who transfer to the government
service or from the government service to the
private sector to combine their years of service and
contributions which have been credited with the SSS
or GSIS, as the case may be, to satisfy the required
number of years of service for entitlement to the
benefits under the applicable laws. (Chan, 2019)
Coverage
Applies to all worker-members of the GSIS and/or
SSS who transfer from the public sector to private
sector or vice-versa, or who wish to retain their
membership in both Systems. (Sec. 1, Rule 1, IRR)
For those without any life insurance as of the
effectivity of this Act, their insurance shall take
effect following said effectivity. (Sec. 24, R.A. No.
8291)
Portability
Portability refers to the transfer of funds for the
account and benefit of a worker who transfers from
one system to the other. (Sec. 2(b), R.A. No. 7699)
Optional Life Insurance Coverage
1.
A member may at any time apply for himself
and/or his dependents an insurance and/or
pre-need coverage embracing:
a.
Limited Portability Rule
A covered worker who transfers employment from
one sector to another or is employed on both
Life;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
146
Labor Law and Social Legislation
qualified for any benefits from the SSS.
sectors, shall have creditable services or
contributions on both Systems credited to his
service or contribution record in each of the
Systems and shall be totalized for purposes of oldage, disability, survivorship, and other benefits in
either or both Systems. (Sec. 3, R.A. No. 7699)
NOTE: For purposes of computation of benefits,
totalization shall apply to 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. (Sec 3, Rule V, IRR,
R.A. N. 7699)
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. (Sec. 4, R.A. No. 7699)
Overlapping periods of creditable services in both
Systems shall be credited only one for purposes of
totalization. (Sec. 7, Rule V, IRR, R.A. 7699)
NOTE: This is advantageous to the SSS and GSIS
members for purposes of death, disability or
retirement benefits. In the event the Ees transfer
from the private sector to the public sector, or viceversa, their creditable employment services and
contributions are carried over and transferred as
well.
If after the totalization, the worker-member still
does not qualify for any benefit, the member will
then get whatever benefits correspond to his/her
contributions in either or both Systems. (Sec. 4, Rule
V, IRR, R.A. No. 7699)
Creditable Services
Totalization
I.
Totalization refers to the process of adding up the
periods of creditable services or contributions under
each of the Systems, SSS or GSIS, for the purpose of
eligibility and computation of benefits. (Sec. 2(e), R.A.
No. 7699)
1.
2.
All services rendered or contributions paid by a
member personally or paid by the employers to
either System shall be considered in the
computation in the computation of benefits, which
may be claimed from either or both Systems. (Sec. 2,
Rule V, IRR, R.A. No. 7699)
3.
NOTE: The amount of benefits to be paid by one
System shall be in proportion to the services
rendered/periods of contribution made to that
System. (Sec. 2, Rule V, IRR, R.A. No. 7699)
Totalization
instances:
1.
2.
3.
shall
apply
in
the
4.
5.
following
If a worker is not qualified for any benefits
from both System;
If a worker in the public sector is not
qualified for any benefits in the GSIS; or
If a worker in the private sector is not
For the public sector, the following shall be
considered creditable services:
II.
147
All previous services rendered by an
official/employee
pursuant
to
an
appointment
whether
permanent,
provisional or temporary;
All previous services rendered by an
official/employee pursuant to a duly
approved appointment to a position in the
Civil Service with compensation or salary;
The
period
during
which
an
official/employee was on authorized sick
leave of absence without exceeding one
year;
The period during which an official or
employee was out of the service as a result
of illegal termination of his service as finally
decided by the proper authorities; and
All previous services with compensation or
salary rendered by elective officials. (Sec.
1(f), Rule III, IRR, R.A. No. 7699)
For private sector, the periods of contribution
shall refer to the periods during which a person
renders services for an employer with
compensation or salary and during which
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
contributions were paid to SSS. (Sec. 1(g), Rule
III, IRR R.A. No. 7699)
D. DISABILITY AND DEATH BENEFITS
NOTE: A self-employed person shall be considered
an employee and employer at the same time. (Sec.
1(g), Rule III, IRR, R. A. No. 7699)
1. UNDER THE LABOR CODE
Employees Compensation Program
The benefits covered under the law are the
following:
1.
2.
3.
4.
5.
6.
The State shall promote and develop a tax-exempt
Employee’s Compensation Program (ECP) 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, LC)
Old-age benefit;
Disability benefit;
Survivorship benefit;
Sickness benefit;
Medicare benefit, provided that the member
shall claim said benefit from the System
where he was last a member; and
Such other benefits common to both System
that may be availed of through totalization.
(Sec. 1(j), Rule III, IRR, R.A. No. 7699)
The basic features of the new program are:
1.
2.
3.
4.
5.
6.
The System or Systems responsible for the payment
of money benefits due to a covered worker shall
release the same within 15 working days from
receipt of the claim, subject to the submission of the
required documents and availability if the complete
employee/employer records in the System. (Sec. 2,
Rule IV, IRR, R.A. No. 7699)
Integration of benefits;
Increase in benefits;
Prompt payment of income benefits;
Legal services dispensed with;
Wider coverage; and
A more balanced rehabilitation program.
(Poquiz, 2019)
State Insurance Fund
The State Insurance Fund (SIF) is built up by the
contributions of employers based on the salaries of
their employees as provided under the Labor Code.
(Chan, 2019)
Q: Luisito has been working with Lima Land for
20 years. Wanting to work in the public sector,
Luisito applied for and was offered a job at
Livecor. Before accepting the offer, he wanted to
consult you whether the payments that he and
Lima Land had made to the Social Security
System (SSS) can be transferred or credited to
the Government Service Insurance System
(GSIS). What would you advise? (2014 BAR)
It is exclusively used for payment of the employee’s
compensation benefits and no amount thereof is
authorized to be used for any other purpose. (Art.
185, LC)
Beneficiaries under the Labor Code
A: YES. Under RA 7699, otherwise known as the
Limited Portability Law, one may combine his years
of service in the private sector represented by his
contributions to the SSS with his government
service and contributions to the GSIS. The
contributions shall be totalized for purposes of oldage, disability, survivorship and other benefits in
case the covered member does not qualify for such
benefits in either or both Systems without
totalization.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
I. Primary Beneficiaries
1.
2.
148
The legitimate spouse until he remarries.
Legitimate, legitimated, legally adopted or
acknowledged natural children, who are
unmarried not gainfully employed, not
over 21 years of age, or over 21 years of
age provided that he is incapacitated and
incapable of self-support due to physical
Labor Law and Social Legislation
3.
or mental defect, which is congenital or
acquired during minority.
NOTE: A dependent acknowledged natural child
shall be considered as a primary beneficiary only
when there are no other dependent children who are
qualified and eligible for monthly income benefit;
provided finally, that if there are two or more
acknowledged natural children, they shall be
counted from the youngest and without substitution,
but not exceeding five (5). (Sec. 1(b), Rule XV,
Amended Rules on EC)
a. DISABILITY BENEFITS
Disability refers to the loss or impairment of a
physical or mental function resulting from injury or
sickness. (Art. 173 (n), LC)
The purpose of the law in providing benefits to the
injured or sick employee during temporary
disability is to compensate him for what he might
have earned during the period while his injury or
sickness is being medically treated. (Chan, 2019)
II. Secondary beneficiaries
1.
2.
The legitimate parents wholly dependent
upon the employee for regular support;
and
Kinds of Disability
There are three (3) kinds of disability benefits
under the Labor Code:
The
legitimate
descendants
and
illegitimate children who are unmarried,
not gainfully employed, and not over 21
years of age, or over 21 years of age
provided that he is incapacitated and
incapable of self- support due to physical
or mental defect which is congenital or
acquired during minority. (Sec. 1(c), Rule
XV, Amended Rules on EC)
a.
b.
c.
No claim for compensation shall be given due course
unless said claim is filed with the System within
three (3) years from the time the cause of action
accrued. (Sec. 6(a), Rule VII, Amended Rules on EC)
a.
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, or where the injury or sickness
still requires medical attendance beyond 120 days
but not exceed 240 days from the onset of disability.
(Sec. 2(a), Rule VII, Amended Rules on EC)
Reckoning Date of the Three-Year Prescriptive
Period
Sickness – from the time the Ee lost his earning
capacity.
NOTE: The three (3) years have to be counted
from the time the employee lost his earning
capacity, not from the time the illness was
discovered. (ECC v. Sanico, G.R. No. 134028, 17
Dec. 1999)
2.
Temporary total disability (Art. 197, LC)
Permanent total disability (Art. 198, LC)
Permanent partial disability (Art. 199, LC)
NOTE: The compensation for the disabilities is not
mutually exclusive. For instance, recovery of
compensation for temporary total disability or
permanent partial disability shall not preclude
recovery for permanent total disability. (Chan,
2019)
Prescriptive Period
1.
Death – from the time of death of the covered
employee (Sec. 6(a), Rule VII, Amended Rules on
Employees’ Compensation)
Conditions for Entitlement
An employee shall be entitled to an income benefit
for temporary total disability if all the following
conditions are satisfied:
Injury – from the time it was sustained
1.
149
He has been duly reported to the System;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
2.
3.
He sustains the temporary total disability as
a result of the injury or sickness; and
The System has been duly notified of the
injury or sickness which caused his
disability.
b. 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 except when the
disability not exceeding 240 days is declared as
temporary total disability. (Sec. 2(b), Rule VII,
Amended Rules on EC)
NOTE: His employer shall be liable for the benefit if
such illness or injury occurred before the employee
is duly reported for coverage to the System. (Sec. 1,
Rule X, Amended Rules on EC)
Total disability means disablement of an employee
to earn wages in the same kind of work, or work of
similar nature that he was trained for or
accustomed to perform, or any kind of work which
a person of his mentality and attainment could do.
(Philippine Transmarine Carriers, Inc. v. NLRC, G.R.
No. 123891, 28 Feb. 2001)
Period of Entitlement
The income benefit equivalent to 90% of his average
daily salary credit shall be paid beginning on the first
day of such disability. If caused by an injury or
sickness, it shall not be paid longer than 120
consecutive days except when such injury or
sickness still requires medical attendance beyond
120 days but not to exceed 240 days from onset of
disability, in which case, benefit shall be paid.
NOTE: In disability compensation, it is not the
injury per se which is compensated but the
incapacity to work. (Bejerano v. ECC, G.R. No. 84777,
30 Jan. 1992)
However, the System may declare the total and
permanent status at any time after 120 days of
continuous temporary total disability as may be
warranted by the degree of actual loss or
impairment of physical or mental functions as
determined by the System. (Sec. 2(a), Rule X,
Amended Rules on EC)
Conditions for Entitlement
An employee is entitled to an income benefit for
permanent total disability if all of the following
conditions are satisfied:
1.
2.
NOTE: An employee shall submit to the System a
monthly medical report on his disability certified by
his attending physician, otherwise, his benefit shall
be suspended until such time that he complies with
his requirement. (Sec. 5, Rule IX, Amended Rules on
EC)
3.
NOTE: His employer shall be liable for the benefit if
such illness or injury occurred before the employee
is duly reported for coverage to the System. (Rule XI,
Amended Rules on Employees’ Compensation)
Effect of Relapse of Illness
After the employee has fully recovered from an
illness as duly certified to by the attending
physician, the period covered by any relapse he
suffers, or recurrence of his illness, which results in
disability and is determined to be compensable,
shall be considered independent of, and separate
from, the period covered by the original disability in
the computation of his income benefit for
temporary total disability. (Sec. 2(b), Rule X,
Amended Rules on EC)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
He has been duly reported to the System;
He sustains the permanent total disability as
a result of the injury or sickness; and
The System has been duly notified of the
injury or sickness which caused his
disability.
Total Disabilities Deemed Permanent
The following total disabilities shall be considered
permanent:
1.
150
Temporary
total
disability
lasting
continuously for more than 120 days,
except as otherwise provided for temporary
Labor Law and Social Legislation
4.
total disability;
2.
Complete loss of sight of both eyes;
3.
Loss of two limbs at or above the ankle or
wrist;
4.
Permanent complete paralysis of two limbs;
5.
Brain injury resulting in
imbecility and insanity; and
6.
Such cases as determine by the System and
approved by the Commission. (Sec. 1, Rule
XI, Amended Rules on Employees’
Compensation)
Benefit for Dependent Children
Each dependent child, not exceeding five (5),
counted from the youngest and without
substitution, shall be entitled to ten percent of the
monthly income benefit of the employee. This rule,
however, shall not apply to causes of action which
accrued before 1 May 1978. (Sec. 4, Rule XI, Amended
Rules on Employees’ Compensation)
incurable
c.
The full month income benefit shall be paid for all
compensable months of disability. (Sec. 2(a), Rule XI,
Amended Rules on Employees’ Compensation)
NOTE: An employee’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 considered as temporary may later become
permanent, or who suffers a partial disability
becomes total and permanently disabled for the
same cause. (GSIS v. CA, G.R. No. 117572, 29 Jan. 1998)
After the benefit under the EC shall has ceased as
provided under the preceding paragraph, and if the
employee is otherwise qualified for benefit for the
same disability under another law administered by
the System, he shall be paid a benefit in accordance
with the provisions of that law. This paragraph
applies to contingencies which occurred prior 1
May 1978. (Sec. 2 (b), Rule XI, Amended Rules on
Employees’ Compensation)
Conditions for Entitlement
An employee is entitled to an income benefit for
permanent partial disability if all of the following
conditions are satisfied:
NOTE: Except as otherwise provided for in other
laws, decrees, orders or letter of instructions, the
monthly income benefit shall be guaranteed for five
(5) years and shall be suspended under any of the
following conditions:
Failure to present himself for examination
at least once a year upon notice by the
System;
2.
Failure to submit a quarterly medical
report certified by his attending physician;
3.
Complete or full recovery from his
permanent disability; or
Permanent Partial Disability
A disability is partial and permanent if as a result of
injury or sickness, the employee suffers a permanent
partial loss of the use of any part of his body. (Sec.
2(c), Rule VII, Amended Rules on Employees’
Compensation)
Period of Entitlement
1.
Upon being gainfully employed. (Sec. 2(c),
Rule XI, Amended Rules on Employees’
Compensation)
1.
2.
3.
He has been duly reported to the System;
He sustains the permanent partial disability
as a result of the injury or sickness; and
The System has been duly notified of the
injury or sickness which caused his
disability.
NOTE: His employer shall be liable for the benefit if
such illness or injury occurred before the employee
is duly reported for coverage to the System.
For purposes of entitlement to income benefits, a
covered employee shall continue to receive benefits
151
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
provided thereunder even if he is gainfully employed
and receiving his wages or salary. (Sec. 1, Rule XII,
Amended Rules on Employees’ Compensation)
4.
Period of Entitlement
6.
5.
The monthly income benefit shall be paid beginning
on the first month of such disability, but no longer
than the designated number of months in the
following schedule: (Art. 199, LC)
Complete and Permanent
Loss of the Use of
One thumb
One index finger
One middle finger
One ring finger
One little finger
One big toe
Any toe
One hand
One arm
One foot
One leg
One ear
Both ears
Hearing of one ear
Hearing of both ears
Sight of one eye
7.
b. DEATH BENEFITS
Number of
Months
10
8
6
5
3
6
3
39
50
21
46
10
20
10
50
25
Compensable death refers to death which is the
result of a work-related injury or sickness. (Chan,
2019)
Conditions for Entitlement
The beneficiaries of a deceased employee shall be
entitled to an income benefit if all of the following
conditions are satisfied:
1.
2.
3.
A worker who sustained work-related injuries that
resulted to functional loss and/or physical loss of
any part of this body shall be granted Temporary
Total Disability (TTD) and Permanent Partial
Disability (PPD) benefits successively. Any earlier
compensation for TTD that may have been paid to an
injured worker shall not be deducted from the PPD
benefit that may be later granted to him.
2.
3.
If the employee has been receiving monthly income
benefit for Permanent Total Disability (PTD) at the
time of his death, the surviving spouse must show
that the marriage has been validly subsisting at the
time of his disability. In addition, the cause of death
must be a complication or natural consequence of
the compensated PTD. (Sec. 1, Art. XIII, Amended
Rules on Employees’ Compensation)
Loss of a wrist shall be considered a loss of
a hand;
Loss of an elbow shall be considered a loss
of the arm;
Loss of an ankle shall be considered a loss
of the foot;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
The employee has been duly reported to the
System;
He died as a result of an injury or sickness;
and
The System has been duly notified of his
death as well as the injury or sickness which
caused his death.
NOTE: His employer shall be liable for the benefit if
such illness or injury occurred before the employee
is duly reported for coverage to the System.
NOTE: Under Sec. 2(b), Art. XII, Amended Rules on
Employees’ Compensation:
1.
Loss of a knee shall be considered a loss of
the leg;
Loss of more than one joint shall be
considered a loss of the whole finger or toe;
Loss of only the first joint shall be
considered a loss of one-half of the whole
finger or toe; and
Other permanent partial disabilities shall
be determined by the Medical Officer of the
System.
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Labor Law and Social Legislation
wives, her basic monthly pension shall be
equally redistributed to the remaining
wives; and
Period of Entitlement
I.
1.
For Primary Beneficiaries
3.
The monthly income benefit shall be paid
beginning at the month of death and shall
continue to be paid as long as the beneficiaries
are entitled thereto. With respect to the
surviving legitimate spouse, the qualification is
that he/she has not remarried. For dependent
children, the qualifications are that they must
be:
a.
b.
c.
2.
Unmarried;
Not gainfully employed; and
Over 21 years of age provided he/she is
incapable of self-support due to a
physical or mental defect which is
congenital or acquired during minority.
Presumptive Death
Under ECC Circular No. 15-01-20, 20 Jan. 2015, the
following are the series of events which should be
considered in the grant of EC benefits:
The monthly income benefit shall be guaranteed
for five (5) years which in no case shall be less
than P15,000.00. Thereafter, the beneficiaries
shall be paid the monthly income benefit for as
long as they are entitled thereto. (Sec. 2(A), Art.
XIII,
Amended
Rules
on
Employees’
Compensation)
II.
The qualified dependent children not
exceeding five (5) beginning with the
youngest and without substitution, who are
entitled to dependent’s pension, shall be
counted from among the collective number
of children of the wives of the Muslim and
not counted from the children of each wife
of the Muslim. (Board Resolution No. 14-0734, 29 July 2014)
a.
The word “missing” refers to unknown fate
or there is no trace of whereabouts of a
worker, employee and uniformed personnel
while he/she is in the performance of
his/her duties during the calamities or fatal
events;
b.
The worker, employee or uniformed
personnel was not seen or hear from after
the lapse of four years from the occurrence
of the incident;
c.
The disappearance of the worker, employee
or uniformed personnel gives rise to
presumption of death; and
d.
The death of the worker, employee or
uniformed personnel arises out of and in the
course of employment.
For Secondary Beneficiaries:
The income benefit shall be 60 times the monthly
income benefit of a primary beneficiary, which in no
case be less than P15,000.00, which shall likewise be
paid in monthly pension. (Sec. 2(B), Art. XIII,
Amended Rules on EC)
NOTE: If the deceased has no beneficiaries at the
time of his death, the death benefit shall accrue to the
Employees Compensation Fund. (Sec. 2, Art XV,
Amended Rules on EC)
In relation thereto, the following are the guidelines
on the grant of EC death benefits to qualified wives
and children beneficiaries of Muslims:
1.
The basic monthly pension shall be divided
equally among the surviving wives;
2.
Upon the death or remarriage of any of the
153
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
Liabilities of the Er When the Seafarer Suffers
Work-Related Injury or Illness During the Term
of His Contract
2. UNDER THE POEA STANDARD EMPLOYMENT
CONTRACT (POEA-SEC)
For an occupational disease and the resulting
disability or death to be compensable, all of the
following conditions must be satisfied:
1.
2.
3.
4.
1. The Er shall continue to pay the seafarer his
wages during the time he is on board the
ship;
The seafarer's work must involve the risks
described in Section 32-A of the POEA-SEC;
The disease was contracted as a result of the
seafarer's exposure to the described risks;
The disease was contracted within a period of
exposure and under such other factors
necessary to contract it; and
There was no notorious negligence on the part
of the seafarer. (Benedict Romana v. Magsaysay
Maritime Corporation, G.R. No. 192442, 02 Aug.
2017)
2. If the injury or illness requires medical
and/or dental treatment in a foreign port,
the Er shall be liable for the full cost of such
medical, serious dental, surgical and
hospital treatment as well as board and
lodging until the seafarer is declared fit to
work or to be repatriated.
NOTE: However, if after repatriation, the seafarer
still requires medical attention arising from said
injury or illness, he shall be so provided at cost to
the Er until such time he is declared fit or the
degree of his disability has been established by the
company-designated physician;
a. DISABILITY BENEFITS
Elements of a Compensable Injury
1.
2.
3. The seafarer shall also receive sickness
allowance from his Er in an amount
equivalent to his basic wage computed
from the time he signed off until he is
declared fit to work or the degree of
disability has been assessed by the
company-designated physician. (Sec. 20(a)
2010 POEA-SEC)
The injury or illness is work-related; and
It occurred during the term of the seafarer’s
contract.
Kinds of Disability
1.
2.
Permanent disability is the inability of a
worker to perform his job for more than 120
days, regardless of whether or not he loses the
use of any part of his body.
NOTE:
a. The period within which the seafarer shall
be entitled to his sickness allowance shall
not exceed 120 days.
Total disability means the disablement of an
employee to earn wages in the same kind of
work of similar nature that he was trained for,
accustomed to perform, or any kind of work
which a person of his mentality and attainments
could do.
b.
4. The seafarer shall be entitled to
reimbursement of the cost of medicines
prescribed by the company-designated
physician; and
A total disability does not require that the
employee be completely disabled, or totally
paralyzed. What is necessary is that the injury must
be such that the employee cannot pursue his or her
usual work and earn from it. A total disability is
considered permanent if it lasts continuously for
more than 120 days.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Payment of the sickness allowance shall be
made on a regular basis, but not less than
once a month.
5. In case of permanent total or partial
disability of the seafarer caused by either
injury or illness, the seafarer shall be
154
Labor Law and Social Legislation
In Case Treatment of the Seafarer is on an Outpatient Basis as Determined by the Companydesignated Physician
report to the office due to his medical condition.
Caraan got himself examined, where it was
revealed that there is a mass in his left kidney.
Upon transfer to the National Kidney and
Transplant Institute (NKTI), his left kidney was
surgically removed, where it was confirmed that
he had renal cell carcinoma.
1.
The company shall approve the appropriate
mode of transportation and accommodation;
Is Caraan entitled to disability benefits?
2.
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; and
3.
For this purpose:
compensated in accordance with the
schedule of benefits enumerated in Sec. 32
of the POEA-SEC.
A: YES. Under Section 20(B) of the POEA Standard
Employment Contract, these are the requirements
for compensability: (1) the seafarer must have
submitted to a mandatory post-employment
medical examination within three working days
upon return; (2) the injury must have existed during
the term of the seafarer's employment contract; and
(3) the injury must be work-related.
GR: The seafarer shall submit himself to a postemployment medical examination by a companydesignated physician within three (3) working days
upon his return.
When he arrived in the Philippines, Caraan was
already ill and no longer in good physical condition
to go back to Manila for treatment. Immediately,
petitioner was subjected to series of laboratory
tests to properly diagnose his ailment.
XPN: When he is physically incapacitated to do so,
in which case, a written notice to the agency within
the same period is deemed as compliance.
The treatment by the health card-accredited
doctors served the equivalent post-employment
medical examination to show that petitioner's
illness existed during his employment. It is
undisputed that Caraan had been with Grieg PH
since 2006. Caraan’s illness — renal cell carcinoma
— could not have occurred overnight after
repatriation. In the case of petitioner, his kidney
cancer gradually progressed while he was
employed with Grieg PH until it manifested when
petitioner complained of pain in urinating and
discharging blood in his urine. Hence, at any time
during his 8-year employment with Grieg PH,
petitioner was already suffering from this illness
while at sea.
In the course of the treatment, the seafarer shall also
report regularly to the company-designated
physician specifically on the dates as prescribed by
the company-designated physician and agreed to by
the seafarer. Failure of the seafarer to comply with
the mandatory reporting requirement shall result in
his forfeiture of the right to claim the above
benefits. (Sec. 20-A(3), 2010 POEA-SEC)
Q: Caraan’s duties as a motorman on board MV
Star Loen involved strenuous physical activities
for his 18-hour shift, and exposed him to all
kinds of noxious gases, harmful fumes and
excessive noise while inside the engine room.
Due to his working conditions and dietary
provision, he experienced pain while urinating
and discharged blood in his urine. Eventually, he
was declared unfit to work and medically
repatriated to the Philippines. Instead of being
fetched by his employer, he just went straight
home to Bataan. His wife informed Grieg PH via
mobile phone that he could not personally
Petitioner had likewise proved that his working
conditions aggravated his kidney ailment. As found
by the arbitrators, petitioner had sufficiently
established that his working conditions on board
the vessel increased the risk of contracting the
kidney disease. Grieg PH failed to dispute this and
did not even offer any controverting evidence.
155
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
(Caraan v. Grieg Philippines, Inc., G.R. No. 252199, 5
May 2021)
frequently exposed to harmful chemicals which
could have also contributed to Gonzales' leukemia.
Q: Gonzales, while on board the general cargo
vessel Star Florida, experienced "shortness of
breath, pain in his left leg, fatigue, fever and
headaches." The following month, his past
symptoms returned with the added symptom of
black tarry stools. He was initially diagnosed
with "pancytopenia suspect aplastic anemia."
This caused his further medical attention as
Gonzales was repatriated in the Philippines.
It is also not disputed that he contracted leukemia
only while he was onboard Star Florida since he was
certified to be fit for sea duty prior to boarding and
his leukemia was not genetic in nature. (Grieg
Philippines, Inc. v. Michael John Gonzales, G.R. No.
228296, 26 July 2017)
Q: Manansala’s services were engaged by
Marlow Navigation Phils., Inc, for him to serve as
a fitter on a vessel. Before boarding the vessel,
Manansala underwent a Pre-Employment
Medical
Examination
(PEME).
In
his
examination, Manansala was required to
disclose information regarding all existing and
prior
medical
conditions.
Manansala's
examination certificate indicates that he denied
having hypertension and diabetes, specifically
answering "NO."
The company physicians opined that Gonzales'
leukemia was not work-related. He sought a
second opinion from an independent physician,
Dr. Emmanuel Trinidad, who certified that his
leukemia was work-related. Gonzales claimed
for disability benefits against Grieg Philippines,
Inc. but denied the same on the ground that
Gonzales was not able to substantially prove the
relation between his illness and his former
position as an Ordinary Seaman.
On 30 May 2010, while on board the vessel,
Manansala suffered a stroke. Because of this,
Manansala was repatriated on 08 June 2010. He
was confined at the De Los Santos Medical
Center from 10 June 2010 to 23 June 2010,
under the primary care of company-designated
physician, Dr. Barrairo. While under Dr.
Barrairo's care, he "repeatedly denied that he
had any past history of diabetes and
hypertension."
Can Gonzales claim disability benefits against
Grieg Philippines, Inc.?
A: YES. Settled is the rule that for 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 sufficient 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.
On 21 Oct. 2010, Manansala filed a Complaint
against the respondents for total and permanent
disability benefits. Two months after he filed his
complaint, Dr. San Luis, issued a medical opinion
stating that Manansala must be considered
permanently disabled. The same opinion
indicated that Manansala admitted to having
had a long history of hypertension and diabetes.
Gonzales was able to satisfy the conditions under
the Sec. 32-A of the 2000 POEA – Standard
Employment Contract and establish a reasonable
linkage between his job as an Ordinary Seaman and
his leukemia. Gonzales provided his functions as an
Ordinary Seaman aboard Star Florida. Among
others, his tasks included removing rust
accumulations and refinishing affected areas of the
ship with chemicals and paint to retard the
oxidation process. This meant that he was
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Is Manansala entitled to total and permanent
disability benefits occasioned by work-related
illnesses?
A: NO. Manansala is not entitled to total and
permanent disability benefits. Sec. 20 (E) of the
POEA-SEC bars the compensability of disability
156
Labor Law and Social Legislation
arising from pre-existing illness when attended by
an employee’s fraudulent misrepresentation.
Petitioner
knowingly
and
fraudulently
misrepresented himself as not afflicted with
hypertension and diabetes during his PENE and
after repatriation while being treated by the
company-designated
physician.
(Antonio
Manansala v. Marlow Navigation Phils., Inc., G.R. No.
208314, 23 Aug. 2017)
When a Seafarer May be Allowed to Pursue and
Action for Total or Permanent Disability
Benefits
1.
The company-designated physician failed to
issue a declaration as to his fitness to engage in
sea duty or disability even after the lapse of the
120-day period and there is no indication that
further medical treatment would address his
temporary total disability, hence, justify an
extension of the period to 240 days;
2.
240 days had lapsed without any certification
issued by the company-designated physician;
3.
The company-designated physician declared
that he is fit for sea duty within the 120-day or
240-day period, as the case may be, but his
physician of choice and the doctor chosen
under Sec. 20-B(3) of the POEA-SEC are of a
contrary opinion;
4.
7.
The company-designated physician declared
him totally and permanently disabled but the
employer refuses to pay him the corresponding
benefits; and
8.
The company-designated physician declared
him partially and permanently disabled within
the 120-day or 240-day period but he remains
incapacitated to perform his usual sea duties
after the lapse of said periods. (C.F. Sharp Crew
Management, Inc. v. Joel Taok, G.R. No. 193679,
18 July 2012)
Q: Mabunay was hired by Sharpe Sea as an oiler
for a period of nine (9) months. A day after
boarding, Mabunay slipped and hit his back on
the purifier, while he was cleaning. When he
awoke, his back was numb and he had difficulty
getting up. Despite the persistent pain in his
back, Mabunay continued working for two (2)
days, until the Chief Engineer allowed him to
have a medical checkup when the ship docked in
Nanjing, China. He was declared unfit to work by
his attending physician and was eventually
repatriated.
On 30 Apr. 2009, Mabunay reported to Sharpe
Sea's office and was told to report to a companydesignated physician. He was diagnosed with
"Cervical
Spondylosis;
Thoracolumbar
Spondylosis; and Mild chronic compression
fracture". The doctor recommended that
Mabunay undergo a discectomy. On 24 Nov.
2009, Mabunay underwent surgery and was
observed that he "tolerated the procedure well."
The
company-designated
physician
acknowledged that he is partially permanently
disabled but other doctors who he consulted, on
his own and jointly with his employer, believed
that his disability is not only permanent but
total as well;
5.
The company-designated physician recognized
that he is totally and permanently disabled but
there is a dispute on the disability grading;
Mabunay filed a complaint against Sharpe Sea,
Monte Carlo, and Florem for the payment of his
total disability benefits Mabunay sought the
opinion of third doctor, who opined that he was
unfit to work as a seaman in his present
condition.
6.
The company-designated physician determined
that his medical condition is not compensable
or work-related under the POEA-SEC but his
doctor-of-choice and the third doctor selected
under Sec. 20-B(3) of the POEA-SEC found
otherwise and declared him unfit to work;
The LA ruled in Mabunay's favor and directed
Sharpe Sea to pay him permanent and total
disability benefits. It rejected Sharpe Sea's
claim that its company-designated physicians
assessed Mabunay with a disability rating of
Grade 8 since it was not supported by the
157
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Social Welfare Legislation
and dizziness. He tried to remove it with his
fingers but failed. Solacito was repatriated.
Solacito underwent a surgical procedure at St.
Luke's Medical Center. The company-designated
physician issued a Medical Report finally
declaring Solacito fit to work. Solacito filed a
complaint for total and permanent disability
benefits on the ground that his personal
physician issued a Medical Certificate which
states that he is physically unfit to go back to
work as a seafarer in any capacity because of
hearing loss (L) ear, which is a total and
permanent disability. The LA and NLRC ruled in
favor of Solacito. The CA explained that under
the POEA-SEC and prevailing jurisprudence, the
medical assessment of the company-designated
physicians should be recognized when the
seafarer, as in this case, did not submit himself
to the assessment of a third doctor. Is the CA
correct?
records. The NLRC upheld the LA's findings that
the records were bereft of evidence to support
Sharpe Sea's claim.
On 29 Nov. 2011, the NLRC modified its decision
by reducing the award of US$60,000.00 it earlier
granted to Mabunay, to US$16,795.00,
corresponding to a Grade 8 disability
rating. The NLRC noted that Sharpe Sea
attached a medical report dated 18 Aug. 2009
from Dr. Cruz, which supported its claim that a
company-designated physician had diagnosed
Mabunay with a Grade 8 disability. Is Mabunay
entitled to permanent and total disability
benefits?
A: YES. With the company-designated physicians'
failure to issue either a fit-to-work certification or a
final disability rating within the prescribed periods,
respondent's disability was rightfully deemed to be
total and permanent.
A: YES. Section 20(B)(3) of the POEA-SEC requires
that, after medical repatriation, the companydesignated physician must assess the seafarer's
fitness to work or the degree of his disability.
Thereafter, the seafarer may choose his own doctor
to dispute the findings of the company-designated
physician. If the findings of the company-designated
physician and the seafarer's doctor of choice are
conflicting, the matter is then referred to a third
doctor, whose findings shall be binding on both
parties. The seafarer has then the duty to signify his
intent to challenge the company-designated
physician's assessment and, in turn, the employer
must respond by setting into motion the process of
choosing the third doctor.
A company-designated physician is expected to
come up with a definite assessment of a seafarer's
fitness or lack of fitness to work or to determine the
seafarer's degree of disability within a period of 120
or 240 days from repatriation. Clearly, Dr. Cruz, Dr.
Castillo, or any other company-designated
physician failed to issue respondent either a fit-towork certification or a final disability rating after his
operation and before the lapse of 240 days from his
repatriation.
Nonetheless, even if this Court accepted petitioners'
explanation on the belated submission of the
disability rating into evidence, it is worthy to note
that Dr. Cruz only issued an interim disability rating.
It has been settled in Magsaysay Maritime Corp. that
an interim disability grading is merely an initial
prognosis and does not provide sufficient basis for
an award of disability benefits. (Sharpe Sea
Personnel, Inc. v. Macario Mabunay, Jr., G.R. No.
206113, 06 Nov. 2017)
Following the disability assessment issued by his
personal physician which conflicted with that of the
company-designated physicians, it was incumbent
on Solacito to refer the findings of his own doctor to
his employer who would then have had the
obligation to commence the process of the selection
of the third doctor. However, he failed to do so. Nonreferral to a third doctor, whose decision shall be
considered as final and binding, constitutes a breach
of the POEA-SEC and the assessment of the
company-designated physician shall prevail.
Q: Pacific Ocean Manning, Inc. hired Solacito as
an Able Seaman on board M/V Eurocardo
Salerno. Solacito alleged that while he was on
pirate watch, an insect entered and lodged itself
inside his left ear which caused pain, itchiness,
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
158
Labor Law and Social Legislation
otherwise provided, is considered as a total and
permanent disability. The exception pertains to a
situation when the sickness "still requires medical
attendance beyond the 120 days but not to exceed
240 days" in which case the temporary total
disability period is extended up to a maximum of
240 days.
(Pacific Ocean Manning, Inc. v. Solacito, G.R. No.
217431, February 19, 2020, J. Caguioa)
Need for Definite Assessment Within 120/240
Days
The court summarized the rules regarding the
company-designated physician's duty to issue a
final medical assessment on the seafarer's disability
grading, as follows:
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.
4.
However, for the company-designated physician to
avail of the extended 240-day period, he must first
perform some significant act to justify an extension;
otherwise, the seafarer's disability shall be
conclusively presumed to be permanent and total.
(Talaroc v. Arpaphil Corporation, et. al., G.R. No.
223731, 30 Aug. 2017)
Third-Doctor Referral
If the physician appointed by the seafarer disagrees
with
the
company-designated
physician's
assessment, the opinion of a third doctor may be
agreed jointly between the employer and the
seafarer to be the decision final and binding on
them. Non-compliance with this procedure would
lead to the conclusion that the determination of the
company-designated physician would prevail.
(Jakerson Gargallo v. Dohle Seafront Crewing, G.R.
No. 215551, 17 Aug. 2016)
If the company-designated physician fails to
give his assessment within the 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-designated physician has sufficient
justification to extend the period; and
Q: Pastrana is employed by BSS as an
Environmental Team Leader on board the vessel
Carnival Fascination. While on board the vessel,
Pastrana lifted a red bin full of food waste to free
up space for other bins. However, he
miscalculated the weight of the bin and dropped
it midway. After said incident, Pastrana
experienced lower back pain which radiated to
his right buttock. On December 10, 2012,
Pastrana was repatriated to the Philippines for
medical treatment. On April 11, 2013, the
company-designated physician issued a final
assessment which states that he has a Grade 11
disability rating. Pastrana sought the opinion of
his personal doctor, who declared him
"permanently unfit in any capacity to resume his
duties as a Seaman." Pastrana now claims total
and permanent disability benefits from BSS. Is
Pastrana entitled to total and permanent
disability benefits?
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.
Case law states that without a valid final and
definitive assessment from the companydesignated physician within the 120/240-day
period, the law already steps in to consider
petitioner's disability as total and permanent.
Thus, a temporary total disability becomes total and
permanent by operation of law. (Oscar Gamboa v.
Maunlad Trans., Inc., G.R. No. 232905, 20 Aug. 2018)
NOTE: A temporary total disability lasting
continuously for more than 120 days, except as
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Social Welfare Legislation
Philippines. Esteva returned to the Philippines
and reported to his employer.
The company-designated physician, Dr. CruzBalbon, issued a Medical Certificate indicating
that Esteva was given medications for Pott's
disease, a form of tuberculosis of the spine. She
prescribed that Esteva take at least one (1) year
of treatment.
A: YES. In the seafarer’s claim for total and
permanent disability benefits, the companydesignated physician is required to issue a final and
definitive disability assessment within 120 or 240
days from the date of the seafarer's repatriation.
The initial 120 days within which the companydesignated physician must issue a final and
definitive disability assessment may be extended
for another 120 days for justifiable reasons.
However, to avail of the extended 240-day period,
the company-designated physician must perform
some complete and definite medical assessment to
show that the illness still requires medical
attendance beyond 120 days, but not to exceed 240
days. The failure of the company-designated
physician to do so will render his findings nugatory
and transform the disability suffered by the seafarer
to one that is permanent and total.
In the Medical Certificate, Esteva's suggested
disability grading was Grade 8, with 2/3 loss of
lifting power. Esteva consulted another doctor,
Dr. Reyes-Paguia, who issued another Medical
Certificate. Esteva consulted another doctor, Dr.
Raymundo, an orthopedic surgeon. The
physician issued a Medical Report which
showed Esteva to be ambulatory but walking
with a limp and his condition will no longer
allow him to return as an able-bodied seaman.
In this case, the assessment dated April 11, 2013
was issued beyond the mandated 120-day period.
While this initial 120-day period may be extended
to 240 days, the Court finds no sufficient
justification to apply the extended period in this
case. The records of the case are bereft of any
indication that such extension was needed, or even
intended, to provide Pastrana further medical
treatment. Such failure of the company-designated
physician rendered his opinion on Pastrana's
disability irrelevant. The law had already stepped
in, and considered Pastrana permanently and
totally disabled. (Pastrana v. Bahia Shipping
Services, G.R. No. 227419, June 10, 2020, J. Caguioa)
Is Esteva entitled to total disability benefits?
A: YES. The entitlement of an overseas seafarer to
disability benefits is governed by law, the
employment contract, and the medical findings. Sec.
20, (3) of the POEA Standard Employment Contract
states that “. . . if a doctor appointed by the seafarer
disagrees with the assessment, a third doctor may
be agreed jointly between the Employer and the
seafarer. The third doctor's decision shall be final
and binding on both parties.”
As the one contesting the company-designated
physician's findings, it is the seafarer's duty to
signify the intention to resolve the conflict through
the referral to a third doctor. If the seafarer does not
contest the findings and fails to refer the assessment
to a third doctor, the company can insist on its
disability rating even against a contrary opinion by
another physician. Securing a third doctor's opinion
is the duty of the employee, who must actively or
expressly request for it.
Q: Smith Bell Manning hired Esteva as a seafarer
for nine (9) months. He underwent the
prescribed medical examination and was
pronounced fit to work. While he was onboard
the vessel, Esteva began to suffer severe back
pains. He underwent x-ray and was diagnosed
with lumbar disc prolapse. According to the
Injury/Illness Report, his condition required a
specialist treatment and possible operation. Dr.
Watson declared Esteva to have a temporary
total disability and unfit for work and
recommended
immediate
repatriation.
Wilhelmsen Ship Management also wrote a
letter requesting that Esteva be examined by the
company-designated
physician
in
the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Here, petitioner failed to signify his intention to
resolve the conflicting assessments of the companydesignated physician and his chosen physicians.
Instead, he immediately filed the claim for
permanent disability benefits. Clearly, petitioner
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Labor Law and Social Legislation
definitive medical assessment within the 240-day
extended period transformed the respondent’s
disability to permanent and total.
failed to comply with the mandatory rule on referral
to a third doctor.
Be that as it may, respondents also failed to
discharge their duty. Petitioner claims that they did
not inform him that the company-designated
physician has already issued an assessment.
Respondents did not dispute his contention that he
was never furnished copies of the disability
assessment, and that only after filing the Complaint
did, he become aware of it.
In Island Overseas Transport Corporation v. Beja, this
Court clarified that: If the maritime compensation
complaint was filed prior to 06 Oct. 2008, the rule
on the 120-day period, during which the disability
assessment should have been made in accordance
with Crystal Shipping, Inc. v. Natividad, that is, the
doctrine then prevailing before the promulgation of
Vergara on 06 Oct. 2008, stands; if, on the other
hand, the complaint was filed from 06 Oct. 2008
onwards, the 240-day rule applies. (Orient Hope
Agencies, Inc. v. Michael Jara, G.R. No. 204307, 06 June
2018)
Absent a final, definite disability assessment from a
company-designated physician, the mandatory rule
on a third doctor referral will not apply here.
Hence, petitioner cannot be faulted for not referring
the assessment to a third doctor at the time he filed
his Complaint. There was no medical assessment
from a company-designated physician to contest
then as it had not been timely disclosed to him.
Q: After suffering an Epileptic Seizure with postfit neurological deficit, Atraje was repatriated
to the Philippines and was referred to the
company-designated doctor for further medical
evaluation and treatment. After completing his
treatment, Atraje continued to suffer from
shoulder and neck pain. Thus, he consulted an
independent specialist who declared him
permanently unfit to resume his duties as a
seaman.
Thus, petitioner's failure to refer the assessment to
a third doctor is not fatal to his disability claim.
Hence, petitioner is entitled to total and permanent
disability benefits (Jessie C. Esteva v. Wilhelmsen
Smith Bell Manning, et al., G.R. No. 225899, 10 July
2019)
Atraje later filed a complaint for permanent and
total disability benefits against his employers.
The latter argued that since Atraje failed to
comply with the third doctor rule, the
assessment of the company-designated doctor
should prevail.
Q: Jara was hired by Orient Hope as an engine
cadet on board M/V Orchid Sun. On its way to
Oman, M/V Orchid Sun sank off Muscat on 12
July 2007. Jara sustained leg injuries. On 29 May
2008, the company-designated physician
suggested that his disability grading is Grade 11.
Meanwhile, the Panel of Voluntary Arbitrators
noted that while Atraje initiated submitting to
examination by a third doctor, there was silence
on the part of his employers. Hence, it held that
Atraje could not be faulted anymore if the
appointment of a third physician was deemed
waived in this case.
On 06 Mar. 2008, Jara filed a complaint with the
Labor Arbiter, insisting that he was entitled to
total permanent disability benefits amounting
to US$60,000.00. Is Jara entitled to permanent
and total disability compensation considering
that there was a Grade 11 disability grading
given by the company-designated physician?
Does non-compliance with the third doctor rule
prejudice Atraje’s claim for disability benefits?
A: YES. Jara is entitled to permanent and total
disability compensation despite the Grade 11
disability grading given by the company-designated
physician. The Court finds that the companydesignated physician’s failure to issue a final and
A: NO. Under Sec. 20-A(3) of the 2010 POEA-SEC, “If
a doctor appointed by the seafarer disagrees with
the assessment, a third doctor may be agreed jointly
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Social Welfare Legislation
and consult a doctor of his choice, Sec. 20-A(3)
thereof further provides that any disagreement in
the findings may be referred to a third doctor jointly
agreed upon by the parties, whose findings shall be
final and binding between them. The nonobservance of the requirement to have the
conflicting assessments determined by a third
doctor would mean that the assessment of the
company-designated physician prevails.
between the Employer and the seafarer. The third
doctor’s decision shall be final and binding on both
parties.” The assessment refers to the declaration of
fitness to work or the degree of disability, as can be
gleaned from the first paragraph of Sec. 20-A(3). It
presupposes
that
the
company-designated
physician came up with a valid, final, and definite
assessment on the seafarer’s fitness or unfitness to
work before the expiration of the 120- or 240-day
period.
Considering that Ventura failed to observe the
conflict-resolution procedure provided under the
2010 POEA-SEC, the Court is inclined to uphold the
opinion of the company-designated physician that
Ventura's illnesses were not work-related, hence,
not compensable.
In this case, the third doctor-referral provision does
not apply because there is no definite disability
assessment
from
the
company-designated
physicians. (Magsaysay Mol Marine, Inc. v. Atraje,
G.R. No. 229192, 23 July 2018)
Q: Toquero was employed by Crossworld as a
fitter for a vessel for seven (7) months. He
underwent
a
pre-employment
medical
examination and was declared fit for sea duty.
While on board the vessel, Toquero was
assaulted by his fellow seafarer, Fong.
Q. Teodoro Ventura, Jr. was employed by
Crewtech Shipmanagement Philippines, Inc. as
Chief Cook on board the vessel MV Maria
Cristina Rizzo. Ventura complained that he was
having a hard time urinating that was
accompanied by lower abdominal pain. He was
medically repatriated and referred to the
company-designated physician who diagnosed
Ventura's illnesses to be "Cystitis with
Cystolithiases and Benign Prostatic Hyperplasia
(BPH)," which he declared to be not workrelated.
According to Toquero, he and Fong were
instructed by the master of the vessel to check
and repair a generator. While repairing,
Toquero advised Fong not to remove the flanges
which his irked Fong, and recalled their prior
altercation and challenged him to a fistfight. He
ignored Fong and continued working when
suddenly Fong hit the back of his head with a
large metal spanner, knocking him unconscious.
He was given first aid treatment at the ship
clinic, where his vital signs were monitored.
Prior to the expiration of the 240-day period
reckoned from his repatriation, Ventura
claimed that he was verbally informed by the
company-designated physician that it would be
his last check-up session and that subsequent
consultations would be for his own account.
Ventura was compelled to seek an independent
physician of his choice, Dr. Tan, who declared
him to be permanently disabled.
Toquero's assessment showed that his physical
discomfort was due to trauma and skull defect.
His Medical Evaluation Report read that
Toquero became incapacitated because of the
serious head injury that he incurred on board;
he has a large bone defect which may pose
further damage to his brain; contusion of the
brain tissue also occurred at the site of the skull
fracture. At this time, he is no longer allowed to
engage in heavy physical activities. The ship's
environment is also dangerous to him because
of the unsteady state of the vessel when sailing
at high seas. Dizziness may set anytime and may
Ventura filed a complaint for total permanent
disability benefits. Crewtech argued that the
failure to observe the procedure for the joint
appointment of a third doctor negates the claim
for the disability benefits. Is Ventura entitled?
A. NO. While the seafarer is not irrevocably bound
by the findings of the company-designated
physician as he is allowed to seek a second opinion
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
result to fall, which
irreparable injury.
nowhere. He was then bought to a psychiatric
clinic where he was diagnosed with
Occupational
Stress
Disorder
and
recommended his immediate repatriation on
the ground of "acute psychosis.”
may cause further
Because of the impediment, he is permanently
unfit to return to work as a seaman in any
capacity and considered for total permanent
disability. Is Toquero's injury compensable?
Upon Cayabyab's arrival in the Philippines, VMC
referred him to the company-designated
physician, who endorsed him to a psychiatrist at
the Philippine General Hospital (PGH). The
psychiatrist prescribed him medication for
schizophrenia and advised him to return to
work. During his follow-up check-up on said
date, the psychiatrist declared that Cayabyab
had a brief psychotic episode. Subsequently, the
company-designated physician issued a Grade 6
Disability Assessment. Cayabyab thus filed a
complaint for total and permanent disability
benefits. Months after the filing of the complaint,
Cayabyab a second opinion from his personal
physician, Dr. Elias D. Adamos, who declared
him to be suffering from total and permanent
disability.
A: YES. A disability is compensable under the POEA
Standard Employment Contract if two (2) elements
are present:
1.
2.
The injury or illness must be work-related; and
The injury or illness must have existed during
the term of the seafarer's employment
contract.
Hence, a claimant must establish the causal
connection between the work and the illness or
injury sustained.
Here, the two (2) elements of a work-related injury
are present. Not only was petitioner's injury workrelated, it was sustained during the term of his
employment contract. His injury, therefore, is
compensable.
The LA awarded Cayabyab total and permanent
disability benefits. On the other hand, the NLRC
held that VMC is liable to pay Cayabyab only
partial disability benefits corresponding to
Grade 6 rating under the Amended POEA-SEC.
On appeal, the CA upheld the findings of the
company-designated physician who classified
Cayabyab's mental disorder as a partial
disability with a Grade 6 rating. It also held the
local agency VMC and its foreign principal SPMC
solidarity liable for the payment of Grade 6
disability benefits owing to Cayabyab, based on
the parties' CBA.
Respondents' argument that the claim is precluded
because the injury is due to the willful acts of
another seafarer is untenable. The POEA-SEC
disqualifies claims caused by the willful or criminal
act or intentional breach of duties done by the
claimant, not by the assailant. It is highly unjust to
preclude a seafarer's disability claim because of the
assailant's willful or criminal act or intentional
breach of duty. (Toquero v. Crossworld Marine
Services, et al., G.R. No. 213482, 26 June 2019)
Q: Ventis Maritime Corporation (VMC) hired
Cayabyab on behalf of its foreign principal, St.
Paul Maritime Corporation (SPMC), to work as a
wiper on board one of its vessels. Cayabyab
underwent
a
Pre-Employment
Medical
Examination (PEME) where he was declared fit
for sea duty. In fulfilling his work, Cayabyab
claimed he skipped meals to assist other crew
members. He also experienced erratic sleeping
patterns aggravated by poor nutrition. He began
talking to himself and recited bible verses out of
Can Cayabyab claim partial disability benefits
under the CBA?
A: NO. Cayabyab cannot claim partial disability
benefits under the alleged CBA.
There are three (3) requisites which a seafarer
declared to be suffering from a disability, whether
permanent or partial, must prove to establish his or
her entitlement to superior disability benefits under
the CBA. First, the existence of the CBA; second, the
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Social Welfare Legislation
seafarer's employment contract is covered by the
CBA, i.e., the CBA is in effect or had not yet lapsed at
the time of the seafarer's employment; and third,
that the seafarer complied with the conditions
stipulated in the CBA, i.e., prove that the seafarer's
injury arise from an accident while on board the
vessel.
In Case of Work-Related Death of the Seafarer,
During the Term of his Contract
The Er shall pay his beneficiaries the Philippine
currency equivalent to:
Cayabyab cannot claim disability benefits under the
CBA owing to the following reasons: 1) He failed to
prove its existence; 2) He failed to establish that his
employment contract is covered by the supposed
CBA; and 3) He failed to adduce evidence to show
that his disability arose from an accident.
1.
The amount of $50,000; and
2.
An additional amount of $7,000 to each child
under the age of 21 but not exceeding four (4)
children, at the exchange rate prevailing
during the time of payment. (Sec. 20-B(1), 2010
POEA – SEC)
Where Death is Caused by Warlike Activity
While Sailing Within a Declared War Zone or
War Risk Area
The award of compensation and disability benefits
cannot rest on speculations, presumptions, and
conjectures. While the CBA is a labor contract that
must be logically and liberally construed in favor of
Filipino seafarers, still the rule is that "justice is in
every case for the deserving, to be dispensed with in
the light of established facts, the applicable law, and
existing jurisprudence.
The compensation payable shall be doubled. The
employer shall undertake appropriate war zone
insurance coverage for this purpose.
NOTE: It is understood and agreed that the benefits
mentioned above shall be separate and distinct
from, and will be in addition to whatever benefits
which the seafarer is entitled to under Philippine
laws from the SSS, OWWA, ECP, PHIC and Home
Development Mutual Fund (Pag-IBIG Fund). (Sec.
200-B(2), 2010 POEA – SEC)
Thus, Cayabyab is entitled to disability benefits
corresponding to Grabe 6 disability rating under the
Amended POEA-SEC, and not the CBA. (Ventis
Maritime Corporation, et al. v. Cayabyab, G.R. No.
239257, 21 June 2021)
Other Liabilities of the Er When the Seafarer
Dies as a Result of Work – Related Injury or
Illness During the Term of Employment (O-R-B)
b. DEATH BENEFITS
GR: The seafarer’s death should occur during the
term of his employment.
XPN: The seafarer’s death occurring after the
termination of his employment due to his medical
repatriation on account of a work-related injury or
illness. This is based on a liberal construction of the
2000 POEA-SEC 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 workconnection. (Sec. 20(B), 2010 POEA-SEC)
1.
The employer shall pay the deceased’s
beneficiary all outstanding Obligations due the
seafarer under this Contract.
2.
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 case death occurs at sea, the disposition of
the remains shall be handled or dealt with in
accordance with the master’s best judgment.
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Labor Law and Social Legislation
Is petitioner entitled to death benefits?
In all cases, the employer/master shall
communicate with the manning agency to
advise for disposition of seafarer’s remains.
3.
A: YES. Among other basic provisions, the POEASEC stipulates that the beneficiaries of a deceased
seafarer may be able to claim death benefits for as
long as they are able to establish that (a) the
seafarer’s death is work-related, and (b) such death
had occurred during the term of his employment
contract.
The employer shall pay the beneficiaries of the
seafarer the Philippine currency equivalent to
the amount of $1,000 for Burial expenses at
the exchange rate prevailing during the time of
payment.
While it is true that Brainstem (pontine) Cavernous
Malformation is not listed as an occupational
disease under Sec. 32-A of the 2000 POEA-SEC, Sec.
20-B(4) of the same explicitly provides that “[t]he
liabilities of the employer when the seafarer suffers
work-related injury or illness during the term of his
contract are as follows: those illnesses not listed in
Sec. 32 of this Contract are disputably presumed as
work related.”
When is There No Compensation and Benefits to
be Payable in Respect of an Injury, Incapacity,
Disability or Death of a Seafarer
No compensation and benefits shall be payable in
respect of any injury, incapacity, disability or death
of the seafarer when it is the result of his:
1.
2.
Willful or criminal act; or
Intentional breach of his duties
Also, while the general rule is that the seafarer’s
death should occur during the term of his
employment, the seafarer’s death occurring after
the termination of his employment due to his
medical repatriation on account of a work-related
injury or illness constitutes an exception thereto.
Provided, that the employer can prove that such
injury, incapacity, disability, or death is directly
attributable to the seafarer.
Q: Rodolfo L. Racelis was recruited and hired by
respondent United Philippine Lines, Inc. (UPL)
for its principal, respondent Holland America
Lines, Inc. (HAL) to serve as "Demi Chef De
Partie" on board the vessel MS Prinsendam.
Invalid Side Agreement
An agreement that diminishes an employee’s pay
and benefits as contained in the POEA-approved
contract is void, unless such subsequent agreement
is approved by the POEA. (Azucena, 2016)
In the course of his last employment contract,
Rodolfo experienced severe pain in his ears and
high blood pressure causing him to collapse
while in the performance of his duties. He
consulted a doctor in Argentina and was
medically repatriated on for further medical
treatment.
Period to File OFW Claims
The POEA-SEC states in Sec. 28 that claims under
the contract shall be filed within 1 year from the
date of the seafarer’s return to the point of hire. On
the other hand, Art. 291 of the LC provides for 3
years to file money claims arising from employeremployee relations. The LC provision prevails over
Sec. 28 of the SEC and the latter is declared “null and
void.” (Azucena, 2016)
Upon arrival in Manila, he was immediately
brought to Medical City, Pasig City, where he was
seen by a company-designated physician, Dr.
Gerardo Legaspi, and was diagnosed to be
suffering from Brainstem (pontine) Cavernous
Malformation. He underwent surgery twice for
the said ailment but developed complications
and died. Rodolfo’s surviving spouse sought to
claim death benefits but to no avail.
Q: On 28 Feb. 2006, Magsaysay Maritime
Corporation (Magsaysay), the local manning
agent of Princess Cruise Lines, Limited, hired
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Social Welfare Legislation
employment contract. It was likewise established
that while Bernardine requested medical attention
when he started to feel ill and upon his repatriation,
his requests were repeatedly ignored.
