A.

FUNDAMENTAL PRINCIPLES AND POLICIES

1. Constitutional Provisions
a. Article II - Declaration of Principles and State Policies
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.
1

The State shall promote social justice in all phases of national development.
2
The State values the dignity of every human person and guarantees full respect
for human!rights.
3
The State recogni"es the vital role of the youth in nation-#uilding and shall
promote and protect their physical moral spiritual intellectual and social well-#eing. It
shall inculcate in the youth patriotism and nationalism and encourage their involvement
in pu#lic and civic affairs.
4
1 Sec. 9
2 Sec.10
3 Sec.11
4 Sec. 13
1
The State recogni"es the role of women in nation-#uilding and shall ensure the
fundamental equality #efore the law of women and men.
5

The State affirms la#or as a primary social economic force. It shall protect the
rights of wor$ers and promote their welfare.
6

The State recogni"es the indispensa#le role of the private sector encourages
private enterprise and provides incentives to needed investments.
7
#. Article III% &ill of 'ights
(o person shall #e deprived of life li#erty or property without due process of
law nor shall any person #e denied the equal protection of the laws.
8
5 Sec. 14
6 Sec. 18
7 Sec. 20
8 Sec. 1.
2
(o law shall #e passed a#ridging the freedom of speech of e)pression or of the
press or the right of the people peacea#ly to assem#le and petition the government for
redress of grievances.
9

The right of the people to information on matters of pu#lic concern shall #e
recogni"ed. Access to official records and to documents and papers pertaining to
official acts transactions or decisions as well as to government research data used as
#asis for policy development shall #e afforded the citi"en su#ject to such limitations as
may #e provided #y law.
10
The right of the people including those employed in the pu#lic and private
sectors to form unions associations or societies for purposes not contrary to law shall
not #e a#ridged.
11
(o law impairing the o#ligation of contracts shall #e passed.
12
All persons shall have the right to a speedy disposition of their cases #efore all
judicial quasi-judicial or administrative #odies.
13
9 Sec. 4.
10 Sec. 7
11 Sec. 8.
12 Sec. 10
3
(o involuntary servitude in any form shall e)ist e)cept as a punishment for a
crime whereof the party shall have #een duly convicted.
14
c. Article *III %
The +ongress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity reduce social
economic and political inequalities and remove cultural inequities #y equita#ly
diffusing wealth and political power for the common good. To this end the State shall
regulate the acquisition ownership use and disposition of property and its increments.
15
The promotion of social justice shall include the commitment to create economic
opportunities #ased on freedom of initiative and self-reliance.
16

The State shall afford full protection to la#or local and overseas organi"ed and
unorgani"ed and promote full employment and equality of employment opportunities
for all. It shall guarantee the rights of all wor$ers to self-organi"ation collective
#argaining and negotiations and peaceful concerted activities including the right to
stri$e in accordance with law. They shall #e entitled to security of tenure humane
13 Sec. 16
14 Sec. 18 (2)
15 Sec. 1.
16 Sec. 2.
4
conditions of wor$ and a living wage. They shall also participate in policy and decision-
ma$ing processes affecting their rights and #enefits as may #e provided #y law. The
State shall promote the principle of shared responsi#ility #etween wor$ers and
employers and the preferential use of voluntary modes in settling disputes including
conciliation and shall enforce their mutual compliance therewith to foster industrial
peace. The State shall regulate the relations #etween wor$ers and employers
recogni"ing the right of la#or to its just share in the fruits of production and the right of
enterprises to reasona#le returns to investments and to e)pansion and growth.
17
The State shall protect wor$ing women #y providing safe and healthful wor$ing
conditions ta$ing into account their maternal functions and such facilities and
opportunities that will enhance their welfare and ena#le them to reali"e their full
potential in the service of the nation.
18
2. New Civil Code
,very person must in the e)ercise of his rights and in the performance of his
duties act with justice give everyone his due and o#serve honesty and good faith.
19
The relations #etween capital and la#or are not merely contractual. They are so
impressed with pu#lic interest that la#or contracts must yield to the common good.
Therefore such contracts are su#ject to the special laws on la#or unions collective
#argaining stri$es and loc$outs closed shop wages wor$ing conditions hours of la#or
and similar su#jects.
20