Bernardine De Jesus as an Accommodation
Supervisor for the cruise ship Regal Princess.
On 09 Mar. 2006, Bernardine boarded Regal
Princess and he eventually disembarked 10
months later, or on 16 Jan. 2007, after his
contract of employment ended. Bernardine was
soon diagnosed with Aortic Aneurysm and on 15
Mar. 2007, he had a coronary angiography.
This Court concurs with the Labor Arbiter's
observation that it was improbable for Bernardine
to have developed and died from a cardio-vascular
disease within the two (2) short months following
his repatriation. (Magsaysay Maritime Corporation
v. Cynthia De Jesus, G.R. No. 203943, 30 Aug. 2017)
On 21 Mar. 2007, he underwent a Left
Axillofemoral Bypass. He died on 26 Mar. 2007.
Cynthia, Bernardine’s widow claimed that her
husband suffered chest pains while he was still
aboard the Regal Princess. She claimed that he
had reported his condition, but he was not
provided with medical attention. Furthermore,
he had also asked for medical attention upon his
repatriation, but his request was once again
denied.
Is Bernardine’s widow is entitled to death
benefits?
A: YES. Bernardine's widow is entitled to death
benefits. Sec. 20 (A) of the POEA-SEC requires that
for a seafarer to be entitled to death benefits, he
must have suffered a work-related death during the
term of his contract.
However, Sec. 32-A of the POEA-SEC acknowledges
the possibility of "compensation for the death of the
seafarer occurring after the employment contract
on account of a work-related illness" if the following
conditions are met:
1.
2.
3.
4.
The seafarer's work must involve the risks
described herein;
The disease was contracted as a result of the
seafarer's exposure to the described risks;
The disease was contracted within a period of
exposure and under such other factors
necessary to contract it; and
There was no notorious negligence on the part
of the seafarer.
Both labor tribunals found that Bernardine first
experienced chest pains while he was still onboard
the cruise ship, i.e., during the term of his
UNIVERSITY OF SANTO TOMAS
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166
Labor Relations
employee's means of livelihood which is a property
right. (PAL v. NLRC, G.R. No. 85985, 13 Aug. 1993)
Sec. 8, Art. III provides that, “The right of the
people, including those employed in the public and
private sectors, to form unions, associations, or
societies for purposes not contrary to law, shall not
be abridged.”
V. LABOR RELATIONS
Labor Relations
Refers to the interactions between employer and
employees or their representatives and the
mechanism by which the standards and other terms
and conditions of employment are negotiated,
adjusted, and enforced. (Azucena, 2016)
Declaration of Policy
The State aims to promote:
The term denotes all aspects of Er-Ee relationship
which involve concerted action on the part of the
workers. It is usually associated with all the
ramifications of unionism, collective bargaining and
negotiations, and concerted activities such as strike,
picket, mass leave, etc. (Poquiz, 2018)
Constitutional provisions in relation to Labor
Relations
Sec. 3, Art. XIII guarantees to all workers, among
others, their right to:
1.
Self-organization
2.
Peaceful concerted activities including the
right to strike in accordance with law; and
3.
Participate
in
policy-decision
making
processes affecting their rights and benefits as
may be provided by law.
The right to participate in policy and decisionmaking process is not absolute
A scrutiny of the policy must be made if the same is
purely business oriented and concerns the
management aspect of the business of the company
or if the policy has repercussions on the employee's
right to security of tenure. A line must be drawn
between management prerogatives regarding
business operations per se and those which affect
the rights of the employees. In treating the latter,
management should see to it that its employees are
at least properly informed of its decisions or modes
of action especially if the implementation of the
provisions may result in the deprivation of an
167
1.
Free collective bargaining and negotiations,
including voluntary arbitration, mediation,
and conciliation, as modes of settling labor or
industrial disputes;
2.
Free trade unionism;
3.
Free and voluntary organization of a strong
and united labor movement;
4.
Enlightenment of workers concerning their
rights and obligations as union members and
as employees;
5.
Adequate administrative machinery for the
expeditious settlement of labor or industrial
peace;
6.
Stable but dynamic and just industrial peace;
7.
Participation of workers in decision and policy
making processes affecting their rights, duties,
and welfare; and
8.
Truly democratic method of regulating the
relations between the employers and
employees by means of agreements freely
entered into through collective bargaining.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
bargaining
representative of the
employees. (Azucena,
2013)
A. RIGHT TO SELF-ORGANIZATION
Right to Self-Organization
1. WHO MAY JOIN, FORM, OR ASSIST LABOR
ORGANIZATIONS OR WORKERS’ ASSOCIATIONS
Refers to the right of workers and employees to
form, join, or assist unions, organizations, or
associations for purposes of collective bargaining
and/or for mutual aid and protection, including the
right to engage in peaceful concerted activities and
participate in policy-decision making processes
affecting their rights and benefits.
Who may unionize for purposes of collective
bargaining
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. (Art. 253, LC)
Extent of the Right to Self-Organization
It includes at least two (2) rights:
1.
2.
the employees’ group
is not registered with
the DOLE. (Azucena,
2013)
The right to form, join, or assist labor
organizations; and
The right to engage in lawful concerted
activities. (Art. 257, LC)
Who may form a labor organization for
purposes of mutual aid and protection
1.
All persons employed in commercial,
industrial and agricultural enterprises and in
religious, charitable, medical, or educational
institutions, whether operating for profit or
not;
Q: Why do workers organize?
2.
A: For self-advancement and the desire for: (a) job
security; (b) substituting “rule of law” for the
arbitrary power by the boss; and (c) sense of
participation in the business enterprise. (Azucena,
2016)
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, LC)
3.
Aliens working in the country with valid
permits issued by the DOLE may exercise the
right to self-organization and join or assist
labor organizations of their own choosing for
purposes of collective bargaining: Provided,
that said aliens are nationals of a country
which grants the same or similar rights to
Filipino workers. (Principle of Reciprocity)
4.
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
Purpose of Exercise of Right to Self-Organization
1.
2.
Collective bargaining; and
Mutual aid and protection. (Art. 257, LC)
Collective Bargaining vs. Dealing with Employer
COLLECTIVE
BARGAINING
A right that may be
acquired by a labor
organization
after
registering itself with
the DOLE and after
being recognized or
certified by DOLE as
the
exclusive
DEALING WITH
EMPLOYER
A generic description
of interaction between
employer
and
employees concerning
grievances,
wages,
work hours, and other
terms and conditions
of employment, even if
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
168
Labor Relations
c.
have the right to form associations for
purposes not contrary to law.
d.
e.
f.
g.
h.
Q: Is the formation of workers’ association for
mutual aid and protection (instead of a union for
purposes of collective bargaining) limited only
to ambulant, intermittent and itinerant
workers, self-employed people, rural workers,
and those without any definite employers?
Managerial employees
A: NO. The right to self-organization includes the
right to form a union, workers' association, and
labor management councils.
A managerial employee is one who is vested with
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), LC)
More often than not, the right to self-organization
connotes unionism. Workers, however, can also
form and join a workers' association as well as
Labor Management Councils (LMC).
Types of Managers
The right to form a union or association or to selforganization comprehends two notions, to wit: (a)
the liberty or freedom, that is, the absence of
restraint which guarantees that the employee may
act for himself without being prevented by law; and
(b) the power, by virtue of which an employee may,
as he pleases, join or refrain from joining an
association. (Samahan ng Manggagawa sa Hanjin
Shipyard v. BLR, G.R. No. 211145, 14 Oct. 2015)
2. RESTRICTIONS AS TO MANAGERIAL
EMPLOYEES, SUPERVISORY EMPLOYEES,
CONFIDENTIAL EMPLOYEES, EMPLOYEEMEMBERS OF COOPERATIVES, AND
GOVERNMENT EMPLOYEES
1.
First Line Managers (supervisors) –
direct operation of Ees and not supervise
other managers (e.g. foreman)
2.
Middle Managers – direct activities of
other managers (e.g. plant managers)
3.
Top Management – overall management
of organization (e.g. SVP, President)
(United Pepsi Cola Supervisory Union v.
Laguesma G.R. No. 122226, 25 Mar. 1998)
Managerial employees are not eligible to join, assist
or form any labor organization. (Art. 255, LC)
The rationale for the inhibition is that if managerial
employees would belong to or be affiliated with a
union, the latter might not be assured of their
loyalty to the union in view of evident conflict of
interests. The union can become companydominated with the presence of managerial
employees in the union membership. (Bulleting
Publishing Co., Inc. v. Hon. Sanchez, G.R. No. 74425, 07
Oct. 1986)
Q: When can an employee join a labor
organization?
A: Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered as an employee for purposes
of membership in any labor union. (Art. 292 (c), LC)
Managerial employees cannot be allowed to share in
the concessions obtained by the labor union
through collective negotiation. Otherwise, they
would be exposed to the temptation of colluding
with the union during the negotiations to the
detriment of the employer. (Azucena, 2016)
EMPLOYEES RESTRICTED TO FORM, JOIN, OR
ASSIST LABOR ORGANIZATIONS
a.
b.
Confidential employees (in the field of
labor relations);
Employee-members of a cooperative;
Government employees;
Employees of international organizations;
Foreign workers; and
Religious objectors.
Managerial employees;
Supervisory employees;
169
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Supervisory employees
3.
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), LC)
4.
Radio and telegraph operators who have
access to confidential information
Personnel staff
Human Resource Assistants and Personnel
Assistants
are
considered
Confidential
Employees
As a Human Resource Assistant, the scope of one’s
work necessarily involves labor relations,
recruitment and selection of employees, access to
Ees' personal files and compensation package, and
human resource management. As regards a
Personnel Assistant, one's work includes the
recording of minutes for management during CB
negotiations, assistance to management during
grievance
meetings
and
administrative
investigations, and securing legal advice for labor
issues from the petitioner’s team of lawyers, and
implementation of company programs.
Supervisory employees are allowed to organize, but
they cannot form, join, or assist a rank-and-file
union. (Azucena, 2016)
Confidential employees (in the field of labor
relations)
A confidential employee is one who assists and
acts in a confidential capacity to, or has access to
confidential matters of, persons who exercise
managerial functions in the field of labor relations.
(Philips Industrial Development v. NLRC, G.R. No.
88957, 25 June 1992)
NOTE: The phrase “in the field of labor relations” is
important because it stresses the labor nexus, that
is, the confidentiality of the position should relate to
labor relations matters.
Therefore, in the discharge of their functions, both
gain access to vital labor relations information
which outrightly disqualifies them from union
membership. (San Miguel Foods Inc. v. San Miguel
Corporation Supervisors and Exempt Union, G.R. No.
146206, 01 Aug. 2011)
Doctrine of Necessary Implication
Payroll masters are not confidential employees
The Doctrine of Necessary Implication states that
what is implied in a statute is as much a part thereof
as that which is expressed.
A confidential employee is one entrusted with
confidence on delicate, or with the custody,
handling or care and protection of the employer’s
property. Confidential employees, such as
accounting personnel, should be excluded from the
bargaining unit, as their access to confidential
information may become the source of undue
advantage.
The reason for ineligibility of managerial employees
to form, assist, or join a labor union equally applies
to confidential employees. While the Labor Code
singles out managerial employees as ineligible to
join, under the doctrine of necessary implication,
confidential employees are similarly disqualified.
(NATU - Republic Planters Bank Supervisors Chapter
v. Hon. Torres, G.R. No. 93468, 29 Dec. 1994)
However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees
who has access to salary and compensation data.
The position of Payroll Master does not involve
dealing with confidential labor relations
information in the course of the performance of his
functions. Since the nature of his work does not
pertain to company rules and regulations and
confidential labor relations, it follows that he cannot
be excluded from the subject bargaining unit. (San
Examples of confidential employees who could
NOT unionize:
1.
2.
Bank cashiers
Accounting personnel
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
170
Labor Relations
Miguel Foods Inc. v. San Miguel Corporation
Supervisors and Exempt Union, G.R. No. 146206, 01
Aug. 2011)
negotiate, but not the right to strike. (Azucena,
2016)
The right to self-organization of government
employees pertains to all branches, subdivisions,
instrumentalities, and agencies of the Government,
including government-owned or controlled
corporations (GOCCs) with original charters. (E.O.
No. 180)
Employee-Members of a Cooperative
An employee of a cooperative who is also a member
and co-owner thereof cannot invoke the right to
collective bargaining, for an owner cannot bargain
with himself or his co-owners. (San Jose Electric
Service Cooperative, Inc. v. Ministry of Labor, G.R. No.
77231, 31 May 1989)
Government employees’ right to organize is for
a limited purpose
NOTE: Even if employee-members of a cooperative
cannot form a union, they may, however, form an
association for their mutual aid and protection as
employees. (Azucena, 2016)
The right of government employees to “form, join,
or assist employees’ organizations of their own
choosing” under E. O. No. 180 is not regarded as
existing or available “for purposes of collective
bargaining,” but simply “for the furtherance and
protection of their interests.” (Arizala v. CA, G.R. No.
L-43633-34, 14 Sept. 1990)
Q: A, an employee of XYZ Cooperative, owns 500
shares in the cooperative. He has been asked to
join
the
XYZ
Cooperative
Employees
Association. He seeks your advice on whether he
can join the association. What advice will you
give him? (2010 BAR)
Only terms and conditions not fixed by law may be
the subject of negotiation by the duly recognized
employees’ organization of government employees
and the appropriate government authorities. Terms
and conditions of employment that are fixed by law
are excluded from negotiation. (E.O. No. 180)
A: A cannot join XYZ Cooperative Employees
Association because owning shares makes him a coowner thereof. An employee-member of a
cooperative cannot join a union and bargain
collectively with his cooperative for an owner
cannot bargain with himself and his co-owners.
(Cooperative Rural Bank of Davao City v. Calleja, G.R.
No. 143616, 09 May 2001)
Matters that are declared to be “not negotiable” are
matters “that require appropriation of funds” and
“those that involve the exercise of management
prerogatives.” Considered negotiable are such
matters as schedule of vacation, leaves, etc.
(Azucena, 2016)
Government Employees
NOTE: Employees of government corporations
established under the Corporation Code shall have
the right to organize and to bargain collectively.
(Art. 254, LC)
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, LC)
Q: Royal Savings Bank (RSB), organized and
incorporated as a thrift bank entered into a
Memorandum of Agreement with Commercial
Bank of Manila to rehabilitate and infuse capital
into RSB. RSB was renamed ComSavings Bank
(CB). In 1987, the GSIS transferred its holdings
from Commercial Bank of Manila to Boston
Bank. CB was not included in the transfer. Due to
Boston Bank’s acquisition of Commercial Bank
Government employees have the right to selforganization
The highest law of the land guarantees to
government employees the right to organize and to
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
of Manila, the GSIS took over the control and
management of CB.
Members of AFP, police officers, policemen,
firemen, and jail guards
Sometime in 2001, CB changed its name to GSIS
Family Bank. On June 6, 2011, President Aquino
signed into law R.A. No. 10149, or the GOCC
Governance Act of 2011. The law created the
Governance Commission for GovernmentOwned or Controlled Corporations (Governance
Commission). On 20 Dec. 2013, counsel for the
GSIS Union sent GSIS Family Bank a demand
letter for the payment of Christmas bonus to its
members, as stipulated in their Collective
Bargaining Agreement (CBA). The GSIS Family
Bank's refused to negotiate a new CBA. Thus, the
GSIS Union filed a Complaint before the NCMB.
They aimed to compel GSIS Family Bank to abide
by the provisions of their existing CBA.
E.O. No. 180 excludes members of AFP, police
officers, policemen, firemen, and jail guards from
unionizing for reasons of security and safety.
Can the GSIS Family Bank, a non-chartered
government-owned or controlled corporation,
enter into a CBA with its employees?
Employees of International Organizations
High-level Government employees
A high-level employee is one whose functions are
normally
considered
policy
determining,
managerial or one whose duties are highly
confidential in nature. They cannot join the
organization
of
rank-and-file
government
employees. (E.O. No. 180)
NOTE: In the public sector, there are only two levels
of position: high level and rank-and-file.
GR: International organizations are immune from
Philippine jurisdiction. (i.e., ICMC, IRRI, ADB) Thus,
a certification election cannot be conducted in an
international organization which has been granted
immunity from local jurisdiction. (ICMC v. Hon. Pura
Calleja, G.R. No. 89331, 28 Sept. 1990)
A: NO. R.A. No. 10149 directed the Governance
Commission to develop a Compensation and
Position Classification System, to be submitted for
the President's approval, which shall apply to all
officers and employees of government-owned or
controlled corporations, whether chartered or nonchartered. On March 22, 2016, President Aquino
issued Executive Order No. 203, which approved the
compensation and classification standards and the
Index of Occupational Services Framework
developed and submitted by the Governance
Commission.
XPN: However, the international organization has
the discretion to waive its immunity. Without such
express waiver, the NLRC or its labor arbiters have
no jurisdiction over international organizations,
even in cases of alleged illegal dismissal of any of its
employees. (Callado v. IRRI, G.R. No. 106483, 22 May
1995)
When it comes to collective bargaining agreements
and collective negotiation agreements in
government-owned or controlled corporations,
Executive Order No. 203 unequivocally stated that
while it recognized the right of workers to organize,
bargain, and negotiate with their employers, "the
Governing Boards of all covered [governmentowned or controlled corporations], whether
Chartered or Non-chartered, may not negotiate with
their officers and employees the economic terms of
their [collective bargaining agreements]." (GSIS
Family Bank Employees Union v. Secretary
Villanueva, G.R. No. 210773, Jan. 23, 2019)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Foreign Workers
GR: Foreigners are prohibited from engaging in all
forms of trade union activities.
XPN: However, an alien working in the country with
a valid working permit may exercise the right to
self-organization if they are nationals of a country
which grants the same or similar right to Filipino
workers.
172
Labor Relations
Religious objectors; INC members
i. Commonality or Mutuality of Interest
Members of religious sects cannot be compelled or
coerced to join labor unions even when said unions
have closed-shop agreements with the employers.
Free exercise of religious belief is superior to
contract rights. In case of conflict, the latter must
yield to the former. (Victoriano v. Elizalde Rope
Worker’s Union, G.R. No. L-25246, 12 Sept. 1974)
Under this doctrine, the employees sought to be
represented by the collective bargaining agent must
have community or mutuality of interest in terms of
employment and working conditions as evidenced
by the type of work they perform. This is
characterized by similarity of employment status,
same duties, and responsibilities and substantially
similar compensation and working conditions. (San
Miguel Corp. Employees Union-PTGWO v. Confesor,
G.R. No. 111262, 19 Sept. 1996)
Religious objectors can form and join their own
union
Recognition of the tenets of a sect should not
infringe on the basic right to self-organization
granted by the Constitution to workers, regardless
of religious affiliation. (Kapatiran sa Meat and
Canning Division v. Hon. Pura Calleja, G.R. No. L82914, 20 June 1988)
Factors considered in determining
Substantial or Mutuality Interest Doctrine
1.
Similarity in the scale and manner of
determining earnings;
2. Similarity in employment benefits, hours of
work, and other terms and conditions of
employment;
3. Similarity in the kinds of work performed;
4. Similarity in the qualifications, skills, and
training of Ees;
5. Frequency of contract or interchange among
the Ees;
6. Geographical proximity;
7. Continuity and integration of production
processes;
8. Common supervision and determination of
labor-relations policy;
9. History of CB;
10. Desires of the affected Ees; or
11. Extent of union organization. (Cox, Bok &
Gorman, Labor Law, 1977)
NOTE: Religious objectors also have the right to
vote in a certification election. (Reyes v. Trajano, G.R.
No. 84433, 02 June 1992)
3. DETERMINATION OF APPROPRIATE
BARGAINING UNIT (ABU) & EFFECT OF
INCLUSION OF EMPLOYEES OUTSIDE OF THE
ABU
a. DETERMINATION OF APPROPRIATE
BARGAING UNIT (ABU)
The law does not mention any specific mode of
determining what constitutes a bargaining unit. The
basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally
the combination which will best assure to all
employees the exercise of their collective
bargaining rights. (International School v.
Quisumbing, G.R. No. 128845, 1 June 2000)
NOTE: The fact that the three plants are located in
three different places, namely, in Cabuyao, Laguna,
in Otis, Pandacan, Metro Manila, and in San
Fernando, Pampanga is immaterial. Geographical
location can be completely disregarded if the
communal or mutual interests of the employees are
not sacrificed. (Azucena, 2016)
Tests to determine the appropriate bargaining
unit
1.
2.
3.
4.
the
Q: Samahang Tunay, a union of rank-and-file
employees, lost in a certification election at
Solam Company and has become a minority
union. The majority union now has a signed CBA
Community or mutuality of interest
Will of the employees or “Globe Doctrine”
Collective bargaining history
Similarity of employment status
173
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
“One-company, One-union” Policy
with the company and the agreement contains
Maintenance of Membership Clause.
It is the policy of the BLR to encourage the formation
of an employer unit. In other words, one employer
enterprise should constitute only one bargaining
unit because the more solid the employees are, the
stronger their bargaining capacity.
What can Samahang Tunay still do within the
company as a union considering that it still has
members who continue to profess continued
loyalty to it? (2013 BAR)
A: As a legitimate labor organization, it can continue
to represent its members on non-CBA-related
matters. (Art. 248, LC)
GR: All the rank-and-file Ees with substantially the
same interests and who invoke the right to selforganization are part of a single unit so that they can
deal with their Er with just one and potent voice.
The Ees’ bargaining power is strengthened thereby.
(General Rubber and Footwear Corporation v. BLR, et
al., G.R. No. 74262, 29 Oct. 1987)
Q: A registered labor union in UP, ONAPUP, filed
a petition for certification election among the
non-academic employees. The university did
not oppose, however, another labor union, the
All UP Workers Union assents that it represents
both academic and non-academic personnel and
seeks to unite all workers in one union. Do
employees performing academic functions need
to comprise a bargaining unit distinct from that
of the non-academic employees?
XPNs:
1. Supervisory Ees – allowed to form their own
unions apart from the rank-and-file Ees;
A: YES. The mutuality of interest test should be
taken into consideration. There are two classes of
rank-and-file Ees in the university – those who
perform academic functions such as the professors
and instructors, and those whose function are nonacademic who are the janitors, messengers, clerks
etc. Thus, not much reflection is needed to perceive
that the mutuality of interest which justifies the
formation of a single bargaining unit is lacking
between the two classes of Ees. (U.P. v. FerrerCalleja, G.R. No.96189, 14 July 1992)
Craft Unit – bargaining unit composed of
employees of the company with the same
occupation, such as pilots as distinguished
from ground personnel;
3.
Plant Unit – bargaining unit composed of
employees in a particular plant of the
company, such as the company’s Cebu plant as
distinguished from its Ilocos plant.
The main consideration in a plant unit is
geographical, while it is occupational in a craft unit.
(Alcantara, 2008)
NOTE: The policy should yield to the right of Ees to
form a union for purposes not contrary to law, selforganization, and to enter into CB negotiations.
ii. Will of the employees or “Globe Doctrine”
This principle is based on the desires of the
employees. In defining the appropriate bargaining
unit, the determining factor is the desire of the
workers themselves. While the desires of
employees with respect to their inclusion in
bargaining unit is not controlling, it is a factor which
would be taken into consideration in reaching a
decision. (Globe Machine & Stamping Co., 3 NLRB
294, 1937)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
2.
Two corporations cannot be treated as a single
bargaining unit, even if their businesses are related.
(Indophil Textile Mill Workers Union v. VA Calica, G.R.
No. 96490, 03 Feb. 1992)
NOTE: The proliferation of unions in an employer
unit is merely discouraged as a matter of policy.
However, if there are compelling reasons which
would deny a certain class of employees the right to
self-organization for purposes of collective
bargaining, then it would be allowed.
174
Labor Relations
Q: Union filed a petition for certification election
among the rank-and-file employees of three
security agencies including the Veterans
Security. The latter opposed alleging that the
three security agencies have separate and
distinct corporate personalities. May a single
petition for certification election be filed by a
labor union in the three corporations instead of
filing three separate petitions?
In case of two companies with related
businesses, not necessarily treated as a single
BU
It is erroneous to treat two companies as a single
bargaining unit when these companies are
indubitably distinct entities with separate juridical
personalities.
Subsidiaries and Spin-off Corporations
A: YES. The following are indications that the three
agencies do not exist and operate separately and
distinctly from each other with different corporate
direction and goals:
Subsidiaries or corporations formed out of former
divisions of a mother company following a reorganization may constitute a separate bargaining
unit.
1.
NOTE: In determining an appropriate bargaining
unit, the test of grouping is mutuality or
commonality of interests. Considering the spin-offs,
the companies would have their respective and
distinctive concerns in terms of the nature of work,
wages, hours of work, and other conditions of
employment. Interests of employees in the different
companies per force differ. (San Miguel Corp. Union
v. San Miguel Corp., Magnolia Corp., and San Miguel
Foods, Inc., G.R. No. 111262, 19 Sept. 1996)
2.
3.
4.
The Four-Factor Analysis
5.
The US National Labor Relations Board continues to
apply a four-factor analysis in determining whether
two or more employers constitute a single
employer:
1.
2.
3.
4.
6.
Hence, the veil of corporate fiction of the three
agencies should be lifted for the purpose of allowing
the Ees of the three agencies to form single union.
As a single bargaining unit, the Ees need not file
three separate PCE. (Philippine Scout Veterans
Security and Investigation Agency v. SOLE, G.R. No.
92357, 21 July 1993)
Interrelations of operation;
Centralized control of labor relations;
Common management; and
Common ownership (Azucena, 2016)
Distinguishing the CBU from the union is
important because:
1.
2.
3.
Veterans Security failed to rebut the fact that
they are managed through the Utilities
Management Corporation with all their
employees drawing their salaries and wages
from the said entity;
The agencies have common and interlocking
incorporators and officers;
They have a single mutual benefit system and
followed a single system of compulsory
retirement;
They could easily transfer security guards of
one agency to another and back again by
simply filling-up a common pro-forma slip;
They always hold joint yearly ceremonies such
as the PGA Annual Awards Ceremony; and
They continue to be represented by one
counsel.
Q: Company XYZ has two recognized labor
unions, one for its rank-and-file employees and
the other for its supervisory employees. Of late,
the company instituted a restructuring program
by virtue of which A, a rank-and-file employee
and officer of rank-and-file employees’ labor
union, was promoted to a supervisory position
along with four other colleagues, also active
In a CE, the voters are the whole bargaining
unit, whether union or non-union members;
In CBA ratification, the voters are the whole
bargaining unit, not just the union members;
In strike voting, the voters are the members
of the union, not the whole bargaining unit.
(Azucena, 2016)
175
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
union members and/or officers. Labor Union
KMJ, a rival labor union seeking recognition as
the rank-and-file bargaining agent, filed a
petition for the cancellation of the registration
of rank-and-file Ees labor union on the ground
that A and her colleagues have remained to be
members of rank-and-file Ees labor union. Is the
petition meritorious? Explain. (2010 BAR)
appropriate bargaining unit, the same is not
decisive or conclusive. Other factors must be
considered. The test of grouping is community or
mutuality of interests. This is because the basic test
of an asserted bargaining unit’s acceptability is
whether or not it is fundamentally the combination
which will best assure to all Ees the exercise of their
CB rights. (Democratic Labor Association v. Cebu
Stevedoring Company, Inc., G.R. No. L-10321, 28 Feb.
1958)
A: NO. The inclusion as union members of Ees
outside the bargaining unit shall not be a ground for
the cancellation of the registration of the union. Said
Ees are automatically deemed removed from the list
of membership of said union.
iv. Employment Status Doctrine
The determination of the appropriate bargaining
unit based on the employment status of the
employees is considered as an acceptable mode.
(Chan, 2019)
There are only three grounds for the cancellation of
union registration: (R-E-V)
1.
2.
3.
Misrepresentation, false statement, or fraud
in connection with the adoption or
Ratification of the constitution and by-laws or
amendments thereto, the minutes of
ratification, and the list of members who took
part in the ratification;
b. EFFECT OF INCLUSION OF EMPLOYEES
OUTSIDE OF THE ABU
The inclusion as union members of employees
outside the bargaining unit 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, LC)
Misrepresentation, false statements, or fraud
in connection with the Election of officers,
minutes of the election of officers, and the list
of voters;
Under this provision, the inclusion as union
members of employees outside the bargaining unit
is not a ground for the cancellation of the
registration of the union. The employees
improperly included are automatically deemed
removed from the list of members of said union by
operation of law. Therefore, if supervisory
employees are included as members of a rank-andfile union, they are deemed automatically removed
from the roster of members of the said union and
vice versa. (Chan, 2019)
Voluntary dissolution by the members. (Art.
247, LC)
iii. Collective Bargaining History Doctrine
This principle puts premium to the prior collective
bargaining history and affinity of the employees in
determining the appropriate bargaining unit.
However, the existence of a prior collective
bargaining history has been held as neither decisive
nor conclusive in determination of what constitutes
an appropriate bargaining.
NOTE: Mixed membership is now deemed a
prohibited ground for cancellation of union
registration. (Sec. 6, Rule XIV, Book V, IRR)
Bargaining history not a decisive factor in the
determination of appropriateness of bargaining
unit
While the existence of a bargaining history is a
factor that may be reckoned with in determining the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
176
Labor Relations
Right to Union Membership
4. NON-INTERFERENCE WITH WORKERS’ RIGHT
TO SELF-ORGANIZATION
1. Right to Union Membership is not absolute
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 form, join, or assist labor organizations
for the purpose of collective bargaining through
representatives of their own choosing and to engage
in lawful concerted activities for the same purpose
or for their mutual aid and protection, subject to the
provisions of Art. 264 of the Labor Code. (Art. 257,
LC)
An employee cannot invoke an absolute right to
union membership. Though granted by the
Constitution, it is subject to regulation by the State.
An example of this is it has been mandated by law
that no labor organization shall knowingly admit as
member or continue in membership, any individual
who belongs to a subversive organization or who is
engaged directly or indirectly in any subversive
activity.
2. Freedom of Choice
An employee cannot invoke an absolute right to
union membership. The right to self-organization
and collective bargaining comprehends at least two
broad notions, namely:
1.
Liberty or freedom - i.e., the absence of
legal restraint, whereby an employee may
act for himself without being prevented by
law; and
2.
Power - whereby an employee may, as he
pleases, join or refrain from joining an
association.
An employee has the right to join or not join a labor
union. As such, a member of a labor union may leave
and cancel his membership at any time.
However, this is not the case where there is a valid
union security clause in the CBA such as a closedshop or union-shop arrangement between
management and the union. Here, the employee
concerned is duty-bound to keep his union
membership for the duration of the CBA as a
condition for his continued employment. If such
membership in the union which is the collective
bargaining agent is validly terminated, he may
likewise be dismissed from his employment. The
only exception to this is when the employee objects
to such membership on the ground of religious
belief.
It is, therefore, the employee who should decide for
himself whether or not he should join an
association; and should he choose to join, he himself
makes up his mind as to which association he would
join; and even after he has joined, he still retains the
liberty and the power to leave and cancel his
membership with said organization at any time.
(Victoriano v. Elizalde Rope Worker’s Union, G.R. No.
L-25246, 12 Sept. 1974)
3. Right to join a union acquired from first day
of employment
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), LC)
Object of the Law
The right to form, join, or assist a union is
specifically protected by the Constitution and such
right shall not be abridged. Art. 257 of the Labor
Code empathically relates to the policy of the State
to promote and emphasize the primacy of free
collective bargaining and negotiations, free trade
unionism, and free and voluntary organization of a
strong and united labor movement. (Chan, 2019)
4. Union members who are not employees do
not possess the right to join union
If the union members are not employees, no right to
organize for purposes of collective bargaining, nor
to be certified as bargaining agent can be
recognized. The question of whether employer177
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Two (2) Basic Purposes of a Labor Organization
employee relationship exists is a primordial
consideration before extending labor benefits
under the workmen’s compensation, social security,
PhilHealth, termination pay, and labor relations law.
Failure to establish this juridical relationship
between the union members and the employer
affects the legality of the union itself. It means the
ineligibility of the union members to present a
petition for certification election as well as to vote
therein. (Singer Sewing Machine Company v. Drilon,
G.R. No. 91307, 24 Jan. 1991)
1.
2.
For collective bargaining; and
For dealing with the employer.
Two (2) Modes of Creating a Labor Organization
1.
2.
Independent registration (Art. 240, LC)
Chartering of local chapter/chartered local
(Art. 241, LC)
1. REGISTRATION WITH THE DOLE
A labor organization may be registered or not. If
registered, it is considered a “legitimate labor
organization” (LLO). However, a labor organization
is not “illegitimate” just because it is unregistered. It
is still a lawful organization but it has no legal
personality to demand collective bargaining with
the employer. (Azucena, 2016)
B. LEGITIMATE LABOR ORGANIZATIONS
Definition of Terms
Labor Organization means any union or
association of employees which exists in whole or in
part for the purpose of collective bargaining or of
dealing with employers concerning terms and
conditions of employment. (Art. 219 (g), LC)
NOTE: Registration with the DOLE makes a labor
organization legitimate in the sense that it is clothed
with legal personality to claim the representational
and bargaining rights enumerated in Art. 251 and
Art. 267 or to strike and picket under Art. 278.
(Azucena, 2013)
It is created for mutual aid, interest, cooperation,
protection, or other lawful purposes. (Sec. 1, Rule I,
Book V, IRR as amended by D.O. No. 40-04)
It is the fact of being registered with DOLE that
makes a labor organization legitimate. Registration
under the corporation law before the Securities and
Exchange Commission (SEC) only has the effect of
giving it juridical personality to represent itself in
regular courts but it does not grant the rights and
privileges of a legitimate labor organization. (Phil.
Land-Sea-Air Labor Union, Inc. v. CIR, G.R. No. L25711, 29 Oct. 1975)
NOTE: Labor Organization is a generic term as it
can refer to a “union” or “association of employees,”
registered or not. The purposes may also be broad
such as “collective bargaining” or “mutual aid” or
“cooperation” or other lawful purpose. (Azucena,
2016)
Legitimate labor organization means any labor
organization duly registered with the DOLE, and
includes any branch or local thereof. (Art. 219 (h),
LC)
Requirements for Registration
Any applicant labor organization, association, or
group of unions or workers shall acquire legal
personality and shall be entitled to the rights and
privileges granted by law to legitimate labor
organizations upon issuance of the certificate of
registration based on the following requirements:
Bargaining representative means a legitimate
labor organization or any officer or agent of such
organization, whether or not employed by the
employer. (Art. 219 (j), LC)
Company Union refers to any labor organization
whose formation, function or administration has
been assisted by any act defined as unfair labor
practice by the Labor Code. (Art. 219 (i), LC)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
1.
178
P50.00 registration fee;
Labor Relations
2.
The names of its officers, their addresses, the
principal address of the labor organization, the
minutes of the organizational meetings, and
the list of the workers who participated in such
meetings;
3.
The names of all its members comprising at
least 20% of all the employees in the
bargaining unit where it seeks to operate;
4.
If the applicant union has been in existence for
one or more years, copies of its annual
financial reports; and
5.
Four (4) copies of the constitution and by-laws
of the applicant union, minutes of its adoption
or ratification, and the list of the members who
participated in it. (Art. 240, LC)
2. CANCELLATION OF REGISTRATION
Grounds for Cancellation of Registration (R-E-V)
2.
Misrepresentation, false statement, or fraud in
connection with the adoption or Ratification of
the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list
of members who took part in the ratification;
2.
Misrepresentation, false statements, or fraud in
connection with the Election of officers,
minutes of the election of officers, the list of
voters; and
3.
Voluntary dissolution. (D.O. 40-F-03)
Q: If there are supervisors that are joined with
the rank-and-file employees union, would that
be a ground for cancellation of registration?
Where to Register
1.
1.
A: NO. Those who do not properly belong to the
union are deemed automatically removed from the
union by operation of law. (Art. 256, LC)
Independent labor unions, chartered
locals, and workers’ associations – it shall be
filed with and acted upon by the Regional
Office where the applicant principally
operates.
3. AFFILIATION/DISAFFILIATION FROM
NATIONAL UNION OR FEDERATION
Federations, national unions, or workers’
associations operating in more than one
region – it shall be filed with the Bureau or the
Regional Offices, but shall be processed and
acted upon by the Bureau which has national
jurisdiction unlike a regional office.
A local union may affiliate with or disaffiliate from a
federation. This is an exercise of the right of
association recognized by the Constitution.
Between the chapter and the federation, affiliation
or disaffiliation is a contractual relation. Hence,
even if disaffiliation is a matter of right, the local
must comply with the obligations under the CBL
such as manner and period of notice.
Classification of Labor Organizations
At the National Level
1. National Union/Federation;
2. Industry Union;
3. Trade Union Center; and
4. Company Union.
Affiliate
An affiliate refers to:
At the Enterprise Level
1. Independent Union; and
2. Chapter.
1.
An independently registered union that enters
into an agreement of affiliation with a
federation or national union; or
NOTE: A trade union center cannot create a
chartered local. (SMCEU-PTGWO v. SMPPEU-PDMP,
G.R. No. 171153, 12 Sept. 2007)
2.
A chartered local which applies for and is
granted an independent registration but does
179
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
not disaffiliate from its mother federation or
national union.
How local chapter is created
A duly registered federation or national union may
directly create a local/chapter by issuing a charter
certificate indicating the establishment of a
local/chapter.
1.
The chapter shall acquire legal personality
only for purposes of filing a PCE from the date
it was issued a charter certificate.
2.
The chapter shall be entitled to all other rights
and privileges of a LLO only upon the
submission of the following documents in
addition to its charter certificate:
Minutes of the general membership
meeting approving the affiliation;
3.
The total number of members comprising
the labor union and the names of members
who approved the affiliation;
4.
The certificate of affiliation issued by the
federation in favor of the independently
registered labor union; and written notice
to the Er concerned if the affiliating union
is the incumbent bargaining agent. (Sec. 7,
Rule III, D.O. 40-03)
Reasons for Affiliation
1.
Secure support or assistance especially
during
the
formative
stage
of
unionization;
Names of the chapter’s officers, their
addresses, and the principal office of the
chapter;
2.
Utilize expertise in preparing
pursuing bargaining proposals; and
b.
Chapter’s constitution and by-laws; and
3.
c.
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.
To marshal mind and manpower in the
course of a group action such as a strike.
(Azucena, 2016)
a.
3.
2.
NOTE: 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. (Azucena, 2016)
The genuineness and due execution of the
supporting requirements shall be:
a.
b.
and
Independently registered union is required to
report affiliation with the Regional Office
Certified under oath by the secretary or
treasurer of the local/chapter; and
A union affiliating with a federation or national
union is required to report such affiliation to the
Regional Office that issued its certificate of
registration.
Attested to by its president. (Sec. 2(e),
Rule III, Book V, IRR, as amended by D.O.
40-F-03)
Reportorial Requirements in Affiliation
Disaffiliation of local union from the federation
The report of affiliation of independently registered
labor unions with a federation or national union
shall be accompanied by the following documents:
GR: A labor union may disaffiliate from the mother
union to form an independent union only during the
60-day freedom period immediately preceding the
expiration of the CBA.
1.
Resolution of the labor union's board of
directors approving the affiliation;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
XPN: Even before the onset of the freedom period,
disaffiliation may still be carried out, but such must
180
Labor Relations
Effect of Disaffiliation
be effected by the majority of the union members in
the bargaining unit.
Disaffiliation must be decided by the entire
membership through secret balloting in
accordance with Art. 250(d). This happens when
there is a substantial shift in allegiance on the part
of the majority of the members of the union. In such
a case, however, the CBA continues to bind the
members of the new or disaffiliated and
independent union to determine the union which
shall administer the CBA. (ANGLO-KMU v. Samahan
ng Manggagawang Nagkakaisasa Manila Bay
Spinning Mills at J.P. Coats, G.R. No. 118562, 05 July
1996)
1.
Union Dues – the obligation of an employee to
remit union dues to the mother is coterminous
with the affiliation or membership of its local.
The dues must now be remitted to the local.
2.
Existing CBA – the CBA continues to bind the
members of the new or disaffiliated and
independent union up to the CBA’s expiration
date based on the ‘Substitutionary Doctrine.’
Revocation of Charter
A federation may revoke the charter issued to a
local/chapter by serving a verified notice of
revocation, copy furnished to the Bureau, on the
ground of disloyalty or such other grounds as may
be specified in the constitution and by-laws of the
federation. (Sec. 5, Rule VIII, Book V, IRR)
Disaffiliation must be by majority decision
Disaffiliation must be decided by the entire
membership through secret balloting in accordance
with Art. 250 (d). An individual member or any
number of members may disaffiliate from the union
during the “freedom period” but disaffiliating the
union itself from the mother union must be
supported by the majority of the members. If done
by a minority, even during the freedom period, the
act may constitute disloyalty. They may be expelled
from the union or may be removed from their
employment because of the union security clause.
Effect of Revocation: Independently Registered
vs. Unregistered Chartered Local Union
CHARTERED LOCAL UNION
INDEPENDENTLY
UNREGISTERED
REGISTERED
How to Affiliate?
Limitation to Disaffiliation
To disaffiliate is a right, but to observe the terms of
affiliation is an obligation. (Azucena, 2016)
By signing contract of
affiliation.
Disaffiliation should be in accordance with the rules
and procedures stated in the Constitution and bylaws of the federation. A local union may disaffiliate
with its mother federation, provided that there is no
enforceable provision in the federation’s
constitution preventing disaffiliation of a local
union. (Tropical Hut Employees Union v. Tropical
Hut, G.R. Nos. L-43495-99, 20 Jan. 1990)
By application with the
federation for the
issuance of a charter
certificate
to
be
submitted
to
the
Bureau
of
Labor
Relations
Effect of Disaffiliation to the Union (local)
Would not affect its
being an LLO and
therefore, it would
continue to have legal
personality and to
possess all rights and
privileges of LLO.
A prohibition to disaffiliate in the Federation’s
constitution and by-laws is valid because it is
intended for its own protection.
181
Would cease to be an
LLO and would no
longer have the legal
personality and the
rights and privileges
granted by law to LLO,
unless
the
local
chapter is covered by
its duly registered CBA.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
PSEA disaffiliated with PAFLU and hence
affiliated with NCW which was supported by its
members. May a local union disaffiliate with its
mother federation pending the settlement of the
status as the sole and exclusive bargaining
agent?
Effect of Disaffiliation to the CBA
An existing CBA would
continue to be valid as
the labor organization
can
continue
administering the CBA.
The
CBA
would
continue to be valid up
to its expiration date.
A: YES. The pendency of an election protest does not
bar the valid disaffiliation of the local union which
was supported by the majority of its members. The
right of a local union to disaffiliate with the
federation in the absence of any stipulation in the
Constitution and by-laws of the federation
prohibiting disaffiliation is well settled. Local
unions remain as the basic unit of association, free
to serve their own interest subject to the restraints
imposed by the Constitution and by-laws of national
federation and are free to renounce such affiliation
upon the terms and conditions laid down in the
agreement which brought such affiliation to
existence.
Entitlement to Union Dues after Disaffiliation
Labor
organization
entitled to the union
dues and not the
federation from which
the labor organization
disaffiliated.
Union dues may no
longer be collected as
there would no longer
be any labor union that
is allowed to collect
such union dues from
the Ees.
Effect of Revocation
GR: The revocation shall divest the local/chapter of
its legal personality upon receipt of the notice by the
Bureau.
In the case at bar, no prohibition existed under the
Constitution and by-laws of the federation. Hence,
the union may freely disaffiliate with the federation.
(Philippine Skylanders v. NLRC, G.R. No. 127374, G.R.
No. 127374, 31 Jan. 2002)
XPN: If the local/chapter has acquired independent
registration.
Effect of Cancellation of Registration of
Federation or National Union on locals/chapters
Substitutionary Doctrine
This doctrine holds that the employees cannot
revoke the validly executed collective bargaining
contract with their employer by the simple
expedient of changing their bargaining agent. The
new agent must respect the contract. The
employees, through their new bargaining agent,
cannot renege on the collective bargaining contract,
except to negotiate with the management for the
shortening thereof. (Elisco-Elirol Labor Union, G.R.
No. L-41955, 29 Dec. 1977)
GR: The cancellation shall operate to divest its
locals/chapters of their status as legitimate labor
organizations.
XPN: Locals/chapters are covered by a duly
registered CBA.
NOTE: In the latter case, locals/chapters shall be
allowed to register as independent unions. If they
fail to register, they shall lose their legitimate status
upon the expiration of the CBA.
The Substitutionary Doctrine, however, cannot be
invoked to support the contention that a newly
certified collective bargaining agent automatically
assumes all the personal undertakings—like the nostrike stipulation here—in the collective bargaining
agreement made by the deposed union. When EBR
bound itself and its officers not to strike, it could not
have validly bound all the other rival unions existing
Q: PSEA is a local union in Skylander Company
which is affiliated with PAFLU. PSEA won the
certification election among the rank-and-file
employees of the Skylander Company but its
rival union PSEA-WATU protested the results.
Pending the resolution of such controversy,
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
182
Labor Relations
in the bargaining units in question. (Benguet
Consolidated Inc v. BCI Employees and Workers
Union- Paflu, G.R. No. L-24711, 30 Apr. 1968)
a.
Political right
The member’s right to vote and be voted for, subject
to lawful provisions on qualification and
disqualifications.
4. RIGHTS OF LEGITIMATE LABOR
ORGANIZATIONS
b. Right over money matters
A legitimate labor organization shall have the
right:
1.
The member’s right:
1.
2.
To act as the representative of its members for
the purpose of collective bargaining; (Right of
Representation)
3.
2.
3.
To be certified as the exclusive representative
of all the employees in an appropriate
bargaining unit for purposes of collective
bargaining;
4.
5.
6.
To be furnished by the employer with annual
audited financial statements, including the
balance sheet and the profit and loss
statement; (Right to Information)
c.
Against excessive fees;
Against
unauthorized
collection
of
contributions or disbursements;
To require adequate records of income and
expenses;
Of access to financial records;
Vote on officer’s compensation; and
Vote on proposed special assessment and be
deducted a special assessment only with the
member’s written authorization.
Right to information
The member’s right to be informed about the:
4.
To own property, real or personal; (Property
Rights)
5.
To sue and be sued in its registered name;
(Property Rights)
6.
To undertake all other activities designed to
benefit the organization and its members; and
(Art. 251, LC) (Property Rights)
1.
2.
3.
Organization’s constitution and by-laws;
Collective bargaining agreement; and
Labor laws.
d. Deliberative and decision-making right
7.
The member’s right to participate in deliberations
on major policy questions and decide them by secret
ballot.
To collect reasonable membership fees, union
dues, assessments, fines, and other
contributions. (Art. 292(a), LC) (Right to
Collect Union Dues)
Q: When, how, and under what conditions does
an employee become a union member?
A: The answer depends on the union’s constitution
and by-laws. The Labor Code gives a labor
organization the right to prescribe its own rules for
acquisition or retention of membership.
Nonetheless, an employee is already qualified for
union membership starting on his first day of
service. (Azucena, 2016)
5. RIGHTS AND CONDITIONS OF MEMBERSHIP
IN LEGITIMATE LABOR ORGANIZATIONS
The rights of union members may be summarized as
follows: (Pol-M-I-D)
a.
b.
c.
d.
Political right;
Right over Money matters;
Right to Information; and
Deliberative and decision-making right.
183
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Membership in the union does not necessarily
mean coverage in the CBA
Election under the Implementing Rules
The incumbent president should create an election
committee within 60 days before expiration of the
term of incumbent officers. The Rules specify the
composition of the election committee as well as its
powers and duties.
Inclusion or coverage in the CBA depends on the
stipulations in the CBA itself. It is the CBA which
defines its coverage as agreed by the parties.
Qualifying for union membership does not
necessarily mean inclusion in the coverage of the
CBA.
If the officers with expired term do not call an
election, the remedy is for at least 30% of the
members to file a petition with the DOLE Regional
Office. (Sec. 2, Rule XII, Book V, IRR)
Membership in the CBU does not mean
membership in the union
Inclusion or membership in the union depends on
the union’s constitution and by-laws.
Union Officer must be an Employee
No person who is not an employee or worker of the
company or establishment where a union operates
shall be elected or appointed as an officer of such
union. Only an employee may be a union officer.
Inclusion in the CBU depends on the determination
of its appropriateness.
Expulsion of a Union Member
Disqualification of Union Officers
A member of a union may be expelled but only for a
valid cause and by following the procedure outlined
in the constitution and by-laws. A member is
entitled to due process. Expulsion of a member for
arbitrary or impetuous reasons may amount to ULP
by the union.
The following are disqualified to become union
officers:
1.
2.
Election of Union Officers
3.
Q: What positions should be filled up, when, and
how should the election be done?
Frustration over incumbent officers of union
does not justify disregard of union’s constitution
and by-laws
A: It depends on the union’s constitution and bylaws or the agreement among the members. In the
absence thereof, the Implementing Rules of Book V
shall apply.
Frustration over the performance of the incumbent
officers, as well as their fears of a fraudulent election
to be held under the latter’s supervision, could not
justify the imposition of their own will on the union.
The organizations shall have the right to draw up
their own constitution and rules and to elect their
representatives in full freedom, free from any
interference from public authorities. The union
members should respect the constitution and rules
they themselves draw up equally so. The CBL is the
fundamental law that governs the relationship
between and among the members of the union. (UST
NOTE: Officers are elected by the members through
secret ballot voting.
Eligibility of Voters
Only union members can take part in the election of
union officers. The election takes place at intervals
of five (5) years, which is the term of office of the
union officers. (Azucena, 2016)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Those convicted of a crime involving moral
turpitude;
Those who belong to a subversive
organization; or
Those engaged directly or indirectly in any
subversive activity.
184
Labor Relations
Faculty Union, et. al. v. Bitonio, Jr., G.R. No. 131235, 16
Nov. 1999)
XPN: When such violation affects only one or two
members, then only one or two members would be
enough to report such violation.
Due Process in Impeachment of Union Officers
Visitorial power of SOLE to inquire into the
financial activities of labor organizations
Despite practical difficulties in complying with the
procedure laid down in the constitution and bylaws, the impeachment procedure contained
therein must be substantially complied with. (Litton
Mills Employees Association v. Ferrer-Calleja, G.R. No.
78061, 24 Nov. 1988)
SOLE is authorized to inquire into the financial
activities of any labor organization to determine
compliance or non-compliance with the laws and to
aid in the prosecution of any violation thereof.
Q: Can a labor organization prescribe rules and
regulation with respect to voting?
It is initiated on the basis of:
1.
2.
A: YES. It may require reasonable period of prior
membership (such as six months or a year). It may
also condition the exercise of right to vote on the
payment of dues since paying dues is a basic
obligation of membership. However, this is subject
to two (2) qualifications: (a) it must be applied
uniformly; and (b) members must be afforded a
reasonable opportunity to pay dues, including a
grace period during which dues may be paid
without any loss of rights. It should be noted
however, that it cannot create special classes of nonvoting members.
A Complaint under oath; and
Supported by 20% of the membership.
Dues and assessments which the union may
collect
Legitimate labor organizations are authorized to
collect reasonable amounts of the following:
1.
2.
3.
4.
5.
Obtaining Relief with the Union
GR: First, redress must be sought with the union
itself in accordance with the constitution and bylaws.
6.
Membership fees
Union dues
Assessments
Fines
Contribution for labor education and research,
mutual death and hospitalization benefits,
welfare fund, strike fund, and credit and
cooperative undertakings (Art. 292(a), LC)
Agency fees (Art. 259(e), LC)
6. CHECK OFF, ASSESSMENTS, UNION DUES, AND
AGENCY FEES
When the intra-union remedy fails, a case can be
filed with the Bureau of Labor Relations.
Check Off
XPN: When the exhaustion of remedies with the
union would practically amount to a denial of
justice. Then, it cannot be insisted upon as a
condition to the right to invoke the aid of the court.
A check-off is a method of deducting from the
employee’s pay at prescribed periods, any amount
due for fees, fines, or assessments. It is a process or
device whereby the employer, on agreement with
the union recognized as the proper bargaining
representative, or on prior authorization from its
employees, deducts union dues and assessments
from the latter’s wages and remits them directly to
the union.
30% Requirement
GR: At least 30% of the members are required to
report a violation of labor organization procedures.
185
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Members v. ABS-CBN Corp., G.R. No. 106518, 11
Mar. 1999)
Requirements for a Valid Check-Off
1.
2.
3.
Authorization by a written resolution of the
majority of all the members at a general
membership meeting duly called for the
purpose;
The authorization should specify the:
1. Amount;
2. Purpose; and
3. Beneficiary of the deduction.
Secretary’s record of the minutes of said
meeting; and
XPNs:
a.
b.
c.
Individual written authorizations for check-off
duly signed by the employees concerned.
NOTE: Under Art. 113, one of the lawful deductions
from employee’s wage is for “union dues, in cases
where the right of the worker or his union to checkoff has been recognized by the employer or
authorized in writing by the individual worker
concerned.” (Azucena, 2016)
For mandatory activities under the LC;
For Agency Fees;
When non-members of the union avail of
the benefits of the CBA:
i.
ii.
Jurisdiction over Check-Off Disputes
Being an intra-union dispute, the Regional
Director of DOLE has jurisdiction over check off
disputes. (Art. 250(p), LC)
Non-members may be assessed
union dues equivalent to that paid by
union members; and
Only by board resolution approved
by majority of the members in
general meeting called for the
purpose.
Effect of failure to strictly comply with the
requirements set by law
It shall invalidate the questioned special
assessments. Substantial compliance with the
requirements is not enough in view of the fact that
the special assessment will diminish the
compensation of union members. (Palacol v. FerrerCalleja, G.R. No. 85333, 26 Feb. 1990)
Assessments
Payments used for a special purpose. Especially if
required only for a limited time. (Azucena, 2016)
Requisites to Collect Special Assessment
Union Dues
GR: No special assessments, attorney’s fees,
negotiation fees, or any other extraordinary fees
may be checked-off from any amount due to an
employee unless there is:
1.
These are regular monthly contributions paid by the
members to the union in exchange for the benefits
given to them by the CBA and to finance the
activities of the union in representing the union.
Authorization by a written resolution of the
majority of all members at the general
membership meeting duly called for that
purpose;
2.
Secretary’s record of the minutes of the
meeting; and
3.
Individual written authorization for check-off
duly signed by the employee concerned. (Art.
250, LC; ABS-CBN Supervisors Employees Union
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Nature and purpose of union dues
Union dues are the lifeblood of the union. All unions
are authorized to collect reasonable membership
fees, union dues, assessments, fines, and other
contributions for labor education and research,
mutual death and hospitalization benefits, welfare
fund, strike fund, and credit and cooperative
undertakings. (Art. 292(a), LC)
186
Labor Relations
2.
Agency Fees
It is 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.
Q: A is employed by XYZ Company where XYZ
Employees Union (XYZ-EU) is the recognized
exclusive bargaining agent. Although A is a
member of rival union XYR-MU, he receives the
benefits under the CBA that XYZ-EU had
negotiated with the company. XYZ-EU assessed
A, a fee equivalent to the dues and other fees
paid by its members but A insists that he has no
obligation to pay said dues and fees because he
is not a member of XYZ–EU and he has not issued
an authorization to allow the collection. Explain
whether his claim is meritorious. (2010 BAR)
NOTE: Payment by non-union members of agency
fees does not amount to unjust enrichment because
the purpose of such dues is to avoid discrimination
between union and non-union members. The source
of Agency Fee is not contractual but is based from
quasi-contract.
Requisites for Assessment of Agency Fees
1.
2.
3.
The Ee is part of the bargaining unit;
He is not a member of the union; and
He partook of the benefits of the CBA.
A: NO. The fee exacted from A takes the form of an
agency fee which is sanctioned by Art. 248 (now
259) (e) of the Labor Code. The collection of agency
fees in an amount equivalent to union dues and fees
from Ees who are not union members is recognized
under the LC. The union may collect such fees even
without any written authorization from the nonunion member Ees, if said Ees accept the benefits
resulting from the CBA. The legal basis of agency
fees is quasi-contractual. (Del Pilar Academy v. Del
Pilar Academy Employees Union, G.R. No. 170112, 30
Apr. 2008)
NOTE: The individual authorization required under
Art. 250(n) shall not apply to non-members of the
recognized CB agent with regard to assessment of
agency fees.
The employee's acceptance of benefits resulting
from a collective bargaining agreement justifies the
deduction of agency fees from his pay and the
union's entitlement thereto. In this aspect, 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 nonunion employees may not unjustly enrich
themselves by benefiting from employment
conditions negotiated by the bargaining union.
(Holy Cross of Davao College v. Hon. Joaquin, G.R. No.
110007, 18 Oct. 1996)
Union Dues vs. Agency Fees
UNION DUES
AGENCY FEES
From whom collected
Collected from union
members
Limitation on the Amount of Agency Fee
The bargaining union cannot capriciously fix the
amount of agency fees it may collect from its nonmembers. Article 248(e) of the Labor Code
expressly sets forth the limitation in fixing the
amount of the agency fees, thus:
1.
It should be equivalent to the dues and
other fees paid by members of the
recognized collective bargaining agent.
Collected by the union
from
non-members
belonging to the same
bargaining unit who
receive the benefits
under the CBA.
Need for Written Authorization
There must be an
individual
written
authorization
by
individual members.
It should be reasonable in amount; and
187
Can be assessed even
without
the
authorization of the
employee concerned.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
7. UNION SECURITY CLAUSE
Dismissal by virtue of stipulation in the CBA
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.
Moreover, a stipulation in the CBA authorizing the
dismissal of employees is of equal import as the
statutory provisions on dismissal under the Labor
Code, since a CBA is the “law between the company
and the union and compliance therewith is
mandated by the express policy to give protection to
labor.”
Kinds of union security clause
1.
Union-shop – 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.
2.
Maintenance of membership shop – 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 continued
employment until they are promoted or
transferred out of the bargaining unit, or the
agreement is terminated.
3.
In terminating the employment of an employee
by enforcing the union security clause, the
employer needs only to determine and prove
that:
1.
2.
3.
C. BARGAINING REPRESENTATIVE
Closed-shop – 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.
An Organized establishment is an enterprise
where there exists a recognized or certified sole and
exclusive bargaining agent.
An Unorganized establishment, on the other
hand, is an enterprise where no union has yet been
duly recognized or certified as bargaining
representative.
Bargaining representative of the Ees for
purposes of collective bargaining
NOTE: It is a State policy to promote unionism to
enable workers to negotiate with management on
an even playing field and with more persuasiveness
than if they were to individually and separately
bargain with the employer. For this reason, 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 interest vis- -vis the
employer.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
The union security clause is applicable;
The union is requesting for the enforcement of
the union security provision in the CBA; and
There is sufficient evidence to support the
decision of the union to expel the employee
from the union.
The labor organization designated or selected by
the majority of the Ees in an appropriate collective
bargaining unit shall be the exclusive representative
of the Ees in such unit for the purpose of CB.
However, an individual Ee or group of Ees shall have
the right at any time to present grievances to their
Er. (Art. 267, LC)
188
Labor Relations
2.
Three (3) methods of determining the exclusive
bargaining representative:
3.
1.
2.
3.
SEBA Certification
Certification Election
Consent Election
4.
5.
1. MODES TO ACQUIRE STATUS AS SOLE AND
EXCLUSIVE BARGAINING AGENT
Where to file the Request
a. SEBA CERTIFICATION
Any legitimate labor organization may file a Request
in the DOLE Regional Office which issued its
certificate for registration or certificate of creation
of chartered local, as the case may be.
This is a new mode of determining SEBA. D.O. No.
40-I-15, s. 2015 issued on 07 Sept. 2015, has
expressly repealed the entire set of Rules applicable
to Voluntary Recognition in the Implementing Rules
on Book V of the Labor Code. (Chan, 2017)
Action on the Request
Rationale for the Repeal
Within one (1) day from the submission of the
Request, the DOLE Regional Director should:
By allowing the employer to extend “voluntary
recognition” to a union, it is no longer the employees
but the employer who determines and designates
the SEBA when it is supposed to be just a mere “bystander” in such determination and designation
process. (Chan, 2017)
SEBA Certification
Process where a union requests the DOLE Regional
Director to recognize and certify the union as the
Sole and Exclusive Bargaining Agent (SEBA) of the
Barganing Unit (BU) it purports to represent for
purposes of collective bargaining with the
employer.
1.
Determine whether the request is compliant
with the documentary requirements and
whether the bargaining unit sought to be
represented is organized or not; and
2.
Request a copy of the payroll for purposes of
SEBA certification.
If the DOLE Regional Director finds the Request
deficient, he should advise the requesting union or
local to comply within 10 days from notice. Noncompliance shall be deemed withdrawal of the
request. (Sec. 3, D.O. 40-1-15)
Scenarios contemplated by the Rules on Request
for Sole and Exclusive Bargaining Agent
Certification
Conditions:
1. The bargaining unit is not unionized;
2. The requesting union is the only union in that
bargaining unit; and
3. The CBU majority are members of the union.
i.
Request certification in UNORGANIZED
establishment
with
ONLY
ONE
LEGITIMATE UNION.
ii.
Request for certification in UNORGANIZED
establishment with MORE THAN ONE
LEGITIMATE LABOR ORGANIZATION
Documentary Requirements
The Request should indicate:
1.
The name and address of the company
where it operates;
The bargaining unit sought to be
represented;
The approximate number of the
employees in the bargaining unit; and
The statement of the existence/nonexistence
of
other
labor
organization/CBA.
The name and address of the requesting
legitimate labor organization;
189
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
iii.
same to the Election Officer for the conduct of
certification election. (Sec. 3, D.O. No. 40-1-15)
Request for certification in ORGANIZED
establishment
i. Unorganized – Only One Legitimate Union
iii. Organized
The DOLE Regional Director shall call a conference
within five (5) working days for the submission of
the following:
If the DOLE Regional Director finds that the
establishment organized, he should refer the same
to the Mediator-Arbiter for the determination of the
propriety of conducting a certification election.
a.
The names of employees in the covered
bargaining unit who signify their support for
the SEBA certification, provided that said
employees comprise at least majority of the
number of employees in the covered bargaining
unit; and
Q: What would happen if the request is denied?
A: It may be referred to an election officer for the
conduct of a certification election.
Q: What if it was granted?
b.
Certification under oath by the President that
all documents submitted are true and correct
based on his/her personal knowledge.
A: Then the certified union shall enjoy the rights and
privileges of an EBA for the BU.
If the requesting union or local fails to complete the
requirements for the SEBA certification during the
conference, the Request should be referred to the
Election Officer for the conduct of certification
election.
b. CERTIFICATION/CONSENT ELECTION
Certification Election
It is the process of determining through secret
ballot the sole and exclusive representative of the
Ees in an appropriate bargaining unit, for purposes
of CB or negotiation. (Sec. 1(h), Rule I, Book V, IRR)
If the DOLE Regional Director finds that the
requirements are complete, he shall issue, during
the conference, a Certification as SEBA.
NOTE: The process is called CE because it serves as
the official, reliable, and democratic basis for the
BLR to determine and certify the union that shall be
the exclusive bargaining representative of the Ees
for the purpose of bargaining with the Er.
Effect of the Issuance of the Certification as SEBA
a.
The certified union shall enjoy all the rights and
privileges of an exclusive bargaining agent of all
the employees in the covered bargaining unit.
Nature of Certification Election
b.
Certification Bar Rule - The issuance of the
SEBA Certification as SEBA bars the filing of a
petition for election by any labor organization
for a period of one (1) year from the date of
issuance.
A CE is not a litigation but merely an investigation
of a non-adversarial fact-finding character in which
BLR plays a part of a disinterested investigator
seeking merely to ascertain the desire of the Ees as
to the matter of their representation. (Airline Pilots
Association of the Philippines v. CIR, G.R. No. L-33705,
15 Apr. 1977)
ii. Unorganized – More Than One Legitimate
Labor Organization
Certification proceedings directly involve only two
issues:
If the DOLE Regional Director finds that the
establishment unorganized with more than one
legitimate labor organization, he should refer the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
190
Labor Relations
a.
In registration of federation or national union,
the 20% membership requirement may not be
complied with
Proper composition and constituency of the
bargaining unit; and
Veracity of majority membership claims of the
competing unions so as to identify the one
union that will serve as the bargaining
representative of the entire bargaining unit.
(Azucena, 2016)
b.
The registration requirement of submitting the
names of all its members comprising at least 20% of
all the Ees in the bargaining unit where it seeks to
operate is applicable only to registration of
independent union. LC merely requires for proof of
affiliation of at least ten (10) local chapters and the
names and addresses of the companies where they
operate. No 20% membership requirement is
required for registration of a federation or national
union.
Purpose of a Certification Election
It is a means of determining the worker’s choice of:
1.
Whether they want a union to represent them
for CB or if they want no union to represent
them at all.
2.
And if they choose to have a union to
represent them, they will choose which
among the contending unions will be the sole
and exclusive bargaining representative of
the Ees in the appropriate bargaining unit.
NOTE: Under the LC and the Rules, the power
granted to labor organizations to directly create a
chapter or local through chartering is given to a
federation or national union only, not to a trade
union center. (SMCEU v. San Miguel Packaging
Products Employees Union, G.R. No. 171153, 12 Sept.
2007)
Filing a Petition for Certification Election (PCE)
Employer may file a Petition for Certification
Election
The following may file a PCE: (L-NUF-L-Er)
1.
2.
3.
4.
Er may file a petition for certification election when
requested to bargain collectively, but it should
thereafter not be allowed to have an active role in
the CE; it shall merely act as a bystander.
Any LLO;
A National Union or Federation which has
already issued a charter certificate to its local
chapter participating in the CE;
A Local chapter which has been issued a
charter certificate; or
An Er only when requested to bargain
collectively in a bargaining unit where no
registered CBA exists. (Sec. 1, Rule VIII, Book V,
IRR)
NOTE: If the petition for certification election was
filed by the federation which is merely an agent, the
petition is deemed to be filed by the chapter, the
principal which must be a legitimate labor
organization. The chapter cannot merely rely on the
legitimate status of the mother union.
NOTE: A national union or federation filing a
petition in behalf of its local/chapter shall not be
required to disclose the names of the
local/chapter’s officers and members, but shall
attach to the petition the charter certificate it issued
to its local/chapter. (Sec. 1, Rule VIII, Book V, IRR as
amended by D.O. 40-F-03)
Equity of the Incumbent
The incumbent bargaining agent shall automatically
be one of the choices in the certification election as
forced intervenor. (Rule VIII, Sec. 8, DO 40-03)
The incumbent bargaining agent will not file a PCE
because it will not contest its own status as the
bargaining representative.
191
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
such CBA.
It does not lose its representative status; it remains
the sole bargaining representative until it is
replaced by another. Until so replaced, it has the
right to retain the recognition by the employer.
Alternative Answer: A PCE may be filed outside the
freedom period of a current CBA if such CBA is a new
CBA that has been prematurely entered into,
meaning it was entered into before the expiry date
of the old CBA. The filing of the PCE shall be within
the freedom period of the old CBA which is outside
the freedom period of the new CBA that had been
prematurely entered into.
No Union as a Choice
The right to join a union includes the right to not to
join. (Victoriano v. Elizalde Rope Workers Union, G.R.
L-25246, 12 Sept. 1974) In view of this, the “no
union” choice should always be included in the
certification election. If the “no union” option wins,
the statutory bar rule shall apply. Thus, there will
be no SEBA and no new PCE can be filed within one
(1) year from the conduct of certification elections.
Where to file the PCE
Time to File PCE
A petition for certification election shall be filed
with the Regional Office which issued the
petitioning union’s certificate of registration or
certificate of creation of chartered local.
It would depend if the Bargaining Unit has a CBA or
none.
The petition shall be heard and resolved by the MedArbiter.
If there is none, the petition may be filed anytime
except within the 12 months of a previous election,
if any.
NOTE: The filing or pendency of any inter/intraunion dispute and other related labor relations
dispute is not a prejudicial question to any petition
for certification election and shall not be a ground
for the dismissal of a petition for certification
election or suspension of proceedings of
certification election. (Sec. 2, Rule XI of D.O. 40-03)
If there is a CBA, the petition may only be filed
within the “freedom period” of the representational
aspect of the CBA.
NOTE: Freedom period refers to the last 60 days
immediately preceding the expiration of CBA.
(Tanduay Distillery Labor Union v. NLRC, G.R. No.
75037, 30 Apr. 1987)
Med-Arbiter’s Action on the Petition
Hold a Preliminary Conference:
Q: In what instance may a petition for
certification election be filed outside the
freedom period of a current collective
bargaining agreement? (1997 BAR)
A: As a general rule, in an establishment where
there is a CBA in force and effect, a PCE may be filed
only during the freedom period of such CBA, but to
have that effect, the CBA should have been filed and
registered with the DOLE. (Art. 237, 265, and 268,
LC)
Thus, a CBA that has not been filed and registered
with the DOLE cannot be a bar to a CE and such
election can be held outside the freedom period of
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
1.
To determine whether the PCE should be
processed or dismissed;
2.
To determine the BU that will participate in
the election and the identity of the contending
unions; and
3.
To determine the possibility of holding a
“consent election.”
a. If the unions agree, the PCE will no longer
be heard and the unions will instead
prepare for the consent election. (There
is implied waver of the bars)
b.
192
If the unions fail to agree, hearings would
be conducted.
Labor Relations
Conduct of Hearings
Filing of 25% Consent Signatures in the Petition
for Certification Election
After the last hearing, the Med-Arbiter shall issue a
formal order denying or granting the petition.
Ideally, the signature should be filed together with
the petition. However, it may be filed after the
petition within a reasonable period of time.
Requisites For Certification Election
A. In an Unorganized Establishment
Effect if the Petition for Certification Election
was NOT accompanied by the requisite 25%
Consent Signatures
An unorganized establishment is a bargaining
unit with no recognized or certified bargaining
agent. It does not necessarily refer to an entire
company.
Under the Implementing Rules, absence or failure to
submit the written consent of at least 25% of all the
Ees in the bargaining unit to support the petition is
a ground for denying the said petition.
NOTE: It may happen that the rank-and-file unit has
a bargaining agent while the supervisory unit still
does not have such agent; thus, the former is already
an “organized establishment” while the latter
remains, in the same company, an unorganized
establishment.
B. In an Organized Establishment
Notwithstanding the provision of the IRR that
failure to submit the required 25% consent
signatures is a ground for the denial of the petition,
the Supreme Court ruled that, it is within the
discretion of the Med-Arbiter whether to grant or
deny the petition despite absence of the required
25% written consent. (Port Workers Union v.
Bienvenido Laguesma, G.R. Nos. 94929-30, 18 Mar.
1992)
The Mediator-Arbiter is required to automatically
order the conduct of a CE by secret ballot in an
organized establishment as soon as the following
requisites are met:
If the petition, however, is accompanied by the 25%
consent signatures, then the holding of the CE
becomes mandatory. (California Manufacturing
Corp. v. Laguesma, G.R. No. 97020, 8 June 1992)
The certification election shall be automatically
conducted upon the filing of a PCE by a LLO.
1.
A petition questioning the majority status
of the incumbent bargaining agent is filed
before the DOLE within the 60-day
freedom period;
Consent signatures of at least 25% of the
employees in the bargaining unit may not be
submitted simultaneously with the filing of the
Petition for Certification Election
2.
Such petition is verified; and
3.
The petition is supported by the written
consent of at least 25% of all the Ees in the
bargaining unit. (Art. 268, LC; TUPASWFTU v. Laguesma, G.R. No. 102350, 30
June 1994)
The administrative rule requiring the simultaneous
submission of the 25% consent signatures upon the
filing of PCE should not be strictly applied to
frustrate the determination of the legitimate
representative of the workers. Accordingly, the
Court held that the mere filing of a PCE within the
freedom period is sufficient basis for the issuance of
an order for the holding of a CE, subject to the
submission of the consent signatures within a
reasonable period from such filing. (Port Workers
Union of the Phils. v. Laguesma, G.R. Nos. 94929-30,
18 Mar. 1992)
193
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
NOTE: In case of failure of elections, a re-run
election will be held within six (6) months. Also,
when the election held is invalid.
Duty of Fair Representation
The winning union in the certification election
becomes the EBA of all the workers in the BU and
shall represent even the members of the minority
union.
Exception to the Certification Year Bar Rule
When there is a failure of election – when the
number of votes cast in a certification or consent
election is less than the majority of the number of
eligible votes and there is no material challenged
votes.
Consent Election
Consent election is an election that is voluntarily
agreed upon by the parties with or without the
intervention of DOLE for the purpose of
determining the EBA.
CERTIFICATION
ELECTION
Ordered by DOLE
Failure of election does not bar the holding of
another certification or consent election within six
(6) months.
CONSENT
ELECTION
Voluntarily agreed
upon by the parties
with or without the
intervention of DOLE
NOTE: If an election had been held but No Union
won, a PCE may be filed again but only after 12
months.
If a union has won, such union and the employer
must within 12 months start negotiating a collective
agreement.
c. BARS TO THE HOLDING OF
CERTIFICATION/CONSENT ELECTION
Negotiation Bar Rule
GR: In the absence of a CBA duly registered in
accordance with Art. 237 of the Labor Code, a
petition for certification election may be filed at any
time. (Sec. 1, Rule VIII, Book V, IRR)
Under this rule, no petition for certification election
should be entertained while the sole and exclusive
bargaining agent and the employer have
commenced and sustained negotiations in good
faith within the period of one (1) year from the date
of a valid certification, consent, run-off, re-run, or
from the date of voluntary recognition.
Bar Rules
No certification election may be held under the
following rules:
Certification Year Bar Rule
Once the CBA negotiation have commenced and
while the parties are in the process of negotiating
the terms and conditions of the CBA, no challenging
union is allowed to file a petition for certification
election that would disturb the process and unduly
forestall the early conclusion of the agreement.
Under this rule, a petition for certification election
may not be filed within one (1) year from the date a
valid certification, consent, run-off, or re-run
election has been conducted within the bargaining
unit. This is also called as the 12-month Bar rule.
If after the lapse of 12 months and they failed to
commence the negotiation, the employees’ wish to
have a CBA is defeated. Hence, another union can
petition again for a certification election to replace
the unproductive bargaining agent. (Azucena, 2016)
1.
2.
3.
4.
Certification year bar rule;
Negotiations bar rule;
Bargaining deadlock bar rule; or
Contract bar rule.
The same ban applies if “No Union” won in the
previous election.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
194
Labor Relations
Bargaining Deadlock Bar Rule
2.
3.
Under this rule, a petition for certification election
may not be entertained when a bargaining deadlock
to which an incumbent or certified bargaining agent
is a party has been submitted to conciliation or has
become the subject of a valid notice of strike or
lockout.
Contract Bar Rule applied on Extended CBA
under Deadlock
No petition for certification election may be filed
before the onset of the freedom period nor after
such period. The old CBA is extended until a new
one is signed.
NOTE: The employer’s continuing act of evading
negotiation with the certified bargaining union is
tantamount to a bargaining deadlock.
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.
Artificial Deadlock
A deadlock pre-arranged or preserved by collusion
of the employer and the majority union. Signs of
Artificial Deadlock include failure of the union to
resort to conciliation, failure to charge the Employer
ULP, or failure to file a notice of strike despite the
deadlock.
The Contract Bar Rule does NOT apply in the
following cases:
1.
Where there is an automatic renewal provision
in the CBA but prior to the date when such
automatic renewal became effective, the
employer seasonably filed a manifestation with
the Bureau of Labor Relations of its intention to
terminate the said agreement if and when it is
established that the bargaining agent does not
represent anymore the majority of the workers
in the bargaining unit.
2.
Where the CBA, despite its due registration, is
found in appropriate proceedings that (a) it
contains provisions lower than the standards
fixed by law; or (b) the documents supporting
its registration are falsified, fraudulent, or
tainted with misrepresentation.
3.
Where the CBA does not foster industrial
stability, such as contracts where the identity of
the representative is in doubt since the
employer extended direct recognition to the
union and conducted a CBA therewith less than
one (1) year from the time a certification
election was conducted where the “no union”
vote won. This situation obtains in a case where
the company entered into a CBA with the union
when its status as exclusive bargaining agent of
the employees has not been established yet.
Contract Bar Rule
Under this rule, a petition for certification election
may not be filed when a CBA between the employer
and a duly recognized or certified bargaining agent
has been registered with the BLR in accordance
with the Labor Code. Where the CBA is duly
registered, a petition for certification election may
be filed within the 60-day freedom period prior to
its expiry.
The purpose of this rule is to ensure stability in the
relationship of the workers and the employer by
preventing frequent modifications of any CBA
entered into by them in good faith and for the
stipulated original period.
NOTE: To bar a certification election, it is no longer
necessary that the CBA be “certified”; it is enough
that it is registered in accordance with Art. 237.
(Azucena, 2016)
Requisites of Contract Bar
1.
It must be signed by the parties; and
The effective date and expiration date must be
readily discernible on the face of the contract.
It must contain substantial terms and
conditions of employment sufficient to
stabilize the bargaining relationship;
195
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
4.
7.
Where the CBA was registered before or during
the last 60 days of a subsisting agreement or
during the pendency of a representation case. It
is well-settled that the 60-day freedom period
based on the original CBA should not be
affected by any amendment, extension, or
renewal of the CBA for purposes of certification
election.
Absence of Er-Ee relationship between all the
members of the petitioning union and the
establishment where the proposed bargaining
unit is sought to be represented; (Sec. 14(h),
Rule VIII of D.O. 40-F-03)
Q: Does the filing of a petition for cancellation of
registration of union cause the suspension or
dismissal of a PCE?
Denial; Other grounds
A: NO. An order to hold a certification election is
proper despite the pendency of the petition for
cancellation of the registration certificate of the
respondent union. The rationale for this is that at
the time the respondent union filed its petition, it
still had the legal personality to perform such act
absent an order directing the cancellation.
(Association of Court of Appeals Employees v. FerrerCalleja, G.R. No. 94716, 15 Nov. 1991)
The Med-Arbiter may either approve or disapprove
the PCE. The disapproval or denial of the petition
has to be based on the grounds specified by the law:
1.
Non-appearance – When petitioner does not
appear in two (2) successive conferences
called by the Med-Arbiter, despite notice, the
petition may be dismissed;
2.
Illegitimacy/Unregistered union - When the
petitioning union or national union or
federation is not listed in DOLE’s list of LLOs or
if its registration has been cancelled;
3.
When there is a failure on the part of a local
chapter, national union or federation to submit
a duly issued Charter Certificate upon filing of
PCE; (Sec. 14(b), Rule VIII of D.O. 40-F-03)
4.
When a PCE is filed before or after the freedom
period of a duly registered CBA, provided that
the 60-day period based on the original CBA
shall not be affected by any amendment,
extension or renewal of the CBA; (Sec. 14(c),
Rule VIII of D.O. 40-F-03)
5.
6.
NOTE: The finality of a decision cancelling the
certificate of registration of a LLO would not
retroact to the time of its issuance of the certificate.
Meaning, despite the fact that a PCE is filed during
the pendency of a trial ruling over the legitimacy of
a labor union, the filing for said petition was done
when it still had legal personality. Additionally, the
legitimacy of the legal personality of a LLO cannot
be collaterally attacked. It must be done in a
separate action. (Legend International Resorts
Limited v. Kilusang Manggagawa Ng Legenda, G.R.
No. 169754, 23 Feb. 2011)
Filing of a petition within one (1) year from the
date of recording of voluntary recognition, or
within the same period from a valid
certification, consent, or run-off election
where no appeal on its results is pending; (Sec.
14(d), Rule VIII of D.O. 40-F-03)
Illegitimacy – No charter - When the local or
chapter, or the national union or federation
fails to submit a duly issued charter certificate
of the chapter at the time the union files its
PCE, it will cause the dismissal of the PCE;
9.
Absence of employment relationship Employees’ right to unionize is founded on the
existence of Er-Ee relationship. If there is
none, there would be no basis; and
NOTE: Med-Arbiter can determine Er-Ee
relationship. Med-Arbiter has the authority to
determine existence of Er-Ee relationship in a PCE.
When a duly certified union has commenced
and sustained negotiations with the employer
in accordance with Art. 250 of LC within the
one-year period referred in the preceding
number; (Sec. 14(e), Rule VIII of D.O. 40-F-03)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
8.
196
Labor Relations
for the dismissal of a petition for certification
election or suspension of proceedings of
certification election. (Sec. 2, Rule XI of D.O. 40-03)
10. Lack
of
support
(25%
signature
requirement) - When the union filing a PCE
does not have the support of 25% of the
bargaining unit manifested through their
signatures, the PCE may be denied.
Double Majority Rule (certification election)
Without this minimum support, the challenge
to the incumbent union looks like a nuisance.
It must appear that a sizeable portion of the
employees desire to have a union.
1.
Valid election (First Majority rule) –
Majority of eligible voters shall have validly
cast their votes.
2.
Winning Union (Second Majority rule) –
The winner who obtained majority of the valid
votes cast shall be declared as the bargaining
agent in the bargaining unit.
This requirement only applies to organized
establishments.
In
unorganized
establishments, it is merely directory.
NOTE: The 25% requirement may be relaxed by the
Med-Arbiter and order the holding of the
certification election precisely for the purpose of
ascertaining which of the contending unions shall
be the EBA.
Q: Liwayway Glass had 600 rank-and-file
participated in the certification election
ordered by the Med-Arbiter. Five hundred (500)
employees voted. The unions obtained the
following votes: A-200; B-150; C-50; 90
employees voted “no union”; and 10 were
segregated votes. Out of the segregated votes,
four (4) were cast by probationary employees
and six (6) were cast by dismissed employees
whose respective cases are still on appeal. (2014
BAR)
Effect of Withdrawal of Signature by the
Employees
Critical factor to consider is when the withdrawal
happened:
1.
2.
If it is made before the filing, the withdrawal
is presumed voluntary and affects the
propriety of the petition.
a.
If it is made after the filing, the withdrawal is
deemed involuntary and does not cause the
dismissal of the petition.
Should the votes of the probationary and
dismissed employees be counted in the
total votes cast for the purpose of
determining the winning labor union?
b. Was there a valid election?
Appeal of Grant or Denial of PCE
c.
It would depend if the establishment is organized or
unorganized.
d. Suppose the election is declared invalid,
which of the contending unions should
represent the rank-and-file employees?
1.
2.
In case of organized establishment, it is
appealable.
In case of unorganized establishment, it is
not appealable, except if the petition is denied.
e.
NOTE: The filing or pendency of any inter/intraunion dispute and other related labor relations
dispute is not a prejudicial question to any petition
for certification election and shall not be a ground
197
Should Union A be declared the winner?
Suppose that in the election, the unions
obtained the following votes: A-250; B-150;
C-50; 40 voted “no union”; and 10 were
segregated votes. Should Union A be
certified as the bargaining representative?
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
A:
a.
b.
c.
A: YES. While there is a prohibition against the
mingling of supervisory and rank-and-file
employees in one labor organization, the Labor
Code does not provide for the effects thereof. Thus,
the Court held that after a labor organization has
been registered, it may exercise all the rights and
privileges of a legitimate labor organization. Any
mingling between supervisory and rank-and-file
employees in its membership cannot affect its
legitimacy for that is not among the grounds for
cancellation of its registration, unless such mingling
was brought about by misrepresentation, false
statement, or fraud under Art. 239 of the Labor
Code. (Republic v. Kawashima Textile, G.R. No.
160352, 23 July 2008)
YES. Rule IX, Sec. 6 of DOLE D.O. No. 40-03
provides that, “All employees who are
members of the appropriate bargaining unit
sought to be represented by the petitioner at
the time of the issuance of the order granting
the conduct of a certification election 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.”
d. FAILURE OF ELECTION, RUN-OFF ELECTION,
RE-RUN ELECTION
YES. To have a valid election, at least majority
of all eligible voters in the unit must have cast
their votes. In the instant case, 500 out of 600
rank-and-file employees voted.
Failure of Election
There exists a failure of election in the following
instances:
NO. The Labor Code provides that the Labor
Union receiving majority of the valid votes cast
shall be certified as the exclusive bargaining
agent of all the workers in the unit. Here, the
number of valid votes cast is 490; thus, the
winning union should receive at least 246
votes. Union A only received 200 votes.
d.
None of them should represent the rank-andfile employees.
e.
YES. The Labor Code provides that the Labor
Union receiving majority of the valid votes cast
shall be certified as the exclusive bargaining
agent of all the workers in the unit. Here, the
number of valid votes cast is 490. Thus, the
winning union should receive at least 246
votes; Union A received 250 votes.
Where the number of votes cast in a
certification or consent election is less than
the majority of the number of eligible voters
and there is no material challenged votes –
In this case, the failure of election shall not bar
the filing of a motion for the immediate holding
of another certification or consent election
within six (6) months from date of declaration
of failure of election; and
2.
When there is a tie – The next election must be
held within a period of ten (10) days from the
last election in order to determine or break the
tie.
Run-off Election
Q: May an organization which carries a mixture
of rank-and-file and supervisory employees
possess any of the rights of a legitimate labor
organization, including the right to file a petition
for certification election for the purpose of
collective bargaining?
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
1.
A run-off election refers to an election between the
labor union receiving the two highest votes in a
certification election or consent election with three
or more unions in contention, where such
certification election or consent election results in
none of the contending unions receiving the
majority of the valid votes cast; provided, that the
total number of votes for all contending unions, if
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Labor Relations
added is at least 50% of the number of valid votes
cast. (Art. 268, LC)
Posting of Notice for Run-Off Election
The notice should be posted by the Election Officer
at least five (5) days before the actual date. (Sec. 1,
Rule X, Book V, IRR)
Qualification of Voters in the Run-Off Election
The same voters list used in the certification
election shall be used in the run-off election.
Re-Run Election
There are three instances of Re-Run:
When to be Conducted
1.
If conditions that justify the conduct of a run-off
election are present and there are no objections or
challenges which, if sustained, can materially alter
the election results, the Election Officer should motu
proprio conduct the run-off election within ten (10)
days from the close of the election proceeding
between the labor unions receiving the two highest
number of votes cast.
2.
3.
Failure of certification election declared by the
election officer;
Tie between two unions; or
Tie between a union and no union.
In both instances, the “no union” is also a choice.
e. EMPLOYER AS A MERE BYSTANDER RULE
Requirements for a Run-Off Election
Employer as a Bystander (Bystander Rule)
A run-off election is proper if five concurrent
conditions exist:
In all cases, whether the PCE is filed by an Er or an
LLO, the Er shall not be considered a party thereto
with a concomitant right to oppose a PCE. The only
purpose of the proceeding is to determine which
organization will represent the employees in
bargaining with the employer. The choice of
representative is the exclusive concern of the
employees.
1.
2.
3.
4.
5.
A valid election took place because majority of
the CBU members voted;
The election presented at least three choices,
e.g., Union One, Union Two, and No Union,
meaning, there are at least two union
“candidates”;
Not one of the unions obtained the majority
valid votes;
The total number of votes for all the unions is
at least 50% of the votes cast; and
There is no unresolved challenge of voter or
election process. (Azucena, 2016)
The Er’s participation in such proceedings shall
be limited to:
1.
2.
NOTE: Thus, if “no union” garnered the majority
vote, no run-off elections may be held.
Being notified or informed of petitions of
such nature; and
Submitting the list of Ees during the preelection conference should the MediatorArbiter act favorably on the petition.
(Republic v. Kawashima Textile, G.R. No.
160352, 23 July 2008)
Choices in a run-off election
Employer’s possible recourse
The unions receiving the highest and 2nd highest
number of the votes cast. (Sec. 2, Rule X, Book V, IRR)
If the employer believes that the union has
inappropriate membership because it includes
rank-and-file
with
managerial/supervisory
employees, the employer’s recourse is not to oppose
the PCE, but to file a separate petition to cancel the
union’s registration. (Azucena, 2016)
“No Union” is not a choice in the Run-off Election.
199
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
However, either party can serve a written notice to
terminate or modify the agreement at least 60 days
prior the expiration of its fifth year.
D. COLLECTIVE BARGAINING
NOTE: 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’ automatic
renewal clause. (Art. 264, LC)
1. DUTY TO BARGAIN COLLECTIVELY,
BARGAINING IN BAD FAITH
Duty to Bargain Collectively
The duty to bargain collectively means the
performance of a mutual obligation to meet and
convene promptly and expeditiously in good faith
for the purpose of:
1.
2.
3.
4.
Jurisdictional
Bargaining:
1.
Negotiating an agreement with respect to
wages, hours of work, and all other terms and
conditions of employment;
2.
3.
Including proposals for adjusting any
grievances or questions arising under such
agreement;
of
Collective
Possession of the status of majority
representation
of
the
employees’
representative;
Proof of majority representation; and
A demand to bargain.
NOTE: An employer’s duty to recognize and bargain
collectively with a union does not arise until the
union requests the employer to bargain.
Executing a contract incorporating such
agreements if requested by either party but
such duty does not compel any party to agree
to a proposal or to make any concession (Art.
263, LC); and
Q: When should bargaining begin and when
should it end?
A: It begins when the three (3) jurisdictional
preconditions are present. The collective bargaining
should begin within the 12 months following the
determination and certification of the employees’
exclusive bargaining representative. The period is
known as certification year.
Negotiation over the terms of a new contract or
proposed modifications, when an existing
agreement is validly opened for negotiations.
(Azucena, 2016)
When there is no CBA
The law encourages expeditious and good-faith
negotiations but fixes no time limit for completion
of the negotiation. The law dictates no deadline. It
depends upon the will and agreement of the
negotiating panels. (Azucena, 2016)
In the absence of an agreement or other voluntary
arrangement providing for a more expeditious
manner of Collective Bargaining, it shall be the duty
of employer and the representatives of the
employees to bargain collectively in accordance
with the provisions of the LC. (Art. 262, LC)
Bargaining in Bad Faith
When there is a CBA
When there is a CBA, the duty to bargain
collectively, in addition to Art. 263, shall mean that
neither party shall terminate nor modify such
agreement during its lifetime.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Preconditions
200
1.
Boulwarism – It is the tactic of making a
"take-it-or-leave-it" offer in a negotiation,
with no further concessions or discussion.
2.
Blue-Sky Bargaining – It is defined as
"unrealistic and unreasonable demands in
negotiations by either or both labor and
Labor Relations
University-Philippines v. WUP Faculty and Staff
Association, G.R. No. 181806, 12 Mar. 2014)
management, where neither concedes
anything and demands the impossible." It
actually is not collective bargaining at all.
(i.e., making exaggerated or unreasonable
proposals)
3.
Purpose
The goal of collective bargaining is the making of
agreements that will stabilize business conditions
and fix fair standards of working conditions. (P.I.
Manufacturing, Incorporated v. P.I. Manufacturing
Supervisors and Foremen Association, G.R. No.
167217, 04 Feb. 2018)
Surface Bargaining – It is defined as
"going through the motions of negotiating"
without any legal intent to reach an
agreement.
Surface bargaining is also called “shadow
boxing” or “apparent bargaining.”
Mandatory Provisions of the CBA
NOTE: Blue-sky bargaining and Surface bargaining
are allowed in the beginning of negotiations. But
when during the negotiations, you have not moved
a bit in your position and you impose a “take-it-orleave-it” position to the other party, then such
amounts to boulwarism which is already bargaining
in bad faith.
For a matter to be subject to mandatory collective
bargaining, it must materially or significantly affect
the terms or conditions of employment.
Examples of matters considered as mandatory
subjects of bargaining:
1.
Wages and other types of compensation
including merit increases
2. Working hours and working days, including
work shifts
3. Vacations and holidays
4. Bonuses
5. Pensions and retirement plants
6. Seniority
7. Transfer
8. Lay-offs
9. Employee workloads
10. Work rules and regulations
11. Rent of company houses
12. Union security arrangements
2. COLLECTIVE BARGAINING AGREEMENT
(CBA), MANDATORY PROVISIONS
Collective Bargaining Agreement (CBA)
Refers to a contract executed upon request of either
the employer or the exclusive bargaining
representative of the employees – incorporating the
agreement reached after negotiations with respect
to wages, hours of work, and all other terms and
conditions of employment, including proposals for
adjusting any grievances or questions under such
agreement.
CBA should include the mandatory provisions such
as grievance procedure, “no strike-no lockout”
clause, cooperative scheme, and Labor Management
Council (LMC). (Abad, 2015)
Nature
The CBA is the law between the contracting
parties
and
the
Collective
Bargaining
representative and the employer-company.
Compliance with a CBA is mandated by the
expressed policy to give protection to labor. (Vicente
Almario v. Philippine Airlines, Inc., G.R. No. 170928,
11 Sept. 2007)
No duty to agree even on mandatory subjects
The law speaks of a duty to bargain but not of an
obligation to agree. The law does not compel
agreements between employers and employees,
and neither party is legally obligated to yield even
on a mandatory bargaining subject. (Azucena, 2016)
NOTE: Unilateral changes in the implementation of
the provisions of the CBA cannot be allowed without
the consent of both contracting parties. (Wesleyan
201
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Services, Inc. v. Confessor, G.R. No. 110854, 13 Feb.
1995)
Procedure in Collective Bargaining
When a party desires to negotiate an agreement:
1.
It shall serve a written notice upon the other
party with a statement of proposals;
2.
Reply by the other party shall be made within
ten (10) calendar days with counter proposals;
3.
In case of differences, either party may request
for a conference which must be held within 10
calendar days from receipt of request;
4.
If not settled, NCMB may intervene and shall
exert all efforts to settle disputes amicably, and
encourage the parties to submit the dispute to
a voluntary arbitrator; and
5.
If not resolved, the parties may resort to any
other lawful means, either to settle the dispute
or submit it to a voluntary arbitrator.
The rationale of the such clause is to make it the
duty of the parties to keep the status quo and to
continue in full effect the terms and conditions of
the existing agreement until a new agreement is
reached by the parties. (Principle of CBA
Continuity) (Art. 264, LC)
Q: What is the Lock, Stock, and Barrel Rule?
A: When the employer refuses to submit any
counter-proposal, the employer had lost its right to
bargain the terms and conditions of employment.
Consequently, all the terms and conditions of the
CBA as proposed by the SEBA are deemed approved
and accepted lock, stock, and barrel by the
employer. (Kiok Luy v. NLRC G.R. No. L-54334, 22 Jan.
1986)
Hold-over Principle
NOTE: During the conciliation proceeding in the
NCMB, the parties are prohibited from doing any act
which may disrupt or impede the early settlement
of disputes. (Art. 261(d), LC)
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. 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.
Ratification of the CBA
GR: The agreement negotiated by the employees'
EBR should be ratified or approved by the majority
of all the workers in the bargaining unit. The proper
ratifying group is not the majority union but the
majority of all the workers in the bargaining unit
represented by the negotiation.
Q: Does the hold-over principle apply to an
imposed CBA / arbitral award?
A: YES. The Hold-over Principle applies to an
imposed CBA. The law does not provide for any
exception nor qualification on which economic
provisions of the existing agreement are to retain its
force and effect. Likewise, the law does not
distinguish between a CBA duly agreed upon by the
parties and an imposed CBA. (General Milling
Corporation – ILU v. General Milling Corp., G.R. No.
193723, 20 July 2011)
XPN: Ratification of the CBA by the employees is not
needed when the CBA is a product of an arbitral
award by a proper government authority (Art.
278(g) LC) or a voluntary arbitrator. (Art. 275, LC)
Q: What is the automatic renewal clause of
collective bargaining agreements? (2008 BAR)
A: The automatic renewal clause means that
although the CBA has expired, it continues to have
legal effects as between the parties until a new CBA
has been entered. (Pier &Arrastre Stevedoring
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
202
Labor Relations
A: In one case, the CBA was not posted for at least
five days in two conspicuous places in the
establishment before ratification, to enable the
workers to clearly inform themselves of its
provisions. Moreover, the CBA submitted to the
MOLE (now SOLE) did not carry the sworn
statement of the union secretary, attested by the
union president, that the CBA had been duly posted
and ratified, as required by Sec. 1, Rule 9, Book V of
the Implementing Rules and Regulations. These
requirements being mandatory, non-compliance
therewith rendered the said CBA ineffective.
(Associated Trade Unions v. Trajano, G.R. No. L75321, 20 Jun. 1988)
3. SIGNING, POSTING, REGISTRATION
Registration
Within 30 days from execution of CBA, the parties
thereto shall submit the agreement to the DOLE
Regional Office where the bargaining union is
registered or where it principally operates. Multiemployer collective bargaining agreements shall be
filed with the Bureau.
NOTE: Failure to register the CBA does not make it
invalid or unenforceable. Once it is duly entered into
and signed by the parties, a CBA becomes effective
as between the parties whether or not it has been
certified by the BLR. (Liberty Flour Mills Employees
Association v. Liberty Flour Mills, G.R. Nos. 58768-70,
29 Dec. 1989) However, its non-registration renders
the contract-bar rule inoperative.
NOTE: In case of denial by the Regional Office, it is
appealable to the Bureau within ten (10) days. In
case of denial by the Bureau, it is appealable to the
Secretary of Labor and Employment.
Requirements for Registration
Effectivity of an Arbitral Award
The application for CBA registration shall be
accompanied by the original and two duplicate
copies of the following requirements:
CBA arbitral awards granted after six (6) months
from the expiration of the last CBA, shall retroact to
such time agreed upon by both parties. Absent such
an agreement, the award shall retroact to the first
day after the six-month period following the
expiration of the last day of CBA.
1.
2.
3.
4.
Duly
accomplished
and
notarized
Application Form;
Original and 2 duplicate signed copies of
the CBA which must be certified under oath
by the representatives of the employer/s
and labor union/s concerned;
Statement that the CBA was posted in at
least two (2) conspicuous places in the
establishment/s concerned for at least five
(5) days before its ratification; and
Statement that the CBA was ratified by the
majority of the employees in the bargaining
unit of the employer/s concerned.
In the absence of a CBA, the Secretary’s
determination of the date of retroactivity as part of
his discretionary powers over arbitral awards shall
control. (Manila Electric Co. v. Quisumbing, G.R. No.
127598, 22 Feb. 2000)
Zipper Clause
It is a stipulation in a CBA indicating that issues that
could have been negotiated upon but not contained
in the CBA cannot be raised for negotiation when
the CBA is already in effect. All matters not included
in the agreement shall be deemed to have been
raised and disposed of as if covered.
The following documents must be certified under
oath by the representative of the employer and the
labor union. No other document shall be required
in the registration of the CBA.
A CBA is not an ordinary contract but one impressed
with public interest, only provisions embodied in
the CBA should be so interpreted and complied
with. Where a proposal raised by a contracting
party does not find print in the CBA, it is not a part
Q: What is the effect for non-compliance with the
requirement of posting?
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
immediately preceding the expiration of the
five-year term of the CBA;
thereof and the proponent has no claim whatsoever
to its implementation under the Zipper Clause.
(SMTFM-UWP v. NLRC, G.R. No. 113856, 07 Sept.
1998)
2.
Either party can serve a written notice to
terminate or modify agreement at least 60
days prior to the expiration of the five-year
term of the CBA; and
3.
A PCE may be filed.
Effectivity
The effectivity date depends on whether the CBA is
the first CBA or a renegotiated CBA.
1.
2.
First CBA - Effectivity date depends upon the
agreement of the parties.
60–Day
aspect)
NOTE: The determining point is the date the
parties agreed, not the date they signed.
The freedom period under Art. 265 & 268 is
different from the other 60-day period mentioned in
Art. 264. The latter speaks of the right of the parties
to propose modifications to the existing CBA, as an
exception to the rule that the CBA cannot be
modified during its lifetime, within 60 days prior
the expiration of its economic/non-economic
aspect. This 60-day period does not and cannot
refer to the representative status of the incumbent
union since the acquisition or loss of representative
status is to be resolved through CE.
Renegotiated CBA - If within six (6) months
from the expiry date of the old CBA, then the
new CBA starts to take effect on the date
following such expiry date. If beyond six (6)
months, the retroaction date will have to be
agreed upon by the parties.
NOTE: The date is important particularly in relation
to wage increase because a long retroaction period
will mean sizeable back pay to employees.
Economic and Non-Economic Aspect – may
last for a maximum period of three (3) years
after the execution of the CBA.
In case of doubt:
-
Representation Aspect – may last for five (5)
years. It refers to the identity and majority
status of the union that negotiated the CBA as
the exclusive bargaining representative.
60-Day
Aspect)
Freedom
Period
(Representative
A labor union may disaffiliate from the mother
union to form a local or independent union
only during the 60-day freedom period
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
All labor legislation and labor contracts
should be construed in favor of the safety
and decent living of the laborer. (Art. 1702,
Civil Code)
All doubts should be resolved in favor of
labor. (Art. 4, LC)
Q: Is the 10-year suspension of the CBA
unconstitutional and contrary to public policy?
During the 60-day freedom period:
1.
(Non-representative
A: As a contract and the governing law between the
parties, the general rules of statutory construction
apply in the interpretation of its provisions
(NUWHRAIN-APL-IUF v. Phil Plaza Holdings, G.R. No.
177524, 23 July 2014)
Term/Duration of a CBA
2.
Period
Q: How should the CBA be interpreted?
4. TERM OF THE CBA, FREEDOM PERIOD
1.
Notice
A: NO. The assailed PAL-PALEA agreement was the
result of voluntary collective bargaining
negotiations undertaken in the light of the severe
financial situations faced by the employer. It is a
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Labor Relations
valid exercise of the freedom to contract. (Rivera, et
al. v. Espiritu, G.R. No. 135547, 23 Jan. 2002)
b. ASPECTS
ULP has two aspects, namely:
1. Civil; and
2. Criminal.
E. UNFAIR LABOR PRACTICES
NOTE: Lawmakers intended acts of ULP to be
prosecuted in the same manner as criminal offenses
because it is an offense against a public right or
interest.
Definition
ULP means any unfair labor practice as expressly
defined by the Labor Code. (Art. 219(k), LC)
Q: What is the condition precedent before
criminal prosecution of ULP may be made?
ULP has a technical meaning. It only refers to acts
that violate the right of employees to selforganization and the observance of the CBA. Thus,
not all unfair acts constitute as unfair labor practice.
Without the element of self-organization, an act, no
matter how unfair, cannot be considered as unfair
labor practice.
A: There should be a finality of judgment in a labor
case finding that the respondent indeed committed
ULP.
NOTE: The judgment in the labor case cannot be
used as evidence in the criminal case. It should be
noted that the evidence required in labor
proceedings is only substantial evidence while
criminal cases need proof beyond reasonable doubt.
Thus, the criminal charge needs to be proven
independently from the labor case.
Q: Is there an exception where ULP is committed
even if the act is not a violation of an employee’s
right to self-organization?
A: YES. Dismissing or prejudicing an employee for
giving testimony (regardless of the subject of the
testimony) under Art. 259(f) of the Labor Code.
Difference between Civil and Criminal aspect of
ULP
1. NATURE, ASPECTS
CIVIL ASPECT
Persons liable
a. NATURE
Officers and agents of
employer or labor
organizations
ULPs are not only violations of the civil rights of
both labor and management but are also criminal
offenses against the State. (Art. 258, LC)
2.
Officers and agents
who participated or
authorized the act
Jurisdiction
Elements of ULP
1.
CRIMINAL ASPECT
Labor Arbiter
Existence of Er-Ee relationship between the
offender and offended party; and
Act is expressly defined in the Code as ULP.
RTC or MTC, as the
case may be.
(Concurrent
jurisdiction)
Prescriptive period
One (1) year from
accrual of the ULP act
NOTE: A showing of prejudice to public interest is
not a requisite for ULP charges to prosper.
(Standard Chartered Bank Employees Union v. Hon.
Confessor, G.R. No. 114974, 16 Jun. 2014)
One (1) year from
accrual of the ULP act
Quantum of proof
Substantial evidence
205
Beyond reasonable
doubt
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
All ULP acts must be included in a single charge
A charge of ULP must include all acts of ULP.
Splitting the cause of action is not allowed to
prevent harassing the employer with subsequent
charges.
2. ULP BY EMPLOYERS
f.
g.
h.
i.
Interference, restraint, or coercion
Yellow dog contract
Contracting out of services
Company unionism
Discrimination
for
or
against
membership
Discrimination because of testimony
Violation of duty to bargain
Paid negotiation
Gross violation of the CBA
Communicate to the employee the purpose of
the questioning;
2.
Assure the employee that no reprisal would
take place; and
3.
The questioning must occur in a context free
from employer hostility to union organization.
Test of Interference
The following are the ULP committed by employers:
a.
b.
c.
d.
e.
1.
Whether the employer has engaged in conduct
which it may reasonably be said tends to interfere
with the free exercise of employees’ rights.
Direct evidence of interference is not necessary
union
Direct evidence is not necessary if there is a
reasonable inference that the anti-union conduct of
the employer does have an adverse effect on selforganization and collective bargaining.
Totality of Conduct Doctrine
NOTE: The enumeration of ULP under Art. 259 is
not exclusive. Other ULP acts can be found in other
provisions of the Labor Code.
An employer’s remarks must be evaluated not only
based on their implications, but against the
background of and in conjunction with collateral
circumstances.
a. INTERFERENCE, RESTRAINT, OR COERCION
To interfere with, restrain, or coerce employees in
the exercise of their right to self-organization. (Art.
259(a), LC)
Expression of opinion by the employer, though
innocent in themselves, was frequently held to be
culpable because of the circumstances under which
they were uttered.
ULP can be committed even if union is not
registered
Prohibiting organizing activities is ULP
An employer who interferes with the formation of a
labor union and retaliation against the employees’
exercise of their right to self-organization is guilty of
ULP. (Samahan ng mga Manggagawa sa BandolinoLMLC, et. al v. NLRC, G.R. No. 125195, 17 July 1997)
It is unlawful to prohibit solicitation of union
membership in the company whether it is working
or non-working time.
Illegal dismissal may be considered as ULP
Q: Is persistent interrogation by an employer to
elicit information about what happened in
union meetings and activities considered as
ULP?
When there is a showing that the illegal dismissal
was dictated by anti-union motives, the same
constitutes as ULP. If not, then there is no ULP. The
proper remedy would be an action for
reinstatement with backwages and damages.
A: IT DEPENDS. It may be deemed as coercive. In
order not to become coercive, the employer must:
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
206
Labor Relations
Later, Kim executed a deed purporting to convey
the factory to Yu Guat. When the factory
reopened, the members of the union were not
readmitted and those who left the union were
allowed to work. The union members filed a
complaint for ULP against Kim. Decide.
Lockout or closure may amount to ULP
The lockout or closure must be for the purpose of
interfering with an employees’ exercise of their
right. An honest closing of one’s plant is not a
violation of the law.
A: YES. The sale of the factory was simulated, and a
device resorted merely to get rid of the employees
who were members of the union. (Moncada Bijon
Factory v. CIR, G.R. No. L-16037, 29 Apr. 1964)
NOTE: Proof of employer’s state of mind is often
very difficult unless it is expressed. However, it may
be proven by circumstantial evidence.
Other examples of interference, restraint, or
coercion:
1.
Using violence or intimidation to restrain or
coerce employees to exercise their right to
self-organization.
2.
Espionage and surveillance of employees by
the employer since it is a form of “pressure.”
3.
b. YELLOW DOG 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), LC)
A Yellow Dog Condition is a promise exacted from
workers as a condition of employment that they are
not to belong to, or attempts to foster, a union
during their period of employment.
Inducing employees with economic benefits
to restrain or coerce them in their exercise of
their right to self-organization.
Requisites of a Yellow Dog Condition
4.
Mass layoff of union members by the
company pursuant to a subterfuge or a fake
reduction effort when it has been making
profits. (Madrigal and Company, Inc. v.
Zamora, G.R. No. L-48237, 30 Jun. 1987)
1.
2.
3.
In case of sale in bad faith
When the sale of a business enterprise was attended
with bad faith, labor contracts, despite being in
personam, becomes enforceable against the
transferee. The transferee is in the position of tortfeasor, having been a party likewise responsible for
the damage inflicted on the members of the
aggrieved union and therefore cannot justly escape
liability. As successor-in-interest of the vendor, he
becomes responsible for all the rights and
obligations of his predecessor.
A representation by the employee that he is
not a member of a labor union;
A promise by the employee not to join a
labor union; and
A promise by the employee that, upon,
joining a labor union, he will quit his
employment.
c. CONTRACTING OUT
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. (Art.
259(c), LC)
Q: Is contracting out per se ULP?
Q: Kim, owner of the factory, called the workers
who are also members of the union to a meeting.
He requested them to resign from the union and
withdraw their claims filed before the NLRC
years before. The requests were rejected.
A: NO. Contracting out, itself, is not ULP. It is the ill
intention that makes it so when it is motivated by a
desire to prevent his employees from organizing
and selecting a collective bargaining representative,
get rid of union men, or escape his statutory duty to
207
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
not enough reason to pierce the veil of corporate
fiction of the corporation. The closure was not
motivated by union activities of the employees, but
rather by necessity since it can no longer engage in
production. (Complex Electronics Employees
Association v. NLRC, G.R. No. 121315, 19 July 1999)
bargain collectively with his employees’ bargaining
representative.
If the contracting out is done for a legitimate
business reason such as decline in business,
inadequacy of equipment, or need to reduce cost, it
is a valid exercise of management prerogative.
d. COMPANY UNIONISM
NOTE: To be considered as valid outsourcing, it
must be (1) motivated by good faith; and (2) must
not have been resorted to circumvent the law.
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.
(Art. 259(d), LC)
Contracting out restricted in the CBA
When a CBA is entered into, the terms of the
agreement is binding on both parties. The company
did not have to agree to such a stipulation. Or it
could have reserved the right to effect a dissolution
and reassignment. It did not do so. (Shell Oil
Workers’ Union v. Shell Company of the Philippines,
G.R. No. L-28607, 31 May 1971)
Forms of company domination:
1.
2.
3.
4.
Runaway shop
Refers to business relocation animated by antiunion animus. It is a plant moved to a new location
in order to discriminate against employees at the
old plant because of their union activities.
Initiation of the company union idea by:
a. Outright formation by the employer or
his representatives; or
b. Managerially motivated formation of
union.
Financial support to the union
Employer encouragement and assistance
Supervisory assistance
e. DISCRIMINATION FOR OR AGAINST
UNION MEMBERSHIP
Q: Complex Electronics Corporation informed
its employees that it was closing down its
operations since it was incurring losses and
promised to give notice and retrenchment pay.
The employees asked for a higher retrenchment
pay but the company refused. The machines and
equipment were pulled out from the company
premises and were transferred to the premises
of Ionics Circuit, Inc.
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. (Art. 259(e), LC)
Discrimination v. Classification
Discrimination is different from classification. For
instance, it is common management practice to
classify jobs and grant them varying levels of pay or
benefits package. These are valid differentiations
that recognize differences in job requirements or
contributions.
They
are
not
necessarily
discrimination classifiable as ULP.
The union of the employees filed a complaint for
ULP against the company alleging that Ionics
Circuit is a runaway shop since it has the same
President and Board of Directors with Complex
Electronics. Is the contention tenable?
Test of Discrimination
A: NO. The mere fact that one or more corporations
are owned or controlled by the same or single
stockholder is not sufficient ground for
disregarding separate corporate personalities. It is
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Whenever benefits or privileges given to one is not
given to the other under similar or identical
208
Labor Relations
conditions when directed to
discourage union membership.
encourage
itself, constitute refusal to bargain. (Philippine
Marine Radio Officers Association v. CIR, G.R. Nos. L10095 & L-10115, 31 Oct. 1957)
or
NOTE: Existence of a union security clause is a form
of valid discrimination. It is a discrimination
favoring unionism.
However, when the Er refuses to submit an answer
or reply to the written bargaining proposals of the
certified bargaining union, ULP is committed.
f. DISCRIMINATION BECAUSE OF TESTIMONY
NOTE: While the law does not compel the parties to
reach an agreement, it contemplates that both
parties will approach the negotiation with an open
mind and make a reasonable effort to reach a
common ground of agreement. They should
negotiate in good faith. (Kiok Loy v. NLRC, G.R. No.
54334, 22 Jan. 1986)
Dismissing or prejudicing an employee who is about
to give or has given testimony under the Labor Code.
NOTE: The subject matter of the testimony is
anything under the Labor Code.
ULP also applies to refusal to testify
Acts not deemed refusal to bargain:
The article also applies to refusal to testify because
it is analogous to giving of testimony. (Mabeza v.
NLRC, G.R. No. 118506, 18 Apr. 1997)
a.
b.
g. VIOLATION OF DUTY TO BARGAIN
c.
It refers to acts that violate the duty to bargain
collectively as prescribed by the Code.
d.
e.
Four Forms of ULP in bargaining:
f.
1.
2.
3.
4.
Failure or refusal to meet and convene;
Evading mandatory subjects of bargaining;
Bad faith in bargaining; and
Gross violation of the CBA.
g.
h.
1. Failure or refusal to meet and convene
i.
Occurrence of Refusal to Bargain
This occurs when the Er refuses or fails to meet and
convene with the majority of his Ees. To bargain in
good faith, an Er must not only meet and confer with
the union which represents his Ees but must also
recognize the union for the purpose of CB. (Azucena,
2010)
Adoption of an adamant bargaining position in
good faith;
Refusal to bargain over demands for
commission of ULP;
Refusal to bargain during period of illegal
strike;
There is no request for bargaining;
The union seeks recognition for an
appropriately large unit;
The union seeks to represent some persons
who are excluded under the LC;
The rank-and-file includes supervisors;
The demand for recognition and bargaining is
made within the year following a certification
election in which the clear choice was no
union, and no ad interim significant change has
taken place in the unit; or
The union makes unlawful bargaining
demand.