17 Sec. 3
18 Sec. 14
19 Art. 19
5
In case of dou#t all la#or legislation and all la#or contracts shall #e construed in
favor of the safety and decent living for the la#orer.
21
3. Labor Code
The State shall afford protection to la#or promote full employment ensure equal
wor$ opportunities regardless of se) race or creed and regulate the relations #etween
wor$ers and employers. The State shall assure the rights of wor$ers to self- organi"ation
collective #argaining security of tenure and just and humane conditions of wor$.
22
All dou#ts in the implementation and interpretation of the provisions of this +ode
including its implementing rules and regulations shall #e resolved in favor of la#or.
23
The State shall promote and develop a ta)-e)empt employees- compensation
20 Art. 1700
21 Art. 1702
22 Art. 3
23 Art. 4
6
program where#y employees and their dependents in the event of wor$-connected
disa#ility or death may promptly secure adequate income #enefit and medical related
#enefits.
24
A. It is the policy of the State.
/a0 To promote and emphasi"e the primacy of free collective #argaining
and negotiations including voluntary ar#itration mediation and conciliation as
modes of settling la#or or industrial disputes1
/#0 To promote free trade unionism as an instrument for the enhancement
of democracy and the promotion of social justice and development1
/c0 To foster the free and voluntary organi"ation of a strong and united
la#or movement1
/d0 To promote the enlightenment of wor$ers concerning their rights and
o#ligations as union mem#ers and as employees1
/e0 To provide an adequate administrative machinery for the e)peditious
settlement of la#or or industrial disputes1
/f0 To ensure a sta#le #ut dynamic and just industrial peace1 and
/g0 To ensure the participation of wor$ers indecision and policy-ma$ing
processes affecting their rights duties and welfare.
&. To encourage a truly democratic method of regulating the relations #etween
the employers and employees #y means of agreements freely entered into through
collective #argaining no court or administrative agency or official shall have the power
to set or fi) wages rates of pay hours of wor$ or other terms and conditions of
employment e)cept as otherwise provided under this +ode.
25
24 Art. 166
25 Art. 211
7
Definitions.
+ommission The (ational 2a#or 'elations +ommission or any of its
divisions as the case may #e.
&ureau The &ureau of 2a#or 'elations and!or the 2a#or
'elations Divisions in the regional offices esta#lished
under Presidential Decree (o. 3 in the Department of
2a#or.
&oard The (ational +onciliation and 4ediation &oard
esta#lished under ,)ecutive 5rder (o. 367.
+ouncil The Tripartite 8oluntary Ar#itration Advisory +ouncil
esta#lished under ,)ecutive 5rder (o. 367 as amended.
,mployer Includes any person acting in the interest of an employer
directly or indirectly. The term shall not include any
la#or organi"ation or any of its officers or agents e)cept
when acting as employer.
,mployee Includes any person in the employ of an employer. The
term shall not #e limited to the employees of a particular
employer unless the +ode so e)plicitly states. It shall
include any individual whose wor$ has ceased as a result
of or in connection with any current la#or dispute or
#ecause of any unfair la#or practice if he has not o#tained
any other su#stantially equivalent and regular
employment.
2a#or organi"ation Any union or association of employees which e)ists in
8
whole or in part for the purpose of collective #argaining
or of dealing with employers concerning terms and
conditions of employment.
2egitimate la#or organi"ation Any la#or organi"ation duly registered with the
Department of 2a#or and ,mployment and includes any
#ranch or local thereof.
+ompany union Any la#or organi"ation whose formation function or
administration has #een assisted #y any act defined as
unfair la#or practice #y this +ode.
&argaining representative A legitimate la#or organi"ation whether or not employed
#y the employer.
9nfair la#or practice Any unfair la#or practice as e)pressly defined #y the
+ode.
2a#or dispute Includes any controversy or matter concerning terms and
conditions of employment or the association or
representation of persons in negotiating fi)ing
maintaining changing or arranging the terms and
conditions of employment regardless of whether the
disputants stand in the pro)imate relation of employer
and employee.
4anagerial employee
Supervisory employees
5ne who is vested with the powers or prerogatives to lay
down and e)ecute management policies and!or to hire
transfer suspend lay-off recall discharge assign or
discipline employees
Those who in the interest of the employer effectively
recommend such managerial actions if the e)ercise of
such authority is not merely routinary or clerical in nature
#ut requires the use of independent judgment.
9
'an$-and-file employees All employees not falling within any of the a#ove
definitions.
8oluntary Ar#itrator Any person accredited #y the &oard as such or any
person named or designated in the +ollective &argaining
Agreement #y the parties to act as their 8oluntary
Ar#itrator or one chosen with or without the assistance
of the (ational +onciliation and 4ediation &oard
pursuant to a selection procedure agreed upon in the
+ollective &argaining Agreement or any official that
may #e authori"ed #y the Secretary of 2a#or and
,mployment to act as 8oluntary Ar#itrator upon the
written request and agreement of the parties to a la#or
dispute.
Stri$e Any temporary stoppage of wor$ #y the concerted action
of employees as a result of an industrial or la#or dispute.
2oc$out Any temporary refusal of an employer to furnish wor$ as
a result of an industrial or la#or dispute.
Internal union dispute Includes all disputes or grievances arising from any
violation of or disagreement over any provision of the
constitution and #y-laws of a union including any
violation of the rights and conditions of union
mem#ership provided for in this +ode
Stri$e-#rea$er Any person who o#structs impedes or interferes with #y
force violence coercion threats or intimidation
any peaceful pic$eting affecting wages hours or
conditions of wor$ or in the e)ercise of the right of self-
organi"ation or collective #argaining.
Stri$e area The esta#lishment warehouses depots plants or offices
including the sites or premises used as runaway shops of
the employer struc$ against as well as the immediate
vicinity actually used #y pic$eting stri$ers in moving to
and fro #efore all points of entrance to and e)it from said
esta#lishment.
26
26 Art. 212
10
The la#or organi"ation designated or selected #y the majority of the employees in
an appropriate collective #argaining unit shall #e the e)clusive representative of the
employees in such unit for the purpose of collective #argaining.
:owever an individual employee or group of law to the contrary notwithstanding
wor$ers shall have the right su#ject to such rules and regulations as the Secretary of
2a#or and ,mployment may promulgate to participate in policy and decision-ma$ing
processes of the esta#lishment where they are employed insofar as said processes will
directly affect their rights #enefits and welfare.
;or this purpose wor$ers and employers may form la#or-management councils.
Provided That the representatives of the wor$ers in such la#or-management councils
shall #e elected #y at least the majority of all employees in said esta#lishment.
27
4iscellaneous provisions.
a. All unions are authori"ed to collect reasona#le mem#ership fees union dues
assessments and fines and other contri#utions for la#or education and research mutual
death and hospitali"ation #enefits welfare fund stri$e fund and credit and cooperative
underta$ings.