2. Evading mandatory subjects of bargaining
No Duty to Agree even on Mandatory Subjects
The law speaks of a duty to bargain but not of an
obligation to agree.
Effect of Refusal of Management to Give CounterProposals to the Union’s Demands
Voluntary Benefits
The failure of the Er to submit its counter-proposals
to the demands of the bargaining union does not, by
Q: In consideration of the impending expiration
of the existing collective bargaining agreement,
209
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Remedies In Case of Deadlock
which includes a retirement plan, between
Nestle and Union, the latter informed the former
of their intent to open a new collective
bargaining negotiation for the succeeding years.
However, Nestle underscored its position that
unilateral grants such as the retirement plan
are, by their very nature, not proper subjects of
the CBA negotiations. The Union argues that the
retirement plan remains to be a CBA item. May
the Union demand that an existing voluntary
benefit such as the retirement plan be discussed
and included in the CBA?
The parties, during renegotiation, may:
1.
2.
3.
NOTE: This remedy (par. 3) is a remedy of last
resort.
A: YES. As the benefit was already subject of the
existing CBA, the members of Union were only
exercising their prerogative to bargain or
renegotiate for the improvement of the terms of the
Retirement Plan just like they would for all the other
economic, as well as non-economic benefits
previously enjoyed by them. Precisely, the purpose
of collective bargaining is the acquisition or
attainment of the best possible covenants or terms
relating to economic and non-economic benefits
granted by employers and due the employees. The
Labor Code has imposed as a mutual obligation of
both parties, this duty to bargain collectively. (Union
of Filipro Employees v. Nestle Philippines, G.R. No.
158930-31, 03 Mar. 2008)
3. Bad faith in bargaining
Surface Bargaining
It is the act of “going through the motions of
negotiating” without any legal intent to reach an
agreement. (Standard Chartered Bank v. Confessor,
G.R. No. 114974, 16 Jun. 2004)
A concrete example is the withholding of the Er of
the audited financial statement requested by the
union.
Surface Bargaining is a question of intent of the
party concerned and usually, such intent can only be
inferred from the totality of the challenged party’s
conduct both at and away from the bargaining table.
Impasse In Bargaining
Where the subject of a dispute is a mandatory
bargaining subject, either party may bargain to an
impasse if he bargains in good faith.
Blue Sky Bargaining
Where the subject is non-mandatory, a party may
not insist on bargaining to the point of impasse. His
insistence may be construed as evasion of duty to
bargain.
It is defined as making exaggerated or unreasonable
proposals. It connotes demands from the union
which the Er has no capacity to give. Whether or not
the union is engaged in blue-sky bargaining is
determined by the evidence presented by the union
as to its economic demands. Thus, if the union
requires exaggerated or unreasonable economic
demands, then it is guilty of ULP. (Standard
Chartered Bank v. Confessor, G.R. No. 114974, 16 Jun.
2004)
Deadlock
It is synonymous with impasse or a standstill which
presupposes reasonable effort at good faith
bargaining but despite noble intentions, does not
conclude an agreement between the parties.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Call upon the NCMB to intervene for the
purpose of conducting conciliation or
preventive mediation;
Refer the matter for voluntary arbitration or
compulsory arbitration; or
Declare a strike or lockout upon compliance
with
the
legal
requirements.
210
Labor Relations
Boulwarism
Life Assurance Co., Ltd., G.R. No. L-25291, 30 Jan.
1971)
Boulwarism is a violation of good faith in
bargaining. It includes the failure to execute the
CBA.
NOTE: There is no legal prohibition for an Ee to
bargain with his Er.
Q: ABC Corporation offered, among other
It is a practice wherein one party gives an offer to
which no further revisions are intended to be made.
It is also known as the “Take-It-or-Leave-It
Bargaining.”
employees. To receive the benefits, employees
had to sign a waiver that said that the new CBA
shall only be effective on Jan. 1, 2008. Realizing
that the waiver was an unfair labor practice,
some members of XYZ union refused to sign. XYZ
Union and its members who refused to sign the
waivers filed a complaint for unfair labor
practices against ABC Corporation. Further, XYZ
Union members who did not sign the waiver
demanded a wage increase enjoyed by those
who signed. The Court found ABC Corp guilty of
unfair labor practice but denied the claim for
wage increase as there was no provision in the
existing CBA pertaining to the said increase. XYZ
Union appealed alleging that the wage increase
was integrated in the salary of those who signed
the waivers and are currently receiving
4. Gross violation of the CBA
The allegations in the complaint should show prima
facie the concurrence of two things, namely:
1.
gross violation of the CBA, as opposed to
simple violations of the CBA which are only
grievance matters; and
2.
the violation pertains to the economic
provisions of the CBA. (Silva v. NLRC, G.R.
No. 110226, June 1997)
h. PAID NEGOTIATION
Should the wage increase given to the
employees who signed the waiver be awarded to
the employees who did not?
The act of employer of paying negotiation or
attorney’s fees to the union or its officers as part of
the settlement of any issue in collective bargaining
or any other dispute.
A: YES. Generally, the Collective Bargaining
Agreement controls the relationship between the
parties. Any benefit not included in it is not
demandable. However, considering the peculiar
circumstances in this case, the requested wage
increase should be granted. Accordingly, it is illegal
to continue denying the petitioners the wage
increase that was granted to employees who signed
the waivers. To rule otherwise will perpetuate the
discrimination against employees who did not sign.
All the consequences of the unfair labor practice
must be addressed. The grant of the P32.00/day
wage increase is not an additional benefit outside
the Collective Bargaining Agreement of 2009. By
granting this increase to those who did not sign, the
Court is eliminating the discrimination against
them, which was a result of respondent's unfair
labor practice. (Sonedco Workers Free Labor Union
(See discussion on sweetheart contracts under ULP by
Labor Organizations – page 214)
i. GROSS VIOLATION OF THE CBA
It is the flagrant and/or malicious refusal by a party
to comply with the economic provisions of the CBA.
NOTE: If the violation of the CBA is not gross, it is
not ULP but a mere grievance.
Individual bargaining considered as ULP
When the Er attempts to negotiate with individual
workers rather than with the certified bargaining
agent, it is considered as ULP. (Insular Life
Assurance Co., Ltd., Employees Assoc.-NATU v. Insular
211
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
v. Universal Robina Corporation, G.R. No. 220383, 05
July 2017)
b. UNION-INDUCED DISCRIMINATION
This pertains to the attempt of the labor
organization to cause an employer to grant
advantages to:
3. ULP BY LABOR ORGANIZATIONS
Persons Criminally Liable in Case of ULP by LO
1.
2.
3.
1.
2.
Officers
Members of governing board
Representatives, agents, members of the labor
organization who actually participated,
authorized, or ratified the ULP act.
3.
4.
ULP Committed by Labor Organizations
a.
b.
c.
d.
e.
f.
Arbitrary use of Union Security Clause
Restraint or coercion
Union-induced discrimination
Refusal to bargain
Featherbedding
or
Make-Work
Arrangements
CBA deal with employer
Gross violation of CBA
Unions are not entitled to arbitrarily exclude
qualified applicants for membership, and a closedshop 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. (Salunga v. CIR, G.R. No.
L-22456, 27 Sept. 1967)
a. RESTRAINT OR COERCION
A union member may not be expelled from her
union, and consequently from her job, for personal
or impetuous reasons or for causes foreign to the
closed-shop agreement and in a manner
characterized by arbitrariness and whimsicality.
(Manila Mandarin Employees Union v. NLRC, G.R. No.
76989, 29 Sept. 1987)
Interference by a Labor Organization is not ULP
A labor organization can interfere with employees’
right to self-organization as long as it does not
amount to restraint or coercion. Interfering in the
exercise of right to organize is itself a function of
self-organizing. (Azucena, 2016)
Not disloyalty to ask help from another union
NOTE: Under the first ULP committed by an
employer, there is (I-R-C) or Interference,
Restraint, or Coercion. However, under the first ULP
committed by a labor organization, the word
“interference” is left out, leaving only “restraint or
coercion.” The omission is deliberate. (Azucena,
2016)
The mere act of seeking help from another union
cannot constitute disloyalty. It is an act of selfpreservation of workers who, driven to desperation,
found shelter in another union who took the cudgels
for them. (Rance v. NLRC, G.R. No. L-68147, 30 Jun.
1988)
Labor organization cannot coerce members to
participate in strike
Q: Noya was employed by Slord. The
employment was governed by a CBA effective
until April 15, 2014. The CBA contained a closedshop agreement. Sometime in 2013, Noya tried
to form a new union which was eventually
formed and registered on Feb. 20, 2014. NLM –
Katipunan,
the
exclusive
bargaining
A labor organization violates the law when it
restrains or coerces an employee in the exercise of
his right to refuse to participate in or recognize a
strike.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Members over non-members;
Members in good standing over suspended or
expelled members;
Members of the executive board over more
senior employees; or
Members of one union over members of
another union.
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Labor Relations
It is settled that in cases involving dismissals for just
cause but without observance of the twin
requirements of notice and hearing, the validity of
the dismissal shall be upheld, but the employer shall
be ordered to pay nominal damages. (Slord
Development Corp v. Noya, G.R. No. 232687, 04 Feb.
2019)
representative, on the strength of the
testimonies and affidavit signed by the other
members that Noya was actively seeking
signature to form a new union, terminated the
membership of Noya after due proceeding.
Thereafter, NLM – Katipunan requested Slord to
terminate Noya’s employment. After notifying
Noya of the decision of NLM – Katipunan and
showing him the documents, Slord terminated
the employment of Noya. Could Noya be
dismissed on the ground he solicited signature
to form a new union?
c. REFUSAL TO BARGAIN
It is the act of a union in refusing or violating its duty
to bargain collectively by entering negotiations with
a fixed purpose of not reaching an agreement or
signing a contract.
A: YES. Case law recognizes that dismissal from
employment due to the enforcement of the union
security clause in the CBA is another just cause for
termination of employment. To validly terminate
the employment of an employee through the
enforcement of the union-security clause, the
following requisites must concur:
1.
2.
3.
(See discussion on Blue Sky Bargaining – page 210)
NOTE: It is intended to ensure that unions approach
the bargaining table with the same attitude of
willingness to agree as the law requires of
management.
The union security clause is applicable;
The union is requesting for the
enforcement of the union security
provision in the CBA; and
There is sufficient evidence to support the
decision of the union to expel the employee
from the union.
d. FEATHERBEDDING OR MAKE-WORK
ARRANGEMENTS
To cause or attempt to cause an Er to pay or deliver
or agree to pay or deliver any money or other things
for 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.
(Art. 260 (d), LC)
All requisites are present. In Tanduay Distillery
Labor Union v. NLRC, the Court ruled that the
organization by union members of a rival union
outside the freedom period, without first
terminating their membership in the union and
without the knowledge of the officers of the latter
union, is considered an act of disloyalty, for which
the union members may be sanctioned. This
requirement ceases to be binding only during the
60-day freedom period immediately preceding the
expiration of the CBA. However, the employer must
furnish the employee with two (2) written notices
before the termination of employment can be
effected: (1) the first apprises the employee of the
particular acts or omissions for which his dismissal
is sought; and (2) the second informs the employee
of the employer's decision to dismiss him. Slord
failed to do so.
Featherbedding refers to an employee practice
which creates or spreads employment by
unnecessarily maintaining or increasing the
number of employees used, or the amount of time
consumed, to work on a particular job.
NOTE: The practices are found to be economically
wasteful and without any legitimate employee
justification. (Azucena, 2016)
e. CBA DEAL WITH EMPLOYER
Accepting for or accepting some “fee” from the
employer as part of CBA or dispute settlement.
213
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Sweetheart Contract
It is an order to compel the respondent to bargain
with the bargaining agent. It can also be an
imposition of a collective bargaining contract upon
an employer who refuses to bargain with the union
of its employees which is known as “Mandated
CBA.”
It is when a labor organization asks for or accepts
negotiations or attorney’s fees from Ers as part of
the settlement of any issue in CB or any other
dispute. The resulting CBA is considered as a
“sweetheart contract,” which is a CBA that does
not substantially improve the employees’ wages
and benefits and whose benefits are far below than
those provided by law. It is an incomplete or
inadequate CBA.
Disestablishment
It is an order directing the employer to withdraw all
recognition from the dominated labor union and to
disestablish the same.
f. GROSS VIOLATION OF THE CBA
ULP case is not subject to compromise
It is the flagrant and/or malicious refusal by a party
to comply with the economic provisions of the CBA.
In view of the public interest involved, they are not
subject to compromise. (E.G. Gochangco Workers
Union v. NLRC, G.R. Nos. L-67158-62, 30 May 1988)
NOTE: If the violation of the CBA is not gross, it is
not ULP but a mere grievance.
Reliefs available in ULP cases
1.
2.
3.
4.
F. PEACEFUL CONCERTED ACTIVITIES
Cease and Desist Order
Affirmative Order
Order to Bargain; or Mandated CBA
Disestablishment of the Company-Dominated
Union
Forms of Concerted Activities
Cease and Desist Order
A prohibitive order requiring a person found to be
committing ULP to cease and desist from such ULP
and take affirmative action that will effectuate the
policies of the law, including, but not limited to
reinstatement with or without back pay and
including rights of employees prior to dismissal,
including seniority.
1.
Legal Strike – One called for a valid purpose
and conducted through means allowed by law.
2.
Illegal Strike – One staged for a purpose not
recognized by law, or if for a valid purpose,
conducted through means not sanctioned by
law.
3.
Economic Strike/Bargaining Strike – One
staged by workers to force wage or other
economic concessions from the employer
which he is not required by law to grant.
(Consolidated Labor Association of the Phil. v.
Marsman, G.R. No. L-17038, 31 July 1964)
4.
ULP Strike – One called to protest the
employer’s acts of unfair practice enumerated
in Art. 259 of the LC, as amended, including
gross violation of the CBA and union busting.
5.
Slow Down Strike – An industrial action in
which employees perform their duties but seek
to reduce productivity or efficiency in their
performance of these duties.
Affirmative Order
It is an order directing either the reinstatement of
the discharged employee without prejudice to their
rights or, if new laborers have been hired, the
dismissal of the hired laborers to make room for the
returning employee.
Order to Bargain
UNIVERSITY OF SANTO TOMAS
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Labor Relations
6.
7.
irrespective of the employers for whom they
are working.
Mass Leaves – An action wherein the Ees
simultaneously filed leaves of absence based on
various reasons such as, inter alia, vacation and
sick leaves.
16. Particular Strike – Directed solely against the
strikers’ employer.
Wild-Cat Strike – A strike action undertaken
by employees without filing the required notice
of strike and without the majority approval of
the total union membership.
8.
Sit Down Strike – A strike during which
workers occupy their place of employment and
refuse to work or allow others to work until
such time that the strike is settled.
9.
Overtime Boycott – Involves the act of
workers in refusing to render overtime work in
violation of the CBA resorted to as it means to
coerce the Er to yield to their demands.
NOTE: For purposes of determining whether or not
a certain activity is “concerted,” it is essential that
the activities of the Ee should be collective in nature.
Express statutory recognition of the workers’
right to strike and the employer’s right to
lockout
The right to strike is a constitutional and legal right
of the workers in the same manner that the
employers have the inherent and statutory right to
lockout, all 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.
10. Boycott of Products – Involves the concerted
refusal to patronize an Er’s goods and services
and to persuade others to a like refusal.
Right to strike or lockout not absolute
11. Walk-out Strike – A form of strike where the
employees leave their workplace and establish
themselves outside the plant and refuse access
to the owners and other employees who want
to work.
The exercise of these rights is subject to reasonable
restrictions pursuant to the police power of the
State. It has been held that the right to strike,
because of the more serious impact upon the public
interest, is more vulnerable to regulation than the
right to organize and select representatives for
purposes of CB. (NFSW v. Ovejera, et al. G.R. No. L59743, 31 May 1982)
12. Primary Strike – Directed against the
employer because of a labor dispute with him.
13. Secondary Strike – Directed against the
employer with primary labor dispute
connected by-product or employment with the
employer of the secondary strikers.
1. STRIKES
Strike
14. Sympathy Strike – A strike staged to make
common cause with strikers in other
establishments, without any dispute between
the strikers and their employer. In a sympathy
strike, there is no connection of product or
employment with the primary labor dispute.
This distinguishes a secondary strike and a
sympathy strike.
It means any temporary stoppage of work by the
concerted action of Ees as a result of an industrial or
labor dispute. (Sec. 1 (uu), Rule I, Book V, IRR)
The right to strike, while constitutionally
recognized, is not without legal constrictions. Art.
279(a) of the LC, as amended, provides that no
strike or lockout shall be declared after assumption
of jurisdiction by the President or the SOLE or after
certification or submission of the dispute to
compulsory or voluntary arbitration or during the
15. General Strike – Directed against all the
employers, participated in by the workmen,
215
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
4.
pendency of cases involving the same grounds for
the strike or lockout. The court has consistently
ruled that once the Secretary of Labor assumes
jurisdiction over a labor dispute, such jurisdiction
should not be interfered with by the application of
the coercive processes of a strike or lockout. A strike
that is undertaken despite the issuance by the
Secretary of Labor of an assumption order and/or
certification is a prohibited activity and thus illegal.
(Solidbank Corporation v. Gamier/Solid Bank Union,
G.R. No. 159460, 15 Nov. 2010)
5.
6.
7.
Employment relation is deemed to continue
although in a state of belligerent suspension;
Temporary work stoppage;
Work stoppage is done through concerted
action; and
The striking group is a legitimate labor
organization; in case of a bargaining deadlock,
it must be the Ees’ sole bargaining
representative.
Declaration of a Strike
NOTE: The fact that the conventional term “strike”
was not used by the striking employees to describe
their common course of action is inconsequential,
since the substance of the situation and not its
appearance will be deemed controlling. (Toyota
Motor Phils. Corp. Workers Association v. NLRC, G.R.
NOS. 158798-99, 19 Oct. 2007)
The following may declare a strike or lockout:
1.
2.
“Striking Employee” is still an employee
During a strike the Er-Ee relationship is not
terminated but merely suspended as the work
stoppage is not permanent but only temporary.
Thus, a striking employee is still an employee.
However, the effects of employment are suspended,
hence a striking employee, as a rule, is not entitled
to his wage during the strike. (Azucena, 2016)
Any certified or duly recognized bargaining
representative may declare a strike in cases of
bargaining deadlocks and ULP. The Er may
declare a lockout in the same cases.
In the absence of a certified or duly recognized
bargaining representative, any LLO in the
establishment may declare a strike but only on
grounds of ULP. (Sec. 6, Rule XXII, Book V, IRR
as amended by D.O. 40-03)
A strike conducted by a minority union is patently
illegal because no labor dispute which will justify
the conduct of a strike may exist between the
employer and a minority union. (United Restaurors
v. Torres, et al., G.R. No. L-24993, 18 Dec. 1968)
a. GROUNDS FOR STRIKE
Purpose of a Strike
The law recognizes two (2) grounds for the valid
exercise of the right to strike or lockout, namely:
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. L-3021, 13 July 1950)
1.
2.
Collective Bargaining Deadlock (CBD); and/or
Unfair Labor Practices (ULP) - Includes
flagrant and/or malicious refusal to comply
with the economic provisions of the CBA.
Elements of a Strike
1.
2.
3.
NOTE: If the violation of the CBA is gross, it will
amount to unfair labor practice, which is a ground
for a valid strike. If the violation is not gross, it will
just be a grievance falling under the grievance
machinery of the CBA.
Existence of established relationship between
the strikers and the person or persons against
whom the strike is called;
Existence of an Er-Ee relationship;
Existence of a labor dispute and the utilization
by labor of the weapon of concerted refusal to
work as a means of persuading, or coercing
compliance with the working men’s demands;
UNIVERSITY OF SANTO TOMAS
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Labor Relations
b. MANDATORY PROCEDURAL REQUIREMENTS
Those Who May File Notice of Strike
The requirements for a valid strike are as follows:
a.
Filing of Notice of Strike;
Only a LLO can legally hold a strike. (Bukluran ng
Manggagawa sa Clothman Knitting, etc. v. CA, et al.,
G.R. No. 158158, 17 Jan. 2005)
b.
Observance of the cooling-off period:
a.
c.
30 days for bargaining deadlock, and
15 days for ULP;
1.
Notice of strike vote meeting within 24
hours before the intended vote;
d.
Strike vote;
e.
Report of the strike vote; and
f.
Observance of the 7-day waiting period.
In establishments with certified bargaining
agent
2.
Any certified or duly recognized bargaining
representative may file a notice or declare
a strike in cases of ULP.
If the reason for the intended strike is
bargaining deadlock, only the bargaining
union has the legal right to file a notice of
strike.
NOTE: The employer may file a notice or declare
lockout or request for preventive mediation in the
same cases.
Filing a Notice of Strike
b.
It should be filed with the DOLE, specifically the
Regional Branch of the NCMB, copy furnished the
employer.
In establishments with no certified
bargaining agent - Any LLO in the
establishment may file a notice, request
preventive mediation, or declare a strike but
only on grounds of ULP.
Time to File
1.
NOTE: A union, instead of filing a notice of strike,
may request NCMB to do preventive mediation, but
the union must be the certified or duly recognized
bargaining agent. (Insular Hotel Employees UnionNFL v. Waterfront Insular Hotel Davao, G.R. No.
174040-41, 22 Sept. 2010)
At least 15 days before the intended strike or
lockout if the issues raised are ULP.
NOTE: In case of union busting where the existence
of the union is threatened because of the dismissal
from employment of union officers duly elected in
accordance with the union constitution and bylaws, the 15-day cooling-off period shall not apply
and the union may act immediately after the strike
vote is conducted and the result thereof submitted
to the appropriate Regional Branch of the NCMB
with due observance with the seven (7) day strike
ban.
2.
Contents of Notice of Strike
1.
2.
3.
4.
5.
6.
7.
At least 30 days before the intended date
thereof if the issues involve bargaining
deadlock.
8.
217
Name and addresses of Er
Union involved
Nature of the industry to which the Er belongs
Number of union members
Workers in the bargaining unit
Other relevant dates
In case of bargaining deadlocks: Unresolved
issues, written proposals of the union,
counter-proposals of the Er and proof of
request for conference to settle differences
In case of ULP: the acts complained of, and the
efforts taken to resolve the dispute
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
NOTE: NCMB shall inform the concerned party in
case notice does not conform to the requirements.
Notice of strike vote meeting to NCMB within 24
hours before the intended vote
Observance of the Cooling-off Period
The union shall furnish the regional branch of the
NCMB the notice of the meeting for the strike vote
at least 24 hours before the intended vote.
The Cooling-off Period is the period given by the
NCMB to mediate and conciliate the parties. It is the
span of time allotted by law for the parties to settle
their disputes in a peaceful manner before staging a
strike or lockout. The principles of improved offer
and reduced offer balloting apply during the
cooling-off period.
Strike Vote
A strike must be approved by a majority vote of the
members of the union and a lockout must be
approved by a majority vote of the members of the
Board of Directors of the Corporation or Association
or of the partners in a partnership, obtained by a
secret ballot in a meeting called for that purpose.
NOTE: During the said period, the NCMB-DOLE is
directed to exert all efforts at the mediation and
conciliation to affect a voluntary settlement during
the cooling-off period. The cooling-off period is
designed to afford the parties the opportunity to
amicably resolve the dispute with the assistance of
the NCMB Conciliator/Mediator.
Purpose of Strike Vote
To ensure that the decision to strike broadly rests
with the majority of the union members in general,
and not with a mere minority, at the same time, to
discourage wildcat strikes, union bossism, and even
corruption. (No. 07, Primer on Strike, Picketing and
Lockout)
Cooling-off Periods Provided by Law
a.
b.
In cases of CBD, the cooling-off period is 30
days;
In cases of ULP, the period shall be 15 days.
Participation of the NCMB in the taking of strike
vote or lockout vote
NOTE: In the case of union busting, as defined in
Art. 278(c), the cooling-off period need not be
observed.
The Regional Branch of the NCMB may, at its own
initiative or upon request of any affected party,
supervise the conduct of the secret balloting. The
union / employer must give notice at least 24 hours
prior to the conduct of the voting to give the NCMB
sufficient time to decide if it will supervise the
voting and in the event it does, to prepare.
Start of Cooling-off Period
The start of the cooling-off period should be
reckoned not on the date the union or employer
prepared the notice of strike or lockout but from the
time the notice of strike or lockout is filed with the
NCMB, a copy of said notice having been served on
the other party concerned.
Effect of the 7-day waiting period if the vote
balloting is taken within the cooling-off period
The seven (7) – day requirement shall be counted
from the day following the expiration of the coolingoff period. (No. 06 Primer on Strike, Picketing and
Lockout)
The mere filing of the notice with NCMB, without
proof of valid service thereof to the other party
concerned, shall not trigger the running of the
cooling-off period.
Q: Is the Strike Vote still necessary in case of
union-busting?
A: YES. The time requirement of 15 days for the
filing of the Notice of Strike shall be dispensed with
UNIVERSITY OF SANTO TOMAS
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Labor Relations
but the strike vote requirement, being mandatory in
character, shall “in every case” be complied with.
The requirement on
the 7-day waiting
period or strike ban,
together with the
requirement on the
conduct of strike vote
and submission of the
result thereof to the
NCMB, should still be
complied with in case
of union-busting.
Strike Vote Report
The result of the strike vote should be reported to
the NCMB at least seven (7) days before the
intended strike subject to the cooling-off period.
A strike staged without the submission of the result
of the strike-vote is illegal. (Samahan ng
Manggagawa in Moldex Products, et al. v. NLRC, et al.,
G.R. No. 119467, 01 Feb. 2000)
In case of unionbusting, the law allows
the complete disregard
of
the
cooling-off
period.
Cooling-off and waiting period may be
done simultaneously.
7-Day Waiting Period or Strike Ban
If the dispute remains unsettled after the lapse of
the cooling-off period and the seven-day waiting
period, the labor union may strike.
The seven (7) – day 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 in addition to the
cooling-off period before the actual strike.
c. LEGAL STRIKE vs. ILLEGAL STRIKE
Legal Strike
NOTE: Failure to comply with the aforesaid
requirements
makes
the
strike
illegal.
Consequently, the officers of the union who
participated therein are deemed to have lost their
employment status. (Bukluran ng Manggagawa sa
Clothman Knitting, etc. v. CA, et al., G.R. No. 158158,
17 Jan. 2005)
One called for a valid purpose and conducted
through means allowed by law.
Illegal Strike
One staged for a purpose not recognized by law, or
if for a valid purpose, conducted through means not
sanctioned by law.
Waiting period vs. Cooling-off period
WAITING PERIOD
COOLING-OFF
PERIOD
Period reckoned from
the time the strike vote
report is submitted to
the NCMB, DOLE.
Period counted form
the time of the filing of
the notice of strike or
lockout up to the
intended or actual
staging thereof.
Tests in Determining the Legality of Strike
The following must concur:
219
1.
Purpose test – The strike must be due to
either bargaining deadlock and/or the ULP.
2.
Compliance with the procedural and
substantive requirements of the law. (See
requisites of a valid strike)
3.
Means employed test – It states that a strike
may be legal at its inception but eventually be
declared illegal if the strike is accompanied by
violence which is widespread, pervasive, and
adopted as a matter of policy and not mere
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
violence which is sporadic and which normally
occurs in a strike area.
EXAMPLE OF STRIKE
1.
2.
3.
4.
REASON FOR ITS
ILLEGALITY
Sit-down strike –
Characterized by a
temporary
work
stoppage of workers
who seize or occupy
property of the Er or
refuse to vacate the
premises of the Er.
Amounts to a
criminal
act
because of the Ees
trespass on the
premises of the Er.
Wildcat strike – A
work stoppage that
violates
the
labor
contract and is not
authorized by the
union membership.
It fails to comply
with
certain
requirements of
the law, to wit:
notice of strike,
vote, and report on
strike vote.
Slowdown – Strike on
an installment plan; an
activity
by
which
workers,
without
complete stoppage of
work,
retard
production or their
performance of duties
and
functions
to
compel management to
grant their demands.
Ees work on their
own terms; while
the Ees continue to
work and remain
in their positions
and accept wages
paid to them, they,
at the same time,
select what part of
their allotted tasks
they
care
to
perform on their
own volition or
refuse openly or
secretly.
Sympathetic strike –
Work stoppages of
workers
of
one
company to make
common cause with
other strikers or other
companies
without
demands or grievances
of their own against the
Er.
5. Secondary strike –
Work stoppages of
workers
of
one
company
to
exert
pressure on their Er so
that the latter will in
turn bring pressure
upon the Er of another
company with whom
another union has a
labor dispute.
There is no labor
dispute between
the workers who
are joining the
strikers and the
latter’s Er.
There is no labor
dispute involved.
6. General strike (causeoriented strike) – A
type
of
political
sympathetic strike and
therefore there is
neither a bargaining
deadlock nor any ULP.
(e.g., Welga ng bayan)
It is a political
rally.
7. Quickie strike – Brief
and
unannounced
temporary
work
stoppage.
Failure to comply
with
notice
requirements and
etc.
Good Faith Strike is no longer a valid defense
A strike may be considered legal when the union
believed that the respondent company committed
unfair labor acts and the circumstances warranted
such belief in good faith although subsequently such
allegation of unfair labor practices is found out as
not true. (PICEWO-FFW v. People’s Industrial and
Commercial Corp., G.R. No. L-37687, 15 Mar. 1982)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
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Labor Relations
can be no wage or pay unless, of course, the laborer
was able, willing, and ready to work but was illegally
locked out, suspended, dismissed or otherwise
illegally prevented from working. However, for this
exception to apply, it is required that the strike be
legal. (Danilo Escario v. NLRC, G.R. No. 160302, 27
Sept. 2010)
However, with the enactment of R.A. No. 6715
which took effect on 21 March 1989, the rule now is
that such requirements as the filing of a notice of
strike, strike vote, and notice given to the DOLE are
mandatory in nature.
Thus, 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. Claim of
good faith is not a valid excuse to dispense with the
procedural steps for a lawful strike. (Grand
Boulevard Hotel v. Dacanay, G.R. No. 153665, 18 July
2003)
d. PROHIBITED ACTS DURING A STRIKE
1.
The term “illegal acts” under Art. 279(a) may
encompass several acts that violate existing
labor or criminal laws, such as:
a.
It is not enough that the union believed that the
employer committed acts of ULP when the
circumstances clearly negate even prima facie
showing to sustain such belief. (National Union of
Workers in Hotels, Restaurants and Allied Industries
v. NLRC, et al., G.R. No. 122561, 06 Mar. 1998)
Any act of violence, coercion or
intimidation, or obstruct the free ingress to
or egress from the Er’s premises for lawful
purposes or obstruct public thoroughfares.
(Art. 279(e), LC)
b.
Commission of crimes and other unlawful
acts in carrying out the strike; and
Employees who staged an illegal strike are not
entitled to backwages
c.
Violation of any order, prohibition, or
injunction issued by the SOLE or NLRC in
connection with the assumption of
jurisdiction or certification order under
Art. 278(g) of the LC.
Contemplating two causes for the dismissal of an Ee
— (a) unlawful lockout, and (b) participation in an
illegal strike — Art 279(a) authorizes the award of
full backwages only when the termination of
employment is a consequence of an unlawful
lockout.
As a general rule, backwages are granted to
indemnify a dismissed Ee for his loss of earnings
during the whole period that he is out of his job.
Considering that an illegally dismissed Ee is not
deemed to have left his employment, he is entitled
to all the rights and privileges that accrue to him
from the employment. That backwages are not
granted to Ees participating in an illegal strike
simply accords with the reality that they do not
render work for the Er during the period of the
illegal strike under the principle of a fair day’s wage
for a fair day’s labor.
2.
No Er shall employ any strike-breaker that shall
interfere with any peaceful picketing by Ees
during any labor controversy. (Art. 279, LC)
3.
No public official or employee, including
officers and personnel of the Armed Forces of
the Philippines, 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), LC)
The involvement of the police during strikes,
lockouts, or labor disputes in general shall be
limited to the maintenance of the peace and order,
enforcement of laws and legal orders of duly
constituted authorities, and the performance of
specific functions as may be provided by law.
With respect to backwages, the principle of “fair
day’s wage for a fair day’s labor” remains as the
basic factor in determining the award thereof. If
there is no work performed by the employee, there
221
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
NCMB that their union was not duly
registered as a legitimate labor
organization and notwithstanding the
letter from the federation’s legal counsel
informing them that their acts constituted
disloyalty to the national federation; and
Requisites for Police
1.
2.
3.
4.
Should always be in uniform with proper name
cloth;
Shall observe strict neutrality in dealing with
both parties. They shall not bring in, introduce,
or escort any individual who seeks to replace
the strikers;
Shall
not
be
stationed
in
the
picket/confrontation line; and
Shall maintain themselves outside a 50-meter
radius from the picket/confrontation or in
such public thoroughfare for the purpose of
insuring free flow of traffic.
b.
2.
e. LIABILITY OF UNION OFFICERS AND
MEMBERS FOR ILLEGAL STRIKE AND ILLEGAL
ACTS DURING STRIKE
Participation in Lawful Strike
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. (Art. 279, LC)
Union officers have the duty to guide their members
to respect the law. If instead of doing so, the officers
urged the members to violate the law, their
dismissal from the service is just a penalty for their
unlawful act. Their responsibility, as main players in
an illegal strike, is greater than that of an ordinary
union member’s and, therefore, limiting the penalty
of dismissal only to the former for their
participation in an illegal strike is in order.
Union officers – The mere finding or
declaration of illegality of the strike will result
in the termination of all union officers who
knowingly participated in the illegal strike.
Unlike ordinary members, it is not required,
for purposes of termination, that the officers
should commit an illegal act during the strike.
However, absent any showing that the Ees are
union officers, they cannot be dismissed solely
on the illegality of the strike. Further, the fact
that they are union officers is not sufficient – it
should be proven that they participated.
Q: The employees of Arabella’s Bakeshop
formed a union called as AB Union and was
certified by the DOLE as a legitimate labor
organization. On 19 Feb. 2022, members of the
union, headed by its president, Arturo Lopez,
staged a sit-down strike at Arabella’s Bakeshop
allegedly because of Arabella’s Bakeshop
officers who are interfering in their union
activities and for threatening to terminate union
members from employment.
To illustrate how the “knowing participation” of
union officers may be ascertained, the following
were considered in Abaria v. NLRC, G.R. No. 154113,
07 Dec. 2011:
a.
A Notice of Strike was made to the NCMB on the
same day. Due to this, Arabella’s Bakeshop
issued a memorandum ordering the preventive
suspension of striking union members and to
explain within 24 hours from notice their
Their persistence in holding picketing
activities despite the declaration by the
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Ordinary union members – The mere finding
or declaration of illegality of a strike will not
result in termination of ordinary union
members. For an ordinary union member to
suffer termination, it must be shown by clear
evidence that he has committed illegal acts
during the strike.
Reason for the distinction
Liability for Participation in Illegal Strike
1.
Their filing of notice of strike and
conducting a strike vote even though their
union has no legal personality to
negotiate with their Er for collective
bargaining purposes.
222
Labor Relations
In cases of union busting, the 15-day cooling-off
period shall not apply. The union did not file the
requisite Notice of Strike and failed to observe the
cooling-off period. To legitimize the strike on 19
Feb. 2022, the union filed a Notice of Strike on the
same day. This cannot be considered as compliance
with the requirement, as the cooling-off period is
mandatory. As to the second strike, it was illegal
because prohibited acts were committed by the
union members against Art. 279 of the Labor Code.
(Bigg’s Inc. v. Jay Boncacas, G.R. No. 200636, 06 Mar.
2019, J. Caguioa)
actions. However, said union members failed to
comply hence were dismissed.
Another strike was staged by the union
members on 5 Mar. 2022 to which Arabella’s
Bakeshop presented evidence of prohibited acts
conducted by the union members such as violent
and disruptive acts. They prevented ingress and
egress of employees and customers to and from
the company’s premises. They also stopped
Arabella’s Bakeshop’s vans from making
deliveries by throwing stones at the vans which
caused injury to the driver as well as damage to
vehicles and to the guardhouse. They shouted at
customers using megaphones to prevent them
from going to the bakeshop.
b) Were the union officers and employees
validly dismissed?
A: YES. The dismissal of union officers was valid, but
the dismissal of employees who did not commit
prohibited acts during the strike was invalid. For
union members, what is required is that they
knowingly participated in the commission of illegal
acts during the strike for there to be sufficient
ground for termination of employment. For union
officers, however, it suffices that they knowingly
participated in an illegal strike. (Bigg’s Inc. v. Jay
Boncacas, G.R. No. 200636, 06 Mar. 2019, J. Caguioa)
The strike was later stopped when both parties
agreed to compulsory arbitration. The union
members argued that their second strike was
not illegal because they were dismissed prior
thereto. Thus, the commission of any prohibited
acts during the second strike cannot be used as
a justification for their illegal dismissal on 19
Feb. 2022. They prayed for reinstatement,
including the union officers, with payment of
backwages. Arabella’s Bakeshop argued that
there was a sit-down strike staged by the union
members as it was the employees who refused
to perform their respective jobs during the first
shift of the day. Also, it argued that they are not
entitled to backwages because the strike that
they conducted was illegal.
c) Should backwages be awarded to dismissed
employees?
A: NO. Backwages are not granted to dismissed
employees who participated in an illegal strike even
if they are later reinstated. In Escario v. NLRC, the
Court held: Conformably with the long-honored
principle of a fair day’s wage for a fair day’s labor,
employees dismissed for joining an illegal strike are
not entitled to backwages for the period of the strike
even if they are reinstated by virtue of their being
merely members of the striking union who did not
commit any illegal act during the strike. (Bigg’s Inc.
v. Jay Boncacas, G.R. No. 200636, 06 Mar. 2019, J.
Caguioa)
a) Were the strikes staged by the union
members illegal?
A: YES. In a strike grounded on unfair labor practice,
the following are the requirements: (1) the strike
may be declared by the duly certified bargaining
agent or legitimate labor organization; (2) the
conduct of the strike vote in accordance with the
notice and reportorial requirements to the NCMB
and subject to the seven (7) day waiting period; and
(3) notice of strike filed with the NCMB and copy
furnished to the employer, subject to the 15-day
cooling-off period.
Liability for Participation in the Commission of
Illegal Acts During a Strike
1.
223
The legality or illegality of a strike is
immaterial as far as liability for commission of
illegal acts during the strike is concerned. If the
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Rule on reinstatement of striking workers
union officer or member commits an illegal act
during the strike, be it legal or illegal, his
employment can be validly terminated.
2.
Striking Ees are entitled to reinstatement,
regardless of whether or not the strike was the
consequence of the Er’s ULP because while out on
strike, the strikers are not considered to have
abandoned their employment, but rather have only
ceased from their labor. The declaration of a strike
is not a renunciation of employment relation.
Liability for illegal acts should be determined
on an individual basis. For this purpose, the
individual identity of the union members who
participated in the commission of illegal acts
may be proven through affidavits and
photographs.
Persons not entitled to reinstatement
Q: Can the SOLE restrain the employer from
imposing sanctions against the union officers
who knowingly participated in the illegal strike?
1.
2.
A: NO. If the strike is declared illegal, the SOLE
cannot restrain or enjoin the employer from
imposing the appropriate sanctions against the
union officers who knowingly participated in the
illegal strike and against any striking employee who
committed illegal acts during the strike. Since the
strike is illegal, the employer has the right to take
disciplinary action against the union officers who
participated in it and against any member who
committed illegal acts during the strike. (PAL v.
SOLE, G.R. No. 88210, 23 Jan. 1991)
UNION OFFICER
NOTE: Those union members who have joined an
illegal strike but have not committed any illegal act
shall be reinstated but without backwages.
The responsibility for the illegal acts committed
during the strike must be on an individual and not
on a collective basis. (First City Interlink
Transportation Co., Inc. v. Confesor, G.R. No. 106316,
05 May 1997)
ORDINARY WORKER
Q: X was dismissed for joining an illegal strike
but was reinstated because he is only a member
of the union who did not commit any illegal act.
Is X entitled for backwages for the period of
strike?
Knowingly participating in illegal strike
May be declared to
have lost his
employment status
Cannot be terminated
NOTE: The LC protects
ordinary, rank-and-file
union members who
participated in such a
strike from losing their
jobs, provided that
they did not commit
illegal acts during the
strike
A: NO. Conformably with the long-honoured
principle of “a fair day’s wage for a fair day’s labor,”
Ees dismissed for joining illegal strike are not
entitled to backwages for the period of the strike
even if they are reinstated by virtue of their being
merely members of the striking union who did not
commit any illegal act during the strike. (Escario v.
NLRC, G.R. 124055, 08 June 2000)
Knowingly participating in the commission of
illegal acts during strike
May be terminated
Union officers who knowingly participate in
the illegal strike; and
Any striker or union who knowingly
participates in the commission of illegal acts
during the strike.
Rule on strikes in hospitals
May be terminated
It shall be the duty of the striking Ees or locking out
Er to provide and maintain an effective skeletal
workforce of medical and health personnel for the
duration of the strike or lockout.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
224
Labor Relations
SOLE may immediately assume jurisdiction within
24 hours from knowledge of the occurrence of such
strike or lockout and certify it to the NLRC for
compulsory arbitration.
committed illegal acts would be tantamount to
dismissal without due process of law. (Telefunken
Semiconductors Ees Union-FFW v. SOLE, G.R. No.
122743 & 127215, 12 Dec. 1997)
Q: More or less 1,400 employees of the company
staged a mass walk-out, allegedly without
anybody leading them as it was a simultaneous,
immediate and unanimous group action and
decision, to protest the non-payment of their
salaries and wages. The SOLE, who found the
strike to be illegal, granted the clearance to
terminate the employment of those who were
instigators in the illegal strike. Was the decision
of the Secretary in granting the clearance
correct?
Employees who abandoned a legal strike but
were refused reinstatement can be awarded
backwages
Provided the following requisites are present:
1.
2.
A: NO. A mere finding of the illegality of a strike
should not be automatically followed by wholesale
dismissal of the strikers from their employment.
While it is true that administrative agencies
exercising quasi-judicial functions are free from the
rigidities of procedure, it is equally well-settled that
avoidance of technicalities of law or procedure in
ascertaining objectively the facts in each case
should not, however, cause denial of due process.
(Bacus v. Ople, G.R. No. L-56856, 23 Oct. 1984)
3.
The strike was legal;
There was an unconditional offer to return to
work as when the strikers manifested their
willingness to abide by the CIR back-to-work
order and even sought the aid of competent
authorities to affect their return; and
The strikers were refused reinstatement such
as when they have not been re-admitted to
their former position. (Philippine Marine
Officers' Guild v. Compañia Maritima et al., G.R.
Nos. L-20662 and L-20662, 27 Mar. 1971)
Separation pay in lieu of reinstatement in strike
cases
In strike cases, the award of separation pay in lieu
of reinstatement is proper only when the strikers
did not participate in the commission of illegal acts
in the course thereof.
Q: Two days after the union struck, the SOLE
ordered the striking workers to return to work
within 24 hours. But the striking union failed to
return to work and instead they continued their
pickets. As a result, violence erupted in the
picket lines. The service bus ferrying nonstriking workers was stoned causing injuries to
its passengers. Threats, defamation, illegal
detention, and physical injuries also occurred.
The company was directed to accept back all
striking workers, except the union officers, shop
stewards, and those with pending criminal
charges. Was the SOLE correct in not including
the union officers, shop stewards, and those
with pending criminal charges in the return-towork order?
Entitlement of strikers to their backwages or
strike duration pay
GR: Strikers are not entitled to their backwages or
strike duration pay even if such strike was legal.
XPNs:
1. Where the strikers voluntarily and
unconditionally offered to return to work, but
the Er refused to accept the offer – Ees are
entitled to backwages from the date their offer
was made;
2.
A: NO. To exclude union officers, shop stewards, and
those with pending criminal charges in the directive
to the company to accept back the striking workers
without first determining whether they knowingly
225
When there is a return-to-work order and the
Ees are discriminated against other Ees,
workers are entitled to backwages from the
date of discrimination;
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
3.
In case of a ULP strike, in the discretion of the
authority deciding the case; and
4.
When the Ees were illegally locked out and
thus, compelled them to stage a strike.
is peaceful but fruitless; the management is
adamant. So after 60 days, the strikers abandon
their strike and offer to return to work. Is the
company bound to re-admit them? Why?
A: YES. By going on strike, the Ees are not deemed
to have abandoned their work; they are merely
utilizing a weapon given to them by law to seek
better terms and conditions of employment and to
protect their rights. An Er who refuses to re-admit
the strikers, excepting those who have forfeited
their employment status because of illegal acts
committed during the strike, would be
discriminating against them for having exercised
their right to engage in a concerted action; it
commits a ULP. (Cromwell Commercial Employees
and Laborers Union v. CIR, et al., G.R. No. L-19778, 30
Sept. 1964)
If the strike is illegal, no backwages should be paid.
Thus, in Arellano University Employees and Workers
Union v. CA, G.R. No. 139940, 19 Sept. 2006, where the
strike was declared illegal, petitioner union
members who were found not to have participated
in the commission of illegal acts during the strike
were ordered reinstated to their former positions
but without backwages. If reinstatement is no
longer possible, they should receive separation pay
of one (1) month for every year of service in
accordance with existing jurisprudence. With
respect to the union officers, their mere
participation in the illegal strike warrants their
dismissal.
2. PICKETING
Liability of Employer for Reinstatement of
Strikers
1.
Reinstatement (without backwages) of
ordinary rank-and-file union members who
did not participate in the commission of illegal
acts during the conduct of the illegal strike
may be ordered.
2.
Terminate strikers who committed illegal acts
during a strike. They are not entitled to be
reinstated. Additionally, they may be held
criminally liable therefor.
3.
Forfeit reinstatement of strikers who failed to
report for work without proper justification
and despite the order reinstating them to their
job.
4.
Pay backwages, reckoned from the Labor
Arbiter’s issuance of the reinstatement order
up to its reversal by the NLRC, if Er fails to
reinstate strikers who were ordered
reinstated by the Labor Arbiter.
Picketing
It is a concerted activity of workers consisting in
peacefully marching to and from, 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. (Chan, 2017)
The Right to Picket as a Means of
Communicating the Facts of a Labor Dispute
It is a phase of the freedom of speech guaranteed by
the Constitution. Picketing, if peacefully carried out,
cannot be curtailed even in the absence of Er-Ee
relationship. (PAFLU v. Cloribel, G.R. No. L-25878, 28
Mar. 1969)
Requisites for Lawful Picketing
1.
2.
3.
Q: By reason of a deadlock in collective
bargaining, the union, after the lapse of the
cooling-off period, declares a strike. The strike
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
4.
226
It should be peacefully carried out;
There should be no act of violence, coercion, or
intimidation;
The ingress to (entrance) or egress from (exit)
the company premises should not be
obstructed; and
Public thoroughfares should not be impeded.
Labor Relations
Effect of the absence of Employee-Employer
Relationship on Picketing
3.
If peacefully carried out, picketing cannot be
prohibited even in the absence of Ee-Er
relationship. (PAFLU v. CFl, G.R. No. L-49580, 17 Jan.
1983)
Vandalisms and other acts of a less terroristic
nature which causes physical discomfort to the
Er’s customers.
Right to picket is protected by the Constitution
and the law
Unlike a strike which is guaranteed under the
Constitutional provision on the right of workers to
conduct peaceful concerted activities under Sec. 3,
Art. XIII thereof, the right to picket is guaranteed
under the freedom of speech and of expression and
to peaceably assemble to air grievances under Sec.
4, Art. III (Bill of Rights) thereof.
Right to Picket not an absolute right
While peaceful picketing is entitled to protection as
an exercise of free speech, the courts are not
without power to confine or localize the sphere of
communication or the demonstration to the parties
to the labor dispute, including those with related
interests, and to insulate establishments or persons
with no industrial connection or having interest
totally foreign to the context of the dispute.
(Liwayway Pub., Inc. v. Permanent Concrete Workers
Union, G.R. No. L-25003, 23 Oct. 1981)
Effect of the use of foul language during the
conduct of the picket
In the event the picketers employ discourteous and
impolite language in their picket, such may NOT
result in, or give rise to libel or action for damages.
While workers have the right to peaceful picketing,
no person engaged in picketing is allowed to commit
any act of violence, coercion, or intimidation or to
obstruct the free ingress to or egress from the
employer’s premises for lawful purposes, or to
obstruct public thoroughfares. (Chan, 2017)
When picket considered a strike
In distinguishing between a picket and a strike, the
totality of the circumstances obtaining in a case
should be considered.
Strike vs. Picketing
Moving Picket
The right granted to striking workers is merely a
pedestrian right. It does not create the additional
rights of squatting or assembly on the portion of Er’s
land. Any such squatting or assembly would exceed
the scope of the public’s easement and would
constitute enjoinable trespass.
Untruthful Picketing
Such act is tantamount to unlawful picketing which
is enjoinable even though the purpose is valid. It is
the act of employing false statements, falsehood,
defamation, and other misrepresentations.
STRIKE
PICKETING
To withhold or to stop
work by concerted
action of Ees because of
an industrial or labor
dispute. The work
stoppage
may
be
accompanied
by
picketing
by
the
striking
employees
outside of the company
compound.
To march to and from
the
employer’s
premises,
usually
accompanied by the
display of placards and
other signs making
known
the
facts
involved in a labor
dispute. It is a strike
activity separate and
different from actual
stoppage of work.
Other Unlawful Picketing Acts
1.
2.
Use of abusive and threatening language
towards patrons of the place or business;
Use of violence and intimidation; or
227
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
Focuses on stoppage of
work.
The lockout must be for a lawful purpose and
carried out through lawful means. A lockout is
unlawful where it is declared in order to defeat
organizational and bargaining rights of employees.
(Dingsalan v. NLU, G.R. No. L-14183, 28 Nov. 1959)
Focuses on publicizing
the labor dispute and
its incidents to inform
the public of what Is
happening
in
the
company
struck
against.
Lockout consists of the following:
1.
2.
Q: PHIMCO argues that the strike staged by its
employees was illegal as they committed the
prohibited acts under Art. 279(e) of the LC such
as blocking the ingress and egress of the
company premises. The employees, on the other
hand, submit that the picket was peaceful, and
no human barricade blocked the company
premises. May a peaceful picketing of
employees be held illegal?
3.
4.
A: YES. Despite the validity of the purpose of a strike
and compliance with the procedural requirements,
a strike may still be held illegal where the means
employed are illegal. The means become illegal
when they come within the prohibitions under Art.
264(e) of the Labor Code. Protected picketing does
not extend to blocking ingress to and egress from
the company premises, and, the fact that the picket
was moving, was peaceful and was not attended by
actual violence may not free it from taints of
illegality if the picket effectively blocked entry to
and exit from the company premises. (PHIMCO
Industries, Inc. v. PHIMCO Industries Labor
Association, G.R. No. 170830, 11 Aug. 2010)
Shutdowns
Mass Retrenchment and dismissals initiated
by the Er
Dismissals without previous written clearance
from the Secretary of Labor or his duly
authorized representative. (Sec. 3, PD 823, as
amended by PD 849)
Er’s act of excluding Ees who are union
members. (Complex Electronics Employees
Association, etc. et. al. v. NLRC, et al., G.R. No.
121315, 19 July 1999)
a. GROUNDS FOR LOCKOUT
1.
2.
Collective bargaining deadlock; or
Unfair Labor Practice act. (D.O. No. 40-03, as
amended by D.O. No. 40A-03)
NOTE: No strike or lockout may be declared on
grounds involving inter-union and intra-union
dispute or without first having filed a notice of
strike or lockout or without the necessary strike or
lockout vote having been obtained and reported to
the Board. (Sec. 5, Rule XXII, Book V, IRR)
b. MANDATORY PROCEDURAL REQUIREMENTS
3. LOCKOUTS
The requirements for a valid lockout are as follows:
Lockout
It means any temporary refusal of an Er to furnish
work as a result of an industrial or labor dispute.
(Art. 219 (p), LC)
a.
Filing of Notice of Lockout by the employer
to the NCMB;
b.
Observance of the cooling-off period:
- 30 days for bargaining deadlock, and
- 15 days for ULP;
Notice of lockout vote meeting within 24
ours before the intended vote;
Elements of Lockout
c.
1.
2.
Temporary refusal to furnish work by the
employer; and
Occasioned by an industrial or labor dispute.
(Chan, 2017)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
228
d.
Lockout vote;
e.
Report of the lockout vote; and
Labor Relations
f.
Upon receipt of the notice, the regional branch of
the NCMB shall exert all efforts at mediation and
conciliation to enable the parties to settle the
dispute amicably. It may, upon agreement of the
parties, treat a notice as a preventive mediation
case. It shall also encourage the parties to submit
the dispute to voluntary arbitration.
Observance of the 7-day waiting period.
Filing of Notice of Lockout
A notice of lockout should be filed with the NCMB,
copy furnished the union.
In bargaining deadlocks, the notice shall be filed at
least 30 days before the intended date thereof. In
cases of unfair labor practice, the period of notice
shall be 15 days.
NOTE: During the proceedings, the parties shall not
do any act which may disrupt or impede the early
settlement of the dispute. They are obliged, as part
of their duty, to bargain collectively in good faith
and to participate fully and promptly in the
conciliation meetings called by the regional branch
of the NCMB. (Sec. 9, Rule XXII, Book V, IRR)
The notice shall state, among others:
1.
2.
3.
4.
Names and addresses of the employer and the
union involved;
The nature of the industry to which the
employer belongs;
The number of union members and of the
workers in the bargaining unit; and
Such other relevant data as may facilitate the
settlement of the dispute, such as a brief
statement or enumeration of all pending labor
disputes involving the same parties. (Sec. 8, Rule
XXII, Book V, IRR)
A lockout notice, upon agreement of the parties,
may be referred to alternative modes of dispute
resolution, including voluntary arbitration. (Ibid.)
Notice of Lockout vote
The employer shall furnish the regional branch of
the NCMB a notice of meeting for the lockout vote at
least 24 hours before such meeting.
NOTE: In cases of bargaining deadlocks, the notice
shall, as far as practicable, further state:
1.
2.
3.
4.
Lockout vote
A decision to declare a lockout must be approved by
a majority of the Board of Directors of the employer,
corporation or association or the partners in a
partnership obtained by a secret ballot in a
meeting called for the purpose. (Sec. 10, Rule XXII,
Book V, IRR)
The unresolved issues in the bargaining
negotiations;
The written proposals of the union;
The counter-proposals of the employer;
and
The proof of a request for conference to
settle the differences. (Sec. 8, Rule XXII,
Book V, IRR)
The regional branch of the NCMB may, at its own
initiative or upon request of any affected party,
supervise the conduct of the secret balloting.
In cases of unfair labor practices, the notice shall, as
far as practicable, state the acts complained of and
the efforts taken to resolve the dispute amicably.
(Sec. 8, Rule XXII, Book V, IRR)
Report of the Lockout Vote
The employer shall furnish the regional branch of
the NCMB the results of the voting at least seven (7)
days before the intended lockout, subject to the
cooling-off period.
Observance of the cooling-off period
A cooling-off period must be observed, i.e., a time
gap is required to cool-off tempers between the
filing of notice and the actual execution of lockout.
NOTE: If the vote is filed within the cooling-off
period, the seven-day waiting period shall be
counted from the day the following the expiration of
229
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
the cooling-off period. In effect, the seven days are
added to the 15-day of 30-day cooling off period.
4. ASSUMPTION OF JURISDICTION BY THE DOLE
SECRETARY
Observance of the 7-day waiting period
When DOLE Secretary may assume or certify a
labor dispute
The 7-day waiting period/lockout ban reckoned
after the submission of the lockout vote report to
the NCMB-DOLE should be fully observed in all
cases.
Art. 278(g) of the Labor Code provides that when in
the opinion of the DOLE Secretary, the there exists a
labor dispute causing or will likely cause a strike or
lockout in an industry indispensable to the national
interest, he is empowered to either:
Should the dispute remain unsettled after the lapse
of the said period, the employer may lock out its
workers. The regional branch of the NCMB shall
continue mediating and conciliating. (Sec. 11, Rule
XXII, Book V, IRR)
1.
2.
Lockout amounting to ULP
A lockout, actual or threatened, as a means of
dissuading the Ees from exercising their rights, is
clearly an ULP. However, to hold an Er guilty, the
evidence must establish that the purpose was to
interfere with the Ees exercise of their rights.
The Secretary may act at his own initiative or upon
petition by any of the parties. (Azucena, 2016)
The assumption of jurisdiction by the Secretary of
Labor over labor disputes causing or likely to cause
a strike or lockout in an industry indispensable to
the national interest is in the nature of a police
power measure. It cannot be denied that the private
respondent is engaged in an undertaking affected
with public interest being one of the largest
manufacturers of food products. The compelling
consideration of the Secretary's assumption of
jurisdiction is the fact that a prolonged strike or
lockout is inimical to the national economy and
thus, the need to implement some measures to
suppress any act which will hinder the company's
essential productions is indispensable for the
promotion of the common good. Under this
situation, the Secretary's certification order for
compulsory arbitration which was intended for the
immediate formulation of an already delayed CBA
was proper. (Union of Filipro Employees v. NLRC, G.R.