#. Su#ject to the constitutional right of wor$ers to security of tenure and their
right to #e protected against dismissal e)cept for a just and authori"ed cause and without
prejudice to the requirement of notice under Article 6<= of this +ode the employer shall
furnish the wor$er whose employment is sought to #e terminated a written notice
containing a statement of the causes for termination and shall afford the latter ample
27 Art. 255
11
opportunity to #e heard and to defend himself with the assistance of his representative if
he so desires in accordance with company rules and regulations promulgated pursuant to
guidelines set #y the Department of 2a#or and ,mployment. Any decision ta$en #y the
employer shall #e without prejudice to the right of the wor$er to contest the validity or
legality of his dismissal #y filing a complaint with the regional #ranch of the (ational
2a#or 'elations +ommission. The #urden of proving that the termination was for a valid
or authori"ed cause shall rest on the employer. The Secretary of the Department of 2a#or
and ,mployment may suspend the effects of the termination pending resolution of the
dispute in the event of a prima facie finding #y the appropriate official of the Department
of 2a#or and ,mployment #efore whom such dispute is pending that the termination may
cause a serious la#or dispute or is in implementation of a mass lay-off. /As amended #y
Section == 'epu#lic Act (o. 7>3? 4arch 63 3@<@0

c. Any employee whether employed for a definite period or not shall #eginning
on his first day of service #e considered as an employee for purposes of mem#ership in
any la#or union.
d. (o doc$et fee shall #e assessed in la#or standards disputes. In all other
disputes doc$et fees may #e assessed against the filing party provided that in #argaining
deadloc$ such fees shall #e shared equally #y the negotiating parties.