No. 91025, 19 Dec. 1990)
In an unfair labor practice proceeding which arises
out of a lockout used as a weapon during a labormanagement dispute, an employer’s legal position
is improved if it appears that he did not lock out his
employees during the early stages of negotiations,
and did not employ the lockout to for acceptance of
his terms. (NLRB v. Brown, 13 L ed 839, 29 Mar.
1965).
Lockout vs. Shutdown
Lockout is different from shutdown in the sense that
in a lockout the plant continues to operate; whereas
in a shutdown, the plant ceases to operate. (Ungos,
2021)
A shutdown is the willful act of the employer himself
following a complete lockout as contrasted to the
compulsory stoppage of operations as a result of a
strike and walkout. It can be truly said that all
shutdowns are lockouts but not all lockouts
constitute shutdowns. (Sta. Mesa Slipway
Engineering v. CIR, G.R. No. L-4521, 18 Aug. 1952)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Assume jurisdiction over the labor dispute and
decide it himself; or
Certify it to the NLRC for compulsory
arbitration, in which case, it will be the NLRC
which shall hear and decide it.
Requisites for Assumption of Jurisdiction
The Secretary of Labor and Employment may
assume jurisdiction over the dispute and decide it,
or certify the same to the NLRC for compulsory
arbitration, provided, that any of the following
conditions is present:
230
Labor Relations
1.
2.
Both parties have requested the Secretary
of Labor and Employment to assume
jurisdiction over the labor dispute; or
Prior notice is not required for Assumption of
Jurisdiction
The discretion to assume jurisdiction may be
exercised by the SOLE without the necessity of prior
notice or hearing given to any of the parties’
disputants. The rationale justifiably rests on his
consideration of the exigency of the situation in
relation to national interests.
After a conference called by the Office of
the Secretary of Labor and Employment on
the propriety of its issuance, motu proprio
or upon a request or petition by either
parties to the labor dispute. (Sec. 15, Rule
XXII, Book V, IRR)
Effect of Assumption
Actual Strike or Lockout Not a Condition for the
Exercise of the Power
The assumption or certification by the DOLE
Secretary has the effect of automatically enjoining
the intended or impending strike or lockout as
specified in the assumption or certification order.
Art. 278(g) of the LC does not require the existence
of a strike or lockout. All that is required is the
existence of a labor dispute likely to cause a strike
or lockout.
Effect of assumption if a strike or lockout has
already taken place
What constitutes a National Interest Case
The LC vests in the SOLE the discretion to determine
what industries are indispensable to the national
interest. Accordingly, upon the determination by
the SOLE that such industry is indispensable to the
national interest, he has authority to assume
jurisdiction over the labor dispute.
If a strike or lockout has already taken place at the
time of assumption or certification:
1.
2.
The striking or locked 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), LC)
The following industries/services are deemed
indispensable to the national interest:
1.
2.
3.
The Secretary of Labor and Employment or the
Commission may seek the assistance of law
enforcement agencies to ensure compliance with
this provision as well as with such orders as he may
issue to enforce the same.
4.
5.
NOTE: Notwithstanding the foregoing, parties to
the case may agree at any time to submit the dispute
to the Secretary of Labor or his/her duly authorized
representative as Voluntary Arbitrator or to a duly
accredited Voluntary Arbitrator or to a panel of
Voluntary Arbitrators. (As created by D.O. No. 40-G03-10, and amended by D.O. No. 040-H-13)
Hospital sector;
Electric power industry;
Water supply services, to exclude small water
supply services such as bottling and refilling
stations;
Air traffic control; and
Such other industries as may be recommended
by the National Tripartite Industrial Peace
Council (TIPC). (Sec. 16, Rule XXII, Book V,
Omnibus Rules Implementing the Labor Code)
NOTE: The above enumerated industries are NOT
exclusive as other industries may be considered
indispensable to the national interest based on the
appreciation and discretion of the SOLE or as may
be recommended by TIPC.
231
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
for resolution and shall be final and executory ten
(10) calendar days after receipt thereof by the
parties. (Sec. 18, Rule XXII, Book V, Omnibus Rules
Implementing the Labor Code)
Extent of the powers of the President during
strikes/lockouts
1.
2.
May determine the industries which are, in
his opinion, indispensable to national
interest; and
May intervene at any time and assume
jurisdiction over any such labor dispute in
order to settle or terminate the same. (Art.
278(g), LC)
Issues that the SOLE may resolve when he
assumes jurisdiction over a labor dispute
Power of SOLE is plenary and discretionary. (St.
Luke’s Medical Center v. Torres, G.R. No. 99395, 29
June 1993)
NOTE: The decision of the President or SOLE is final
and executory after receipt thereof by the parties.
As the term "assume jurisdiction" connotes, the
intent of the law is to give the Labor Secretary full
authority to resolve all matters within the dispute
that gave rise to or which arose out of the strike or
lockout; it includes and extends to all questions and
controversies arising from or related to the dispute,
including cases over which the labor arbiter has
exclusive jurisdiction. (Tabangao Shell Refinery
Employees Association v. Pilipinas Shell Petroleum
Corp, G.R. No. 170007, 07 Apr. 2015)
Different rule on strikes and lockouts in
hospitals, clinics, and medical institutions
As a general rule, strikes and lockouts in hospitals,
clinics, and similar medical institutions should be
avoided.
In case a strike or lockout is staged, 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 in emergency
cases, for the duration of the strike or lockout.
The SOLE may immediately assume, within 24
hours from knowledge of the occurrence of such a
strike or lockout, jurisdiction over the same or
certify it to the NLRC for compulsory arbitration.
Effects of Defiance
Non-compliance with the certification order of the
Secretary of Labor and Employment shall be
considered as an illegal act committed in the course
of the strike or lockout and shall authorize the
Commission to enforce the same under pain of
immediate disciplinary action, including dismissal,
or loss of employment status, or payment by the
locking-out employer of backwages, damages and
other affirmative relief, even criminal prosecution
against the liable parties. (Section 4, Rule VIII, 2011
NLRC Rules of Procedure)
Decision on the Assumed Labor Dispute
Some principles on assumption/certification
power of the DOLE Secretary
Within five (5) days from the issuance of the
assumption or certification order, a preliminary
conference or hearing shall immediately be
conducted by the Office of the Secretary of Labor
and Employment, the NLRC, or the voluntary
arbitrator or panel of voluntary arbitrators as the
case may be.
Prior notice and hearing are NOT required in the
issuance of the assumption or certification order.
The SOLE may seek the assistance of law
enforcement agencies like the Philippine National
Police to ensure compliance with the provision
thereof as well as with such orders as he may issue
to enforce the same.
The decision of the Secretary of Labor and
Employment, the NLRC, or Voluntary Arbitrator or
Panel of Voluntary Arbitrators shall be rendered
within 30 calendar days from submission of the case
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
232
Labor Relations
Corporation v. NLRC, G.R. No. 99266, 02 Mar.
1999)
Assumption or certification orders are immediately
executory and are to be strictly complied with even
during the pendency of a motion for
reconsideration or petition questioning its validity.
(St. Scholastica’s College v. Torres, G.R. No. 100158,
02 June 1992)
3.
If declared against an industry indispensable
to national interest.
4.
If staged by employees who are not accorded
the right to strike.
5. INJUNCTIONS
Injunction
Regular courts are prohibited from issuing
injunction against strikes or lockouts
It is an order or a writ that commands a person to
do or not to do a particular act. It may be a positive
(mandatory) or a negative (prohibitory)
command.
The cases cited above involve the issuance of
restraining order or injunction by the NLRC
pursuant to the exercise of its injunctive power.
In contrast, regular courts are absolutely
prohibited to grant any injunctive relief in cases of
strikes or lockouts.
Injunction in picketing, strike or lockout cases
GR: Strikes and lockouts that are validly declared
enjoy the protection of the law and cannot be
enjoined unless illegal acts are committed or
threatened to be committed in the course thereof.
Injunction in picketing cases
GR: Injunction cannot be issued against the conduct
of picketing by the workers. Under our
constitutional set up, picketing is considered part of
the freedom of speech duly guaranteed by the
Constitution.
A strike cannot be enjoined even if it may appear to
be illegal because strike is a weapon that the law
grants the employees for their protection and
advancement of their interest. (Caltex v. Lucero, G.R.
No. L-15338, 28 Apr. 1962)
XPNs, wherein picketing may be enjoined by the
NLRC:
XPNs: In some cases, injunctions issued to enjoin
the conduct of the strike itself and not only the
commission of illegal acts in the course thereof,
were held to be valid.
1.
2.
1.
2.
3.
Injunction may be issued not only against the
commission of illegal acts during the strike but
against the strike itself because the notice of
strike filed by the union has been converted
into a preventive mediation case. Having been
so converted, a strike can no longer be staged
based on said notice. Upon such conversion,
the legal effect is that there is no more notice of
strike to speak of. (San Miguel Corporation v.
NLRC, G.R. No. 119293, 10 June 2003)
When carried out through illegal means;
Such involves the use of violence and other
illegal acts; or
Such affects the rights of third parties or
innocent bystanders and injunction becomes
necessary to protect such rights.
Q: Company C, a toy manufacturer, decided to
ban the use of cell phones in the factory
premises. In the pertinent Memorandum,
management explained that too much texting
and phone-calling by employees disrupted
company operations. Two employee-members
of Union X were terminated from employment
due to violation of the memorandum-policy.
NLRC committed grave abuse of discretion
when it denied the petition for injunction to
restrain the union from declaring a strike
based on non-strikeable grounds. (San Miguel
The union countered with a prohibitory
injunction case (with prayer for the issuance of
233
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Labor Law and Social Legislation
party or render ineffectual any decision in
favor of such party;
a temporary restraining order) filed with the
RTC
challenging
the
validity
and
constitutionality of the cell phone ban.
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 after hearing the testimony of witnesses,
with opportunity for cross-examination, in support
of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered; and
The company filed a motion to dismiss, arguing
that the case should be referred to the grievance
machinery pursuant to an existing CBA with
Union X, and eventually to Voluntary
Arbitration. Is the company correct? Explain.
(2010 BAR)
4.
A: NO. The RTC has jurisdiction to hear and decide
the prohibitory injunction case filed by Union X
against Company C to enjoin the latter from
implementing the memorandum-policy against the
use of cell phones in the factory. The issue in this
case is the validity and constitutionality of the
cellphone ban being implemented by Company C.
The issue, therefore, does not involve the
interpretation of the memorandum-policy, but its
intrinsic validity. (Haliguefla v. PAL, G.R. No. 172013,
02 Oct. 1999)
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 and will
be continued unless restrained, but no
injunction or temporary restraining order
shall be issued on account of any threat,
prohibited or unlawful act, except against
the person or persons, association or
organization making the threat or
committing the prohibited or unlawful act
or 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. (Art. 225(e), LC)
Labor Injunctions
GR: No temporary or permanent injunction or
restraining order in any case involving or growing
out of labor disputes shall be issued by any court.
(Art. 266, LC)
XPNs:
1. Injunction power of the NLRC (Art. 225, LC)
2. Prohibited activities during a strike or lockout
(Art. 279, LC)
3. Assumption or certification power of the SOLE
in national interest cases (Art. 278(g), LC)
Requisites in issuing an Injunction in labor cases
1.
There is an actual or threatened commission of
any or all prohibited or unlawful acts in any
labor dispute;
2.
There is a need to enjoin or restrain such acts
or to require the performance of a particular
act;
3.
If not restrained or performed forthwith, may
cause grave or irreparable damage to any
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
NOTE: Labor dispute includes any controversy or
matters concerning terms or 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 the disputants
234
Labor Relations
stand in the proximate relation of Er and Ee. (Art.
219, LC)
235
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Kinds of Employment
VI. TERMINATION OF EMPLOYMENT
1.
As to tenure
a.
Coverage of Termination of Employment
Applies to all establishments or undertakings
whether for profit or not. (Art. 293, LC)
Termination is a broader concept that is used to
denote dismissal or lay-off. It may also imply
complete severance of employer-employee
relationship.
b. Temporary/Probationary – one who stays
on the job for a defined or pre-agreed period.
(Azucena, 2016)
On the other hand, dismissal is a form of ending an
employer-employee relationship initiated either by
the employee or employer.
2.
e.g., Just cause or authorized cause dismissal.
As to the Labor Code Book VI
a.
b.
c.
d.
e.
f.
Lay-off is a termination initiated by the employer
without prejudice to reinstatement or recall of an
employee who has been temporarily separated
brought about by adverse economic conditions.
A. SECURITY OF TENURE
3.
b.
The policy of the State is to assure the right of
workers to security of tenure. (Art. XIII, Sec. 3, 1987
Constitution) The guaranty is an act of social justice.
Regular
Project
Seasonal
Casual
Probationary
Fixed-term
On the basis of salary component
a.
No worker shall be dismissed except for a just or
authorized cause provided by law and after due
process. (Art. 294, LC)
Monthly-paid – where the salary covers
all the days of the month including the
rest days and holidays
Daily-paid – salary only covers the day
or days worked
NOTE: Daily-paid or monthly-paid refers to the
inclusiveness of the salary, not the frequency or
intervals of payments.
Security of Tenure is the right not to be removed
from one’s job without valid cause and valid
procedure. It extends to regular as well as
nonregular employment. (Kiamco v. NLRC, G.R. No.
129449, 29 June 1999)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Permanent – who is appointed to a job for
an undefined and indefinite period.
– Also called “regular” employee
– One who is doing a job which is
“necessary or desirable” to the
usual business of the employer
– May be terminated only because of
“just” or an “authorized” cause
according to Art. 294
236
Labor Law and Social Legislation
between the particular activity performed by
the Ee to the usual trade or business of the Er.
The test is whether the former is usually
necessary or desirable in the usual business or
trade of the Er. (De Leon v. NLRC, G.R. No.
70705, 21 Aug. 1989)
1. CATEGORIES OF EMPLOYMENT AS TO
TENURE
a. REGULAR EMPLOYMENT
Those who are hired for activities which are
necessary or desirable in the usual business of the
employer. (Abad, Jr., 2015)
NOTE: The connection can be determined by
considering the nature of the work performed and
its relation to the scheme of the particular business
or trade in its entirety. (Highway Copra Traders v.
NLRC, G.R. No. 108889, 30 July 1988)
Types of Regular Employment
1.
2.
As to nature of work – An employment shall
be deemed to be regular where the Ee has
been engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the Er, the provisions of
written agreements to the contrary
notwithstanding and regardless of the oral
agreements of the parties. (Sec. 5(a), Rule I,
Book VI, IRR)
2.
As to length of service – Any Ee who has
rendered at least one (1) year of service,
whether such service is continuous or
broken, shall be considered a regular Ee with
respect to the activity in which he is
employed, and his employment shall
continue while such activity exists. (Sec. 5(b),
Rule I, Book VI, IRR)
The status of regular employment attaches to the
casual Ee on the day immediately after the end of his
first year of service. The law does not provide the
qualification that the Ee must first be issued a
regular appointment or must first be formally
declared as such before he can acquire a regular
status. (Aurora Land Projects Corp. v. NLRC, G.R. No.
114733, 02 Jan. 1997)
NOTE: Regularization is not a management
prerogative; rather, it is the nature of employment
that determines it. It is a mandate of the law. (PAL
v. Pascua, G.R. No. 143258, 15 Aug. 2003)
Repeated rehiring and the continuing need for the
employee’s services are sufficient evidence of the
necessity and indispensability of his services to the
employer’s business or trade. (Baguio Country Club
Corporation v. NLRC, G.R. No. 102397, 04 Sept. 1992)
What determines regularity or casualness is not the
employment contract, written or otherwise, but the
nature of the job. (Policy Instruction No. 2)
Seafarers are Not Regular Employees
The practice of entering employment contracts
which would prevent the workers from becoming
regular should be struck down as contrary to public
policy and morals. (Universal Robina Corp. v.
Catapang, G.R. No. 164736, 14 Oct. 2005)
Seafarers cannot be considered as regular Ees. The
contract which they sign every time they are hired
governs their employment. Their employment is
terminated when the contract expires. Their
employment is fixed for a certain period. (Ravago v.
Esso Eastern Maritime Ltd., G.R. No. 158324, 15 Mar.
2005)
Tests to Determine Regular Employment
1.
Also, the performance of a job for at least a
year is sufficient evidence of the job’s necessity
if not indispensability to the business. This is
the rule even if its performance is not
continuous and merely intermittent. The
employment is considered regular, but only
with respect to such activity and while such
activity exists. (Universal Robina Corp. v.
Catapang, G.R. No. 164736, 14 Oct. 2005)
The primary standard of determining regular
employment is the reasonable connection
In case of OFWs, Art. 295 of the LC does not apply.
237
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Q: Various camera operators were engaged by
and rendered services directly to GMA Network,
Inc. and received compensation for such. They
were subsequently dismissed by GMA which led
them to file a complaint for “illegal dismissal,
non-payment
of
salary/wages,
and
regularization,” claiming that they were regular
Ees of GMA because as camera operators, they
performed functions that were necessary and
desirable to its business as a television and
broadcasting company. They also claimed that
they were illegally dismissed for lack of just or
authorized cause. On the other hand, GMA
argues that they were not their Ees, and that
even if they were, they could not have attained
regular status considering their failure to
render “at least one year of service” as required
by law.
Q: L. Natividad Poultry Farms is a business
engaged in livestock and poultry production
which employed several workers as livestock
feed mixers or as maintenance personnel.
The workers filed complaints for illegal
dismissal against L. Natividad, asserting that
they are regular employees, having been
continuously employed by L. Natividad for a
period ranging from more than one (1) year to
17 years. They stress that L. Natividad provided
all the tools, equipment, and materials they used
as maintenance personnel and then gave them
specific tasks and supervised their work.
The CA ruled that petitioners cannot be
considered as regular Ees because there was no
reasonable connection between the nature of
their carpentry and masonry work and
respondents' usual business in poultry and
livestock production, sale, and distribution. Are
the petitioners regular Ees of L. Natividad?
a.
b. Assuming the existence of an employeremployee relationship, were the camera
operators regular Ees of GMA?
A: YES. The necessity or desirability of the work
performed by an employee can be inferred from the
length of time that an employee has been
performing this work. If an employee has been
employed for at least one (1) year, he or she is
considered a regular employee by operation of law.
Likewise, if an employee has been on the job for at
least one (1) year, even if the performance of the job
is intermittent, the repeated and continuous need
for the employee's services is sufficient evidence of
the indispensability of his or her services to the
employer's business.
A:
a.
Thus, even if the Court of Appeals is of the opinion
that carpentry and masonry are not necessary or
desirable to the business of livestock and poultry
production, the nature of their employment could
have been characterized as being under the second
paragraph of Art. 280. Thus, petitioners' service of
more than one (1) year to respondents has made
them regular Ees for so long as the activities they
were required to do subsist. (Mario Abuda, et al. v. L.
Natividad Poultry Farms, G.R. No. 200712, 04 July
2018)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Is
there
an
employer-employee
relationship
between
the
camera
operators and GMA?
YES. To determine the existence of an
employer-employee relationship, case law has
consistently applied the four-fold test, to wit:
(a) the selection and engagement of the
employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer’s
power to control the employee on the means
and methods by which the work is
accomplished, this being deemed as the most
crucial and determinative indicator of the
presence or absence of an employer-employee
relationship.
In applying the four-fold test in this case, (a) the
camera operators were engaged by and rendered
services directly to GMA; (b) they received
compensation for their services; (c) they were
dismissed by GMA; and (d) they were subject to
GMA’s control and supervision on the following
grounds: (a) their recordings and shoots were
never left to their own discretion and craft; (b) they
238
Labor Law and Social Legislation
been determined at the time of the
engagement of the employee; or
were required to follow the work schedules which
GMA provided to them; (c) they were not allowed
to leave the work site during tapings, which often
lasted for days; (d) they were also required to
follow company rules like any other employee; (e)
they were provided the equipment they used
during tapings; and (f) they were assigned
supervisors to monitor their performance and
guarantee their compliance with company
protocols and standards.
b.
2.
Contract of Perpetual Employment
It deprives management of its prerogative to decide
whom to hire, fire, and promote and renders inutile
the basic precepts of labor relations.
YES. Under Art. 295 of the Labor Code, there
are two ways to attain regular employment
status: (1) 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, notwithstanding the
provisions of written agreement and
regardless of the oral agreement of the parties;
and (2) any casual 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.
It is contrary to public policy and good customs, as
it unjustly forbids the Er from terminating the
services of an employee despite the existence of a
just or valid cause.
Since the relation between capital and labor are not
merely contractual, impressed as they are with so
much public interest that the same should yield to
common good. (Philippine Telegraph and Telephone
Co. v. NLRC, G.R. No. 118978, 23 May 1997)
Mode of compensation is not determinative of
regular employment
While the Ees mode of compensation was on a “per
piece basis”, the status and nature of their
employment was that of regular Ees. (Labor
Congress of the Phils v. NLRC, G.R. No. 123938, 21 May
1998)
Only casual Ees performing work that is neither
necessary nor desirable to the usual business and
trade of the employer are required to render at
least one year of service to attain regular status.
Ees who perform functions which are necessary
and desirable to the usual business and trade of the
employer attain regular status from the time of
engagement. Here, the camera operators were
never casual Ees because they performed functions
that were necessary and desirable to the usual
business of GMA; hence, they did not need to
render a year’s worth of service to be considered
Ees. (Henry Paragele, et al. v. GMA Network, Inc., G.R.
No. 235315, 13 July 2020)
Q: Moises was employed by La Tondeña at the
maintenance section of its Engineering
Department paid on a daily basis through petty
cash vouchers. His work consisted mainly of
painting company building and equipment and
other odd jobs relating to maintenance. After a
service of more than 1 year, Moises requested
that he be included in the payroll of regular
workers, instead of being paid through petty
cash vouchers. Instead, La Tondeña dismissed
Moises and claimed that Moises was contracted
on a casual basis specifically to paint certain
company buildings and that its completion
terminated Moises’ employment. Can Moises be
considered as a regular Ee?
Temporary Ee becoming Regular Ee
An employment may only be said to be ‘temporary’:
1.
Where the work or services to be performed
is seasonal in nature and the employment is
for the duration of the season.
Where it has been fixed for a specific
undertaking the completion of which has
239
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
NOTE: The repeated rehiring of workers and the
continuing need for their services clearly attest to
the necessity or desirability of their services in the
regular conduct of the business or trade of the
company. (Magsalin & Coca-Cola v. N.O.W.M., G.R. No.
148492, 09 May 2003)
A: YES. The law demands that the nature and
entirety of the activities performed by the Ee be
considered. Here, the painting and maintenance
work given to Moises manifests a treatment
consistent with a maintenance man and not just a
painter, for if his job was only to paint a building,
there would be no basis for giving him other work
assignments in-between painting activities. It is not
tenable to argue that the painting and maintenance
work of Moises are not necessary in La Tondeña’s
business of manufacturing liquors; otherwise, there
would be no need for the regular maintenance
section of the company’s engineering department.
(De Leon v. NLRC, G.R. No. 70705, 21 Aug. 1989)
Q: Metromedia Times Corp. entered, for the fifth
time, into an agreement with Efren Paguio,
appointing him to be an account executive of the
firm. He was to solicit advertisements for “The
Manila Times.” The written contract between
the parties provided that, “You are not an
employee of the Metromedia Times Corp. nor
does the company have neither any obligations
towards anyone you may employ, nor any
responsibility for your operating expenses or
for any liability you may incur. The only rights
and obligations between us are those set forth in
this agreement. This agreement cannot be
amended or modified in any way except with the
duly authorized consent in writing of both
parties.” Is Efren Paguio a regular Ee of
Metromedia Times Corporation?
Q: A total of 43 Ees who are deaf-mutes were
hired and re-hired on various periods by Far
East Bank and Trust Co. as money sorters and
counters through a uniformly worded
agreement called “Employment Contract for
Handicapped
Workers.”
The
company
disclaimed that these Ees were regular Ees and
maintained, among others, that they are a
special class of workers, who were hired
temporarily under a special employment
arrangement which was a result of overtures
made by some civic and political personalities to
the Bank. Should the deaf-mute Ees be
considered as regular Ees?
A: YES. He performed activities which were
necessary and desirable to the business of the Er,
and that the same went on for more than a year. He
was an account executive in soliciting
advertisements, clearly necessary and desirable, for
the survival and continued operation of the
business of the corporation.
A: YES. The renewal of the contracts of the
handicapped workers and the hiring of others leads
to the conclusion that their tasks were beneficial
and necessary to the bank. It also shows that they
were qualified to perform the responsibilities of
their positions; their disability did not render them
unqualified or unfit for the tasks assigned to them.
The law, in defining their contractual relationship,
does so, not necessarily or exclusively upon the
terms of their written or oral contract, but also
based on the nature of the work of Efren has been
called upon to perform. A stipulation in an
agreement can be ignored as and when it is utilized
to deprive the Ee of his security of tenure. (Paguio v.
NLRC, G.R. No. 147816, 09 May 2003)
The Magna Carta for Disabled Persons mandates
that a qualified disabled Ee should be given the
same terms and conditions of employment as a
qualified able-bodied person. The fact that the Ees
were qualified disabled persons necessarily
removes the employment contracts from the ambit
of Art. 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, hence, they
are covered by Art. 295 of the LC. (Bernardo v. NLRC,
G.R. No. 122917, 12 July 1999)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Q: Super Comfort Hotel employed a regular pool
of “extra waiters” who are asked to report for
duty when the Hotel’s volume of business is
beyond the capacity of the regularly employed
waiters to undertake. Pedro has been an “extra
waiter” for more than 10 years. He is also called
upon to work on weekends, on holidays, and
240
Labor Law and Social Legislation
when there are big affairs at the hotel. What is
Pedro’s status as an Ee under the LC? (2008
BAR)
in which he is employed, and his employment shall
continue while such activity exists.
A casual Ee is only casual for one (1) year, and it is
the passage of time that gives him a regular status.
(KASAMMA-CCO v. CA, G.R. No. 159828, 19 Apr. 2006)
A: Pedro has acquired the status of a regular Ee.
Pedro was engaged to perform activities which are
necessary or desirable in the usual business or trade
of the Er. Moreover, Pedro has been “extra waiter”
for more than ten years. Under the law, any Ee who
has rendered service for at least one year, whether
such service is continuous or broken, shall be
considered a regular Ee with respect to the activity
in which he is employed, and his employment shall
continue while such activity exists. (Art. 295, LC)
The purpose is to give meaning to the constitutional
guarantee of security of tenure and right to selforganization. (Mercado v. NLRC, G.R. No. 79868, 05
Sept. 1991)
Q: Yakult Phils. is engaged in the manufacture of
cultured milk. The workers were hired to cut
cogon grass and weeds at the back of the factory
building used by Yakult. They were not required
to work on fixed schedule, and they worked on
any day of the week on their own discretion and
convenience. The services of the workers were
terminated by Yakult before the expiration of
the 1-year period.
b. CASUAL EMPLOYMENT
Casual employment
It is an employment where the Ee is engaged in an
activity which is not usually necessary or desirable
in the usual business or trade of the Er, provided,
such employment is neither Project nor Seasonal.
(Art. 295, LC) He performs only an incidental job in
relation to the principal activity of the Er.
May casual or temporary Ees be dismissed by
the Er before the expiration of the 1-year period
of employment?
A: YES. The usual business or trade of Yakult Phils.
is the manufacture of cultured milk. The cutting of
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business
of the Yakult.
NOTE: But despite the distinction between regular
and casual employment, every Ee shall be entitled to
the same rights and privileges and shall be subject
to the same duties as may be granted by law to
regular Ees during the period of their actual
employment.
The workers are casual Ees. Nevertheless, they may
be considered regular Ees if they have rendered
services for at least one (1) year. When, as in this
case, they were dismissed from their employment
before the expiration of the one (1) year period, they
cannot lawfully claim that their dismissal was
illegal. (Capule, et al. v. NLRC, G.R. No. 90653, 12 Nov.
1990)
An Ee is engaged to perform a job, work or service
which is merely incidental to the business of the
Er, and such job, work or service is for a definite
period made known to the Ee at the time of
engagement. (Sec. 5(b), Rule I, Book VI, IRR)
Employment is casual when it is irregular,
unpredictable, sporadic, and brief in nature, and
outside the usual business of the Er. (Caro v.
Rilloraza, G.R. No. L-9569, 30 Sept. 1997)
Casual Ee becoming a Regular Ee
If he has rendered at least one (1) year of service,
whether such service is continuous or broken, he is
considered as regular Ee with respect to the activity
241
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
employment based on reasonable standards made
known to him at the time of engagement. (Tamson’s
Enterprises, Inc. v. CA, G.R. No. 192881, 16 Nov. 2011)
Casual Ee vs. Project Ee
CASUAL EE
PROJECT EE
Engaged to perform a
job, work or service
which is incidental to
the business of the Er
and the definite period
of his employment is
made known to him at
the time of his
engagement.
Employed
for
a
specific project or
undertaking
where
the completion or
termination of which
is determined at the
time
of
his
engagement.
His
continued
employment after the
lapse one year makes
him a regular Ee.
His work need not be
incidental
to
the
business of the Er and
his employment may
exceed
one
year
without necessarily
making him a regular
Ee.
No termination report
required.
Job is coterminous
with a specific project
or phase thereof. It is
required
that
a
termination report be
submitted
at
the
nearest employment
office
upon
completion of the
project or phase.
Probationary Employment
Employment where the Ee, upon his engagement:
1.
2.
3.
NOTE: In all cases involving employees engaged on
probationary basis, the employer shall make known
to the employee the standards under which he will
qualify as a regular employee at the time of his
engagement. (Sec. 6(d), Book VI, Rule I, IRR)
Requisites for a Valid Probationary Employment
c. PROBATIONARY EMPLOYMENT
1.
There must be a written contract;
2.
The contract must spell out that the employee
will go through a probationary period of
employment for a specified number of months;
3.
The contract must specify reasonable standards
on the basis of which his performance will be
evaluated;
There must be an assessment of the
performance of the probationary employee in
relation to the standards; and
4.
Probation is the period during which the Er may
determine if the Ee is qualified for possible inclusion
in the regular force. (Holiday Inn Manila v. NLRC, G.R.
No. 109114, 14 Sept. 1993)
5.
It is usually a six (6) month period during which the
employer observes the performance and conduct of
the Ee. If he passes the agreed standard, he will be
retained as a regular Ee. If he fails, his tentative
employment ends.
The result of the assessment must be
communicated to the employee.
Rules on Probationary Employment
1.
There is probationary employment where the
employee upon his engagement is made to undergo
a trial period during which the employer
determines his fitness to qualify for regular
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Is made to undergo a trial period;
During which the Er determines his fitness
to qualify for regular employment; and
Based on reasonable standards made
known to the Ee at the time of engagement.
(Sec. 6, Book VI, Rule I, IRR)
Er shall make known to the Ee at the time he is
hired, the standards by which he will qualify as
a regular Ee;
NOTE: Where no standards are made known to
the employee at that time, he shall be deemed a
regular employee. (Sec. 6(d), Rule VIII-A, Book
VI, IRR)
242
Labor Law and Social Legislation
2.
Probationary employment must have been
expressly agreed upon; without such explicit
agreement, the employment is considered
regular;
3.
An Ee allowed to continue work after the
probationary period shall be considered a
regular Ee;
4.
of what he is expected to do or accomplish during
the trial period of probation. In this case, Abbott
clearly conveyed to Alcaraz her duties and
responsibilities as Regulatory Affairs Manager prior
to, during the time of her engagement, and the
incipient stages of her employment. Hence, Alcaraz
was validly terminated from her employment.
Nonetheless, despite the existence of a sufficient
ground to terminate Alcaraz’s employment and
Abbott’s compliance with the Labor Code
termination procedure, it is readily apparent that
Abbott breached its contractual obligation to
Alcaraz when it failed to abide by its own procedure
in evaluating the performance of a probationary
employee. Since this procedure was not followed,
the dismissal was therefore procedurally infirm
rendering Abbot liable for nominal damages.
(Abbott Laboratories v. Alcaraz, G.R. No. 192571, 23
July 2013)
During the probationary period, the Ee enjoys
security of tenure; his services can only be
terminated for just or authorized causes.
Q: Alcaraz signed an employment contract with
Abbott for the position of Medical and
Regulatory Affairs Manager which stated that
she was to be placed on probation for a period of
six (6) months. In line with this, she received an
email containing Abbott’s organizational chart
and a job description of her work. Further,
during Alcaraz’s pre-employment orientation,
she was briefed on her duties and
responsibilities as Regulatory Affairs Manager.
Abbot has a procedure which requires that the
employee’s performance must be discussed and
reviewed with the employee two times. Later on,
Alcaraz was terminated for allegedly failing to
meet the regularization standards for the said
position.
Period of Probationary Employment
GR: It shall not exceed six (6) months from the date
of the commencement of employment.
XPNs:
1. Covered by an Apprenticeship or
Learnership agreement stipulating a
different period (Art. 296, LC); or
Alcaraz filed a complaint for illegal dismissal
and damages against Abbott and its officers. She
claimed that she should have already been
considered as a regular and not a probationary
employee given Abbott’s failure to inform her of
the reasonable standards for her regularization
upon her engagement as required under Art.
295 of the Labor Code.
2.
When the parties to an employment
contract may agree otherwise, such as:
a.
When the same is established by
company policy; or
b.
When the same is required by the
nature of work to be performed by the
employee. (Busier v. Leogardo, Jr., G.R.
No. L-63316, 31 July 1984)
e.g., The probationary period set for
professors, instructors and teachers is
three (3) consecutive years of satisfactory
service pursuant to DOLE Manual of
Regulations for Private Schools.
Further, she claims that her performance was
not discussed with her in line with the
procedure of Abbot. Was Alcaraz sufficiently
informed of the reasonable standards to qualify
her as a regular employee?
A: YES. An employer is deemed to have made known
the standards that would qualify a probationary
employee to be a regular employee when it has
exerted reasonable efforts to apprise the employee
NOTE: By voluntarily agreeing to such an extension,
the Ee waived any benefit attaching to the
243
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Q: Michelle Miclat was employed on a
probationary basis as marketing assistant by
Clarion Printing House but during her
employment she was not informed of the
standards that would qualify her as a regular Ee.
30 days after, Clarion informed Miclat that her
employment contract had been terminated
without any reason. Miclat was informed that
her termination was part of Clarion’s costcutting measures. Is Miclat considered as a
regular Ee and hence entitled to its benefits?
completion of the period if he still failed to make the
grade during the period of extension. (Mariwasa
Mfg. Inc. v. Hon. Leogardo, G.R. No. 74246, 26 Jan.
1989)
3.
The Er gives the Ee a second chance to pass
the
standards
set.
(Mariwasa
Manufacturing, Inc. v. Leogardo, Jr., G.R. No.
74246, 26 Jan. 1989)
NOTE: Period of probation shall be reckoned from
the date the Ee started working. (Sec. 6(b), Book VI,
Rule I, IRR) Probationary Ees may be dismissed for
cause before end of the probationary period.
A: YES. In all cases of probationary employment, the
Er shall make known to the Ee the standards under
which he will qualify as a regular Ee at the time of
his engagement. Where no standards are made
known to the Ee at that time, he shall be deemed a
regular Ee. In the case at bar, she was deemed to
have been hired from day one as a regular Ee.
(Clarion Printing House Inc., v. NLRC, G.R. No. 148372,
27 June 2005)
After the lapse of the probationary period six (6)
months, Ee becomes regular.
Purpose of the Probation Period
The purpose of the probation period is to afford the
Er an opportunity to observe the fitness of a
probationary Ee at work.
Obligation of the Er to his Probationary Ees
There is obligation on the part of Er to inform
standards for regularization at the time of
engagement. The failure to inform has the effect that
upon the expiry of the probationary employment,
with or without the period provided for in the
contract, the worker is deemed to be regular.
Instances when Extension of Probationary
Period is Allowed
Extension is allowed only when:
1.
2.
Nature of the job requires extensive training; or
If it is a company policy that the period of
probationary employment should be an
extended period.
Q: Middleby Phils. Corp. hired Alcira as
engineering support services supervisor on a
probationary basis for six months. Apparently
unhappy with Alcira’s performance, Middleby
terminated his services. Alcira contends that he
was already a regular Ee when his employment
was terminated. According to Alcira’s
computation, since Art. 13 of the NCC provides
that 1 month is composed of 30 days, 6 months
totaling 180 days, then his 180th day would fall
on Nov. 16, 1996 making him a regular Ee before
his termination. Is the contention of the
petitioner in the computation of six months
correct?
NOTE: The extension of period should always be
reasonable; Such that, the nature of the work so
requires and that it is the amount of time required
for an ordinary worker to learn the job.
Essence of the Prohibition on Double or
Successive Probation
The evil sought to be prevented is to discourage
scheming Ers from using the system of double or
successive probation to circumvent the mandate of
the law on regularization and make it easier for
them to dismiss their Ees. (Holiday Inn Manila v.
NLRC, G.R. No. 109114, 14 Sept. 2003)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
A: NO. The computation of the six (6) month
probationary period is reckoned from the date of
appointment up to the same calendar date of the
244
Labor Law and Social Legislation
Grounds
for
Employment
sixth month following. In short, since the number of
days in each month was irrelevant, Alcira was still a
probationary Ee when Middleby opted not to
“regularize” him on Nov. 20, 1996. (Alcira v. NLRC,
G.R. No. 149859, 09 June 2004)
1.
2.
3.
NOTE: In Mitsubishi Motors v. Chrysler Phils. Labor
Union, G.R. No. 148738, 29 June 2004, the SC ruled in
this wise:
“Applying Art. 13 of the NCC, the probationary
period of 6-months consists of 180 days. This is
in conformity with Art. 13(1) of the NCC. The
number of months in the probationary period (6
months), should then be multiplied by the
number of days within a month (30 days);
hence, the period of 180 days. As clearly
provided in the last par. of Art. 13, in computing
a period, the first day shall be excluded and the
last day included. Thus, the 180 days
commenced on May 27, 1996, and ended on Nov.
23, 1996. The termination letter dated Nov. 25,
1996 was served on Paras only on Nov. 26, 1996.
He was, by then already a regular Ee of the
company under Art. 295 of the LC.”
2.
Limitations on the Er’s Power to Terminate a
Probationary Employment Contract
Statutory Construction – The latter case
prevails (Mitsubishi Motors); or
1.
2.
Instances When a probationary Ee is deemed to
be a Regular Ee
4.
2.
Just causes
Authorized causes; or
When he fails to qualify as a regular Ee in
accordance with reasonable standards made
known by the Er to the Ee at the time of his
engagement. (ICMC v. NLRC, G.R. No. 72222, 30
Jan. 1989; Art. 295, LC)
While probationary Ees do not enjoy permanent
status, they are afforded the security of tenure
protection of the Constitution. Consequently, they
cannot be removed from their positions unless for
cause. Such constitutional protection, however,
ends upon the expiration of the period stated in
their probationary contract of employment.
Thereafter, the parties are free to renew the
contract or not. (CSA v. NLRC, G.R. No. 87333, 06 Sept.
1991)
Rule more favorable to the Ee – Use the
computation which would amount to
granting
the
subject
Ee
regular
employment
status
(Based
on
Constitutional and statutory provisions for
the liberal interpretation of labor laws).
1.
Probationary
NOTE: If pre-termination of probationary contract
is due to the valid causes, the Er is not liable to pay
the monetary value of the unexpired portion of the
employment.
How to resolve the conflict between the Alcira
and Mitsubishi Motors case:
1.
Terminating
3.
If he is allowed to work after a probationary
period. (Art. 295, LC)
If no standards, under which he will qualify as a
regular Ee, are made known to him at the time
of his engagement. (Rule I, Book VI, IRR)
The power must be exercised in accordance
with the specific requirements of the contract;
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;
The Er’s dissatisfaction must be real and in good
faith, not feigned to circumvent the contract or
the law; and
There must be no unlawful discrimination in
the dismissal. (Manila Hotel Corporation v.
NLRC, G.R. No. L-53453, 22 Jan. 1986)
NOTE: The probationary Ee is entitled to
procedural due process prior to dismissal from
service.
Q: Ron Cruz was employed as gardener by
Manila Hotel on “probation status” effective
245
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
qualified teacher becomes available. (Manual of
Regulations for Private Higher Education)
Sept. 22, 1976. The appointment signed by Cruz
provided for a 6-month probationary period. On
Mar. 20, 1977, or a day before the expiration of
the probationary period, Cruz was promoted to
lead gardener position. On the same day, Cruz’
position was “abolished” by Manila Hotel
allegedly due to economic reverses or business
recession, and to salvage the enterprise from
imminent danger of collapse. Was Cruz illegally
dismissed?
Full-time Teacher
One whose total working day is devoted to school,
no other regular remunerative employment, and is
paid on a regular monthly basis regardless of the
number of teaching hours.
In college, the normal teaching load of a full-time
instructor shall be 18 hours a week.
A: YES. There is no dispute that as a probationary
Ee, Cruz had but limited tenure. Although on
probationary basis, however, Cruz still enjoys the
constitutional protection on security of tenure.
During his tenure of employment, therefore, or
before his contract expires, Cruz cannot be removed
except for cause as provided for by law.
Professors and instructors are independent
contractors. They are compensated for their
services by wages and salaries, rather than share of
profits; they cannot substitute others to do their
work without the consent of the university and can
be laid off if their work is unsatisfactory. All these
indicate that the university has control over their
work and that they are, therefore, employees and
not independent contractors. (Feati University v.
Hon. Jose S. Bautista, and Feati University Faculty
Club-PAFLU, G.R. No. L-21278, 27 Dec. 1966)
What makes Cruz’ dismissal highly suspicious is
that it took place at a time when he needs only but a
day to be eligible as a regular Ee. That he is
competent finds support in his being promoted to a
lead gardener in so short span of less than six (6)
months. By terminating his employment or
abolishing his position with but only one day
remaining in his probationary appointment, the
hotel deprived Cruz of qualifying as a regular Ee
with its concomitant rights and privileges. (Manila
Hotel Corp. v. NLRC, G.R. No. L-53453, 22 Jan. 1986)
Requirement of Full-Time Academic Personnel
or Teacher
1.
Possesses at least the minimum academic
qualifications prescribed by the Department;
2. Paid monthly or hourly, based on the regular
teaching loads as provided for in the policies,
rules and standards of the Department and the
school;
3. Total working day of not more than eight (8)
hours a day is devoted to the school;
4. Has no other remunerative occupation
elsewhere requiring regular hours of work that
will conflict with the working hours in the
school; and
5. Not teaching full-time in any other educational
institution.
All teaching personnel who do not meet the
foregoing qualifications are considered part-time.
(Sec. 45, Manual of Regulations for Private Higher
Education)
Period of Probationary Employment of Private
School Teachers
The probationary employment of academic
teaching personnel shall not be more than a period
of six (6) consecutive semesters or nine (9)
consecutive trimesters of satisfactory service, as the
case may be. (Sec. 117, The Manual of Regulations for
Private Higher Education)
NOTE: An academic teaching personnel, who does
not possess the minimum academic qualifications
under Secs. 35 and 36 of the Manual of Regulations
for Private Higher Education shall be considered as
a part-time Ee, and therefore cannot avail of the
status and privileges of a probationary employment.
A part-time Ee cannot acquire a regular permanent
status, and hence, may be terminated when a
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
246
Labor Law and Social Legislation
qualify for the positions applied for. They filed
a complaint for illegal dismissal against their
Er. As the Labor Arbiter, how will you resolve
the case? (2006 BAR)
The Legal Requisites for Acquisition by a
Teacher of Permanent Employment
1.
2.
3.
The teacher is a full-time teacher;
Must have rendered three (3) consecutive
years of service; and
Such service must be satisfactory. (Jocelyn
Herrera-Manaois v. St. Scholastica’s College,
G.R. No. 188914, 11 Dec. 2013)
A: As the LA, I will resolve the case in favor of the
eight probationary Ees due to the following:
Q: Colegio de San Agustin (CSA) hired Gela Jose
as a grade school classroom teacher on a
probationary basis for SY ‘84 – ‘85. Her contract
was renewed for SY’s ‘85-‘86 and ‘86-‘87. On
Mar. 24, ‘87, the CSA wrote the Gela that "it
would be in the best interest of the students and
their families that she seeks employment in
another school or business concern for next
school year." Notwithstanding the said notice,
the CSA still paid Gela her salary for April 15 to
May 15, 1987. On April 6, 1987, Gela wrote the
CSA and sought reconsideration but she
received no reply. Thereafter, she filed a
complaint for illegal dismissal. Was Gela
illegally dismissed?
A: NO. The Faculty Manual of CSA underscores the
completion of three (3) years of continuous service
at CSA before a probationary teacher acquires
tenure. Hence, Gela cannot claim any vested right to
a permanent appointment since she had not yet
achieved the prerequisite three (3) year period
under the Manual of Regulation for Private Schools
and the Faculty Manual of CSA.
1.
Probationary Ees also enjoy security of tenure.
(Biboso v. Victoria Milling, G.R. No. L-44360, 31
Mar. 1977)
2.
In all cases involving Ees on probationary
status, the Er shall make known to the Ee at the
time he is hired, the standards by which he will
qualify for the positions applied for.
3.
The filing of the complaint for illegal dismissal
effectively negates the Er’s theory of
abandonment. (Rizada v. NLRC, G.R. No. 96982,
21 Sept. 1999)
4.
The order to go home and not to return to work
constitutes dismissal from employment.
5.
The eight (8) probationary Ees employment
were terminated without just cause and
without due process.
In view of the foregoing, I will order reinstatement
to their former positions without loss of seniority
rights with full back wages, plus damages and
attorney’s fees.
Q: Arlene started working as a Casual or
Assistant Clinical Instructor for two semesters
in HNU's College of Nursing while awaiting the
results of her Nursing Board Examination. She
alleged that upon her hiring, HNU did not inform
her of the standards for the evaluation of her
satisfactory completion of her probationary
period. In the second semester of S.Y. 19941995, she was hired as a full-time Clinical
Instructor until S.Y. 1998-1999, and was
assigned at the Medical Ward. During the second
semester of S.Y. 1998-1999, she was transferred
to the Guidance Center as a Nursing Guidance
Instructor handling guidance, education, and
graduate school courses. At this time, she was
In the instant case where the CSA did not wish to
renew the contract of employment for the next
school year, Gela has no ground to protest. She was
not illegally dismissed. Her contract merely expired.
(CSA v. NLRC, G.R No. 87333, 06 Sept. 1991)
Q: During their probationary employment,
eight employees were berated and insulted by
their supervisor. In protest, they walked out.
The supervisor shouted at them to go home and
never to report back to work. Later, the
personnel manager required them to explain
why they should not be dismissed from
employment for abandonment and failure to
247
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
requirement for the purpose of determining
whether or not she is a full-time faculty when she
was employed again as a clinical instructor from
2004-2007.
elected as Municipal Councilor of Carmen,
Bohol.
Upon her reelection as Municipal Councilor for
the 2001-2004 term, she took a leave of absence
from HNU. Arlene rejoined HNU and was given a
full-time load for the S.Y. 2004-2005. For S.Y.
2005-2006 and 2006-2007, Arlene signed
contracts for term/semesteral, employment.
The fixed-term contracts presented as evidence
would reveal that the parties intended that their ErEe relationship would last only for a specific period.
Even if no written fixed-term contract was
presented, judicial notice can be made upon the fact
that teachers' employment contracts are for a
specific semester or term. For the second requisite
of a valid fixed-term contract, Arlene was on equal
footing with HNU. She was an honors graduate and
has stellar qualifications. Moreover, she is an
elected public official and appears to be quite
popular, given that she has won as municipal
councilor multiple times and even placed number
one in terms of votes garnered. These facts would
make apparent that Arlene is not a mere run-of-themill employee, and that she certainly has the
capability to be on equal footing in dealing with her
employer when it came to her employment terms.
However, in a notice, HNU informed Arlene that
her contract of employment, which would have
expired on 31 March 2007, will no longer be
renewed. Arlene argued that since she taught at
HNU for more than six consecutive regular
semesters, she already attained the status of a
regular employee pursuant to the Manual of
Regulations for Private School Teachers. Thus,
she claimed that her employment was illegally
terminated. Is Arlene’s contention correct?
A: NO. A private school teacher acquires permanent
status when the following requisites are met: 1) The
teacher serves full-time; 2) he/she must have
rendered three consecutive years of service; and 3)
such service must have been satisfactory.
Thus, petitioner was validly contracted for a fixed
term. The expiry of her latest contract on 31 March
2007 effectively ended the employee-employer
relationship she had with HNU. No dismissal,
whether illegal or not, ever happened. Therefore,
she is not entitled to any of the reliefs sought.
(Arlene Palgan v. Holy Name University, et.al., G.R. No.
219916, 10 Feb. 2021)
While Arlene has rendered three consecutive years
of satisfactory service, she was, however, not a fulltime teacher at the College of Nursing of HNU. Only
a full-time teaching personnel can acquire regular
or permanent status. The three-year or one-year
clinical practice experience is a minimum academic
requirement to qualify as a faculty member in a
College of Nursing, and is therefore, required for
one to be considered as a full-time faculty of such.
Q: UST has a CBA with the Union. The CBA
requires a master’s degree for a professor to be
tenured. The CBA, however, also provides that
“If he does not finish his degree in five (5)
semesters, he shall be separated from service at
the end of the fifth semester; however, if he is
made to serve the University further, in spite of
the lack of a master's degree, he shall be deemed
to have attained tenure”. Is the stipulation
conferring tenureship despite the lack of
master’s degree valid?
Arlene failed to meet the required minimum clinical
practice experience under the law and the relevant
regulations. Since she failed to provide substantial
evidence, her work experience cannot be
considered as "clinical practice." Being unqualified
as a nursing faculty from the start, Arlene cannot
possibly be considered a full-time faculty and thus,
could not, even after rendering satisfactory service
for three years, be entitled to permanency.
Therefore, her stint as a clinical instructor from
1994-1997 cannot even be considered as
compliance with the clinical practice experience
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
A: NO. When the CBA was executed between the
parties in 2006, they had no right to include therein
the provision relative to the acquisition of tenure by
default, because it is contrary to, and thus violative
248
Labor Law and Social Legislation
Teaching and Maintenance Labor Union
demanded that the 70% of the TIP be allocated
to the salaries of the employees. As basis for
their demand, respondents quoted Section 182
(b) of the 2010 Revised Manual, which states
that the increase in tuition or other school fees,
as well as new fees shall be subject to the
condition, among others, that no increase in
tuition or other school fees or charges shall be
approved unless 70% of the proceeds is
allocated for increase in salaries or wages of the
members of the faculty and all other employees
of the school concerned. Is the contention of the
respondents correct?
of the 1992 Revised Manual of Regulations for
Private Schools that was in effect at the time. As
such, said CBA provision is null and void, and can
have no effect as between the parties. “A void
contract is equivalent to nothing; it produces no
civil effect; and it does not create, modify or
extinguish a juridical relation.”
It cannot be said either that by agreeing to the
tenure by default provision in the CBA, UST is
deemed to be in estoppel or have waived the
application of the requirement under CHED
Memorandum Order No. 40-08. Such a waiver is
precisely contrary to law. Moreover, a waiver would
prejudice the rights of the students and the public,
who have a right to expect that UST is acting within
the bounds of the law and provides quality
education by hiring only qualified teaching
personnel.
A: NO. The guidelines issued under DECS Order No.
15, series of 1992 on the allocation of the 70%
incremental proceeds under R.A. No. 6728
restricted the scope of "other benefits" by limiting
its applicability to "wage related benefits," which
the law itself does not require. The term "other
benefits" should not refer only to other wagerelated benefits. Well settled is the doctrine that in
case of conflict, the law prevails over the
administrative regulations implementing it. To be
valid, a rule or regulation must conform and be
consistent with the provisions of the enabling to
statute. As such, it cannot amend the law either by
abridging or expanding its scope.
As the Court held in Escorpizo v. University of Baguio,
a school CBA must be read in conjunction with
statutory and administrative regulations governing
faculty qualifications. Such regulations form part of
a valid CBA without need for the parties to make
express reference to it. While the contracting
parties may establish such stipulations, clauses,
terms and conditions, as they may see fit, the right
to contract is still subject to the limitation that the
agreement must not be contrary to law or public
policy. (Son v. UST, G.R. No 211273, 18 Apr. 2018)
Section 5(2) of R.A. No. 6728 clearly states that a
tuition fee increase is allowed if 70% of the amount
subsidized allotted for tuition fee or of the tuition
fee increases shall go to the payment of salaries,
wages, allowances, and other benefits of teaching
and non-teaching personnel. The law does not
qualify the term "other benefits" to refer only to
"wage-related benefits." Hence, the allocation of a
portion of the 70% TIP for the employees'
retirement plan, which is clearly intended for the
benefit of the employees, fall under the category of
"other benefits" as provided under the law.
Q: In 2010, Guagua National Colleges
(petitioner) implemented a 15% tuition fee
increase for the school year 2010-2011. After
deducting scholarship expenses and making
provisions for dropouts, unpaid accounts, and
contingencies, the net tuition fee incremental
proceeds (TIP) of petitioner amounted to
P4,579,923.00. Pursuant to Section 5(2) of R.A.
No. 6728, petitioner allocated 70% of the TIP, or
P3,205,946.00, as follows: (1) 13th month pay
and cash gift - P 91,709.00; (2) honorarium - P
286,497.00; (3) clothing and family assistance P 191,225.00; (4) SSS, PHIC, and HDMF
contribution - P 67,413.00; and (5) Retirement
benefit fund contribution - P 2,569,102.00.
Respondents Guagua National Colleges Faculty
Labor Union and Guagua National Colleges Non-
Moreover, on 04 February 2011, then Department
of Education Secretary Luistro issued DepEd Order
No. 11 s. 2011. It amended Section 182 of the 2010
Revised Manual of Private Schools to conform to the
provision of Section 5(2) of Republic Act No. 6728,
among others, to include other benefits in the
249
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Q: Herma Shipyard, Inc., (HERMA) is engaged in
the business of shipbuilding and repair. Several
of its employees occupy various positions. In
support of their employment is a contract of
employment denominated as Kasunduang
Paglilingkod, which classifies them as a projectbased employee only. The employees were
informed at the time of their engagement that
their status is only a project employee and their
duration of specific project or undertaking.
allocation of the allowed tuition fee increase, apart
from the payment of salaries, wages, and allowances
of members of the faculty and other school
employees. Thus, Guagua National Colleges'
allocation of a portion of the 70% net tuition fee
incremental proceeds for contribution to the
retirement plan of its employees is VALID. (Guagua
National Colleges v. Guagua National Colleges
Faculty Labor Union, G.R. No. 213730, 23 June 2021)
d. PROJECT EMPLOYMENT
However, under Paragraph 10 of their
employment contract, it allows the extension of
the employees’ employment until the
completion of the specific work. Is the extension
agreement under the employment contract
violation of the second requisite of project
employment that the completion or termination
of such project or undertaking be determined at
the time of engagement?
Project
A "project" has reference to a particular job or
undertaking that may or may not be within the
regular or usual business of the Er. In either case,
the project must be distinct, separate, and
identifiable from the main business of the Er, and its
duration must be determined or determinable. (PAL
v. NLRC, G.R. No. 125792, 09 Nov. 1998)
A: NO. It is enough that Herma Shipyard gave the
approximate or target completion date in the
project employment contract. Given the nature of its
business and the scope of its projects which take
months or even years to finish, Herma Shipyard
cannot be expected to give a definite and exact
completion date. It can only approximate or
estimate the completion date. What is important is
that the employees were apprised at the time of
their engagement that their employment is
coterminous with the specific project and the
purpose of the extension is only to complete the
same specific project, and not to keep them
employed even after the completion thereof.
(Herma Shipyard Inc. v. Oliveros et al., G.R. No.
208936, 17 April 2017)
Project Employment
Project employment is employment that has been
fixed for:
1.
Specific undertaking – a specific project or
undertaking the completion; or
2.
Time-bound – termination of which has been
determined at the time of engagement of the
Ee. (Sec. 5(a), Book VI, Rule I, IRR)
The period is not the determining factor, so that
even if the period is more than one (1) year, the Ee
does not necessarily become regular.
NOTE: Where the employment of a project Ee is
extended long after the supposed project has been
finished, the Ees are removed from the scope of
project Ees and considered as regular Ees.
Indicators
of
Project
Construction Industry
in
Either one or more of the following circumstances,
among others, may be considered as indicators that
an Ee is a project Ee:
Repeated hiring on a project-to-project basis is
considered necessary and desirable to the business
of the Er. The Ee is deemed regular. (Maraguinot v.