e. The 4inister of 2a#or and ,mployment and the 4inister of the &udget shall
cause to #e created or reclassified in accordance with law such positions as may #e
necessary to carry out the o#jectives of this +ode and cause the upgrading of the salaries
of the personnel involved in the 2a#or 'elations System of the 4inistry. ;unds needed
for this purpose shall #e provided out of the Special Activities ;und appropriated #y
&atas Pam#ansa &lg. <A and from annual appropriations thereafter.
12
f. A special 8oluntary Ar#itration ;und is here#y esta#lished in the &oard to
su#sidi"e the cost of voluntary ar#itration in cases involving the interpretation and
implementation of the +ollective &argaining Agreement including the Ar#itrator-s fees
and for such other related purposes to promote and develop voluntary ar#itration. The
&oard shall administer the Special 8oluntary Ar#itration ;und in accordance with the
guidelines it may adopt upon the recommendation of the +ouncil which guidelines shall
#e su#ject to the approval of the Secretary of 2a#or and ,mployment. +ontinuing funds
needed for this purpose in the initial yearly amount of fifteen million pesos
/P3?AAAAAA.AA0 shall #e provided in the 3@<@ annual general appropriations acts.
The amount of su#sidy in appropriate cases shall #e determined #y the &oard in
accordance with esta#lished guidelines issued #y it upon the recommendation of the
+ouncil.

The ;und shall also #e utili"ed for the operation of the +ouncil the training and
education of 8oluntary Ar#itrators and the 8oluntary Ar#itration Program.

g. The 4inistry shall help promote and gradually develop with the agreement of
la#or organi"ations and employers la#or-management cooperation programs at
appropriate levels of the enterprise #ased on the shared responsi#ility and mutual respect
in order to ensure industrial peace and improvement in productivity wor$ing conditions
and the quality of wor$ing life.
h. In esta#lishments where no legitimate la#or organi"ation e)ists la#or-
management committees may #e formed voluntarily #y wor$ers and employers for the
purpose of promoting industrial peace. The Department of 2a#or and ,mployment shall
endeavor to enlighten and educate the wor$ers and employers on their rights and
13
responsi#ilities through la#or education with emphasis on the policy thrusts of this +ode.

i. To ensure speedy la#or justice the periods provided in this +ode within which
decisions or resolutions of la#or relations cases or matters should #e rendered shall #e
mandatory. ;or this purpose a case or matter shall #e deemed su#mitted for decision or
resolution upon the filing of the last pleading or memorandum required #y the rules of the
+ommission or #y the +ommission itself or the 2a#or Ar#iter or the Director of the
&ureau of 2a#or 'elations or 4ed-Ar#iter or the 'egional Director.

9pon e)piration of the corresponding period a certification stating why a
decision or resolution has not #een rendered within the said period shall #e issued
forthwith #y the +hairman of the +ommission the ,)ecutive 2a#or Ar#iter or the
Director of the &ureau of 2a#or 'elations or 4ed-Ar#iter or the 'egional Director as
the case may #e and a copy thereof served upon the parties.

Despite the e)piration of the applica#le mandatory period the aforesaid officials
shall without prejudice to any lia#ility which may have #een incurred as a consequence
thereof see to it that the case or matter shall #e decided or resolved without any further
delay.
B. Recruitment and Placement
1. Recruitment of local and migrant workers
a. Illegal recruitment
28