NLRC, G.R. No. 120969, 22 July 1998)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Employment
1.
250
The duration of the specific/identified
undertaking for which the worker is engaged
is reasonably determinable;
Labor Law and Social Legislation
2.
Such duration, as well as the specific
work/service to be performed, is defined in an
employment agreement, and is made clear to
the Ee at the time of hiring;
Employees in the Construction Industry
Two types of employees in the construction
industry:
NOTE: Absent any other proof that the project Ees
were informed of their status as such, it will be
presumed that they are regular Ees.
1.
Project Employees - those employed in
connection with a particular construction
project or phase; and
3.
The work/service performed by the Ee is in
connection with the particular project/
undertaking for which he is engaged;
2.
Non-project Employees - those employed
by a construction company without
reference to a particular project.
4.
The Ee, while not employed and awaiting
engagement, is free to offer his services to any
other Er;
5.
The termination of his employment in the
particular project/undertaking is reported to
the DOLE Regional Office having jurisdiction
over the workplace within 30 days following
the date of his separation from work, using the
prescribed form on Ee’s terminations,
dismissals or suspensions; or
6.
An undertaking in the employment contract by
the Er to pay completion bonus to the project
Ee as practiced by most construction
companies. (D.O.
19-93; Hanjin Heavy
Industries v. Ibañez, G.R. No. 170181, 26 June
2008)
NOTE: In the case of Exodus International
Construction Corporation v. Guillermo Biscocho, et
al., (G.R. No. 166109, 23 Feb 2011), when one project
is completed, employees were automatically
transferred to the next project. There was no
employment agreement given to the employees
which clearly spelled out the duration of their
employment, the specific work to be performed and
that such is made clear to them at the time of hiring.
As such, they are regular employees falling under
the classification of non-project employees.
Requisites to Acquire Regular Ee Status of
Project Ee
The following must concur to acquire regular Ee
status:
1.
There is a continuous rehiring of project Ee’s
even after cessation of a project; and
2.
The tasks performed by the alleged “project
Ee” are vital, necessary, and indispensable to
the usual business or trade of the Er. (D.M.
Consunji, Inc. v. JAMIN, G.R. No. 192514, 18
April 2012)
Requisites in Determining Whether an Ee is a
Project Ee
1.
2.
3.
4.
5.
Designation of named Ees as “Project Ees”;
The project Ee was assigned to carry out a
specific project or undertaking;
The duration and scope of which were
specified at the time the Ee was engaged for
that project (Imbuido v. NLRC, G.R. No.
114734, 31 May 2000);
The Ee must have been dismissed every after
completion of his project or phase; and
Report to the DOLE of Ee’s dismissal on
account of completion of contract. (D.O. 191993)
The length of time during which the Ee was
continuously rehired is not controlling, but merely
serves as a badge of regular employment.
“Day certain” rule
It states that a project employment that ends on a
certain date does not end on an exact date but upon
the completion of the project.
251
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Q: Diosdado, a carpenter, was hired by Building
Industries Corporation (BIC), and assigned to
build a small house in Alabang. His contract of
employment specifically referred to him as a
"project employee," although it did not provide
any particular date of completion of the project.
Is the completion of the house a valid cause for
the termination of Diosdado’s employment?
(2009 BAR)
years, and that he was dismissed from his
employment without any cause.
A: YES. The completion of the house should be a
valid cause for termination of Diosdado’s
employment, although the employment contract
may not state a particular date.
A: NO. Puente is a project Ee. The contracts of
employment of Puente attest to the fact that he was
hired for specific projects. His employment was
coterminous with the completion of the projects for
which he had been hired. Those contracts expressly
provided that his tenure of employment depended
on the duration of any phase of the project or on the
completion of the construction projects.
Furthermore, the company regularly submitted to
DOLE reports of the termination of services of
project workers. Such compliance with the
reportorial requirement confirms that Puente was a
project Ee.
Filsystems on its part averred that Puente was a
project Ee in the company’s various projects,
and that after the completion of each project, his
employment was terminated, and such was
reported to the DOLE. Is Roger Puente a regular
Ee?
However, if it did not specify that the termination of
the parties’ employment relationship was to be on a
“day certain”—the day when the phase of work
would be completed—the Ee can be considered to
have been a regular Ee. (Filipinas Pre-Fabricated
Building Systems, v. Puente, G.R. No. 153832, 18
March 2005)
NOTE: To satisfy due process requirements, under
DOLE D.O. No. 19, Series of 1993, the employer is
required to report to the relevant DOLE Regional
Office the fact of termination of project Ees as a
result of the completion of the project or any phase
thereof in which one is employed.
The mere rehiring of Puente on a project-to-project
basis did not confer upon him regular employment
status. (Filipinas Pre-Fabricated Building Systems,
Inc. v. Puente, G.R. No. 153832, 18 March 2005)
In the case of Alcatel v. Relos, while the employee
performed tasks that were clearly vital, necessary,
and indispensable to the usual business or trade of
the company, he was not continuously rehired after
the cessation of every project.
Entitlement to Separation Pay
GR: Project Ees are not entitled to separation pay if
their services are terminated as a result of the
completion of project.
Alcatel did not rehire the employee until after a
lapse of 33 months, for the PLDT 1342 project.
Alcatel's continuous rehiring of respondent in
various capacities was done entirely within the
framework of one and the same project – the PLDT
1342 project. This did not make the employee a
regular employee of Alcatel as he was not
continuously rehired after the cessation of a project.
(Alcatel v. Relos, G.R. No. 164315, 03 July 1999)
XPN: If the projects they are working on have not
yet been completed when their services are
terminated; project Ees also enjoy security of tenure
during the limited time of their employment. (De
Ocampo v. NLRC, G.R. No. 81077, 06 June 1990)
Q: Roger Puente was hired by Filsystems, Inc.,
initially as an installer and eventually promoted
to mobile crane operator, and was stationed at
the company’s premises. Puente claimed in his
complaint for illegal dismissal, that his work
was continuous and without interruption for 10
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
252
Labor Law and Social Legislation
merely intermittent, the law deems repeated and
continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
that activity to the business. Hence, the employment
is considered regular, but only with respect to such
activity and while such activity exists. (Benares v.
Pancho, G.R. No. 151827, 29 April 2005)
e. SEASONAL EMPLOYMENT
Seasonal employment
Employment where the job, work, or service to be
performed is seasonal in nature and the
employment is for the duration of the season. (Sec.
5(a), Book VI, Rule I, IRR)
It is not enough that they perform work or services
that are seasonal in nature. They must have also
been employed only for the duration of one season.
An employment arrangement where an Ee is
engaged to work during a particular season on an
activity that is usually necessary or desirable in the
usual business or trade of the Er.
Q: Carlito Codilan and Maximo Docena had been
working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria, and Reynaldo
Tulin have been working for 22, 15, and 6 years
respectively.
NOTE: For Seasonal Ees, their employment legally
ends upon completion of the project or the season.
The termination of their employment cannot and
should not constitute an illegal dismissal. (Mercado
v. NLRC, G.R. No. 79869, 05 Sept. 1991)
The operations of the rice mill continue to
operate and do business throughout the year
even if there are only two or three harvest
seasons within the year.
This seasonal
harvesting is the reason why the company
considers the workers as seasonal employees. Is
the company correct in considering the Ees as
seasonal Ees?
One-year duration on the job is pertinent in
deciding whether a casual Ee has become regular or
not, but it is not pertinent to a Seasonal or Project
Ee. Passage of time does not make a seasonal
worker regular or permanent. (Ibid.)
During off-season, the relationship of Er-Ee is not
severed; the Seasonal Ee is merely considered on
LOA without pay. Seasonal workers who are
repeatedly engaged from season to season
performing the same tasks are deemed to have
acquired regular employment. (Hacienda Fatima v.
National Federation of Sugarcane Workers-Food and
General Trade, G.R. No. 149440, 28 Jan. 2003)
A: NO. The fact is that big rice mills such as the one
owned by the company continue to operate and do
business throughout the year even if there are only
two or three harvest seasons within the year. It is a
common practice among farmers and rice dealers to
store their palay and to have the same milled as the
need arises. Thus, the milling operations are not
seasonal.
Seasonal Ees as Regular Ees
Finally, considering the number of years that they
have worked, the lowest being six (6) years, the
workers have long attained the status of regular Ees
as defined under Art. 295. (Tacloban Sagkahan Rice
Mill v. NLRC, G.R. No. 73806, 21 Mar. 1990)
Seasonal Ees can be considered regular Ees. The fact
that Seasonal Ees do not work continuously for one
whole year but only for the duration of the season
does not detract from considering them in regular
employment. Seasonal workers who are called to
work from time to time and are temporarily laid off
during off-season are not separated from service in
that period, but merely considered on leave until reemployed.
Entitlement to Separation Pay
When the business establishment is sold which
effectively terminates the employment of the
seasonal Ees, the latter would be entitled to
separation pay.
If the Ee has been performing the job for at least a
year, even if the performance is not continuous and
253
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
NOTE: “Month pay” shall be understood, in this
regard, as average monthly pay during the season
they worked. (Abad, Jr., 2015)
Brent Doctrine
Art. 295 of the Labor Code does not prohibit an
employment contract with a fixed period, provided
it is entered into by the parties without any force,
duress, or improper pressure being brought to bear
upon either party, particularly the employee and
absent any other circumstances vitiating consent; or
where it satisfactorily appears that the employer
and employee dealt with each other on more or less
equal terms with no moral dominance whatever
being exercised by the former over the latter. Such
employment for a defined period is allowed even
where the duties of the employee consist of
activities usually necessary or desirable in the usual
business of the employer.
f. FIXED-TERM EMPLOYMENT
Term Employment
A contract of employment for a definite period
terminates by its own terms at the end of such
period. (Brent School v. Zamora, G.R. No. L-48494, 05
Feb. 1990)
Term employment is not a circumvention of the law
on security of tenure if it follows the requisites laid
down by the Brent ruling. (Romares v. NLRC, G.R. No.
122327, 19 Aug. 1998)
There can of course be no quarrel with the
proposition that where, from the circumstances, it is
apparent that periods have been imposed to
preclude acquisition of tenurial security by the
employee, they should be struck down or
disregarded as contrary to public policy, morals, etc.
(Brent School, Inc. v. Zamora, G.R. No. L-48494, 5 Feb.
1990)
The defined period must be a genuine condition of
the job and not merely to avoid regular status of the
Ee. (Azucena, 2016)
Decisive Determinant in Term Employment
It is the day certain agreed upon by the parties for
the commencement and the termination of their
employment relation.
Overseas Seafarers are Contractuals
The employment of overseas seafarers is governed
by the POEA Standard Employment Contract for
Filipino Seamen. Their employment is governed by
the contracts they sign every time they are rehired,
and their employment is terminated when the
contract expires. It is an accepted maritime industry
practice that employment of seafarers is for a fixed
period only.
Fixed Term Employment
It is an employment where a fixed period of
employment was agreed upon:
1.
Knowingly and voluntarily by the parties; and
2.
Without any force, duress or improper
pressure being brought to bear upon the Ee
and business of Er. (Philips Semiconductor v.
Fadriquela, G.R. No. 141717, 14 Apr. 2004)
Fixed-Term
Employment
Employment
vs.
Domestic Seafarers are Not Contractual
Seamen employed in domestic shipping are entitled
to security of tenure, can become permanent
employees, and can be terminated only for just or
authorized causes.
Project
Both employments are time bound or for a certain
period – as agreed upon at the time of engagement.
However, in project employment, the employee is
tasked to do specific undertaking, which is not
present in fixed-term employment.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Domestic seafarers are covered by the Labor Code,
including its Book VI.
Q: Darrell was hired as an athletic director in
Amorita School for a period of five years. As
254
Labor Law and Social Legislation
usually necessary and desirable to the usual
business of the Er, or not.
such, he oversees the work of coaches and
related staff involved in intercollegiate or
interscholastic athletic programs. However, he
was not rehired upon the expiration of said
period. Darrell questions his termination
alleging that he was a regular Ee and could not
be dismissed without valid cause.
a.
Q: Dean Jose and other Ees are holding
administrative positions as dean, department
heads, and institute secretaries. In the
implementation
of
the
Reorganization,
Retrenchment and Restructuring program
effective Jan. 1, 1984, Dean Jose and other Ees
were retired but subsequently rehired. Their
appointment to their administrative positions
as dean, department heads, and institute
secretaries had been extended by the company
from time to time until the expiration of their
last appointment on May 31, 1988. Were Dean
Jose and other Ees illegally dismissed?
Is he a regular Ee?
b. Will Darrell automatically become a
regular Ee if he is rehired by the school for
another definite period of employment?
A:
a. NO. Darrell was not a regular Ee but an Ee under
a fixed-term contract. While it can be said that
the services he rendered were usually
necessary and desirable to the business of the
school, it cannot also be denied that his
employment was for a fixed term of five years.
The decisive determinant in fixed-term
employment should not be the activities that
the employee is called upon to perform, but the
day certain agreed upon by the parties for the
commencement and termination of their
employment relation. (Brent School Inc. v.
Zamora, G.R. No. 48494, 05 Feb. 1990)
A: NO. Petitioners were dismissed by reason of the
expiration of their contracts of employment.
Petitioners' appointments as dean, department
heads, and institute secretaries were for fixed terms
of definite periods as shown by their respective
contracts of employment, which all expired on the
same date, May 31, 1988. The validity of
employment for a fixed period has been
acknowledged and affirmed by the SC. (Blancaflor v.
NLRC, G.R. No. 101013, 02 Feb. 1993)
Q: Lina has been working as a steward with a
Miami, U.S.A.-based Loyal Cruise Lines for the
past 15 years. She was recruited by a local
manning agency, Macapagal Shipping, and was
made to sign a 10-month employment contract
every time she left for Miami. Macapagal
Shipping paid for Lina’s round-trip travel
expenses from Manila to Miami. Because of a
food poisoning incident which happened during
her last cruise assignment, Lina was not rehired. Lina claims she has been illegally
terminated and seeks separation pay. If you
were the Labor Arbiter handling the case, how
would you decide? (2014 BAR)
b. NO. The decisive determinant in term
employment is the day certain agreed upon by
the parties for the commencement and
termination of their employment relationship, a
day certain being understood to be that which
must necessarily come, although it may not be
known when and not whether the work is
usually necessary and desirable to the business
of the Er.
Q: Does the “Reasonable Connection Rule” apply
in fixed term employment for a fixed-term Ee to
be eventually classified as a regular Ee?
A: NO. It should be apparent that this settled and
familiar notion of a period, in the context of a
contract of employment, takes no account at all the
nature of the duties of the Ee; it has absolutely no
relevance to the character of his duties as being
A: I will dismiss Lina's complaint. Lina is a
contractual employee, and the length of her
employment is determined by the contracts she
entered. Here, her employment was terminated at
the expiration of the contract. (Millares, et al. v.
NLRC G.R. No. 110524, 29 July 2002)
255
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
g. WORK POOL EMPLOYEES
2. LEGITIMATE SUBCONTRACTING vs. LABORONLY CONTRACTING
Work Pool
a. ELEMENTS
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. (Tomas
Lao Construction, et. al. v. NLRC, G.R. No. 116781, 05
Sept. 1997)
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. This is beneficial to
both the employer and employee for it prevents the
unjust situation of "coddling labor at the expense of
capital" and at the same time, enables the workers
to attain the status of regular employees. (Ibid.)
NOTE: An employee in the work pool is not
necessarily a regular employee; he may also be a
project employee.
Work Pool in the Construction Industry
Members of a work pool from which a construction
company draws its project employees, if considered
employee of the construction company while in the
work pool, are non-project employees or employees
for an indefinite period.
LEGITIMATE
SUBCONTRACTING
LABOR-ONLY
CONTRACTING
1. The contractor or
subcontractor carries
on a distinct and
independent
business
and
undertakes to perform
the job, work or
service on its own
account and under its
own
responsibility
according to its own
manner and method,
and free from the
control and direction
of the principal in all
matters
connected
with the performance
of the work except as
to the results thereof;
1. The contractor or
subcontractor
does
not have substantial
capital or investment
to perform the job,
work or service under
its own account and
responsibility; and
2. The contractor or
subcontractor
has
substantial capital or
investment; and
If they are employed in a particular project, the
completion of the project or any phase thereof will
not mean severance of employer-employee
relationship. (Policy Instruction No. 20)
3.
The
Service
Agreement
ensures
compliance with all
the rights and benefits
for all the employees
of the contractor or
subcontractor under
the labor laws. (Sec. 8,
D.O. No. 174, s. 2017)
2. The employees
recruited, supplied, or
placed
by
such
contractor
or
subcontractor
are
performing activities
which are directly
related to the main
business
of
the
principal. (Sasan v.
NLRC, G.R. No. 176240,
17 Oct. 2008)
Legitimate Subcontracting - The agreement
between the principal and the contractor or
subcontractor assures the contractual employees'
entitlement to all labor and occupational safety and
health standards, free exercise of the right to selforganization, security of tenure, and social welfare
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
256
Labor Law and Social Legislation
considered only an indirect employer. (PCI
Automation Center, Inc. v. NLRC, G.R. No. 115920, 29
Jan. 1996)
benefits. (Petron Corporation v. ARMZ Caberte et. al,
G.R. No. 182255, 15 June 2015)
Substantial Capital - Refers to paid-up capital
stocks/shares of at least P5 Million in the case of
corporations, partnerships, and cooperatives. P5
Million net worth in the case of a single
proprietorship. (Sec. 3(L), DOLE D.O. No. 174 s. 2017)
What is contracted is the performance and
completion of a designated job, and not just the
supplying of people to do the job.
Major Laws Applicable to Work Relationship
The law does not require both substantial capital
and investments, it is sufficient that either of the
two is complied with. (Neri v. NLRC, G.R. Nos. 9700809, 23 July 1993)
1.
2.
Burden of proof to prove that he/it has substantial
capital or investment rests on the contractor
himself. (Guarin v. NLRC, G.R. No. 86010, 03 Oct.
1989)
Between the Principal and Contractor –
The Civil Code and pertinent Commercial
Laws
Between Contractor and his Employees
– the Labor Code and Special Labor Laws.
NOTE: Between the principal and the contractor’s
employees, no employer-employee relationship
exists; the contractor, being himself a businessman,
is the employer. But the contractor may in turn
become a contractee if he contracts with a
contractor.
NOTE: In legitimate Job Contracting, the principal is
jointly and severally liable with the contractor for
the payment of unpaid wages. (Arts. 106, 107 & 10,
LC)
Employer-employee relationship may be declared
to exist between the principal and the contractor’s
workers where the contracting arrangement is not
legitimate.
Independent Contractor
Those who undertake “job-contracting.” They
exercise independent employment, contracting to
do a piece of work according to their own methods
and without being subject to control of their
employer except as to the result of their work.
(Villuga v. NLRC, G.R. No. 75038, 23 Aug. 1993)
Labor-only contracting
Labor-only contracting (LOC) refers to an
arrangement where the contractor, who does not
have substantial capital or investment in the form of
tools, equipment, machineries, work premises,
among others, supplies workers to an employer and
the workers recruited are performing activities
which are directly related to the principal business
of such employer. (Art. 106, LC)
NOTE: Independent contractors often present
themselves to possess unique skills, expertise, or
talent to distinguish them from ordinary
employees. (Sonza v. ABS-CBN, G.R. No. 138051, 10
June 2004)
Indirect or Statutory Employer - One who enters
a contract with an independent contractor for the
performance of any work, task, job, or project not
directly related to the employer’s business. (Baguio
v. NLRC, G.R. Nos. 79004-08, 04 Oct. 1991)
It is a prohibited act, an arrangement where the
contractor or subcontractor merely recruits,
supplies, or places workers to perform a job, work
or service for a principal.
NOTE: In labor-only contracting, there is really no
contracting and no contractor. There is only a
representative to gather and supply people to the
principal. (Azucena, 2016)
NOTE: No Er-Ee relationship exists between the
owner of the project and the employees of the
independent contractor. (Baguio v. NLRC, G.R. Nos.
79004-08, 04 Oct. 1991) The principal employer is
257
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
There are three parties involved in these
arrangements:
A finding that a contractor is a “labor-only”
contractor is equivalent to declaring that there is an
Er-Ee relationship between the principal and the
employees of the “labor-only” contractor. (San
Miguel Corp. v. MAERC Integrated Systems, G.R. No.
144672, 10 July 2003)
NOTE: A finding that a contractor is a labor-only
contractor, as opposed to permissible job
contracting, is equivalent to declaring that there is
an employer-employee relationship between the
principal and the employees of the supposed
contractor, and the labor-only contractor is
considered as a mere agent of the principal, the real
employer. (Allied Banking Corporation v. Reynold
Calumpang, G.R. No. 219435, 17 Jan. 2018)
1.
Principal (Contractee) – It refers to any
employer, whether a person or entity,
including government agencies and
government-owned
and
controlled
corporations, who/which puts out or farms
out a job, service, or work to a contractor.
2.
Contractor or subcontractor – It refers to
any person or entity, including a
cooperative, engaged in a legitimate
contracting or subcontracting agreement
providing either services, workers or
combination of services to a principal
under a Service Agreement;
3.
Contractual workers – Includes one
employed by a contractor to perform or
complete a job, work or service pursuant to
a Service Agreement with a principal.
Confirming Elements
To have labor-only contracting, the essential
element of supplying workers to another is not
enough. To it must be added either one of two
confirming elements:
Job Contracting vs. Labor-only Contracting
1.
2.
Lack of substantial capital or investment and
performance of activities directly related or
usually necessary or desirable to the
principal’s main business; or
JOB CONTRACTING
The Er/principal is
merely an indirect
employer, by operation
of
law,
of
his
contractor’s
employees.
The contractor does not exercise control over
the performance of the employees. (Azucena,
2016)
NOTE: If the essential element is absent, there can
be no LOC. And even if the essential element is
present, but confirming element one or two is
absent, there is still no LOC. (Azucena, 2016)
The law creates an ErEe relationship for a
limited purpose.
b. TRILATERAL RELATIONSHIP
In legitimate contracting, there exists a trilateral
relationship under which there is a contract for a
specific job, work or service between the principal
and the contractor or subcontractor, and a contract
of employment between the contractor or
subcontractor and its workers. (Azucena, 2016)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
258
LABOR-ONLY
CONTRACTING
The Er/principal is
treated
as
direct
employer
of
the
contractor’s
employees
in
all
instances.
(Contractor = agent of
the employer)
The statute creates an
Er-Ee relationship for a
comprehensive
purpose.
Labor Law and Social Legislation
The principal becomes
solidarily liable. The
liability, however, does
not extend to the
payment of backwages
or separation pay of
employees who are
illegally dismissed.
174. s. 2016 does not contemplate to cover
contractual relationship such as in contract of
sale or purchase, contract of lease, contract of
carriage,
contract
growing/growership
agreement, toll manufacturing, contract of
management, operation and maintenance, and
such other contracts governed by the Civil Code
and special laws.
The principal becomes
solidarily liable with
the contractor not only
for unpaid wages but
also for all the rightful
claims
of
the
employees under the
Labor
Code
and
ancillary laws.
Allowed by law
Prohibited by law
Presence of substantial
capital or investment.
Absence of substantial
capital or investment.
Contractor or Subcontractor to Furnish a Bond
An employer or indirect employer may require the
contractor or subcontractor to furnish a bond equal
to the cost of labor under contract, on the condition
that the bond will answer for the wages due the
employees should the contractor or subcontractor
fail to pay the same. (Art. 107, LC)
DOLE D.O. No. 174 s. 2017
Issued by the Secretary of Labor and Employment
implementing and interpreting Arts. 106 to 109 of
the LC. Effective 16 March 2017.
NOTE: Where the employer fails to require the
posting of the bond, he must be liable for whatever
the contractor may have incurred to his employees,
without prejudice to its right of reimbursement
from the contractor for whatever amount paid.
(Baguio v. NLRC, G.R. Nos. 79004-08, 04 Oct. 1991)
Non-applicability of D.O. No. 174 s. 2017
D.O. 174, Series of 2017 is not applicable to trilateral
relationship which characterizes contracting or
subcontracting arrangement. Including:
Extent of Employer’s
Contracting
Liability in Invalid
1.
BPO/KPO - It does not contemplate to cover
information-technology
enabled
services
involving an entire or specific business process
such as Business Process Outsourcing (BPO) or
Knowledge Process Outsourcing (KPO). (DOLE
D.O. No. 01, s. 2017)
Where the contracting is found to be labor-only
contracting, the liability is immediately and directly
imposed upon the principal. The principal
shoulders all the obligations of an employer, not just
the payment of wages. The liability becomes direct
and total as that of a directly hiring employer.
2.
Construction Industry - Licensing and
exercise of regulatory powers over the
construction industry is lodged with the
Philippine Constructors Accreditation Board
(PCAB) of the Construction Industry Authority
of the Philippines (CIAP).
c. SOLIDARY LIABILITY
3.
4.
Extent of Principal’s Liability in Legitimate
Contracting
The contractor or subcontractor shall be considered
the employer of the contractual employee for
purposes of enforcing the provisions of the Labor
Code and other social legislation.
Private Security Agency - Except for the
registration requirement as provided in DO No.
174, s. 2017, contracting or subcontracting
arrangement in the private security industry
shall be governed by DO No. 150, s. 2016.
The principal shall be solidarily liable with the
contractor in the event of any violation of any
provisions of the Labor Code, including the failure
to pay wages. (D.O. No. 18-02 s. 2002)
Other Contractual Relationships - DO No.
259
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
the principal has already handed over to the
contractor the amount covering the wages, or the
pay increase mandated by a wage order. (Rosewood
Processing, Inc. v. NLRC, G.R. Nos. 116476-84, 21 May
1998)
For Wages and Money Claims
If the contractor or subcontractor fails to pay the
wages of his employees in accordance with the
Code, the employer shall be jointly and severally
liable with the contractor or subcontractor to such
employees to the extent of the work performed
under the contract, in the same manner and extent
that he is liable to employees directly employed by
him. (Art. 107, LC)
Q: Petrotech, a subcontractor of Liquigaz,
engaged the services of Independent Testing
Consultants (ITC) to conduct non-destructive
testing on Liquigaz's piping systems. ITC
conducted the agreed tests. It later billed
Petrotech. However, despite demand, Petrotech
refused to pay. ITC filed a Complaint for
collection of a sum of money with damages
against Petrotech, Liquigaz, and Noell Whessoe
plus legal interest.
NOTE: Where no Er-Ee relationship exists between
the parties and no issue is involved which may be
resolved by reference to the Labor Code, other labor
statutes or any collective bargaining agreement, it is
the Regional Trial Court that has jurisdiction.
It joined Noell Whessoe as a defendant, alleging
that it was Liquigaz's contractor that
subcontracted Petrotech. Liquigaz contended
that ITC had no cause of action against it since
there were no contractual relations between
them and that any contract that ITC had was
with its subcontractors. Noell Whessoe, on the
other hand, denied that it was Liquigaz's
contractor and that its basic role was merely to
supervise the construction of its gas plants. It
argued that any privity of contract was only with
Petrotech.
For Other Violations
The court has interpreted the liability of the
principal under Art. 109 as a qualified or limited
liability.
Liability
1.
2.
For failure to pay the minimum wage or the
service incentive leave or other benefits –
The principal is equally liable with the
contractor as if the principal were the direct
employer.
Thus, it asserted that Petrotech alone should be
liable to ITC. Noell Whessoe submitted
documents showing that Liquigaz engaged
Whessoe Projects Limited (Whessoe UK), a
limited company organized under the laws of
the United Kingdom, for the construction of its
storage facilities. Whessoe UK, in turn, engaged
Noell Whessoe, a separate and distinct entity, to
be the construction manager for the Mariveles
Terminal Expansion Project. The documents
further stated that Whessoe UK had already paid
in full its contractual obligations to Petrotech.
With punitive character – Such as an award
for backwages and separation pay because of
an illegal dismissal of the contractor’s
employee, the liability should be solely that of
the contractor, in the absence of proof that the
principal conspired with the contractor in the
commission of the illegal dismissal.
NOTE: The contractor’s liability for underpaid
wages and unpaid overtime work could be enforced
against the surety bond posted by the contractor as
required by the principal. The law’s aim in imposing
indirect liability upon the principal is to assure
payment of monetary obligations to the workers.
This aim is accomplished through the principal’s
requiring the posting of a bond. After satisfying
from the bond the unpaid wages and overtime pay,
the contractor cannot recover from the principal if
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Can Noell Whessoe, Inc. be held solidarily liable
with
respondents
Liquigaz
Philippines
Corporation and Petrotech Systems, Inc. for
unpaid fees to respondent Independent Testing
Consultants, Inc.?
260
Labor Law and Social Legislation
A: NO. There was insufficient evidence proving that
Whessoe UK and Noel Whessoe were two (2)
separate and distinct entities. Noel Whessoe failed
to prove that for the Mariveles Terminal Expansion
Project, it was a separate and distinct entity from
Whessoe UK. Therefore, it cannot set up the defense
of privity of contract (Art. 1729) to escape liability.
Under Art. 1729, ITC had a cause of action against
Liquigaz and Noel Whessoe, even if its contract was
only with Petrotech. However, Art. 1729, while
serving as an exception to the general rule on the
privity of contracts, likewise provides for an
exception to this exception.
1. SUBSTANTIVE DUE PROCESS
JUST CAUSE
A just cause dismissal
implies
that
the
employee
has
committed, or is guilty
of, some violation
against the employer,
that is, the employee
has committed some
serious misconduct, is
guilty of fraud against
the employer or he has
neglected his duties
such as abandonment.
Thus, the employee
himself initiated the
dismissal
process.
Payment of separation
pay, as a rule, is not
required in just cause
dismissal.
However,
where the employee is
dismissed for causes
other than serious
misconduct or those
reflecting on his moral
character, separation
pay may be allowed as
a measure of social
justice. (Poquiz, 2012)
The contractor is solidarily liable with the owner
and subcontractor for any liabilities against a
supplier despite the absence of contract between
the contractor and the supplier, except when the
subcontractor has already been fully paid for its
services. Here, there was uncontroverted evidence
that PETROTECH had already been paid for its
services. Since Whessoe UK and Noel Whessoe
should be considered the same entity for the
purposes of the Mariveles Terminal Expansion
Project, Whessoe UK's full payment to Petrotech
would serve as a valid defense against Noel
Whessoe's solidary liability.
Thus, Noel Whessoe still cannot be held solidarily
liable with Liquigaz and Petrotech for any
remaining receivables from Independent Testing
Consultants. Any remaining obligations to it should
be solidarily borne by the owner, Liquigaz, and the
subcontractor, Petrotech. (Noelle Whessoe, Inc. v.
Independent Testing Consultants, Inc., G.R. No.
199851, 07 Nov. 2018)
2-Fold Requirement for Lawful Dismissal
2.
Authorized
cause
dismissal is a form of
terminating
Er-Ee
relationship with a
liability on the part of
the employer to pay
separation pay as
mandated by law. It
does not necessarily
imply delinquency or
culpability on the part
of
the
employee.
Instead, the dismissal
process is initiated by
the
employer's
exercise
of
his
management
prerogative such as
installation of laborsaving devices, closure
of
business,
or
implementing
a
retrenchment
program. (Jaka Food v.
Pacot, G.R. No. 151378,
28 Mar. 2005)
The existence of any of the just or authorized causes
enumerated in Arts. 282 and 283 of the Labor Code
does not automatically result in the dismissal of the
employee. The employer must decide whether it
would dismiss the employee, impose a lighter
penalty, or perhaps even condone the offense
committed by an erring employee. In deciding, the
employer may take into consideration the
employee's past offenses. (Santos v. Integrated
Pharmaceutical, Inc., G.R. No. 204620, 11 July 2016)
B. TERMINATION BY EMPLOYER
1.
AUTHORIZED CAUSE
Substantive – legality or illegality of the act of
dismissal (just and authorized causes)
Procedural – legality or illegality of the manner
of dismissal (due process; notice and hearing)
Q: Aldovino and her co-applicants applied for
work at Gold and Green Manpower, a local
manning agency. Eventually, they were hired as
sewers for Dipper Semi-Conductor, a Taiwan261
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
effected merely because respondents no longer
wanted their services. This is not an authorized or
just cause for dismissal under the Labor Code.
Employment contracts cannot be terminated on a
whim. Furthermore, petitioners were not accorded
due process. A valid dismissal must comply with
substantive and procedural due process: there must
be a valid cause and a valid procedure. The
employer must comply with the two (2)-notice
requirement, while the employee must be given an
opportunity to be heard. Here, petitioners were only
verbally dismissed, without any notice given or
having been informed of any just cause for their
dismissal.
based company. Their respective employment
contracts provided an eight (8)-hour working
day, a fixed monthly salary, and entitlement to
overtime pay, among others. Once Aldovino and
her co-workers arrived in Taiwan, Gold and
Green Manpower took all their travel
documents, including their passports. They
were then made to sign another contract that
provides that they would be paid on a piece-rate
basis instead of a fixed monthly salary. Because
they were paid on a piece-rate basis, they
received less than the fixed monthly salary
stipulated in their original contract. When
Aldovino and her co-workers inquired, Dipper
Semi-Conductor refused to disclose the schedule
of payment on a piece-rate basis.
With their right to substantive and procedural due
process denied, petitioners were illegally dismissed
from service. (Julita M. Aldovino et al., v. Gold and
Green Manpower et al. G.R. No. 200811, 19 June 2019)
Aldovino and her co-workers filed a Complaint
against their employers, Dipper SemiConductor and Sage International before a local
court in Taiwan. The parties met before the
Bureau of Labor Affairs for a dialogue. There,
Dipper Semi-Conductor ordered Aldovino and
her co-workers to return to the Philippines as it
was no longer interested in their services. All of
them returned to the Philippines.
Q: Joy was deployed to work for Taiwan Wacoal,
Co. Ltd. on June 26, 1997 for one year. Sameer
Overseas Placement Agency claims that on July
14, 1997, Mr. Huwang from Wacoal informed
Joy, without prior notice, that she was
terminated and that she should prepare for
immediate repatriation. Hence, Joy filed a
complaint with the NLRC claiming that she was
illegally dismissed.
They eventually filed before the Labor Arbiter a
case for illegal termination, underpayment of
salaries, human trafficking, illegal signing of
papers, and other money claims. Respondents
argued that petitioners were not illegally
dismissed and that they voluntarily returned to
the Philippines. Were petitioners illegally
dismissed?
The NLRC declared that Joy was illegally
dismissed, ruling that Sameer Overseas
Placement Agency failed to prove that there
were just causes for termination. Sameer
Overseas Placement Agency counters that there
was just cause for termination because there
was a finding of Wacoal of Joy’s inefficiency,
negligence in her duties, and failure to comply
with the work requirements of her foreign
employer. Therefore, it claims that Joy’s
dismissal was valid. Was Joy illegally dismissed?
A: YES. Under the Labor Code, employers may only
terminate employment for a just or authorized
cause and after complying with procedural due
process requirements. Arts. 297 and 300 of the
Labor Code enumerate the causes of employment
termination either by employers or by employees.
In illegal dismissal cases, the burden of proof that
employees were validly dismissed rests on the
employers. Failure to discharge this burden means
that the dismissal is illegal.
A: YES. Security of tenure for labor is guaranteed by
our Constitution. With respect to the rights of
overseas Filipino workers, we follow the principle
of lex loci contractus. By our laws, overseas Filipino
workers may only be terminated for a just or
authorized cause and after compliance with
procedural due process requirements. Joy’s
A review of the records here shows that the
termination of petitioners' employment was
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
262
Labor Law and Social Legislation
5.
dismissal less than one year from hiring and her
repatriation on the same day show not only failure
on the part of Sameer Overseas Placement Agency
to comply with the requirement of the existence of
just cause for termination – they patently show that
the employers did not comply with the due process
requirement. The abruptness of the termination
negated any finding that she was properly notified
and given the opportunity to be heard. Her
constitutional right to due process of law was
violated. (Sameer Overseas Placement Agency v. Joy
Cabiles, G.R. No. 170139, 05 Aug. 2014)
1. SERIOUS MISCONDUCT AND WILLFUL
DISOBEDIENCE
Serious Misconduct
It is an improper or wrong conduct; the
transgression of 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. To be serious within
the meaning and intendment of the law, the
misconduct must be of such grave and aggravated
character and not merely trivial or unimportant.
(Villamor Golf Club v. Pehid, G.R. No. 166152, 04 Oct.
2005)
a. JUST CAUSES
It is a termination initiated by the employee. This is
an exercise of management prerogative; however, it
must not be exercised with abuse of discretion.
Elements:
1. It must be serious or of such a grave and
aggravated character;
2. Must relate to the performance of the Ees’
duties; and
3. Ee has become unfit to continue working for the
Er. (Philippine Aeolus Automotive United Corp. v.
NLRC, G.R. No. 124617, 28 Apr. 2000)
While the law provides for a just cause to dismiss an
employee, the employer still has the discretion
whether it would exercise its right to terminate the
employment or not. (Santos v. Integrated
Pharmaceutical, Inc., G.R. No. 204620, 11 July 2016)
Basis
As a measure of self-protection against acts inimical
to its interest, a company has the right to dismiss its
erring employees. 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, G.R. No. 190436, 16 Jan. 2012)
Examples:
1. Sexual harassment;
2. Fighting within the company premises;
3. Uttering obscene, insulting, or offensive
words against a superior;
4. Falsification of time records; or
5. Gross immorality.
Just Causes for Termination
1.
2.
3.
4.
Other causes analogous to the foregoing. (Art.
297, LC)
Q: Delos Reyes was a university professor and
the president of the university’s Faculty and
Employees Union, a duly registered labor union.
An administrative complaint for grave
misconduct was filed against him for using
expletives at Paula Mae, a minor student at the
university, when the latter was holding the
doorknob on her way out of the faculty room,
while he held the doorknob on the other side.
When Paula Mae stepped aside, Delos Reyes
allegedly exclaimed the words “anak ng puta”
and walked on without any remorse, causing
emotional trauma to Paula Mae.
Serious misconduct or willful disobedience
by the Ee of the lawful orders of his Er or
representative in connection with his work;
Gross and habitual neglect by the Ee of his
duties;
Fraud or willful breach by the Ee of the trust
reposed in him by his Er or duly organized
representative;
Commission of a crime or offense by the Ee
against the person of his Er or any immediate
member of his family or his duly authorized
representative; or
263
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
In this case, petitioner’s dismissal, which was
brought about by his personal acts, does not
constitute unfair labor practice as provided
under the Labor Code. Dismissing him was not
meant to violate the right of the university
employees to self-organize. Neither was it
meant to interfere with the Union's activities.
Finally, petitioner cannot raise the defense
that he was the Union's president; this does
not make him immune from liability for his
acts of misconduct. (Adamson University
Faculty and Employees Union, et al. v. Adamson
University, G.R. No. 227070, 09 Mar. 2020)
Delos Reyes denied the accusations against him
and filed a counter-complaint against Paula Mae
for maligning and tarnishing his established
reputation in the university. A hearing was held
and later, Delos Reyes was issued a Notice of
Dismissal.
a. Was Delos Reyes validly dismissed?
b. Did his dismissal constitute unfair labor
practice?
A:
a.
YES. A teacher exclaiming, "Anak ng puta" after
having encountered a student is an
unquestionable act of misconduct. However,
whether it is serious misconduct that warrants
the teacher's dismissal will depend on the
context of the phrase's use.
Q: Escando, upset at his transfer to the washer
section, repeatedly uttered “Gago ka” and
threatened bodily harm to his superior Mr.
Andres. Is the utterance of the obscene words
and threats of bodily harm gross and willful
misconduct?
While uttering an expletive out loud in the
spur of the moment is not grave misconduct
per se, the refusal to acknowledge this mistake
and the attempt to cause further damage and
distress to a minor student cannot be mere
errors of judgment. Petitioner's subsequent
acts are willful, which negate professionalism
in his behavior. They contradict a professor's
responsibility of giving primacy to the
students' interests and respecting the
institution in which he teaches. In the interest
of self-preservation, petitioner refused to
answer for his own mistake; instead, he played
the victim and sought to find fault in a student
who had no ill motive against him. Indeed, had
he been modest enough to own up to his first
blunder, petitioner's case would have gone an
entirely different way.
b.
A: YES. The repeated utterances by Escando of
obscene, insulting, or offensive words against a
superior were not only destructive of the morals of
his co-Ees and a violation of the company rules and
regulations, but also constitute gross misconduct,
which is one of the grounds provided by law to
terminate the services of an Ee. (Autobus Workers
Union v. NLRC, G.R. No. 117453, 26 June 1998)
Q: Samson made insulting and obscene
utterances towards the General Manager saying,
“Si EDT bullshit yan, sabihin mo kay EDT yan”
among others during the Christmas party. Are
the utterances towards the General Manager
gross misconduct?
A: The alleged misconduct of Samson when viewed
in its context is not of such serious and grave
character as to warrant his dismissal. Samson made
the utterances and obscene gestures at an informal
Christmas gathering and it is to be expected during
this kind of gatherings, where tongues are often
loosened by liquor of other alcoholic beverages, that
Ees freely express their grievances and gripes
against their Ers. Ees should be allowed wider
latitude to freely express their sentiments during
these kinds of occasions, which are beyond the
NO. In Great Pacific Life Employees Union v.
Great Pacific Life Assurance Corporation, the
Court discussed that if the unfair treatment
does not relate to or affect the workers' right
to self-organize, it cannot be deemed unfair
labor practice. A dismissal of a union officer is
not necessarily discriminatory, especially
when that officer committed an act of
misconduct. In fact, union officers are held to
higher standards.
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
relationship, Jose continued to have special
feelings for Erica. One afternoon, Jose chanced
upon Erica riding in the car of Paolo, a coemployee and Erica's ardent suitor; the two
were on their way back to the office from a sales
call on Silver Drug, a major drug retailer. In a fit
of extreme jealousy, Jose rammed Paolo's car,
causing severe injuries to Paolo and Erica. Jose's
flare up also caused heavy damage to the two
company-owned cars they were driving. As
lawyer for Magna, advise the company on
whether just and valid grounds exist to dismiss
Jose. (2013 BAR)
disciplinary authority of the Er. (Samson v. NLRC,
G.R. No. 121035, 12 Apr. 2000)
Q: Cheryll Leus was a non-teaching personnel
employed in St. Scholastica’s College Westgrove
(SSCW). Cheryll and her boyfriend conceived a
child out of wedlock. SSCW dismissed her on the
ground that her pregnancy out of wedlock
constitutes disgraceful and immoral conduct
and ran counter to the moral principles that
SSCW stands for and teaches its students. Does
pregnancy out of wedlock (without a legal
impediment to marry) constitute immoral
conduct as a ground for dismissal contemplated
by law?
A: Jose can be dismissed for serious misconduct,
violation of company rules and regulations, and
commission of a crime against the employer’s
representatives. For misconduct to be serious and
therefore a valid ground for dismissal, it must be of
grave and aggravated character and not merely
trivial or unimportant and connected with the work
of the employee.
A: NO. It is an immoral conduct if such does not
conform to what society generally views as
respectable or moral. Substantial evidence must be
presented to prove that such conduct is considered
immoral. The two-step process to determine
whether the conduct is immoral:
1.
2.
Q: Assuming this time that Magna dismissed Jose
from employment for cause and you are the
lawyer of Jose, how would you argue the
position that Jose's dismissal was illegal? (2013
BAR)
Consideration of the totality of the
circumstances surrounding it; and
Assessment of said circumstances based on
the prevailing norms of conduct.
Pre-marital sexual relations between two
consenting adults who have no impediment to
marry each other, and, consequently, conceiving a
child out of wedlock, does not amount to a
disgraceful or immoral conduct. (Leus v. SSCW, G.R.
No. 187226, 28 Jan. 2015)
A: The offense committed by Jose did not relate to
the performance of his duties. For misconduct or
improper behavior to be a just cause for dismissal,
it:
a.
b.
A teacher engaging in an extra-marital affair with
another married person is a serious misconduct, if
not an immoral act. But a teacher falling in love with
her pupil and, subsequently, contracting a lawful
marriage with him, though there is a disparity in
their ages and academic level cannot be considered
as a defiance of contemporary social mores. (ChuaQua v. Clave. G.R. No. 49549, 30 Aug. 1990)
c.
Must be serious;
Must relate to the performance of the
employee’s duties; and
Must show that the employee has become unfit
to continue working for the employer.
Based on the forgoing guidelines, it can be
concluded that Paolo was not guilty of serious
misconduct. He was not performing official work at
the time of the incident. (Lagrosas v. Bristol Myers
Squibb, G.R. No. 168637/170684, 12 Sept. 2008)
Additionally, there was no compliance with the
rudimentary requirements of due process.
Q: Jose and Erica, former sweethearts, both
worked as sales representatives for Magna, a
multinational firm engaged in the manufacture
and sale of pharmaceutical products. Although
the couple had already broken off their
265
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
unimportant matters. Disobedience to be
considered willful must be resorted to without
regard to its consequences. (DOLE Manual; BLTB Co.
v. CA, G.R. No. L-38482, 18 June 1976; Family
Planning Org. of the Phil. Inc. v. NLRC, G.R. No. 75907,
23 Mar. 1992)
Q: Rivera, a bus conductor of Genesis, was
dismissed on account of a discrepancy in the
amount he declared on bus ticket receipts. He
reported and remitted the amount of P198.00
instead of the admittedly correct amount of
P394.00 worth of bus ticket receipts. He averred
that it was an honest mistake, which he was
unable to correct because the bus encountered
mechanical problems.
Requisites
Contending that this termination was arbitrary
and not based on just causes for terminating
employment, he filed a complaint for illegal
dismissal. Genesis claimed that Rivera's
misdeclaration of the amount in the bus ticket
receipts and failure to remit the correct amount
clearly violated Genesis' policies and amounted
to serious misconduct, fraud, and willful breach
of trust; thereby justifying his dismissal. Was
Rivera terminated with just cause?
A: NO. Absent any other supporting evidence, the
error in a single ticket issued by petitioner can
hardly be used to justify the inference that he has
committed serious misconduct or has acted in a
manner that runs afoul of his employer's trust.
Terminating his employment on these unfounded
reasons is manifestly unjust. 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 bus conductors should, in all cases, be free from
any kind of error. Not every improper act should be
taken to justify the termination of employment.
(Rivera v. Genesis Transport Service Inc., and Moises,
G.R. No. 215568, 03 Aug. 2015)
1.
The Ees assailed conduct must have been
willful or intentional, the willfulness being
characterized by a wrongful and perverse
attitude; and
2.
The disobeyed orders, regulations, or
instructions of the Er must be:
a. Reasonable and lawful;
b. Sufficiently known to the Ee; and
c. In connection with the duties which the
Ee has been engaged to discharge.
(Cosep v. NLRC, G.R. No. 124966, June 16,
1998; Realda v. New Age Graphics, G.R.
No. 192190, 25 Apr. 2012)
Valid Transfer
GR: Management has the right to transfer or
reassign an employee. The right of the employer to
transfer the employees in the interest of the efficient
and economic operation of its business cannot be
seriously challenged.
XPN: Where the transfer is vitiated by improper
motive and is merely a disguised attempt to remove
or punish the employee sought to be transferred.
(Associated Labor Unions v. NLRC, G.R. Nos. 7691617, 31 Mar. 1983)
Willful Disobedience
Invalid Transfer
There is willful disobedience when there is
wanton disregard to follow orders of the employer.
The right to transfer personnel should not be used
as a subterfuge by the employer to rid himself of an
undesirable worker. Nor when the real reason is to
penalize an employee for his union activities and
thereby defeat his right to self-organization.
(Pocketbell Philippines, Inc. v. NLRC, et al., G.R. No.
106843, 20 Jan. 1995)
Willful is characterized by a wrongful perverse
mental attitude rendering the employee’s act
inconsistent with the proper subordination (Lakpue
Drug Inc. v. Belga, G.R. No. 166379, 20 Oct. 2005)
The employee’s disobedience must relate to
substantial matters, not merely to trivial or
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
disobedience thereof is not a reason to dismiss the
worker.
In case of a constructive dismissal, the employer has
the burden of proving that the transfer and
demotion of an employee are for valid and
legitimate grounds such as genuine business
necessity. Particularly, for a transfer not to be
considered a constructive dismissal, the employer
must be able to show that such transfer is not
unreasonable, inconvenient, or prejudicial to the
employee; nor does it involve a demotion in rank or
a diminution of his salaries, privileges, and other
benefits. Failure of the employer to overcome this
burden of proof, the employee's demotion shall no
doubt be tantamount to unlawful constructive
dismissal. (SIMIFRU v. Baya, G.R. No. 188269, 17 Apr.
2017)
NOTE: The reasonableness and lawfulness of a rule,
order, or instruction depend on the circumstances
availing in each case. Reasonableness pertains to
the kind or character of directives and commands
and to the manner through which they are made.
(Escobin et al. v. NLRC et al., G.R. No. 118159, 15 Apr.
1998)
Q: Is refusal to a promotion by an Ee an act of
insubordination or willful disobedience?
A. NO. There is no law that compels an Ee to accept
a promotion because a promotion is a gift or reward,
which a person has the right to refuse. The exercise
of the Ee of the right to refuse a promotion cannot
be considered in law as insubordination or willful
disobedience. (PT&T Corp. v. CA, G.R. No. 152057, 29
Sept. 2003)
Disobeying an Order to Transfer
The requisites for willful disobedience must be
observed before dismissing an employee who
disobeys an order transferring him from one job or
one location to another. (Azucena, 2016)
Q: Escobin’s group were security guards based
in Basilan. They were placed in floating status
and were asked to report for reassignment in
Metro Manila by PISI. Upon failure to report or
respond to such directives, they were ordered
dismissed from employment by PISI for willful
disobedience. Did the failure to report to Manila
amount to willful disobedience?
NOTE: The refusal to obey a valid transfer order
constitutes willful disobedience of a lawful order of
an employer. Employees may object to, negotiate,
and seek redress against employers for rules or
orders that they regard as unjust or illegal.
However, until and unless these rules or orders are
declared illegal or improper by competent
authority, the employees ignore or disobey them at
their peril. But transfer should not result to
demotion of rank, which is tantamount to
constructive dismissal. (Manila Pavilion Hotel v.
Henry Delada. G.R. No. 189947, 25 Jan. 2012)
A: NO. The reasonableness of the rule pertains to
the kind or character of directives and commands
and to the manner through which they are made. In
this case, the order to report to the Manila office fails
to meet this standard. The order to report to Manila
was inconvenient, unreasonable, and prejudicial to
Escobin’s group since they are heads of families
residing in Basilan and they were not given
transportation money or assurance of availability of
work in Manila. (Escobin v. NLRC, G.R. No. 118159, 15
Apr. 1998)
Disobedience of an Inconvenient Transfer
GR: Inconvenience to the employee does not
necessarily invalidate a transfer order.
NOTE: The transfer from one city to another within
the country is valid if there is no bad faith on the
part of the employer. (Homeowners Savings and
Loan Association, Inc. v. NLRC, et al., G.R. No. 97067,
26 Sept. 1996)
Q:
ICT Marketing Services, Inc. hired
respondent Mariphil as its Customer Service
Representative (CSR) and assigned her to its
Capital One account. Later, Mariphil became a
regular employee. Later on, Mariphil wrote to
ICT’s Vice President complaining about
XPN: Inconvenience caused by unreasonableness of
the transfer order makes the order itself invalid, and
267
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Degree of Negligence as a Just Cause for
Termination
supposed irregularities in the handling of funds
entrusted to ICT by Washington Mutual.
However, no action appears to have been taken
on her complaint. Mariphil was then transferred
to the Bank of America account where she was
required to attend a training seminar for six
days. On the third day of training, Mariphil was
unable to attend.
GR: Gross and habitual negligence.
When she reported for training the next day,
Mariphil was informed that she could not be
certified to handle calls for Bank of America due
to her failure to complete the training. From
then on, she was placed on "floating status" and
was not given any work assignment. After a
month, the HR Manager tendered her
resignation from work, effective upon receipt of
the letter. Hence, Mariphil filed a complaint for
constructive dismissal against ICT. Did ICT
constructively dismissed Mariphil?
Gross neglect 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. (NBS v. Court of Appeals. G.R. No.
146741, 27 Feb. 2002)
b.
Habitual neglect implies repeated failure to
perform one’s duties over a period of time,
depending upon the circumstance. (JGB and
Associates v. NLRC, G.R. No. 10939, 07 Mar. 1996)
XPN: An employee who was grossly negligent in the
performance of his duty, though such negligence
committed was not habitual, may be dismissed
especially if the grossly negligent act resulted in
substantial damage to the company. (LBC Express v.
Mateo. G.R. No. 168215, 09 June 2009)
A: YES. In causing respondent's transfer, petitioner
clearly acted in bad faith and with discrimination,
insensibility, and disdain; the transfer was effected
as a form of punishment for her raising a valid
grievance related to her work. Furthermore, said
transfer was obviously unreasonable, not to
mention contrary to experience, logic, and good
business sense. This being the case, the transfer
amounted to constructive dismissal. 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. (ICT Marketing Services, Inc. v. Mariphil L.
Sales. G.R. No. 202090, 09 Sept. 2015)
Q: Antiola, as assorter of baby infant dress for
Judy Phils., erroneously assorted and packaged
2,680 dozens of infant wears. Antiola was
dismissed from employment for this infraction.
Does the single act of misassortment constitute
gross negligence?
A: NO. Such neglect must not only be gross but also
habitual in character. Hence, the penalty of
dismissal is quite severe considering that Antiola
committed the infraction for the first time. (Judy
Phils. v. NLRC, G.R. No. 111934, 29 Apr. 1998)
2. GROSS AND HABITUAL NEGLIGENCE
Q: Dolora and Merlinda are employees of
Rustan’s Makati, assigned as Inventory
Specialists at the Cosmetics, Perfumeries &
Toiletries (CP & T) stockroom of Rustan’s
Department Store. When there was shortage in
the inventory of the CP&T merchandise,
Rustan’s sent Notices to Explain to Dolora and
Merlinda in reference to a report provided
concerning the variance in the inventory of
concerned beauty cosmetics merchandise.
Accordingly, Dolora and Merlinda were
It implies a want or absence of or failure to exercise
diligence that an ordinary prudent man would use
in his own affairs.
Significantly, in order to constitute a just cause for
the employees’ dismissal, the neglect of duties must
not only be gross but also habitual. Thus, the single
or isolated act of negligence does not constitute a
just cause for the dismissal of the employee.
(National Bookstore v. CA, G.R. No. 146741. 27 Feb
2002)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
a.
268
Labor Law and Social Legislation
without exerting any effort to avoid them. (Eastern
Overseas Employment Center Inc. v. Bea, G.R. 143023,
29 Nov. 2005)
required "to explain why they should not be held
accountable for the losses of petitioner due to
the aforementioned shortage and why no
appropriate action should be taken against
them." Dolora and Merlinda were initially
served with notices of suspension, followed by
their termination from employment, allegedly
for gross and habitual neglect of duty. Is there
just cause for the dismissal of Dolora and
Merlinda?
“Unsatisfactory Rating” can be a just cause for
dismissal only if it amounts to gross and habitual
neglect of duties. (Azucena, 2016)
Requisites of Poor Performance as a Ground for
Termination
A: YES. In any case, while the rule is that a single or
isolated act of negligence is not sufficient to
constitute a just cause for the dismissal of the
employee, the same, however, is not absolute. An
infraction, even if not habitual, may warrant a
dismissal under appropriate circumstances. In this
case, the Court finds, under the circumstances
pertaining herein, that it was just and reasonable for
petitioner to dismiss respondents even, assuming,
that it was the first time that they committed the
infraction. The Court considers two important
factors. First is the quantity and the substantial
amount or value of the merchandise lost, amounting
to P509,044.00. Second, respondents' position is
necessarily one of trust and confidence. Petitioner
cannot legally be compelled to continue with the
employment of respondents who are entrusted with
the care, custody, and safekeeping of high-end
cosmetic products, but who just committed gross
negligence which resulted to missing assigned
products amounting to an enormous amount of
around half a million pesos. Clearly, respondents'
continued tenure is patently inimical to the
petitioner's business interest. (Rustan’s Commercial
Corporation v. Dolora F. Raysag and Merlinda S.
Entrina, G.R. No. 219664, 12 May 2021)
1.
2.
3.
Employer must prove that it has set standards
of performance expected of the employee;
These standards must be reasonable and in
connection with the employee’s work; and
There must be proof that the employee failed to
meet the standards despite the given
reasonable opportunity to meet the same.
Inefficiency as a Just Cause for Dismissal
Failure to observe prescribed standards of work or
to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal.
Such inefficiency is understood to mean failure to
attain work goals or work quotas, either by failing
to complete the same within the allotted reasonable
period, or by producing unsatisfactory results.
(Buiser v. Leogardo, G.R. No. L-63316, 31 July 1984)
This ground is considered analogous to those
enumerated under Art. 297. (Skippers United Pacific
v. Magud, G.R. No. 166363, 15 Aug. 2006)
Q: Gamido was a quality control inspector of VH
Manufacturing. Gamido was allegedly caught by
the company Pres. Dy Juanco of sleeping and was
dismissed from employment. Did Gamido’s act
of sleeping on the job constitute a valid cause of
dismissal?
Failure in Performance Evaluations
A: NO. Sleeping on the job as a valid ground for
dismissal only applies to security guards whose
duty necessitates them to be always awake and
watchful. Gamido’s single act of sleeping further
shows that the alleged negligence or neglect of duty
was neither gross nor habitual. (VH Manufacturing
v. NLRC, G.R. No. 130957, 19 Jan. 2000)
As a general concept, “poor performance” is
equivalent to inefficiency and incompetence in the
performance of official duties. The fact that an Ee’s
performance is found to be poor or unsatisfactory
does not necessarily mean that the Ee is grossly and
habitually negligent of his duties. Gross negligence
implies a want or absence of or failure to exercise
slight care of diligence or the entire absence or care.
He evinces a thoughtless disregard of consequences
269
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
requirement. (New Puerto Commercial v. Lopez, G.R.
NO. 169999, 26 July 2010)
Some Forms of Neglect of Duty
1.
2.
Habitual tardiness and absenteeism
Abandonment:
a. Failure to report for work or absence
without justifiable reason; and
b. Clear intention to sever Er-Ee
relationship manifested by some overt
acts. (Labor et. al v. NLRC, G.R. No.
110388, 14 Sept. 1995)
Q: Mejila, a barber at Windfield Barber Shop,
had an altercation with a fellow barber, which
resulted in his subsequent turning over the
duplicate keys of the shop to the cashier, took
away all his belongings therefrom, and worked
at different barbershop. Mejila then filed an
illegal dismissal case but did not seek
reinstatement as a relief. Did Mejila commit
abandonment?
Abandonment as a Just Cause for Termination
A: YES. Mejila’s acts such as surrendering the shop’s
keys, not reporting to the shop anymore without
any justifiable reason, his employment in another
barber shop, and the filing of a complaint for illegal
dismissal without praying for reinstatement clearly
show that there was a concurrence of the intention
to abandon and some overt acts from which it may
be inferred that the Ee concerned has no more
interest in working. (Jo v. NLRC, G.R. No. 121605, 02
Feb. 2000)
It means deliberate and unjustified refusal of an
employee to resume his employment.
Requirements
Abandonment
for
a
Valid
Finding
of
Two (2) factors must be present:
1.
The failure to report for work, or absence
without valid or justifiable reason; and
2.
A clear intention to sever Er-Ee relationship,
with the 2nd element as the more
determinative factor, being manifested by some
overt acts. (Sta. Catalina College v. NLRC, G.R. No.
144483, 19 Nov. 2003)
Q: The Ees averred that they were underpaid
and filed a complaint for money claims against
the Er before the LA. As a result of their
complaint, they were relieved from their posts
and were not given new assignments despite the
lapse of six months. On the other hand, the Er
maintains that the Ees were not dismissed but
were merely transferred to a new post and
voluntarily abandoned their jobs when they
failed to report for duty in the new location.
Upon termination, the Ee moved to file a joint
complaint for illegal dismissal. Is there a valid
indication of abandonment from work?
How to Prove Abandonment
Abandonment is proven when the Er must show
that the Ee deliberately and unjustifiably refused to
resume his employment without any intention of
returning. There must be a concurrence of the
intention to abandon and some overt acts from
which an Ee may be deduced as having no more
intention to work. The law, however, does not
enumerate what specific overt acts can be
considered as strong evidence of the intention to
sever the Ee-Er relationship. (Sta. Catalina College v.
NLRC, G.R. No. 144483, 19 Nov. 2003)
A: NO. For abandonment of work to fall under Art.
297 of the LC, as amended, as gross and habitual
neglect of duties there must be the occurrence of
two elements: first, there should be a failure of the
Ee to report for works without a valid or justifiable
reason and second, there should be a showing that
the Ee intended to sever the Er-Ee relationship, the
second element being the more determinative
factor as manifested by overt acts.
NOTE: In case of abandonment, the ER is still
required under the law to notify the employee of his
termination. There is still a need to observe the twonotice rule and opportunity to be heard
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
The Er cannot simply conclude knowledge that an
Ee is ipso facto notified of a transfer when there is
no evidence to indicate that the Ee had knowledge
of the transfer order. Hence, the failure of an Ee to
report for work at the new location cannot be taken
against him as an element of abandonment. In
addition to these tests for valid transfer, there
should be proper and effective notice to the Ee
concerned. It is the Er’s burden to show that the Ee
was duly notified of the transfer. Verily, an Er cannot
reasonably expect an Ee to report for work in a new
location without first informing said Ee of the
transfer. (Alert Security and Investigation Agency,
Inc. et al v. Saidali Pasawilan, et al., G.R. No. 182397,
14 Sept. 2011)
Mere failure to report to work is insufficient to
support a charge of abandonment. The employer
must adduce clear evidence of the employee's
"deliberate, unjustified refusal to resume
employment,'' which is manifested through the
employee's overt acts. (Demex v. Leron, G.R. No.
204288, 08 Nov. 2017)
Q: Leron was hired as a weaver by Demex. He is
paid on a piece-rate basis and is contracted
through job orders. He worked from Monday to
Saturday, but there were times when he was
required to work on Sundays. Leron received his
wages at the end of every week but he never
received standard benefits such as 13th month
pay, service incentive leave, rest day pay,
holiday pay, and overtime pay. Later, Leron was
dismissed, thus, he filed a complaint for illegal
dismissal. Demex justifies Leron’s dismissal on
the ground of abandonment, arguing that
Leron’s
unauthorized
absences,
noncompliance with the return-to-work notices,
and alleged act of crumpling the first return-towork notice are indicators of his intention to
sever his employment. Was there a valid
dismissal?
3. FRAUD OR WILLFUL BREACH OF TRUST
Gross Negligence vs. Habitual Neglect
The former connotes want of care in the
performance of one’s duties while the latter implies
repeated failure to perform one’s duties over a
period of time, depending upon the circumstances.
(Azucena, 2016)
Fraud
Fraud, in its general sense, is deemed to comprise
anything calculated to deceive, including all acts,
omissions, and concealment involving a breach of
legal or equitable duty, trust, or confidences justly
reposed, resulting in damage to another, or by
which an undue and unconscientious advantage is
taken of another. Deceit is a species of fraud. (Galvez
v. CA, G.R. No. 187919, 25 Apr. 2012)
Willful Breach of Trust
A breach is willful if it is done intentionally,
knowingly, and purposely without justifiable
excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly, and inadvertently.
(Austria v. NLRC, G.R. No. 124382, 06 Aug. 1999) But
loss of trust or confidence can be based on gross
negligence. (School of the Holy Spirit of Quezon City
v. Taguiam, G.R. No. 165565, 14 July 2008)
A: NO. The dismissal was invalid because Demex’s
evidence does not clearly establish a case of
abandonment. It failed to prove the second element
of abandonment. Abandonment of work has been
construed as a “clear and deliberate intent to
discontinue one's employment without any
intention of returning back." To justify the dismissal
of an employee on this ground, two (2) elements
must concur, namely: "(a) the failure to report for
work or absence without valid or justifiable reason;
and (b) a clear intention to sever the employeremployee relationship."
Requisites of Fraud or Willful Breach of Trust
1.
2.
3.
271
There must be an act, omission, or
concealment;
The act, omission, or concealment involves a
breach of legal duty, trust, or confidence justly
reposed;
It must be committed against the employer or
his/her representative; and
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
4.
To this class belong cashiers, auditors,
property custodians, etc., or those who, in
the normal and routine exercise of their
functions, regularly handle significant
amounts of money or property. (Mabeza v.
NLRC, G.R. No. 118506, 18 Apr. 1997)
It must be in connection with the employee’s
work.
Loss of Confidence
There is loss of confidence when the employer has
reasonable ground or has basis to believe that the
employee is responsible for the misconduct and the
nature of his participation renders him unworthy of
the trust and confidence demanded by his position.
Proof beyond reasonable doubt it not required.
(Jerusalem v. Keppel Monte Bank, G.R. No. 169564, 06
Apr. 2011)
2.
A 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. (Dela Cruz v. NLRC, G.R. No.
119536, 17 Feb. 1997)
Loss of Trust and Confidence as a Just Cause for
Termination:
1.
It applies only to cases involving:
a.
Ees occupying positions of trust and
confidence
(confidential
and
managerial Ee’s) – To this class belong
managerial Ees, i.e., those vested with the
powers or prerogatives to lay down
management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge,
assign or discipline Ees or effectively
recommend such managerial actions.
Position of trust and confidence is one where
a person is entrusted with confidence on
delicate matters, or with the custody, handling,
or care and protection of the employer’s
property. (Pandoy v. NLRC, G.R. No. 67664, 20
May 1992) and/or funds. (Gonzales v. NLRC, G.R.
No. 131653, 26 Mar. 2001)
The act constituting the breach must be “workrelated” such as would show the Ee concerned
to be unfit to continue working for the Er.
(Gonzales v. NLRC, G.R. No. 131653, 26 Mar.
2001)
4.
It must be substantial and founded on clearly
established facts sufficient to warrant the Ee’s
separation from employment. (Sulpicio Lines
Inc. v. Gulde, G.R. No. 149930, 22 Feb. 2002)
5.
Fraud must be committed against the Er or his
representatives, e.g.:
Falsification of timecards
Theft of company property
Unauthorized use of company vehicle
NOTE: The treatment of rank-and-file personnel
and managerial Ees in so far as the application of the
doctrine of loss of trust and confidence is
concerned is different. As regards managerial Ees,
such as Caoile, mere existence of a basis for
believing that such Ee has breached the trust of his
Er would suffice for his dismissal. (Caoile v. NLRC,
G.R. No. 115491, 24 Nov. 1998)
Ees routinely charged with the care and
custody of the Er’s money or property –
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
3.
a.
b.
c.
NOTE: The mere existence of a basis for the loss
of trust and confidence justifies the dismissal of
the managerial Ee because when an Ee accepts
a promotion to a managerial position or to an
office requiring full trust and confidence, such
Ee gives up some of the rigid guaranties
available to ordinary workers. (Cecilia T.
Manese v. Jollibee Foods Corporation, G.R. No.
1704 54, 11 Oct. 2012)
b.
The loss of trust and confidence must be based
on willful breach.
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Labor Law and Social Legislation
Guidelines for the Doctrine of Loss of Confidence
to Apply
her from the service. (Celiz v. Cord Chemicals, Inc.,
G.R. No. 200352, 20 July 2016)
1.
Loss of confidence should not be simulated
(reasonable basis for loss of trust and
confidence);
2.
Not used for subterfuge for causes which are
improper and/or illegal or unjustified;
An employee’s attitude problem is a valid ground
for termination. It is a situation analogous to loss of
trust and confidence that must be duly proved by
the employer, still there must be substantial
evidence. (Azucena, Vol. II, 2016, p. 851) (Heavylift
Manila v. CA, G.R. No. 154410, 20 Oct. 2005)
3.
Not arbitrarily asserted in the face of
overwhelming evidence to the contrary;
4.
Must be genuine, not a mere afterthought to
justify earlier action taken in bad faith; and
5.
The Ee involved holds a position of trust and
confidence. (Ramos v. Court of Appeals, G.R. No.
145405, 29 Jun. 2004)
Q: Mac was employed as a part-time teacher and
comptroller of Elysen College. A committee was
created to formulate a new "ranking system for
non-academic employees for school year 20202021. He then directed to arrange a salary
adjustment schedule for the new ranking
system to the committee organized.
Later, he obtained his employee ranking slip
which showed his evaluation score and the
change of his rank "from office head to middle
manager-level IV', this was prepared however
without prior approval from the Human
Resource Department. On July 25, 2020, Elysen
College notified Mac of its decision to terminate
his services for serious misconduct and loss of
trust and confidence.
Q: Mary June CELIZ worked as Chief of Sales
concurrent with her position as Senior
Operations Manager with CORD, INC. Celiz then
asked that she be allowed to resign. However,
upon clearance, the Accounting Department
said that CELIZ need to account the unliquidated
advances amounting to P713,471.00. She
liquidated her advances, but her accounting fell
short of P445,272.93. Upon her failure to
account her advances, CORD, INC. dismissed
CELIZ for serious breach of trust and confidence.
CELIZ filed for illegal dismissal. Is the dismissal
of CELIZ due to breach of trust and confidence
valid?
Upon receipt of the termination letter that reads
"For this reason, you are advised to explain or
show cause why your employment with Elysen
College will not be terminated for Serious
Misconduct
due
to
intentional
misclassification/miscomputation
of
your
salary and some employees named hereunder,
thereby causing prejudice not only to the school
but also to said employees as well", Mac
immediately filed before Executive Labor
Arbiter. Was Mac illegally dismissed?
A: YES. The dismissal of CELIZ due to breach of trust
and confidence was valid. In cases of dismissal for
breach of trust and confidence, proof beyond
reasonable doubt of an employee's misconduct is
not required. It is sufficient that the employer had
reasonable ground to believe that the employee is
responsible for the misconduct, which renders him
unworthy of the trust and confidence demanded by
his position. The Court, upon review of the records
of the case, found that contrary to CELIZ’s
contention, there was substantial evidence showing
that the subject cash advances were properly
attributed to CELIZ and that she failed to liquidate
the same. In short, there was just cause to dismiss
A: NO. Mac was validly dismissed based on loss of
trust and confidence. Mac was not an ordinary rankand-file employee. His position of responsibility on
delicate financial matters entailed a substantial
amount of trust from respondent. The preparation
of the payroll is a sensitive matter requiring
attention to detail. The alleged misconduct for loss
of trust and confidence is sufficient to warrant the
dismissal of fiduciary rank-and-file employees.
273
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
violation. Hence, Lamadrid instituted a
complaint for illegal dismissal. Was Lamadrid
illegally dismissed?
However, "mere existence of a basis for believing
that [the] employee has breached the trust [and
confidence] of [the] employer" is sufficient for
managerial employees.
A: YES. Lamadrid's position as a Senior Purser is
imbued with trust and confidence. Employees can
be terminated only for just or authorized cause.
Article 297 [282] of the Labor Code enumerates the
just causes for dismissal, among others, fraud, or
willful breach by the employee of the trust reposed
in him by his employer or duly authorized
representative.
A formal hearing only becomes mandatory in
termination cases when so required under company
rules or when the employee requests for it. "To be
heard" does not mean verbal argumentation alone
because one may be heard just as effectively
through written explanations, submissions or
pleadings. In this case, respondent complied with all
the requirements of procedural due process in
terminating petitioner's employment, it furnished a
show cause memo stating the specific grounds for
dismissal and required him to answer the charges
by submitting a written explanation. (Yolando Bravo
v. Urios College Now Father Saturnino Urios
University, G.R. No. 198066, 07 June 2017)
Lamadrid's infraction was clearly a case of
misconduct considering that it is a transgression of
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. It evidently eroded Cathay's trust
and confidence in her. However, while the weight of
evidence points to Lamadrid's infraction of
company policy, it should also be considered that
this is Lamadrid's first infraction in her 17 years of
service in the airline which involved a mere bottle
of water. Concededly, the company laid down the
penalties for violation of its policies; however, the
evaluation of an employee's infraction should be
dealt with fairness and reason. Simply put, all
surrounding circumstances must be considered,
and the penalty must be commensurate to the
violation committed by an employee. Termination
of the services of an employee should be the
employer's last resort especially when other
disciplinary actions may be imposed, considering
the employee's long years of service in the company,
devoting time, effort, and invaluable service in line
with the employer's goals and mission, as in
Lamadrid's case.
Q: Salvacion A. Lamadrid was a cabin crew of
Cathay Pacific, serving the airlines for about 17
years. On May 19, 2007, Donald Lal (Lal), Airport
Services Officer of Cathay in Sydney Airport,
received a report from Customer Officer Mary
Greiss (Mary) that some crew members of
Cathay flight CX 139, including Lamadrid, were
caught in possession of goods after alighting
from the aircraft. Mary handed to Lal a plastic
bag containing a 1.5 liter Evian water bottle and
a pile of magazines confiscated from Lamadrid
as well as the photocopy of the latter's passport.
Cathay Pacific asked Lamadrid to explain.
Lamadrid denied the allegations against her.
She claimed that the Hello magazine which was
confiscated from her was not Cathay's property.
She clarified that she brought and declared the
bottle of Evian water as her own. She denied
having committed serious misconduct, and
demanded that the items taken from her be
preserved following a fair and transparent
investigation. Cathay then informed Lamadrid
of the termination of her services effective
immediately for committing serious misconduct
by removing company property without
authorization. According to Cathay, it could no
longer repose its trust and confidence on
petitioner considering the seriousness of her
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
During Lamadrid's span of employment, she did not
commit any infraction or was ever sanctioned
except in the incident subject of the present
controversy. To impose a penalty as grave as
dismissal for a first offense and considering the
value of the property allegedly taken would be too
harsh under the circumstances. Therefore,
Lamadrid was illegally dismissed from service.
(Lamadrid v. Cathay Pacific Airways Limited, G.R. No.
200658, 23 June 2021)
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Labor Law and Social Legislation
4. COMMISSION OF A CRIME OR OFFENSE
5. ANALOGOUS CAUSES
This refers to an offense committed by the Ee
against the person of his Er or any immediate
member of his family or his duly authorized
representative and thus, conviction of a crime
involving moral turpitude is not analogous thereto
as the element of relation to his work or to his Er is
lacking.
For an act to be included in analogous cases of just
causes of termination, it must be due to the
voluntary and/or willful act or omission of the Ee.
(Nadura v. Benguet Consolidated, G.R. No. L-17780,
24 Aug. 1962)
Requisites
1.
Requisites
1.
There must be an act or omission
punishable/prohibited by law; and
2.
The act or omission was committed by the
employee against the person of the employer,
any immediate member of his/her family, or
his/her duly authorized representative. (Sec.
5.2 [f], D.O. No. 147-15)
-
2.
There must be an act or omission like those
specified just causes; and
The act or omission was voluntary and/or
willful on the part of the employees. (Sec. 5.2
[g], D.O. No. 147-15)
E.g.:
1. Violation of company rules and regulations;
2. Immorality, Drunkenness or Fighting inside
the premise;
3. Gross inefficiency;
4. Illegally diverting Er’s products;
5. Failure to heed an order not to join an illegal
picket;
6. Violation of safety rules and code of discipline;
7. Theft of company property;
8. Theft of property owned by co-employee;
9. Failure to attain work quota;
10. Attitude problem. (Chan, 2019)
An Er’s family shall refer to the spouse,
ascendants, descendants or legitimate,
natural, or adopted brothers or sisters of
the ER or his relative by affinity in the same
degrees, and those by consanguinity within
the fourth civil degree. (Starlite Plastic
Industrial Corp v. NLRC, G.R. No.
78491 March 16, 1989
To fall within the ambit of “analogous cases” the
act or omission must have an element like those
found in the specific Just cause enumerated under
Art. 297. (International Rice Research Institute v.
NLRC, G.R. No. 97239, 12 May 1993)
NOTE: A criminal case need not be filed.
Commission of acts constituting a crime itself is
sufficient. (National Labor Union, Inc. v. Standard
Vacuum Oil Company. G.R. No. L-48170, 10 Oct. 1941)
Conviction not a Condition Sine Qua Non
Qualification under D.O. 147-15
The conviction of an employee in a criminal case is
not indispensable to warrant his dismissal by his
employer. (Starlite Plastic Industrial Corporation v.
NLRC. G.R. No. 78491, 16 Mar. 1989)
D.O. No. 147-15 amends the IRR of Book IV. The last
sentence in Sec. 5.2 (g) states, “No act or omission
shall be considered as analogous cause unless
expressly specified in the company rules and
regulations or policies.”
Ratio: The quantum of evidence needed is merely
substantial evidence to terminate an employee
under these grounds.
NOTE: However, nowhere does the Labor Code
require analogous acts or omissions to be
“expressly specified in company rules and
regulations or policies.” Moreover, the requirement
appears unreasonable, if not impossible. To demand
275
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Totality of Infractions Doctrine
an express specification of all analogous cases is to
demand anticipation of all things similar. But these
cannot all be preconceived or predefined. (Azucena,
2016)
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.
The offenses committed by an employee should not
be taken singly and separately. 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 an employee was penalized for his previous
infractions, this does not and should not mean that
his employment record would be wiped clean of his
infractions. 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 taken
together in determining the proper imposable
penalty. (Cebu People’s Multi-Purpose Cooperative v.
Carbonilla, G.R. No. 212070, 27 Jan. 2016)
Past offenses
Previous offenses may be so used as a valid
justification for dismissal from work ONLY if the
infractions are related to the subsequent offense
upon which the basis the termination of
employment is decreed. (Stellar Industrial Service
Inc. v. NLRC, G.R. No. 117418. 24 Jan. 1996)
Doctrine of Incompatibility
Where the Ee has done something that is contrary
or incompatible with the faithful performance of his
duties, his Er has a just cause for terminating his
employment. (Manila Chauffeur’s League v.
Bachrach Motor Co., G.R. No. L-47071, 29 June 1940)
Doctrine
of
Commensurate
Proportionality Rule
Penalty/
Q: Mapili works as a bus conductor for
Philippine Rabbit Bus Lines, Inc. While on duty
en route from Manila to Pangasinan, a PRBLI
field inspector caught Mapili extending a free
ride to a co-employee’s wife. Noting that this was
already the third time that Mapili committed the
said violation, the company terminated his
employment. Is Mapili illegally dismissed?
In this regard, it is a hornbook doctrine that
infractions committed by an employee should merit
only the corresponding penalty demanded by the
circumstance. The penalty must be commensurate
with the act, conduct or omission imputed to the
employee and must be imposed in connection with
the disciplinary authority of the employer. (Sagales
v. Rustans Commercial Corporation, G.R. No. 166554,
27 Nov. 2008)
A: NO. It is apparent that the bus conductor is aware
that the infraction he committed constituted a grave
offense, but he persisted in committing the same out
of gratitude to the passenger. Hence, there was a
deliberate intent on the part of the petitioner to
commit the violation. An employee’s propensity to
commit repetitious infractions evinces wrongful
intent, making him undeserving of the compassion
accorded by law to labor; thus, dismissal of said
employee would be justified. (Jerry Mapili v.
Philippine Rabbit Bus Lines, Inc., G.R. No. 172506, 27
July 2011)
Factors that can be considered:
1.
2.
3.
4.
5.
6.
7.
8.
Length of service
Gravity of the offense
Nature of the position
Nature of the business
First offense rule
Totality of infractions
Principle of charity,
understanding
Principle of equity
compassion
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
and
Q: Neren is employed as head of the Front Desk
Department in La Luz Beach Resort by GRRI.
Sometime in 2013, Neren was found guilty of
violating company policies, i.e., abuse of
276
Labor Law and Social Legislation
misconduct and present behavior must be taken
together in determining the proper imposable
penalty. In this case, there had been several
violations from Neren. It is also worth mentioning
that GRRI had already previously warned Neren
that the penalty for her next infraction would be
elevated to dismissal. Thus, the dismissal of
petitioner, based on the principle of totality of
infractions, is justified. (Villanueva v. Ganco Resort
and Recreation, Inc., G.R. No. 227175, 08 Jan. 2020, J.
Caguioa)
authority, when she rejected walk-in guests
without management approval, and threat to
person in authority, when she threatened the
manager, with physical harm. She was meted the
penalty of suspension subject to the agreement
that any further violation which would warrant
suspension would be elevated to immediate
dismissal.
GRRI implemented a reorganization and
transferred five of its employees, including
Neren, to another department without
diminution in rank and benefits. However,
Neren repeatedly refused to sign the Notice to
Transfer and remained at the reception area.
She was preventively suspended for her refusal
to sign the Notice of Transfer.
Guidelines to
Termination
Determine
the
Validity
Of
Validity of termination per se is determined by
compliance with two-notice rule, hearing
(opportunity to be heard), and the presence of a just
or authorized cause.
After her suspension, she failed to report back to
work for 4 days without notice of leave. When
she returned, she was terminated on the ground
the ground of gross and habitual neglect. The LA
and NLRC held that while the totality of
infractions may justify an employee's dismissal,
past infractions for which an employee has
already been penalized, as in this case, can no
longer be cited as bases for the present offense
and cannot be collectively taken to justify an
employee's termination. Are the LA and NLRC
correct?
b. AUTHORIZED CAUSES
Authorized causes are initiated by the employer’s
exercise of management prerogative, who shall be
liable to pay separation pay as mandated by law. It
does not usually require delinquency or culpability
on the part of the employee.
Authorized causes of termination by the Er:
1.
2.
3.
4.
A: NO. While there may be no basis to dismiss her
on the ground of gross and habitual neglect,
petitioner is still guilty of having committed a
violation. It is here that totality of infractions may be
considered to determine the imposable sanction for
her current infraction. 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. The offenses committed by
petitioner should not be taken singly and
separately. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and ability
separate and independent of each other. 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
5.
Installation of labor-saving devices
Redundancy
Retrenchment
Closing or cessation of operation of the
establishment or undertaking
Disease
1. INSTALLATION OF LABOR-SAVING DEVICES
(AUTOMATION)
Automation is a management prerogative of
replacing manpower with machine power in order
to effect more economy and greater efficiency in
method of production.
277
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
2.
3.
Requisites for a Valid Automation
1.
2.
3.
4.
Written notice to the employee and to the
DOLE at least one (1) month before the
intended date of termination;
Payment of separation pay of at least one (1)
month for every year of service;
Good faith in the discharge of employees; and,
Reasonable criteria to be used in
implementing automation.
4.
Decline in volume of business;
Closure of a particular product line of an
economic activity previously engaged by the
employer; and
Phasing out of service activity priorly
undertaken by the business. (Chan, 2019)
Requisites of Redundancy
1.
Robotics is the switch from ‘men’ employment to
‘mechanical’ employment.
2.
The purpose for such installation must be valid such
as: to save on cost, enhance efficiency, and other
justifiable economic reasons. (Chan, 2019)
3.
4.
Reduction of the number of workers in a company’s
factory made necessary by the introduction of
machinery in the manufacture of its products is
justified. There can be no question as to the right of
the manufacturer to use new labor-saving devices
with a view to affect more economy and efficiency
in its method of production. (Sheet Metal Workers’
Union v. CIR. G.R. No. L-2028; 28 Apr. 1949)
5.
There must be superfluous positions or
services of employees;
The positions or services are in excess of what
is reasonably demanded by the actual
requirements of the enterprise to operate in an
economical and efficient manner;
There must be good faith in abolishing
redundant positions;
There must be fair and reasonable criteria in
selecting the employees to be terminated; and
There must be an adequate proof of
redundancy such as but not limited to the new
staffing patter, feasibility studies/ proposal, on
the viability of the newly created positions, job
description and the approval by the
management of the restructuring.
Procedure
2. REDUNDANCY
1.
It is the superfluity in the performance of a
particular work. It exists where the services of an Ee
are in excess of what is reasonably demanded by the
actual requirements of the enterprise.
2.
Redundancy in an Er’s personnel does not
necessarily or even ordinarily refer to duplication of
work. The characterization of services as no longer
necessary or sustainable and therefore properly
terminable, was an exercise of business judgment
on the part of the Er. The Er has no legal obligation
to keep in its payroll more Ees that are necessary for
the operation of its business. (Wiltshire File Co., Inc.
v. NLRC, G.R. No. 82249, 07 Feb. 1991)
3.
4.
Q: Matiere SAS hired Acosta as Technical
Assistant. Under the Employment Agreement
Acosta was tasked to: (1) Prepare reports
regarding Woodfields Consultants, Inc. (WCI)
consultants; (2) Be the intermediary between
NOTE: A position is redundant when it is
superfluous. Superfluity is the outcome of some
factors:
1.
Over-hiring of workers;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Written notice served on both the Ees and the
DOLE at least one (1) month prior to
separation from work;
Payment of separation pay equivalent to at
least one (1) month pay or at least one (1)
month pay for every year of service, whichever
is higher;
Good faith in abolishing redundant position;
and
Fair and reasonable criteria in ascertaining
what positions are to be declared redundant:
a. Less preferred status, e.g., temporary Ee
b. Efficiency
c. Seniority (DAP v. Court of Appeals, G.R. No.
165811, 14 Dec. 2005)
278
Labor Law and Social Legislation
the third and fourth requisites are wanting. To
establish good faith, the company must provide
substantial proof that the services of the employees
are in excess of what is required of the company,
and that fair and reasonable criteria were used to
determine the redundant positions. Here, Matiere
SAS' only basis for declaring Acosta's position
redundant was that his function, which was to
monitor the delivery of supplies, became
unnecessary upon completion of the shipments.
the operators in WCI and the management; (3)
Attend coordination meetings; (4) Evaluate
billings; (5) Follow the SIT and prepare reports;
and (7) Site visits.
Later, Matiere SAS sent a letter to
Acosta informing him that his employment
contract will end on July 31, 2013 due to the
cessation of the company’s delivery operations
and the diminution of activities and that it
cannot find any reinstatement at the office. He
also received a calculation of his separation pay.
On June 26, 2013, Matiere SAS informed DOLE
that it would have to terminate five (5) of its
workers which includes Acosta. Matiere SAS also
filed an Establishment Employment Report,
citing redundancy and the completion of
delivery of supplies as its reasons for dismissing
its employees.
However, upon scrutiny, the Employment
Agreement itself contradicts Matiere SAS'
allegation. Under Acosta's job description listed in
his tasks as a technical assistant, there was no
mention of monitoring shipments. If his work
pertains mainly to the delivery of supplies, it should
have been specifically stated in his job description.
There was no basis for respondents to consider his
position irrelevant when the shipments had been
completed.
Acosta filed a complaint to NLRC for illegal
dismissal alleging that the declaration of
redundancy of his position was not based on fair
and reasonable criteria pointing out that he, the
most senior engineer, was dismissed while the
other engineers remained. Was Acosta validly
dismissed on the ground of redundancy?
Matiere SAS also failed to show that they used fair
and reasonable criteria in determining what
positions should be declared redundant. Although
Acosta was among the five (5) employees dismissed,
he cannot be similarly situated with the other
employees since his duty is not limited to the
monitoring of deliveries. Accordingly, this Court
declares petitioner to have been illegally dismissed.
(Manuel Acosta v. Matiere SAS and Philippe Gouvary,
G.R. No. 232870, 03 June 2019)
A: NO. Redundancy is recognized as one (1) of the
authorized causes for dismissing an employee
under the Labor Code as provided under Art. 298.
For the implementation of a redundancy program to
be valid, the employer must comply with the
following requisites: (1) written notice served on
both the employees and the Department of Labor
and Employment at least one month prior to the
intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay
or at least one month pay for every year of service,
whichever is higher; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable
criteria in ascertaining what positions are to be
declared redundant and accordingly abolished.
Redundancy in Bad Faith
The employee was terminated on the ground of
redundancy. But it was found out that the employer
had been hiring new employees while it was firing
the old ones, negating the claim of redundancy.
(General Milling Corp., v. V.L. Viajar, G.R. No. 181738,
30 Jan. 2013)
Q: Pantoja was assigned at SCA Corporation’s
Paper Mill No. 4, the section that manufactures
the company’s industrial paper products. In a
Notice of Transfer, SCA informed Pantoja of its
reorganization plan and offered him a position
at Paper Mill No. 5 under the same terms and
conditions of employment in anticipation of the
Matiere SAS complied with the first and second
requisites; notifying both Acosta and DOLE at least
a month prior planned redundancy and providing
Acosta computation of his separation pay. However,
279
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
consequences for the livelihood of the Ee is or
otherwise laid-off. (Poquiz, 2018)
eventual closure and permanent shutdown of
PM No. 4 due to financial difficulties brought
about by the low volume of sales and orders.
However, Pantoja rejected the offer of transfer.
A notice of termination of employment was sent
to Pantoja as his position was declared
redundant by the closure of PM No. 4. SCA
informed the DOLE of its reorganization and
partial closure. Petitioner filed a complaint for
illegal dismissal assailing his termination as
without any valid cause. Was the petitioner
illegally dismissed?
NOTE: The kind of losses contemplated under the
Labor Code is actual or anticipated/impending
losses. There is NO prohibition for the ER to embark
on retrenchment program if he could perceive that
its economy will go down the drain. (Poquiz, 2018)
Proof of actual losses or possible imminent losses is
the most singular distinctive requisite of
retrenchment, which the installation of labor-saving
device and redundancy do not have. (Chan, 2019)
A: NO. Exercising its management prerogative and
sound business judgment, SCA decided to cut down
on operational costs by shutting down one of its
paper mills. The abolishment of PM No. 4 was a
business judgment arrived at in the face of the low
demand for the production of industrial paper at the
time. Despite an apparent reason to implement a
retrenchment program as a cost-cutting measure,
SCA, however, did not out rightly dismiss the
workers affected by the closure of PM No. 4 but gave
them an option to be transferred to posts of equal
rank and pay. SCA did not proceed directly to
retrench. This is an indication of good faith on SCA’s
part as it exhausted other possible measures other
than retrenchment. (Dannie Pantoja v. SCA Hygiene
Products Corporation, G.R. No. 163554, 23 Apr. 2010)
Preventive Retrenchment is Allowed
“To prevent losses” justifies retrenchment. Such
phrase means that retrenchment or termination of
the services of some employees is authorized to be
undertaken by the employer sometime before the
losses anticipated are sustained or realized. It is not
the intention of the lawmaker to compel the
employer to stay his hand and keep all his
employees until sometime after losses shall have
been materialized. (Lopez Sugar Corporation v.
Federation of Free Workers, et al., G.R. Nos. 75700-01
Aug. 1990)
Standards of Preventive Retrenchment
NOTE: The losses which the company may suffer or
is suffering may be proved by financial statements
audited by independent auditor. (Asian Alcohol
Corporation v. NLRC, G.R. No. 131108, 25 Mar. 1999)
1.
The losses expected should be substantial and
not merely de minimis in extent; The
substantial loss apprehended must be
reasonably imminent;
3. RETRENCHMENT
2.
It is the reduction of personnel usually due to poor
financial returns as to cut down on costs of
operations in terms of salaries and wages to prevent
bankruptcy of the company. (Poquiz, 2018)
It must be reasonably necessary and likely
to effectively prevent the expected losses;
and,
3.
Alleged losses if already realized, and the
expected imminent losses sought to be
forestalled, must be proven by sufficient and
convincing
evidence.
(Lopez
Sugar
Corporation v. Federation of Free Workers, et
al., G.R. Nos. 75700-01 Aug. 1990)
Cutting of expenses includes the reduction of
personnel; it is a management prerogative, a means
to protect and preserve the Er’s viability and ensure
his survival. To be an authorized cause it must be
effected in good faith and for the retrenchment,
which is after all a drastic recourse with serious
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
280
Labor Law and Social Legislation
Employees Organization v. NLRC, G.R. No. 106256, 28
Dec. 1994)
Causes of Retrenchment
1.
2.
3.
4.
Lack of Work
Business Recession
Fire
Conservatorship
LIFO Rule Mandatory
GR: In cases of installation of labor-saving devices,
redundancy and retrenchment, the LIFO rule shall
apply.
Requisites of a Valid Retrenchment
1.
2.
3.
4.
5.
6.
XPN: When an employee volunteers to be separated
from employment. (DOLE D.O. No. 147-15, Series of
2015)
Written notice served on both the Ee and the
DOLE at least one (1) month prior to the
intended date of retrenchment;
Payment of separation pay equivalent to at
least one month pay or at least one-half (1/2)
month pay for every year of service, whichever
is higher;
Good faith in effecting retrenchment;
Proof of expected or actual losses;
To show that the employer first instituted cost
reduction measures in other measures in other
areas of production before undertaking
retrenchment as a last resort; and
The Er used fair and reasonable criteria in
ascertaining who would be retained among
the Ees, such as status, efficiency, seniority,
physical fitness, age, and financial hardship of
certain workers. (FASAP v. PAL, G.R. No.
178083, 02 Oct. 2009)
Criteria In
Retrenched
Selecting
Employees
To
Q: Due to mounting losses, the former owners of
Asian Alcohol Corporation sold its stake in the
company to Prior Holdings. Upon taking control
of the company, Prior Holdings, to prevent
losses, implemented a reorganization plan and
other cost-saving measures including the
retrenchment of 117 Ees some of which are
members of the union and the majority held by
non-union members.
Some retrenched workers filed a complaint for
illegal dismissal alleging that the retrenchment
was a subterfuge for union busting activities.
Was the retrenchment made by Asian Alcohol
valid and justified?
A: YES. Even though the bulk of the losses were
suffered under the old management and continued
only under the new management, ultimately the
new management of Prior Holdings will absorb such
losses. The law gives the new management every
right to undertake measures to save the company
from bankruptcy. (Asian Alcohol Corp. v. NLRC, G.R.
No. 131108, 25 Mar. 1999)
Be
There must be fair and reasonable criteria to be
used in selecting Ees to be dismissed such as:
1.
2.
3.
Less preferred status;
Efficiency rating;
Seniority (Phil. Tuberculosis Society, Inc. v.
National Labor Union, G.R. No. 115414, 25 Aug.
1998)
Retrenchment vs Redundancy
RETRENCHMENT
Involves
losses,
closures, or cessation
of
operations
of
establishment
or
undertaking due to
serious business losses
or financial reverses.
“Last In First Out” (L-I-F-O) Rule
It applies to termination of employment in the same
line of work. What is contemplated in the LIFO rule
is that when there are two or more Ees occupying
the same position in the company affected by the
retrenchment program, the last one employed will
necessarily be the first one to go. (Maya Farms
281
REDUNDANCY
Does not involve losses
or the closing or
cessation of operations
of the establishment.
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
2.
In
preventive
retrenchment,
retrenchment may be
undertaken by the
employer
before
losses are sustained.
3.
Separation pay equivalent to at least onehalf (½) month pay for every year of
service; and,
Cessation of business is bona fide in
character.
2. Total Closure due to economic reverses or
losses
Evidence to Prove Losses
Requirements:
1. Written notice to the EE and to the
DOLE at least one (1) month before the
intended date of termination.
2. Cessation of business is due to serious
economic reverses or losses.
Alleged losses if already realized and the expected
imminent losses must be proved by sufficient and
convincing evidence.
Evidence presented in NLRC Proceedings must have
modicum of admissibility.
Financial Statements audited by independent
external auditors, and for GOCCs, financial
statements audited by the Commission on Audit.
(Chan, 2019)
Requisites
4. CLOSURE OF BUSINESS
b.
a.
It must be done in good faith and not for the purpose
of circumventing pertinent labor laws.
c.
d.
e.
A change of business ownership does not create an
obligation on the part of the new owner to absorb
the employees of the previous owner, unless
expressly assumed. Labor contracts being in
personam, are generally not enforceable against a
transferee. (Fernando v. Angat Labor Union, G.R. No.
L-17896, 30 May 1962)
Test for the validity of closure or cessation of
establishment or undertaking
To be a valid ground for termination the following
must be present:
Closure contemplated is a unilateral and voluntary
act on the part of the Er to close the business
establishment.
1.
Two (2) Kinds of Closure:
1.
2.
3.
Partial Closure – although grounded on
economic losses, partial closure is a form of
retrenchment.
There must be a decision to close or cease
operation of the enterprise by the
management;
The decision was made in good faith; and,
There is no other option available to the
employer except to close or cease operations.
(Sec. 5.4 .(d), D.O. No. 147, Series of 2015)
Payment of separation pay in case of closure
Requirements:
1. Written notice to the EE and to the DOLE
at least one (1) month before the
intended date of termination;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Written notice served on both the Ees and
the DOLE at least one (1) month prior to the
intended date of closure;
Payment of separation pay equivalent to at
least one month pay or at least one-half
(1/2) month pay for every year of service,
whichever is higher, except when closure is
due to serious business losses;
Good faith;
No circumvention of the law; and,
No other option available to the Er.
Payment of separation pay is required only where
closure is neither due to serious business losses nor
due to an act of Government. (North Davao Mining
282
Labor Law and Social Legislation
operations. Art. 298 of the LC governs the
grant of separation benefits "in case of
closures or cessation of operation" of business
establishments "not due to serious business
losses or financial reverses." Where, the
closure then is due to serious business losses,
the LC does not impose any obligation upon
the Er to pay separation benefits. (Galaxie Steel
Workers Union v. NLRC, G.R. No. 165757, 17 Oct.
2006)
Corp v. NLRC, G.R. No. 112546, 13 Mar. 1996, and NFL
v. NLRC, G.R. No. 127718, 02 Mar. 2000)
Basis for computation: latest salary rate, unless
reduced by the employer to circumvent the law, in
which case, it shall be based on the rate before its
deduction. (Sec. 10, Book IV, Rule I, IRR)
There is no obligation to pay separation pay
1.
2.
When the closure of the business is due to
serious business loss; and
Obligation of a Transferee to absorb the Ees of
the Old Corporation
Where closure of business is by compulsion of
law because closure of business is not
attributed to Er’s will. (e.g., the land where the
building is situated was declared covered by
the Comprehensive Agrarian Reform Law)
GR: There is no law requiring a bona fide purchaser
of assets of an on-going concern to absorb in its
employ the Ee’s of the transferor.
XPNs:
1. When the transaction between the parties is
colored or clothed with bad faith. (Sundowner
Dev’t Corp. v. Drilon, G.R. No. 82341, 06 Dec.
1989)
Q: Galaxie Steel Corp. decided to close down
because of serious business loses. It filed a
written notice with the DOLE informing its
intended closure and the termination of
employment. It posted the notice of closure on
the corporate bulletin board.
Does the written notice posted by Galaxie
on the bulletin board sufficiently comply
with the notice requirement under Art. 298
of the LC?
b. Are Galaxie Ees entitled to separation pay?
2.
Where the transferee was found to be merely
an alter ego of the different merging firms.
(Filipinas Port Services, Inc. v. NLRC, G.R. No.
97237, 16 Aug. 1991)
3.
Where the transferee voluntarily agrees to do
so. (Marina Port Services, Inc. v. Iniego, G.R. No.
77853, 22 Jan. 1990)
a.
A:
a.
NO. In order to meet the purpose, service of
the written notice must be made individually
upon each Ee of the company.
Merger of Corporations
The merger of a corporation does not operate to
dismiss the employees of the corporation absorbed
by the surviving corporation. This is in keeping with
the nature and effects of a merger as provided under
law and the constitutional policy protecting the
rights of labor. The employment of the absorbed
employees subsists. Necessarily, these absorbed
employees are not entitled to separation pay. (The
Philippine Geothermal, Inc. Employees Union v.
Unocal Philippines, Inc. [now known as Chevron
Geothermal Philippines Holdings, Inc.] G.R. No.
190187, 28 Sept. 2016)
However, the Supreme Court held that where
the dismissal is for an authorized cause, noncompliance with statutory due process should
not nullify the dismissal, or render it illegal, or
ineffectual. Still, the Er should indemnify the
Ee, in the form of nominal damages, for the
violation of his right to statutory due process.
(Galaxie Steel Workers Union v. NLRC, G.R. No.
165757, 17 Oct. 2006)
b. NO. Galaxie had been experiencing serious
financial losses at the time it closed business
283
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
employees. (Dutch Movers Inc., et al. v. Lequin, et al.,
G.R. No. 210032, 25 Apr. 2017)
Piercing the Veil of Corporate Fiction
Q: The Dutch Movers, Inc., (DMI), informed their
employees that it would cease its hauling
operation for no reason and it did not file any
notice of business closure before the DOLE.
Their employees filed an illegal dismissal case
against DMI. Thus, employees prayed that
officers named in DMI’s Article of Incorporation
be impleaded and be held solidarily liable with
DMI in paying the judgment awards.
Q: Crisologo was employed by petitioner NEC
System Integrated Construction Phils., Inc.
(NESIC) as Manager of Communication Facilities.
A cost-cutting measure was implemented,
specifically terminating all project and
contractual employees and withheld some of the
employees’ benefits.
Notwithstanding with the cost cutting measures
NESIC still incurred financial losses an
announced
retrenchment
which
causes
respondent’s dismissal. He however voluntarily
sign quitclaim and receipt of separation pay.
Upon learning that NESIC employed other
person to fill the vacancy in the company
respondent filed a case for illegal dismissal. Will
the case prosper?
However, spouses Smith, officers named in the
AOI, merely lent their names to spouses LEE,
alleged owner, to assist them in incorporating
DMI and after such undertaking; spouses SMITH
transferred their rights in DMI in favor of
spouses LEE.
Now, spouses LEE contends that DMI had a
separate and distinct personality from the
officers comprising it. Hence, they cannot be
held personally liable for the judgment awards.
Is the contention of spouses LEE tenable?
A: NO. Not all waivers and quitclaims are invalid as
against public policy. If the agreement was
voluntarily entered into and represents a
reasonable settlement, it is binding on the parties
and may not later be disowned simply because of a
change of mind.
A: NO. As a general rule, a corporation has a
separate and distinct personality from its
stockholders, and from other corporations it may be
connected with.
It is only where there is clear proof that the waiver
was wangled from an unsuspecting or gullible
person, or the terms of settlement are
unconscionable on its face, that the law will step in
to annul the questionable transaction. (NEC System
Integrated Construction Phils., Inc. v. Crisologo, G.R.
No. 201535, 05 Oct. 2015)
However, such personality may be disregarded, or
the veil of corporate fiction may be pierced
attaching personal liability against responsible
person if the corporation’s personality, is used to
defeat public convenience, justify wrong, protect
fraud or defend crime, or is used as a device to
defeat the labor laws.
Here, petitioners should be held personally liable
for having controlled DMI and actively participated
in its management, and for having used it to evade
legal obligations to respondents.
While it is true that one’s control does not by itself
result in the disregard of corporate fiction;
however, considering the irregularity in the
incorporation of DMI, then there is sufficient basis
to hold that such corporation was used for an illegal
purpose, including evasion of legal duties to its
UNIVERSITY OF SANTO TOMAS
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Labor Law and Social Legislation
Closure vs. Retrenchment
5. DISEASE
CLOSURE
RETRENCHMENT
It is the reversal of
fortune of the Er
whereby there is a
complete cessation
of
business
operations
to
prevent
further
financial drain upon
an Er who cannot pay
anymore his Ees
since business has
already stopped.
Is the reduction of
personnel
for
the
purpose of cutting down
on costs of operations in
terms of salaries and
wages resorted to by an
Er because of losses in
operation of a business
occasioned by lack of
work and considerable
reduction in the volume
of business.
One
of
the
prerogatives
of
management is the
decision to close the
entire establishment
or to close or abolish
a department or
section thereof for
economic
reasons,
such as to minimize
expenses and reduce
capitalization.
Does not obligate the
Er for the payment of
separation package if
there is closure of
business due
to
serious losses.
Disease as a Ground for Dismissal
When the Ee suffers from a disease, and:
1.
2.
His continued employment is prohibited by
law or prejudicial to his health or to the health
of his co-Ees; and (Sec. 8, Book VI, Rule I, IRR)
With a certification by competent public
health authority that the disease is incurable
within six (6) months despite due medication
and treatment. (Solis v. NLRC, G.R. No. 116175,
28 Oct. 1996)
NOTE: The requirement for a medical certification
cannot be dispensed with; otherwise, it would
sanction the unilateral and arbitrary determination
by the Er of the gravity or extent of the Ee’s illness
and thus defeat the public policy on the protection
of labor. (Manly Express v. Payong, G.R. No. 167462,
25 Oct. 2005)
In
the
case
of
retrenchment, however,
for the closure of a
business
or
a
department due to
serious business losses
to be regarded as an
authorized cause for
terminating Ees, it must
be proven that the losses
incurred are substantial
and actual or reasonably
imminent; that the same
increased through a
period of time; and that
the condition of the
company is not likely to
improve in the near
future.
Procedure in terminating an Ee’s employment
on the ground of disease
1.
LC provides for the
payment of separation
package in case of
retrenchment to prevent
losses.
The Er shall not terminate his employment
unless:
a.
There is a certification by a competent
public health authority; and,
b.
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.
NOTE: In terminating employment on the ground of
disease, the employer must comply with the twinnotice rule.
In Sy v. CA and Manly Express, Inc. v. Payong, Jr.,
promulgated in 2003 and 2005, respectively, the
Court finally pronounced the rule that the employer
must furnish the employee two written notices in
terminations due to disease, namely:
285
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
a.
b.
Entitlement to reinstatement
The notice to apprise the employee of the
ground for which his dismissal is sought;
and
The notice informing the employee of his
dismissal, to be issued after the employee
has been given reasonable opportunity to
answer and to be heard on his defense. (Sy
v. CA and Manly Express, Inc. v. Payong, Jr.,
G.R. No. 167462, 25 Oct. 2005)
An Ee suffering from a disease is entitled to a
reinstatement, provided he presents a certification
by a competent public health authority that he is fit
to return to work. (Cebu Royal Plant v. Deputy
Minister, G.R. No. L-58639, 12 Aug. 1987)
Medical Certificate as mandatory requirement
These rulings reinforce the State policy of
protecting the workers from being terminated
without cause and without affording them the
opportunity to explain their side of the controversy.
(Deoferio v. Intel Technology, G.R. No. 202996, 18
June 2014)
2.
The requirements of a medical certificate are
mandatory. Only where there is a prior certification
from a competent public authority that the disease
afflicting the Ee sought to be dismissed is of such
nature or at such stage that it cannot be cured
within six (6) months even with proper medical
treatment that the latter could be validly terminated
from his job. (Tan v. NLRC, G.R. No. 116807, 14 Apr.
1997)
If the disease or ailment can be cured within the
period, the Er shall not terminate the Ee’s
employment but shall ask the Ee to take a leave.
The Er shall reinstate such Ee to his former
position immediately upon the restoration of
his normal health. (Sec. 8, Book VI, Rule I, IRR)
Q: Anna Ferrer has been working as a
bookkeeper at Great Foods, Inc., which operates
a chain of high-end restaurants throughout the
country, since 1970 when it was still a small
eatery at Binondo. In the early part of the year
2003, Anna, who was already 50 years old,
reported for work after a week-long vacation in
her province. It was the height of the SARS scare,
and management learned that the first
confirmed SARS death case in the Phils, a
“balikbayan” nurse from Canada, is a townmate
of Anna.
HIV-positive Status and AIDS, not a Ground for
Termination
Discrimination in any form from pre-employment
to post-employment, including hiring, promotion,
or assignment, based on the actual, perceived or
suspected HIV status of an individual is prohibited.
Termination from work on the sole basis of actual,
perceived, or suspected HIV status is deemed
unlawful. (Sec. 35, R.A. No. 8504)
Immediately, a memorandum was issued by
management terminating the services of Anna
on the ground that she is a probable carrier of
SARS virus and that her continued employment
is prejudicial to the health of her co-Ees. Is the
action taken by the Er justified? (2004 BAR)
Disability, not a Ground for Termination
GR: Dismissing or terminating the services of a
disabled employee by reason of his disability is not
a valid ground.
A: The Er’s act of terminating the employment of
Anna is not justified. There is no showing that said
Ee is sick with SARS, or that she associated or had
contact with the deceased nurse. They are merely
town mates. Furthermore, there is no certification
by a competent public health authority that the
disease is of such a nature or such a stage that it
cannot be cured within a period of six (6) months
even with proper medical treatment. (IRR, Book VI,
XPN: The employer can prove that he impairs the
satisfactory performance of the work involve to the
prejudice of the business entities; provided,
however, that the employer first sought provide
reasonable accommodations for disabled persons.
UNIVERSITY OF SANTO TOMAS
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286
Labor Law and Social Legislation
to study the accusation against them, consult
a union official or lawyer, gather data and
evidence, and decide on the defenses they will
raise against the complaint. (King of Kings
Transport Inc. v. Mamac, G.R. No. 166208, 29
June 2007)
Rule 1, Sec. 8)
Other authorized causes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Total and permanent disability of Ee
Valid application of union security clause
Expiration of period in term of employment
Completion of project in project employment
Failure in probation
Relocation of business to a distant place
Defiance of return-to work-order
Commission of Illegal acts in strike
Violation of contractual agreement
Retirement
b.
2. PROCEDURAL DUE PROCESS
2.
Hearing (opportunity to be heard) – The
worker may answer the allegations against him
in the notice of dismissal within a reasonable
period from receipt of the notice of dismissal
with the ample opportunity to be heard.
3.
Judgement/Decision to Dismiss – It should be
in writing and should clearly state all the
reasons for dismissal.
a. TWO-NOTICE RULE
The Two-Notice Rule requires that:
1.
There must be a notice stating the ground
for termination and requiring the employee
to explain his side; and
There must be a notice for the termination
itself.
2.
Under the Perez Doctrine, the two-notice-and-ahearing rule was not imposed because hearing may
now be dispensed. The Supreme Court held that
what is important is that the parties are given the
opportunity to be heard unless they request in
writing for a hearing. What is required is that the
complainant is given the opportunity to be heard.
(Perez v. Philippine Telegram and Telephone
Company, G.R. 152048, 07 Apr. 2009)
Procedural Requirements of Dismissal for Just
Causes
1.
Notice (Two-notice rule) – the employer is
required to furnish an employee who is to be
dismissed with two (2) written notices before
such termination:
a.
Post-notice – The notice informing the
employee of the employer’s decision to
dismiss him which notice must come only
after the employee is given a reasonable
period from receipt of the first notice
within which to answer the charge, and
ample opportunity to be heard and
defend himself.
Pre-notice – the notice to apprise the
employee of the particular acts or
omissions for which dismissal is sought
and is considered as the proper charge;
Where the employer had a valid reason to dismiss
the employee but failed to comply with the
procedural due process requirement, the dismissal
may be upheld but the employer will be penalized
to pay an indemnity to the employee. (Wenphil Corp.
v. NLRC, G.R. No. 80587, 08 Feb. 1989)
NOTE: 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 written
explanation within a reasonable period. This
should be construed as a period of at least
five (5) calendar days from receipt of the
notice to give the employees an opportunity
The above-cited doctrine was reinstated in the case
of Agabon v. NLRC. In cases involving dismissals for
cause but without observance of the twin
requirements of notice and hearing, the better rule
is to abandon the Serrano doctrine and to
follow Wenphil by holding that the dismissal was for
287
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
NOTE: It is not necessary for the affiants to appear
and testify and be cross-examined by the counsel for
the adverse party. It is sufficient that the documents
submitted by the parties have a bearing on the issue
at hand and support the positions taken by them.
(C.F. Sharp & Co., Inc. v. Zialcita, G.R. No. 157619, 17
July 2006)
just cause but imposing sanctions on the employer.
Such sanctions, however, must be stiffer than that
imposed in Wenphil. (Agabon v. NLRC, G.R. No.
158693, 17 Nov. 2004)
NOTE: The burden of proving that the termination
was for a valid or authorized cause shall rest on the
Er. (Art. 292(b), LC)
The essence of due process is simply an
opportunity to be heard, or as applied to
administrative proceedings, an opportunity to
explain one’s side or an opportunity to seek a
reconsideration of the action or ruling complained
of. (PLDT v. Bolso, G.R. No. 159701, 17 Aug. 2007)
Indemnity in the Form of Nominal Damages
An employer is liable to pay indemnity in the form
of nominal damages to an employee who has been
dismissed if, in effecting such dismissal, the
employer fails to comply with the requirements of
due process.
The burden of proof in termination cases
The violation of the petitioners' right to statutory
due process by the private respondent warrants the
payment of indemnity in the form of nominal
damages. The amount of such damages is addressed
to the sound discretion of the court, considering the
relevant circumstances. (Agabon v. NLRC, G.R. No.
158693, 17 Nov. 2004)
The burden of proof rest upon the Er to show that
the dismissal of the Ee is for a just cause, and failure
to do so would necessarily mean that the dismissal
is not justified, consonant with the constitutional
guarantee of security of tenure.
Due process refers to the process to be followed;
burden of proof refers to the amount of proof to be
adduced. In money claims, the burden of proof as to
the amount to be paid the Ees rests upon the Er
since he is in custody of documents that would be
able to prove the amount due, such as the payroll.
Q: The illegal dismissal case was referred to the
LA. Is a formal hearing or trial required to satisfy
the requirement of due process?
A: NO. Trial-type hearings are not required in labor
cases, and these may be decided on verified position
papers, with supporting documents and their
affidavits. The holding of a formal hearing or trial is
discretionary with the labor arbiter and is
something that the parties cannot demand as a
matter of right. It is entirely within his authority to
decide a labor case before him, based on the
position papers and supporting documents of the
parties, without a trial or formal hearing.
Degree of proof required
In illegal dismissal cases, the Er is burdened to
prove just cause for terminating the employment of
its Ee with clear and convincing evidence to give
flesh and blood to the guaranty of security of tenure
granted by the Constitution to Ees under the LC.