Any act of canvassing enlisting contracting transporting utili"ing hiring or
procuring wor$ers and includes referring contract services promising or advertising for
28 Sec. 5, R.A. No. 10022
14
employment a#road whether for profit or not when underta$en #y non-licensee or non-
holder of authority.
29
Any such non-licensee or non-holder
30
who in any manner offers or
promises for a fee employment a#road to two or more persons shall #e deemed so
engaged.
It shall li$ewise include the following acts whether committed #y any person
whether a non-licensee non-holder licensee or holder of authority.
/a0 To charge or accept directly or indirectly any amount greater than that specified
in the schedule of allowa#le fees prescri#ed #y the Secretary of 2a#or and ,mployment
or to ma$e a wor$er pay or ac$nowledge any amount greater than that actually received
#y him as a loan or advance1
/#0 To furnish or pu#lish any false notice or information or document in relation
to recruitment or employment1
/c0 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 2a#or
29 under Art. 13 (f)
30 Any person, corport!on or ent!ty"
1. #$!c$ $s not %een !ssued &'!d '!cense or ut$or!ty to en((e !n recru!t)ent nd p'ce)ent
%y t$e Secretry of *%or nd +)p'oy)ent (S*+) or
2. #$ose '!cense or ut$or!ty $s %een suspended, re&o,ed or cnce''ed %y t$e -.+A or t$e S*+
15
+ode or for the purpose of documenting hired wor$ers with the P5,A which include
the act of reprocessing wor$ers through a jo# order that pertains to none)istent wor$
wor$ different from the actual overseas wor$ or wor$ with a different employer whether
registered or not with the P5,A1
/d0 To include or attempt to induce a wor$er already employed to quit his
employment in order to offer him another unless the transfer is designed to li#erate a
wor$er from oppressive terms and conditions of employment1
/e0 To influence or attempt to influence any person or entity not to employ any
wor$er who has not applied for employment through his agency or who has formed
joined or supported or has contacted or is supported #y any union or wor$ersB
organi"ation1
/f0 To engage in the recruitment or placement of wor$ers in jo#s harmful to pu#lic
health or morality or to the dignity of the 'epu#lic of the Philippines1
/h0 To fail to su#mit reports on the status of employment placement vacancies
remittance of foreign e)change earnings separation from jo#s departures and such other
matters or information as may #e required #y the Secretary of 2a#or and ,mployment1
/i0 To su#stitute or alter to the prejudice of the wor$er employment contracts
approved and verified #y the Department of 2a#or and ,mployment from the time of
actual signing thereof #y the parties up to and including the period of the e)piration of the
same without the approval of the Department of 2a#or and ,mployment1
/j0 ;or an officer or agent of a recruitment or placement agency to #ecome an
officer or mem#er of the &oard of any corporation engaged in travel agency or to #e
engaged directly or indirectly in the management of travel agency1
/$0 To withhold or deny travel documents from applicant wor$ers #efore departure
for monetary or financial considerations or for any other reasons other than those
authori"ed under the 2a#or +ode and its implementing rules and regulations1
/l0 ;ailure to actually deploy a contracted wor$er without valid reason as
16
determined #y the Department of 2a#or and ,mployment1
/m0 ;ailure to reim#urse e)penses incurred #y the wor$er in connection with his
documentation and processing for purposes of deployment in cases where the
deployment does not actually ta$e place without the wor$erBs fault. Illegal recruitment
when committed #y a syndicate or in large scale shall #e considered an offense involving
economic sa#otage1 and
/n0 To allow a non-;ilipino citi"en to head or manage a licensed
recruitment!manning agency.
Illegal recruitment is deemed committed #y a syndicate if carried out #y a group
of three /=0 or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three /=0 or more persons individually or as
a group.
30 2icense
31
vs. authority
2icense Authority
A document issued #y the Department of
2a#or authori"ing a person or entity to
A document issued #y the Department of
2a#or authori"ing a person or
31 No '!cense or ut$or!ty s$'' %e used d!rect'y or !nd!rect'y %y ny person ot$er t$n t$e one !n /$ose
f&or !t /s !ssued or t ny ot$er p'ce ot$er t$n t$t stted !n t$e '!cense or ut$or!ty, nor )y suc$
'!cense or ut$or!ty %e trnsferred, con&eyed or ss!(ned to ny ot$er person or ent!ty.
*!censees or $o'ders of ut$or!ty or t$e!r du'y ut$or!0ed representt!&es )y, s ru'e, undert,e