(Duty Free Phils. Services, Inc. v. Tria, G.R. No. 174809,
27 June 2012)
The requirements of due process are satisfied when
the parties are given the opportunity to submit
position papers wherein, they are supposed to
attach all the documents that would prove their
claim in case it be decided that no hearing should be
conducted or was necessary. (Shoppes Manila, Inc. v.
NLRC, G.R. No. 147125, 14 Jan. 2004)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Guidelines in determining whether the penalty
imposed on Ee is proper
1.
2.
3.
4.
288
Gravity of the offense
Position occupied by the Ee
Degree of damage to the Er
Previous infractions of the same offense
Labor Law and Social Legislation
Length of service (ALU-TUCP v. NLRC, G.R. No.
120450, 10 Feb. 1999); (PAL v. PALEA, G.R. No.
L-24626, 28 June 1974)
The Er, however, should be held liable for noncompliance with the procedural requirements of
due process in the form of damages.
Q: Felizardo was dismissed from Republic Flour
Mills-Selecta Ice Cream Corporation for
dishonesty and theft of company property for
bringing out a pair of boots, 1 piece aluminum
container and 15 pieces of hamburger patties. Is
the penalty of dismissal commensurate with the
offense committed?
Q: Integrated Pharma, engaged the services of
Rowena as "Clinician," tasked with the duty of
promoting and selling Integrated Pharma's
products.
5.
Rowena received a memorandum from her
immediate supervisor stating the charges
against her relative to her failure to remit her
collections and to return the CareSens POP
demonstration unit to the office, at a specified
time, habitual tardiness, and her act of
deliberately misdeclaring or overstating her
actual travelling expense. In the same
memorandum, she was required to submit a
written explanation within 24 hours.
A: There is no question that the Er has the inherent
right to discipline its Ees which includes the right to
dismiss. However, this right is subject to the police
power of the State. As such, the Court finds that the
penalty imposed upon Felizardo was not
commensurate with the offense committed
considering the value of the articles he pilfered and
the fact that he had no previous derogatory record
during his two (2) years of employment in the
company.
Rowena, however, refused to accept said
memorandum. Subsequently, Rowena received
through registered mail another memorandum,
but already denominated as Termination of
Employment. Rowena thus filed a complaint for
illegal dismissal. Is the dismissal valid despite
Rowena not being accorded due process?
Moreover, Felizardo was not a managerial or
confidential Ee in whom greater trust is reposed by
management and from whom greater fidelity to
duty is correspondingly expected. (ALU-TUCP v.
NLRC, G.R. No. 120450, 10 Feb. 1999)
A: YES. If the dismissal is based on a just cause
under Art. 297 of the Labor Code, as in this case, the
employer must give the employee two written
notices and conduct a hearing. The first written
notice is intended to apprise the employee of the
particular acts or omissions for which the employer
seeks her dismissal; while the second is intended to
inform the employee of the employer's decision to
terminate him.
Hearing is not an indispensable part of due
process
Sec. 2(d), Rule I of the IRR of Book VI of the LC
provides that the so-called standards of due process
outlined therein shall be observed “substantially,”
not strictly. This is a recognition that while a formal
hearing or conference is ideal, it is not an absolute,
mandatory or exclusive avenue of due process.
(Perez v. PT&T, G.R. No. 152048, 29 Apr. 2009)
In the present case, Integrated Pharma presented
two first written notices charging Rowena with
various offenses. Both notices, however, fell short of
the requirements of the law. Integrated Pharma did
not afford Rowena ample opportunity to
intelligently respond to the accusations hurled
against her as she was not given a reasonable period
of at least five days to prepare for her defense.
Liability for Nominal Damages When Due
Process is Not Observed
It was held that when dismissal is for just or
authorized cause, but due process was not
observed, the dismissal should be upheld. (Agabon
v. NLRC, G.R. No. 158693, 17 Nov. 2004)
Failure to comply strictly with the requirements-of
procedural due process for dismissing an employee
289
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
will not render such dismissal ineffectual if it is
based on a just or an authorized cause.
The employer, however, must be held liable for
nominal damages for non-compliance with the
requirements of procedural due process. (Santos
v. Integrated Pharmaceutical, Inc., G.R. No. 204620,
11 July 2016)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
290
Labor Law and Social Legislation
Procedural Due Process under Art. 297-299 of the LC
as applied in the Agabon Case
Art. 297
Art. 298
Art. 299
The Er must give the Ee a notice
specifying the grounds for which
dismissal is sought a hearing or an The Er must give the Ee and the DOLE
Er may terminate the services
opportunity to be heard and after written notices 30 days prior to the
of his Ee.
hearing or opportunity to be effectivity of his separation.
heard, a notice of the decision to
dismiss.
Worker is an inactive party in the
cause for termination.
The requirement under Art. 292
(b) of notice and hearing applies
only in Art. 297 because the Er is
accusing the worker that the latter
committed an act or omission
constituting
a
cause
for
termination of his employment.
POSSIBLE SITUATIONS
a.
b.
a.
b.
a.
b.
a.
b.
With Just or Authorized
Cause
With Due Process
Without Just or Authorized
Cause
With Due Process
Without Just or Authorized
Cause
Without Due Process
With Just or Authorized
Cause
Without Due Process
Only notice with DOLEand notice to
worker is required. No need for a
hearing because due process is found
in LC (Art. 298) not in Constitution
according to Agabon.
There
is
no
hearing
requirement in diseases but
there is notice requirement to
worker, but no notice to DOLE.
NOTE: in Art. 292 (b) in relation to Art.
298, if the closure of business will
result in a mass layoff and serious
labor dispute, the SOLE can enjoin the
Er as regards mass termination
EFFECT OF
TERMINATION
LIABILITY OF EMPLOYER
NO Liability
VALID
NOTE: Separation Pay if for Authorized Cause.
Reinstatement + Full Backwages
INVALID
NOTE: If Reinstatement not possible
Separation Pay
Reinstatement + Full Backwages
—
INVALID
NOTE: If Reinstatement not possible —
Separation Pay
Liable for noncompliance with procedural
requirements
VALID
NOTE: Separation Pay if for Authorized Cause
291
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
NOTE: The Agabon ruling was modified by JAKA
Food Processing v. Pacot, (G.R. No. 151378, 28 Mar.
2005), where it was held that:
1.
If based on just cause (Art. 297, LC), but the Er
failed to comply with the notice requirement,
the sanction to be imposed upon him should be
tempered because the dismissal process was,
in effect, initiated by an act imputable to the
Ee; and
2.
If based on authorized causes (Art. 298, LC),
but the Er failed to comply with the notice
requirement, the sanction should be stiffer
because the dismissal process was initiated by
Er’s exercise of his management prerogative.
4.
As to the amount of nominal damages awarded:
1.
2.
3.
1.
In the determination of the amount of
nominal damages which is addressed to the
sound discretion of the court, several
factors are taken into account:
b.
The number of employees to be
awarded;
c.
Whether there was a bona fide attempt
to
comply
with
the
notice
requirements as opposed to giving no
notice at all. (Industrial Timber
Corporation v. Ababon, G.R. No. 164518,
30 March 2006)
An employer who terminates an employee
for a valid cause but does so through invalid
procedure is liable to pay the latter nominal
damages. (Abbot Laboratories v. Alcaraz,
G.R. No. 192571, 23 July 2013)
Written Notice to DOLE 30 days prior to the
intended day of termination.
2.
Written notice to Ee concerned 30 days
prior the intended date of termination.
3.
Payment of separation pay – Serious
business losses do not excuse the Er from
complying with the clearance or report
required in Art. 298 of the LC and its IRR
before terminating the employment of its
workers. In the absence of justifying
circumstances, the failure of the Er to observe
the procedural requirements under Art. 298 of
the LC taints their actuations with bad faith if
the lay-off was temporary but then serious
business losses prevented the reinstatement
of respondents, the Er’s should have complied
with the requirements of written notice.
When Notice is Not Needed
The capacity of the employers to satisfy
the awards, taken into account their
prevailing financial status as borne by
the records;
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
e.
Purpose: To enable it to ascertain the veracity
of the cause of termination.
In Jaka, where the dismissal of the
employees was based on an authorized
cause under Article 283, but without the
required notice under the same rule, we
fixed the amount at P50,000.00.
The authorized cause invoked,
whether it was a retrenchment or a
closure or cessation of operation of the
establishment due to serious business
losses or financial reverses or
otherwise;
The employer’s grant of other
termination benefits in favor of the
employees; and
Procedural Requirements of Dismissal for
Authorized Causes
In Agabon, the nominal damages awarded
to the employees for a dismissal based on a
just cause without the notice requirement
was P30,000.00;
a.
d.
When an employee:
1. Consented to his retrenchment; or,
2. Voluntarily applied for retrenchment.
292
Labor Law and Social Legislation
Rules on separation pay with regard to each
cause of termination
The employee, thereby, acknowledged the existence
of a valid cause for termination of his employment.
(Santos v. Pepsi Cola, et al., G.R. No. 141947, 05 July
2001)
CAUSE OF
TERMINATION
Separation Pay
Separation pay refers to the amount due to the Ee
who has been terminated from service for causes
authorized by law such as the installation of laborsaving losses or the closing or cessation of operation
of the establishment or undertaking.
Automation
Redundancy
Purpose for providing separation pay
Separation pay is intended to provide the Ee with
the wherewithal during the period he is looking for
another employment. (Gabuay v. Oversea Paper
Supply, G.R. No. 148837, 13 Aug. 2004)
Retrenchment
Closures or
cessation of
operation not due
to serious
business losses/
financial reverses
Instances when Ee is entitled to separation pay
1.
When the termination of employment is due
to causes authorized by law; (Art. 298, LC)
2.
When the severance of employment is caused
by a disease, particularly when the Ee is found
to be suffering from any disease and whose
continued employment is prohibited by law or
is prejudicial to his health and of his co-Ees;
(Art. 299, LC)
3.
4.
5.
Disease
SEPARATION PAY
Equivalent to at least one
(1) month pay or at least
one (1) month pay for every
year of service, whichever
is higher
Equivalent to at least one
(1) month pay or at least
one (1) month pay for every
year of service, whichever
is higher
Equivalent to one (1)
month pay or at least onehalf (½) month
pay for
every year or service
Equivalent to at least one
(1) month pay or at least
one (1) month pay for every
year of service. (If due to
severe financial losses, no
separation pay.)
Equivalent to at least one
(1) month pay or at least
one-half (½) month pay for
every year of service,
whichever is higher
NOTE: A fraction of at least six (6) months shall be
considered one (1) whole year.
When the termination from service has been
declared illegal, but his reinstatement to his
former position is no longer feasible for some
valid reason; (Gabuay v. Oversea Paper Supply,
G.R. No. 148837, 13 Aug. 2004)
There is no separation pay when the closure is due
to an act of the Government.
Time of Payment and/or Release of Final Pay
In case of pre-termination of employment
contract in job-contracting arrangement; or
(D.O 18-02, Rules Implementing Art. 106 – 109,
LC); and
To effectively harmonize the management
prerogative of the employer and the right of an
employee, the Final Pay shall be released within 30
days from the date of separation or termination of
employment, unless there is a more favorable
company policy, individual or collective agreement
thereto. (D.A. 06-20))
Where separation pay is awarded as a measure
of social or compassionate justice. (PLDT v.
NLRC, G.R. No. L-80609, 23 Aug. 1988)
293
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Q: DAP Corp. ceased its operation due to the
termination of its distribution agreement with
Int’l Distributors Corp. which resulted in its
need to cease its business operations and to
terminate the employment of its Ees. Marcial et
al. filed a complaint for illegal dismissal and for
failure to give the Ees written notices regarding
the termination of their employment.
Issuance of Certificate of Employment
The employer shall issue a certificate of
employment within three (3) days from the time of
the request by the employee. (Ibid.)
Enforcement Mechanism
Any issue or claim dispute arising our or relating to
the payment of final pay, or issuance of certificate of
employment, shall be filed before the nearest DOLE
Regional/Provincial/Field Office, which has
jurisdiction over the workplace, for conciliation and
subject to DOLE’s existing enforcement mechanism.
(Ibid.)
On the other hand, DAP claims that their Ees
knew of the termination therefore the written
notices were no longer required. Are written
notices dispensed with when the Ees have actual
knowledge of the redundancy?
A: The Ees’ actual knowledge of the termination of a
company’s distributorship agreement with another
company is not sufficient to replace the formal and
written notice required by law. In the written notice,
the Ees are informed of the specific date of the
termination, at least a month prior to the date of
effectivity, to give them sufficient time to make
necessary arrangements.
Acceptance of Separation Pay is Not a Bar to
Question the Illegality of Dismissal
A dismissed employee who has accepted his
separation pay is not necessarily estopped from
assailing the illegality of his dismissal. In fact, he
filed the complaint for illegal dismissal with prayer
for reinstatement a month after his separation from
service — a fact which strongly indicates that he
never waived his right to reinstatement. (Solis v.
NLRC. G.R. No. 116175, 28 Oct. 1996)
In this case, notwithstanding the Ees knowledge of
the cancellation of the distributorship agreement,
they remained uncertain about the status of their
employment when DAP failed to formally inform
them about the redundancy. (DAP Corp. v. CA, G.R.
No. 165811, 14 Dec. 2005)
Purpose of the two notices served to the Ee and
the DOLE 1 month prior to termination
1.
2.
To give the Ees some time to prepare for the
eventual loss of their jobs and their
corresponding income, look for other
employment and ease the impact of the loss of
their jobs; and
3. ILLEGAL DISMISSAL, RELIEFS THEREFROM
Remedies of Ee in case of Illegal Dismissal
In case where the worker is illegally terminated, his
remedies are:
To give the DOLE the opportunity to ascertain
the veracity of the alleged cause of termination.
(Phil. Telegraph & Telephone Corp. v. NLRC, G.R.
No. 147002, 15 Aug. 2005)
a.
NOTE: Notice to both the Ees concerned and the
DOLE are mandatory and must be written and given
at least one (1) month before the intended date of
retrenchment – and the fact that the Ees were
already on temporary lay-off at the time notice
should have been given to them is not an excuse to
forego the one (1) month written notice. (Sebuguero
v. NLRC, G.R. No.115394, 27 Sept. 1995)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
b.
c.
d.
e.
294
Reinstatement without loss of seniority
rights – Actual reinstatement or payroll
reinstatement;
Full backwages – Full backwages means
no deduction;
Separation pay in lieu of reinstatement;
Damages, including Attorney’s fees; and
6% legal interest on monetary award.
Labor Law and Social Legislation
Q: Does the offer to reinstate the illegally
dismissed Ee affect the liability of the erring Er?
Q: Remoticado was absent for fourteen (14) days
without an official leave. He then informs Nielo,
HR officer, that he was resigning due to personal
reasons. After receiving his final pay, he
protested that he was entitled to separation pay
computed at two (2) months for his services for
two (2) years. Nielo averred that he could not be
entitled to separation pay considering that he
voluntarily resigned. Remoticado then filed a
complaint for illegal dismissal claiming that he
was told to stop reporting for work due to a
"debt at the canteen" and thereafter was
prevented from the company’s premises. Was
there an illegal dismissal?
A: NO. Sincere or not, the offer of reinstatement
could not correct the earlier illegal dismissal of the
Ee. The Er incurred liability under the LC from the
moment an Ee was illegally dismissed, and the
liability did not abate as a result of the Er’s
repentance. (Ranara v. NLRC, 14 Aug. 1992)
Q: PAL dismissed strike leader Capt. Gaston, as a
result of which, the Union resolved to undertake
the grounding of all PAL planes and the filing of
applications for “protest retirement” of
members who had completed 5 years of
continuous service, and “protest resignation”
for those who had rendered less than 5 years of
service in the company. PAL acknowledged
receipt of said letters and among the pilots
whose “protest resignation or retirement” was
accepted by PAL were Enriquez and Ecarma.
A: NO. There can be no illegal termination when
there was no termination. Before the employer must
bear the burden of proving that the dismissal was
legal, 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.
Petitioner insists on his version of events, that is,
that on Dec. 23, 2010, he was told to stop reporting
for work on account of his supposed indebtedness
at the canteen. This bare insistence, however, is all
that petitioner has. He failed to present convincing
evidence. (Remoticado v. Typical Construction
Trading Corp., and Alignay, G.R. No. 206529, 23 Apr.
2018)
Before their readmission, PAL required
Enriquez and Ecarma to accept 2 conditions,
namely: that they sign conformity to PAL’s letter
of acceptance of their retirement and or
resignation, and that they submit an application
for employment as new Ees without protest or
reservation. As a result of this, their seniority
rights were lost. Are the pilots entitled to the
restoration of their seniority rights?
A: NO. An Ee has no inherent right to seniority. He
only has such rights as may be based on a contract,
statute, or an administrative regulation relative
thereto. Seniority rights which are acquired by an Ee
through long-time employment are contractual and
not constitutional. The discharge of an Ee thereby
terminating such rights would not violate the
Constitution.
Q: On July 1986, Arriola was employed as a
correspondent assigned in Olongapo City and
Zambales under Pilipino Star Ngayon, Inc.
(Pilipino Star). Sometime in November 2002,
after his column was removed from publication,
Arriola never returned for work. Three years
later, Arriola filed an illegal dismissal complaint
against Pilipino Star stating that he was
“arbitrarily dismissed.”
When the pilots tendered their respective
retirement or resignation and PAL immediately
accepted them, both parties mutually terminated
the contractual employment relationship between
them thereby curtailing whatever seniority rights
and privileges the pilots had earned through the
years. (Enriquez v. PAL, et al., G.R. No. L-51382, 29
Dec. 1986)
Arguing that he was a regular employee, Arriola
contended that his rights to security of tenure
and due process were violated. On the other
hand, Pilipino Star claims that he was never
dismissed, in fact, they tried calling and sending
him messages to report for work but to no avail
until such time that they discovered that Arriola
transferred to a rival newspaper publisher. The
295
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
Labor Arbiter dismissed the case stating that
there was no illegal dismissal for Arriola was the
one who abandoned his work. Is the Labor
Arbiter correct in dismissing the complaint?
work, would nevertheless be included in the
payroll and entitled to receive salary and other
benefits as if she were in fact working.
(Azucena, 2016)
A: YES. Pilipino Star Ngayon, Inc. did not illegally
dismiss Ariolla. The removal of Arriola’s column
from Pilipino Star’s newspaper is not tantamount to
a termination of his employment as his job is not
dependent on the existence of the column.
Moreover, a newspaper publisher has the
management prerogative to determine what
columns to print in its newspaper. Furthermore, it
took him three years to file the complaint of illegal
dismissal which is a clear intention to sever his
employment with Pilipino Star Ngayon, Inc. (Arriola
v. Pilipino Star Ngayon, Inc, and/or Belmonte, G.R. No.
175689, 13 Aug. 2014)
NOTE: Employer is given the option to
reinstate either actually or in payroll.
An employer can reinstate an employee in
payroll when actual reinstatement is no longer
possible in instances wherein:
1.
The Er believes that there was a valid cause for
dismissal; or
2.
Er does not want to see anymore an unwanted
face in the company premise because it may
demoralize employees.
NOTE: An order of reinstatement by the LA is not
the same as actual reinstatement of a dismissed or
separated Ee, however it is immediately executory
even pending appeal. Thus, until the Er continuously
fails to implement the reinstatement aspect of the
decision of the LA, their obligation to the illegally
dismissed Ee, insofar as accrued backwages and
other benefits are concerned, continues to
accumulate. It is only when the illegally dismissed
Ee receives the separation pay (in case of strained
relations) that it could be claimed with certainty
that the Er-Ee relationship has formally ceased
thereby precluding the possibility of reinstatement.
(Triad Security & Allied Services, Inc. et al v. Ortega,
G.R. No. 160871, 06 Feb. 2006)
a. REINSTATEMENT
Reinstatement
It is the restoration of the Ee to the state from which
he has been unjustly removed or separated without
loss of seniority rights and other privileges. The
person reinstated assumes the position he had
occupied prior to his dismissal, and is, ordinarily,
entitled only to the last salary in that position.
(Azucena, 2016)
Reinstatement presupposes that the previous
position from which one had been removed still
exists, or that there is an unfilled position which is
substantially equivalent or of similar nature as the
one previously occupied by the employee.
Q: Is an illegally dismissed Ee entitled to
reinstatement as a matter of right?
Forms of reinstatement
A: GR: YES.
1.
2.
Actual or physical – The Ee should be
reinstated to his position which he occupies
prior to his illegal dismissal under the same
terms and conditions prevailing prior to his
dismissal or separation or, if no longer
available, to a substantially equivalent
position.
XPNs: Proceeds from an illegal dismissal
wherein reinstatement is ordered but cannot be
carried out as in the following cases:
1.
2.
Payroll – The Ee is merely reinstated in the
payroll. The Ee although not admitted back to
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
296
Reinstatement cannot be effected in
view of the long passage of time or
because of the realities of the situation;
It would be inimical to the Ers’ interest;
Labor Law and Social Legislation
3.
4.
5.
6.
7.
8.
in the workplace of an unwanted. Ee. (Maranao
Hotel v. NLRC, G.R. No. 110027, 16 Nov. 1994)
When reinstatement is no longer
feasible;
When it will not serve the best interest
of the parties involved;
Company will be prejudiced by
reinstatement;
When it will not serve a prudent
purpose;
When there is resultant strained
relation (applies to both confidential
and managerial Ees only); or
When the position has been abolished.
(Applies to managerial, supervisory
and rank-and-file Ees)
Order of Reinstatement
An order for reinstatement entitles an Ee to receive
his accrued backwages from the moment the
reinstatement order was issued up to the date when
the same was reversed by a higher court without
fear of refunding what he had received. (Pfizer v.
Velasco, G.R. No. 177467, 09 Mar. 2011)
NOTE: In such cases, it would be more prudent to
order payment of separation pay instead of
reinstatement. (Quijano v. Mercury Drug
Corporation, G.R. No. 126561, 08 July 1998)
Q: Is there any violation of the “No work, No pay”
in payroll reinstatement?
A: Generally, YES. However, since it is the mandate
of the law, although it is harsh, there is no violation
under the dictum of dura lex sed lex. (Poquiz, 2018)
Art. 229
Art. 294
May be availed of as
soon as the LA renders
a judgment declaring
that the dismissal of
the Ee is illegal and
ordering
said
reinstatement. It may
be availed of even
pending appeal
Presupposes that the
judgment has already
become
final
and
executory.
Consequently, there is
nothing left to be done
except the execution
thereof.
NOTE: An award or order for reinstatement is selfexecutory. It does not require the issuance of a writ
of execution. (Pioneer Texturizing Corp. v. NLRC, G.R.
No. 118651, 06 Oct. 1997)
The option in Art. 229 of the Labor Code is
exclusively granted to the Er. The event that gives
rise for its exercise is not the reinstatement decree
of a LA but the writ for its execution commanding
the Er to reinstate the Ee, while the final act which
compels the employer to exercise the option is the
service upon it of the writ of execution when,
instead of admitting the employee back to his work,
the employer chooses to reinstate the employee in
the payroll only.
Reinstatement Pending Appeal
A dismissed Ee whose case was favorably decided
by the LA is entitled to receive wages pending
appeal upon reinstatement, which is immediately
executory. Unless there is a restraining order, it is
ministerial upon the LA to implement the order of
reinstatement and it is mandatory on the Er to
comply therewith.
This option is based on practical considerations. The
Er may insist that the dismissal of the Ee was for a
just and valid cause and the latter's presence within
its premises is intolerable by any standard; or such
presence would be inimical to its interest or would
demoralize the co-employees.
NOTE: After the LA’s decision is reversed by a
higher tribunal, the Ee may be barred from
collecting the accrued wages, if it is shown that the
delay in enforcing the reinstatement pending appeal
was without fault on the part of the Er.
Two-Fold Test
Thus, while payroll reinstatement would in fact be
unacceptable because it sanctions the payment of
salaries to one not rendering service, it may still be
the lesser evil compared to the intolerable presence
1.
297
There must be actual delay or the fact that the
order of reinstatement pending appeal was not
executed prior to its reversal; and
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
2.
not affect the statutory finality of the NLRC decision.
Since the NLRC decision which upheld the dismissal
became final, the Er was correct in stopping the
payroll reinstatement of the Ee. (Bago v. NLRC, G.R.
No. 170001, 04 Apr. 2007)
The delay must not be due to the Er’s
unjustified act or omission. If the delay is due
to the Er’s unjustified refusal, the Er may still
be
required
to
pay
the
salaries
notwithstanding the reversal of the LA’s
decision. (Garcia v. PAL, G.R. No. 164856, 29
Aug. 2009)
Q: What happens if there is an Order of
Reinstatement but the position is no longer
available?
Q: May the Court order the reinstatement of a
dismissed employee even if the prayer of the
complaint did not include such relief?
A: The Ee should be given a substantially equivalent
position. If no substantially equivalent position is
available, reinstatement should not be ordered
because that would in effect compel the Er to do the
impossible. In such a situation, the Ee should merely
be given a separation pay consisting of one (1)
month salary for every year of service. (Grolier Int’l
Inc. v. ELA, G.R. No. 83523, 31 Aug. 1989)
A: YES. So long as there is a finding that the Ee was
illegally dismissed, the court can order the
reinstatement of an Ee even if the complaint does
not include a prayer for reinstatement, unless of
course the Ee has waived his right to reinstatement.
By law, an Ee who is unjustly dismissed is entitled to
reinstatement among others. The mere fact that the
complaint did not pray for reinstatement will not
prejudice the Ee, because technicalities of law and
procedure are frowned upon in labor proceedings.
(Pheschem Industrial Corp. v. Moldez, G.R. No.
116158, 09 May 2005)
Q: Eteliano Reyes, Jr. was employed by Asian
Terminals, Inc. (ATI) as Supervisor III/Foreman
on Board who shall be responsible in ensuring
that shift vessel operations are carried in
accordance with ATI standards. He first went to
Bay 30, but he had to leave the All Purpose
Personnel (APP) tasked to finish the lashing
operations as he needed to supervise the
loading operations at Bay 38.
NOTE: Reinstatement ordered by LA is selfexecutory as provided under Art. 229 while the one
by the NLRC is not because it awaits the issuance of
a writ of execution under Art. 230. (Azucena, 2016)
With a twist of fate, an accident occurred at Bay
30 wherein a lashing bar fell on the pier apron
hitting Manuel Quiban a vessel security guard.
As expected, ATI directed Reyes to explain why
he should not be penalized for negligence. In his
response, Reyes clarified that while completing
the lashing operations at Bay 30, "EC Planner"
directed him to transfer to Bay 38 to supervise
the commencement of loading operations.
Pursuant to said instruction, Reyes left the four
(4) APPs to complete lashing operations at Bay
30 and proceeded to Bay 38 where a loading
operation was about to start and the crane was
already positioned.
Q: A complaining Ee obtained a favorable
decision in an illegal dismissal case. The LA
ordered her immediate reinstatement. The Er
opted payroll reinstatement pending appeal.
The NLRC ruled that the dismissal was valid. The
Er stopped the payroll reinstatement. The Ee
elevated the case to the CA, and eventually to the
SC. The SC upheld the dismissal. Is the Ee entitled
to continued payroll reinstatement after the
NLRC decision?
A: NO. The Ee is not entitled to continued payroll
reinstatement. The decision of the NLRC on appeals
from decisions of the LA shall become final and
executory after ten (10) calendar days from receipt
thereof by the parties. That the CA may take
cognizance of and resolve a petition for certiorari
for the nullification of the decisions of the NLRC on
jurisdictional and due process considerations does
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
In a Notice to Explain with Preventive
Suspension, the ATI informed Reyes that his
failure to ensure that the safeguards for works
on board the vessel were faithfully observed
constitutes probable violation under Section 2.2
298
Labor Law and Social Legislation
of the CTOP (neglect of work, incompetence,
inefficiency, negligence, failure to perform
duties and/or responsibilities, or failure to
observe standard operating procedures, in any
case resulting in injury or death) and may merit
the penalty of dismissal. Is Reyes, Jr. illegally
dismissed?
NOTE: Entitlement to backwages of the illegally
dismissed Ee flows from law. Even if he does not ask
for it, it may be given. The failure to claim
backwages in the complaint for illegal dismissal is a
mere procedural lapse which cannot defeat a right
granted under substantive law. (St. Michael’s
Institute v. Santos, G.R. No. 145280, 04 Dec. 2001)
A: NO. Indeed, as pointed out by the CA, ATI failed
to present clear, accurate, positive, and convincing
evidence that there is just cause to terminate Reyes'
employment. First, Reyes merely followed the rules
in the performance of his job. In fact, his transfer to
Bay 38 was by instructions of the EC Planner.
Second, his transfer to Bay 38 was necessary
because a quay crane has already been
prepositioned and loading operation was about to
commence.
Q: What is the basis of awarding backwages to an
illegally dismissed employee?
A: The payment of backwages is generally granted
on the ground of equity. It is a form of relief that
restores the income that was lost by reason of the
unlawful dismissal; the grant thereof is intended to
restore the earnings that would have accrued to the
dismissed Ee during the period of dismissal until it
is determined that the termination of employment
is for a just cause. It is not private compensation or
damages but is awarded in furtherance and
effectuation of the public objective of the LC. Nor is
it a redress of a private right but rather in the nature
of a command to the Er to make public reparation
for dismissing an Ee either due to the former’s
unlawful act or bad faith. (Tomas Claudio Memorial
College Inc., v. CA, G.R. No. 152568, 16 Feb. 2004)
Reinstatement cannot be barred especially when
the employee has not indicated an aversion to
returning to work or does not occupy a position of
trust and confidence or has no say in the operation
of the employer's business. Here, aside from the fact
that this issue was only raised for the first time,
there is also no compelling evidence presented to
support the conclusion that the parties' relationship
has gone so sour to render reinstatement
impracticable. Also, Reyes has not demonstrated
unwillingness to be reinstated and the existence of
a confidential relationship between him, as a
supervisory employee, and ATI, has not been
established. For lack of evidence on record, it
appears that his position was not a sensitive
position as would require complete trust and
confidence, and where personal ill will would
foreclose his reinstatement. (Asian Terminals, Inc. v.
Reyes, Jr., G.R. No. 240507, 28 Apr. 2021)
Q: What is the period covered by the payment of
backwages?
A: The backwages shall, from the time that wages
are unlawfully withheld until the time of actual
reinstatement or, if reinstatement is no longer
feasible, until the finality of judgment awarding
backwages, cover the period from the date of
dismissal of the Ee up to the date of:
1.
Actual reinstatement, or if reinstatement is no
longer feasible;
2.
Finality of judgment awarding backwages.
(Buhain v. CA, G.R. No. 143709, 02 July 2002)
b. BACKWAGES
Backwages
Backwages refers to the relief given to an Ee to
compensate him for the lost earnings during the
period of his dismissal. It presupposes illegal
termination. (Azucena, 2016)
The backwages to be awarded should not be
diminished or reduced by earnings elsewhere
during the period of his illegal dismissal. The reason
is that the Ee while litigating the illegality of his
dismissal must earn a living to support himself and
his family. (Bustamante v. NLRC, G.R. No. 111651, 15
299
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
certiorari under Rule 65 with the CA. In a
Decision, the CA affirmed the NLRC but with
modification that the backwages should be
computed from the date of illegal dismissal until
the finality of the decision of the CA, and
separation pay computed from the date of
employment until finality of the CA Decision.
Condis moved for reconsideration but this was
denied in the CA's Resolution.
March 1996; Buenviaje v. CA, G.R. No. 147806, 12 Nov.
2002)
Full backwages
The LC points to "full backwages" as meaning
exactly that, i.e., without deducting from backwages,
the earnings derived elsewhere by the concerned Ee
during the period of his illegal dismissal. (Buenviaje
v. CA, G.R. No. 147806, 12 Nov. 2002)
Is Condis liable for the backwages and
separation pay of Rogel computed until the
finality of the decision awarding separation
pay?
NOTE: The award of backwages is computed based
on a 30-day month.
Period covered by full backwages
A: YES. Condis does not question the propriety of
the award of separation pay in lieu of reinstatement
by the NLRC during the Execution Proceedings. The
finality of the decision cuts-off the employment
relationship. Therefore, backwages should be
counted until the finality of the NLRC decision
awarding separation pay. When there is a
supervening event that renders reinstatement
impossible, backwages is computed from the time of
dismissal until the finality of the decision ordering
separation pay. The award of separation pay in lieu
of reinstatement, which Condis does not question,
was made after the finality of the Decision in the
Illegal Dismissal Case. Condis cannot therefore
evade its liability to Rogel for backwages and
separation pay computed until the finality of this
Decision which affirms the order granting
separation pay.
From the date of illegal dismissal to the employee’s
date of actual reinstatement.
Q: The judgment on the Illegal Dismissal Case
became final and executory on 30 Mar. 2012. In
said case, the Court affirmed the CA decision in
favor of respondent therein Rogel Zaragoza
which had affirmed the NLRC's and LA's findings
that Condis had illegally dismissed Rogel, and
ordered his reinstatement and payment of his
backwages. Rogel moved for the issuance of an
alias writ of execution against Condis for his
reinstatement, and the payment of full
backwages, accrued salaries and allowances as
of 3 Dec. 2012, less what was already released to
him by the LA pending appeal. Condis opposed
the motion and argued that its execution of the
Asset Purchase Agreement with Emperador
Distillers, Inc. was a supervening event that
made it impossible to reinstate Rogel to his
former position. The LA ruled in favor of Rogel
and
directed
Condis
to
pay
backwages/reinstatement salaries, including
allowances, from December 3, 2007, the date of
Rogel's illegal dismissal, up to August 3, 2013,
the date of the LA resolution.
Further, Condis invokes Olympia Housing, however,
for it to apply, the employer must prove the closure
of its business in full and complete compliance with
all statutory requirements prior to the date of the
finality of the award of backwages and separation
pay. Here, Condis failed to show that in 2007 it had
closed its business and that it had complied with all
the statutory requirements for the closure. All it
alleged was the execution of the Asset Purchase
Agreement and the termination of the Service
Agreement with EDI — but this does not mean, nor
was it argued to mean, that Condis had closed its
business. (Consolidated Distillers of the Far East, Inc.
v. Zaragoza, G.R. No. 229302, 20 June 2018, J.
Caguioa)
The NLRC ruled that the reinstatement was
indeed rendered impossible because of the
Asset Purchase Agreement, but that backwages
should be computed only until the finality of the
Court's Resolution in the Illegal Dismissal Case
on 30 Mar 2012. Rogel filed a petition for
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
300
Labor Law and Social Legislation
tendered because of the parties' failure to agree on
the figures.
Q: ALECO was suffering from financial distress
with its current payables of Php3.1 billion. Thus,
efforts were undertaken to rehabilitate the
struggling electric cooperative. ALECO was
pushing for Private Sector Participation as its
appropriate rehabilitation strategy, while ALEO
was insisting on the Cooperative-to-Cooperative
(C2C) rehabilitation scheme. ALEO sought
preventive mediation before the NCMB for
unfair labor practices. The parties, however,
failed to settle their differences which
constrained ALEO to file a notice of strike. It
conducted a strike vote. Subsequently, in a
referendum to determine the appropriate
rehabilitation measure to be undertaken by
ALECO, the PSP was eventually chosen. Still,
ALEO went on strike. Nonetheless, with the PSP
adopted, Notices of Retrenchment were served
on all ALECO's employees. As the labor dispute
continued without any of the parties yielding,
ALECO formally requested the Secretary of
Labor to assume jurisdiction over the
controversy. The Secretary of Labor assumed
jurisdiction and correspondingly issued a
Return-to-Work Order of even date. The
Secretary of Labor upheld the validity of the
retrenchment of ALECO's employees and
ordered ALECO to pay them back wages and
other benefits computed from 10 Jan. 2014 until
the finality of the said Resolution.
In other words, to date, the affected employees are
still not paid their wages and benefits for the period
they were supposed to be reinstated. In
consideration of the foregoing, the award of back
wages is proper, not as a penalty for noncompliance with the Assumption Order as argued by
ALEO, but as satisfaction of ALECO's obligation
towards the employees covered by the Assumption
Order.
On said date, the obligation of the employer to readmit the striking employees and/or pay them their
respective salaries and benefits arose. However,
there is no proof that the affected employees were
in fact paid by ALECO their corresponding salaries
and benefits. Because of ALECO's failure to perform
this obligation, and to give the affected employees
what has become due to them as of January 10,
2014, back wages should be awarded.
In illegal dismissal cases, back wages refer to the
employee's supposed earnings had he/she not been
illegally dismissed. As applied in this case, back
wages correspond to the amount ought to have been
received by the affected employees if only they had
been reinstated following the Assumption Order.
(Albay Electronic Cooperative, Inc. v. Aleco Labor
Employees Organization, G.R. No. 241437, 14 Sept.
2020, J. Caguioa)
Was the Secretary of Labor correct in awarding
back wages?
c. SEPARATION PAY, DOCTRINE OF STRAINED
RELATIONS
A: YES. ALECO claims that it complied with the
Assumption Order when it admitted the striking
employees to its premises on 14 Jan. 2014. It alleges
that no less that the RD of DOLE Region V witnessed
the re-admission of these employees, and that this is
further evidenced by the attendance sheets signed
by the returning employees and the photographs
taken on 14 Jan. 2014. However, as pointed out by
ALEO, and admitted by ALECO, no actual work was
given to the returning employees. Instead, they
were merely "confined in a room for over three
weeks." Although ALECO claimed that it tendered
the salaries of the employees who reported back for
work, ALECO also admitted that the employees
refused to receive the amounts it supposedly
Separation Pay in lieu of Reinstatement
GR: Separation pay is not a usual consequence of
illegal dismissal because if there is a finding of illegal
dismissal, the employee shall be entitled to
reinstatement and backwages.
XPNs: Separation pay takes the place
reinstatement in the following instances:
1.
301
of
When Ee’s previous position or its
substantial equivalent position is not
anymore existing, i.e., occupied by another
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
2.
employee or the business is already closed;
and
When there is an application of the doctrine
of strained relations.
more than just the illegal dismissal case
that has been filed by the employee; and
NOTE: There must be independent evidence
showing that the relations have been strained.
Instances when Separation Pay must be Paid
3.
1.
2.
3.
4.
Termination due to authorized causes;
Separation pay in lieu of reinstatement;
By way of financial assistance; and
In case of termination, when it is mandated to
be paid under a CBA or explicit company policy.
Q: Does the strained relations rule always bar
reinstatement in all cases?
A: NO. The rule should be applied on a case-to-case
basis, based on each case’s peculiar conditions and
not universally. Otherwise, reinstatement can never
be possible simply because some hostility is
invariably engendered between the parties as a
result of litigation. That is human nature. (Anscor
Transport v. NLRC, G.R. No. 85894, 28 Sept. 1990)
Doctrine of Strained Relations
It is when the Er can no longer trust the Ee and vice
versa or there were imputations of bad faith to each
other; reinstatement could not effectively serve as a
remedy. This rule applies only to positions which
require trust and confidence. (Globe Mackay v.
NLRC, G.R. No. 82511, 03 Mar. 1992)
Besides, no strained relations should arise from a
valid and legal act of asserting one's right;
otherwise, an Ee who shall assert his right could be
easily separated from the service, by merely paying
his separation pay on the pretext that his
relationship with his Er had already become
strained. (Globe Mackay Cable & Wire Corp. v. NLRC,
supra.)
NOTE: Under the circumstances where the
employment relationship has become so strained to
preclude a harmonious working relationship and
that all hopes at reconciliation are naught after
reinstatement, it would be more beneficial to accord
the Ee backwages and separation pay.
Q: Delfin and Luisito are licensed drivers of
public utility jeepneys owned by Moises Capili.
When Capili assumed ownership and operation
of the jeepneys, the drivers were required to
sign individual contracts of lease of the
jeepneys. The drivers gathered the impression
that signing the contract was a condition
precedent before they could continue driving.
The drivers stopped plying their assigned routes
and a week later filed with the LA a complaint for
illegal dismissal praying not for reinstatement
but for separation pay. Are the respondents
entitled to separation pay?
The following must be proven before the
Doctrine of Strained Relations can be applied
1.
The Ee concerned occupies a position
where he enjoys the trust and confidence of
his Er; and
2.
That it is likely if the Ee is reinstated, an
atmosphere of antipathy and antagonism
may be generated as to adversely affect the
efficiency and productivity of the Ee
concerned. (Ibid.)
The position must involve a position of
trust and confidence.
Requisites of the Doctrine of Strained Relations
1.
It must be alleged and proved by the
employer;
2.
The evidence that should sustain the
application of strained relations should be
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
A: NO. When the drivers voluntarily chose not to
return to work anymore, they must be considered as
having resigned from their employment. The
common denominator of those instances where
payment of separation pay is warranted is that the
302
Labor Law and Social Legislation
were no longer in its employ at the time it closed
its Balintawak plant. Likewise, it claims
exemption from awarding separation pay to the
second batch, because the closure of its plant
was due to "serious business losses," as defined
in Art. 298 of the LC.
employee was dismissed by the Er. (Capili v. NLRC,
G.R. 117378, 26 Mar. 1997)
Q: Romeo has been an Ee of AAA Company from
1993 to 1999 but was unable to report to work
due to some illness. Romeo claimed that he was
offered by AAA of Php 15,000 separation pay, on
the contrary AAA claimed Romeo was never
terminated and even told the latter that Romeo
could go back to work anytime but Romeo
clearly manifested that he was no longer
interested in returning to work and instead
asked for separation pay. Is Romeo terminated
or considered resigned? Is Romeo entitled to
separation pay?
Both labor agencies held that the two groups
were entitled to separation pay equivalent to ½month salary for every year of service, provided
that the employee worked at least 1 month in a
given year. Is the separation pay granted to an
illegally dismissed Ee the same as that provided
under Art. 298 of the LC in case of retrenchment
to prevent losses?
A: NO. The separation pay awarded to Ees due to
illegal dismissal is different from the amount of
separation pay provided for in Art. 298 of the LC.
Proceeding from the above, Phil. Tobacco is liable
for illegal dismissal and should be responsible for
the reinstatement of the first group and the
payment of their backwages. However, since
reinstatement is no longer possible as Phil. Tobacco
have already closed its Balintawak plant, members
of the said group should instead be awarded normal
separation pay (in lieu of reinstatement) equivalent
to at least one (1) month pay, or one month pay for
every year of service, whichever is higher.
A: NO. Romeo is considered resigned. Romeo’s
various pleadings support his intention of not
returning to work on the ground that his health is
failing. Moreover, Romeo did not ask for
reinstatement and rejected AAA Company’s offer for
him to return to work. This is tantamount to
resignation. Resignation is defined as the voluntary
act of an Ee who finds himself in a situation where
he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and
he has no other choice but to disassociate himself
from his employment.
Romeo is not entitled to separation pay. There is no
provision in the LC which grants separation pay to
voluntarily resigning Ees. In fact, the rule is that an
Ee who voluntarily resigns from employment is not
entitled to separation pay, except when it is
stipulated in the employment contract or CBA, or it
is sanctioned by established Er practice or policy.
Hence, Romeo is not entitled to separation pay in
the absence of a Labor provision and a stipulation in
his employment contract or CBA. (Villaruel v. Yeo
Han Guan, G.R. No. 169191, 01 June 2011)
It must be stressed that the separation pay being
awarded to the first group is due to illegal dismissal;
hence, it is different from the amount of separation
pay provided for in Art. 298 in case of retrenchment
to prevent losses or in case of closure or cessation of
the Er’s business, in either of which the separation
pay is equivalent to at least one (1) month or onehalf (1/2) month pay for every year of service,
whichever is higher. (Phil. Tobacco Flue-Curing &
Redrying Corp. v. NLRC, G.R. No. 127395, 10 Dec.
1998)
Q: Two groups of seasonal workers claimed
separation benefits after the closure of Phil.
Tobacco processing plant in Balintawak and the
transfer of its tobacco operations to Candon,
Ilocos Sur. Phil. Tobacco refused to grant
separation pay to the workers belonging to the
first batch, because they had not been given
work during the preceding year and, hence,
Q: Does separation pay apply in cases of legal
dismissal?
A: YES. Separation pay is warranted when the cause
for termination is not attributable to the employee's
fault, such as those provided in Arts. 298 and 299 of
the Labor Code, as well as in cases of illegal
303
UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
dismissal where reinstatement is no longer feasible.
On the other hand, an employee dismissed for any
of the just causes enumerated under Art. 297 of the
same Code, being causes attributable to the
employee's fault, is not, as a general rule, entitled to
separation pay. As an exception, case law allows the
grant of separation pay or financial assistance to a
legally-dismissed employee as a measure of social
justice or on grounds of equity. (Claudia’s Kitchen,
Inc. v. Tanguin, G.R. No. 221096, June 28, 2017)
The Court, in the case of Deoferio v. Intel Technology
Phil. (G.R. No. 202996, 18 June 2014), added the
following to the factors mentioned above:
d. DAMAGES
NOTE: Actual damages cannot be awarded
because that is already represented by the
backwages payable to the employee. That is the
actual damages he suffered.
Moral damages may be awarded to compensate
one for diverse injuries such as mental anguish,
besmirched reputation, wounded feelings, and
social humiliation. It is however not enough that
such injuries have arisen; it is essential that they
have sprung from a wrongful act or omission of the
defendant which was the proximate cause thereof
e.g., breach of contract. (Suario v. BPI, G.R. No. 50459,
25 Apr. 1989)
A: If there is unlawful withholding of wages and
benefits, then there is going to be an award of ten
percent (10%) of the monetary award by way of
Attorney’s Fees.
Since the employee was illegally dismissed, and by
virtue of the illegal dismissal, he was deprived of
wages and benefits that he should have gotten if he
was not illegally dismissed. The award of ten
percent (10%) becomes automatic in illegal
dismissal cases.
The authorized cause invoked;
The number of employees to be awarded;
The capacity of the employers to satisfy the
awards, taken into account their prevailing
financial status as borne by the records;
The employer’s grant of other termination
benefits in favor of the employees; and
Whether there was a bona fide attempt to
comply with the notice requirements as
opposed to giving no notice at all. (Industrial
Timber Corp. et al. v. Ababan, et al., G.R. No.
164518, March 30, 2006)
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
The flexibility and leeway that the employer
allowed the sick employee in performing his
duties while attending to his medical needs.
Q: What is the condition before attorney’s fees
can be awarded?
In the determination of the amount of nominal
damages which is addressed to the sound
discretion of the court, several factors are taken into
account:
5.
2.
In employment termination cases, attorney’s fees
are not recoverable where there is no sufficient
showing of bad faith on the part of private
respondent (employer) there must always be a
factual basis for the award of attorney’s fee. (Pepsi
Cola Products, et al. v. E.V. Santos, G.R. No. 165968, 14
Apr. 2008)
Exemplary damages may be awarded only if the
dismissal was shown to have been effected in a
wanton, oppressive or malevolent manner.
(Cocoland Development Corp. v. NLRC and Mago, G.R.
No. 98458, 17 July 1996)
4.
The employer’s financial, medical, and/or
moral assistance to the sick employee; and
e. ATTORNEY’S FEES
NOTE: There should be proof of bad faith on the part
of the employer for moral damages to be awarded.
1.
2.
3.
1.
Therefore, there is no need to prove bad faith in so
far as attorney’s fees is concerned.
NOTE: Attorney’s fees is dependent on the question
of whether or not there is unlawful withholding of
wages and benefits. And that is, precisely because,
there is a finding of illegal dismissal. (Art. 111, LC) It
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Labor Law and Social Legislation
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. (Sarona v.
NLRC, G.R. No. 185280, 18 Jan. 2012)
is not dependent on bad faith, but is automatic when
there is a finding of illegal dismissal.
f. LIABILITIES OF CORPORATE OFFICERS
It is basic that a corporation is invested by law with
a personality separate and distinct from those of the
persons composing it as well as from that of any
other legal entity to which it may be related.
(Asionics Phil., et al. v. NLRC, G.R. No. 124950, 19 May
1998)
NOTE: For the piercing-the-veil doctrine to apply,
it is of no consequence if the entity is single
proprietorship. It is the act of hiding behind the
personalities of juridical entities that the equitable
piercing doctrine was formulated to address and
prevent. (Ibid.)
The mere fact that the officer is part of the family
corporation does not mean that all its acts are
imputed to him directly and personally, in the
absence of a showing that he acted without or in
excess of his authority or was motivated by personal
ill-will against the employee. (Sweet Lines, Inc. v.
NLRC, G.R. No. 79975, 16 Mar. 1989)
In labor cases, particularly, corporate directors and
officers are solidarily liable with the corporation
for the termination of employment of corporate
employees done with malice or in bad faith. (Uichico,
et al. v. NLRC, et al., G.R. No. 121434, 02 June 1997)
g. BURDEN OF PROOF
GR: Officers of a corporation are not personally
liable for their official acts unless it is shown that
they have exceeded their authority.
In constructive dismissal cases, it is the employee
who bears the burden of proof since it is the
employee who is alleging that he is being placed
under circumstances that is unbearable to him. It is
incumbent upon the employee to prove those
circumstances that proves that there is constructive
dismissal.
XPN: Where the incorporators and directors belong
to a single family, the corporation and its members
can be considered as one in order to avoid its being
used as an instrument to commit injustice, or to
further an end subversive of justice. The shield of
corporate fiction shall be pierced when it is
deliberately and maliciously designed to evade
financial obligations to employees. (Pabalan v.
NLRC, G.R. No. 898799, 20 Apr. 1990) Officers, then,
become personally liable.
In actual illegal dismissal cases, the employer has
the burden to really prove that there is just or
authorized cause or the employee is validly
terminated.
NOTE: In actual illegal dismissal cases, there is
really termination done by the employer. Therefore,
the burden of proof is on the employer to show that
the termination is legal and valid.
Doctrine of Piercing the Corporate Veil Applies
Only in Three Basic Areas:
1.
Defeat public convenience as when the
corporate fiction is used as a vehicle for the
evasion of an existing obligation;
2.
Fraud cases or when the corporate entity is
used to justify a wrong, protect fraud, or
defend a crime; or
3.
Alter ego cases, where a corporation is
merely a farce since it is a mere alter ego or
business conduit of a person, or where the
In constructive dismissal, it is often referred to as
dismissal in disguise because there is really no
actual dismissal. It is the employee who has no other
choice due to circumstances that push her to
relinquish her employment. Therefore, the burden
of proof is not with the employer but with the
employee. The basic rule is that whoever alleges
something must prove it.
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
In this case, factual circumstances necessitate the
application of the doctrine of piercing the veil of
corporate fiction as there is evidence establishing
the scheme employed by Aciee, Inc. to avoid their
legal obligations. It was shown that Aciee, Inc. and
Gecher Corp. are using their respective distinct
corporate personalities in bad faith to frustrate and
render impossible the execution of the judgment
award in favor of Marion. Bad faith on the part of the
corporations was demonstrated when motor
vehicles registered under the name of Aciee, Inc.
were suddenly transferred to Gecher Corp. while its
appeal remained pending. (Eduardo Gilbert Dinoyo,
et al. v. Undaloc Construction Company, Inc., et. al.
G.R. No. 249638, 23 June 2021)
Indeed, in illegal dismissal cases, the burden of
proof is on the employer in proving the validity of
dismissal. However, the fact of dismissal, if disputed,
must be duly proven by the complainant.
The rule is that one who alleges a fact has the
burden of proving it; thus, petitioners were
burdened to prove their allegation that respondents
dismissed them from their employment. It must be
stressed that the evidence to prove this fact must be
clear, positive, and convincing. The rule that the
employer bears the burden of proof in illegal
dismissal cases finds no application here because
the respondents deny having dismissed the
petitioners. (Italkarat 18, Inc. v. Gerasmio, G.R. No.
221411, 28 Sept. 2020)
Q: Marion filed a complaint for illegal dismissal
against Aciee, Inc. and were awarded a total of
P4 million in backwages, money claims, moral
and exemplary damages, and attorney's fees.
Marion filed a motion to treat Gecher
Corporation one and the same with Aciee, Inc.
because the said corporations are using their
respective distinct corporate personalities in
bad faith to frustrate and render impossible the
execution of the judgment award in favor of
Marion. Aciee, Inc. allegedly transferred the
motor vehicles registered under the name of the
former, to Gecher Corp while its appeal
remained pending. The RTC has observed a
pattern adopted by the officers of Aciee, Inc. of
creating run-away companies every time their
companies are embroiled in labor cases to
deliberately circumvent the law, and evade their
obligations to their employees. Can the veil of
corporate fiction be pierced?
C. TERMINATION BY EMPLOYEE
Two Types of Resignation
1.
2.
1. RESIGNATION vs. CONSTRUCTIVE DISMISSAL
CONSTRUCTIVE
DISMISSAL
As to Definition
It occurs when there is
cessation of work
It is the voluntary act of
because
continued
an employee who finds
employment
is
himself in a situation
rendered impossible,
where he believes that
unreasonable,
or
personal
reasons
unlikely as when there
cannot be sacrificed in
is a demotion in rank or
favor of the exigency of
diminution in pay or
the service, then he has
when
a
clear
no other choice but to
discrimination,
disassociate
himself
insensibility, or disdain
from his employment.
by an Er becomes
(Intertrod
Maritime,
unbearable to the Ee
Inc. v. NLRC, G.R. No.
leaving the latter with
81087, 19 June 1991)
no other option but to
quit (The University of
RESIGNATION
A: YES. In the case of Guillermo v. Uson, the Court
stressed that the veil of corporate fiction can be
pierced, and responsible corporate directors and
officers or even a separate but related corporation,
may be impleaded and held answerable solidarily in
a labor case, even after final judgment and on
execution, so long as it is established that such
persons have deliberately used the corporate
vehicle to unjustly evade the judgment obligation, or
have resorted to fraud, bad faith or malice in doing
so.
UNIVERSITY OF SANTO TOMAS
2022 GOLDEN NOTES
Voluntary Resignation; and
Involuntary Resignation or Constructive
Dismissal.
306
Labor Law and Social Legislation
Immaculate Conception
v. NLRC, G.R. No.
181146, 26 Jan. 2011)
As to Voluntariness
Involuntary or forced
Voluntary
resignation
As to Entitlement to Separation Pay
Not
entitled
to
separation pay unless Entitled
to
either
it is a company practice reinstatement
or
or provided in the CBA. separation pay and
(Hanford Philippines backwages
Inc. v. Shirley Joseph,
G.R. No. 158251, March
31, 2005)
As to Burden of Proof
Burden of proving Burden of proving
voluntariness is on the constructive dismissal
employer.
is on the employee.
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
d.
Other causes analogous to any of the
foregoing.
Resignation is withdrawable even if the employee
has called it irrevocable. (Custodio v. Ministry of
Labor and Employment, G.R. No. 643174, 19 July
1990) But after it is accepted or approved by the
employer, its withdrawal needs the employer’s
consent. (Azucena, 2016)
With written notice - An employee may
terminate without just cause the employeremployee relationship by serving a written
notice on the employer at least one (1) month in
advance. (Art. 300 [a], LC)
Intention to Resign
An employee may be deemed to have resigned from
his position, and such resignation may be accepted
and made effective by the management, although
the employee did not mention the word “resign”
and/or “resignation.” (Azucena, 2016)
Q: ANZ Global Services and Operations Manila,
Inc. (respondent) hired John Roger Nino S.
Vergara (petitioner) as Risk Manager. On 05
Aug. 2016 petitioner handed his resignation
letter dated 05 Aug. 2016 to Line Manager,
Kristine Gorospe. Petitioner learned that there
would be a restructuring in the company where
the displaced workers would receive a lump
sum severance payment. Petitioner's position
was included in the positions to be affected by
the restructuring program.
The employer has no control over resignations and
so, the notification requirement was devised in
order to ensure that no disruption of work would be
involved by reason of the resignation. (Intertrod
Maritime, Inc. v. NLRC, G.R. No. 81087, supra.)
Without written notice – An employee may
put an end to the relationship without serving
any notice on the employer for any of the
following just causes. (Art. 300(b), LC):
a.
c.
Withdrawal of Resignation
NOTE: The employer upon whom no such notice
was served may hold the employee liable for
damages.
2.
Inhuman and unbearable treatment
accorded the employee by the employer
or his representative;
NOTE: If resignation is not voluntary, the same can
be deemed to be a constructive dismissal.
Resignation
1.
b.
On 01 Sept. 2016, petitioner checked if the
Resignation Acceptance Form (RAF) had already
been accomplished. He learned that it has not
yet been signed by Gorospe. Petitioner sent an
email to Roscoe Pineda (Pineda), Head of Risk
Serious insult by the employer or his
representative on the honor and person
of the employee;
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UNIVERSITY OF SANTO TOMAS
FACULTY OF CIVIL LAW
Termination of Employment
on 05 September 2016 is informative. If the ELA
constituted as respondent's acceptance of
petitioner's resignation, as respondent insists, then
why would Pineda, in his email, suggest to
petitioner to talk to Hutton to see if retraction was
still possible? This, and all the other circumstances
considered, only shows that 05 Sept. 2016, there
was still no acceptance on the part of respondent of
petitioner's resignation. (G