recru!t)ent nd p'ce)ent ct!&!t!es on'y t t$e!r ut$or!0ed off!c!' ddresses.
1$n(e of o/ners$!p or re't!ons$!p of s!n('e propr!etors$!p '!censed to en((e !n o&erses e)p'oy)ent
s$'' cuse t$e uto)t!c re&oct!on of t$e '!cense.
17
operate a private employment agency. association to engage in recruitment and
placement activities as a private
recruitment entity.
60 ,ssential elements of illegal recruitment
3. 5ffender is a nonlicensee or nonholder of authority to lawfully engage in the
recruitment!placement of wor$ers
6. 5ffender underta$es.
a. Any act of canvassing enlisting contracting transporting utili"ing
hiring or procuring wor$ers and includes referrals contact services promising or
advertising for employment locally or a#road whether for profit or not1
32
or
#. To charge or accept directly or indirectly any amount greater than that
specified in the schedule of allowa#le fees prescri#ed #y the Secretary of 2a#or
or to ma$e a wor$er pay any amount greater than that actually received #y him as
a loan or advance1
c. To furnish or pu#lish any false notice or information or document in
relation to recruitment or employment1
d. To give any false notice testimony information or document or commit
any act of misrepresentation for the purpose of securing a license or authority
under this +ode.
e. To induce or attempt to induce a wor$er already employed to quit his
employment in order to offer him to another unless the transfer is designed to
li#erate the wor$er from oppressive terms and conditions of employment1
f. To influence or to attempt to influence any person or entity not to
employ any wor$er who has not applied for employment through his agency1
32 Art. 132%3
18
g. To engage in the recruitment or placement of wor$ers in jo#s harmful to
pu#lic health or morality or to the dignity of the 'epu#lic of the Philippines1
h. To o#struct or attempt to o#struct inspection #y the Secretary of 2a#or
or #y his duly authori"ed representatives1
i. To fail to file reports on the status of employment placement vacancies
remittance of foreign e)change earnings separation from jo#s departures and
such other matters or information as may #e required #y the Secretary of 2a#or.
j. To su#stitute or alter employment contracts approved and verified #y the
Department of 2a#or from the time of actual signing thereof #y the parties up to
and including the periods of e)piration of the same without the approval of the
Secretary of 2a#or1
$. To #ecome an officer or mem#er of the &oard of any corporation
engaged in travel agency or to #e engaged directly or indirectly in the
management of a travel agency1 and
l. To withhold or deny travel documents from applicant wor$ers #efore
departure for monetary or financial considerations other than those authori"ed
under this +ode and its implementing rules and regulation.
33
=0 Simple illegal recruitment
Chen it involves less than three /=0 victims or recruiters.
D0 Illegal recruitment in large scale
34
?0 Illegal recruitment as economic sa#otage
Chen it is committed..
33 Art. 34
34 see 4''e(' Recru!t)ent, !nfr
19
&y a syndicate In large scale
If carried out #y a group of = or more
persons conspiring and confederating with
one another1
If committed against = or more persons
individually or as a group
70 Illegal recruitment vs. estafa
35
Illegal recruitment ,stafa
Malum proibitum thus.
3. +riminal intent is not necessary
6. A crime which involves moral turpitude
Malum in se thus.
3. +riminal intent is necessary
6. A crime which involves
moral turpitude
35 under Art. 315, pr. 2, R-1
+stf !s co))!tted %y ny person /$o defruds not$er %y us!n( f!ct!t!ous n)e, or f'se'y pretends to
possess po/er, !nf'uence, 5u'!f!ct!ons, property, cred!t, (ency, %us!ness or !)(!nry trnsct!ons, or %y
)ens of s!)!'r dece!ts e6ecuted pr!or to or s!)u'tneous'y /!t$ t$e co))!ss!on of frud ( People v.
Comila, 7.R. No. 171448, 8e%rury 28, 2007, 517 S1RA 153, 167)
20
It is not required that it #e shown that the
recruiter wrongfully represented himself
as a licensed recruiter.
36


Accused defrauded another #y a#use of
confidence or #y means of deceit.
37



Illegal recruitment and estafa cases may #e filed simultaneously or separately. The filing
of charges for illegal recruitment does not #ar the filing of estafa and vice versa.
36 4t !s enou($ t$t t$e &!ct!)s /ere dece!&ed s t$ey re'!ed on t$e )!srepresentt!on nd sc$e)e
t$t cused t$e) to entrust t$e!r )oney !n e6c$n(e of /$t t$ey 'ter d!sco&ered /s &!n $ope
of o%t!n!n( e)p'oy)ent %rod.
37 4t !s essent!' t$t t$e f'se stte)ent or frudu'ent representt!on const!tutes t$e &ery cuse or
t$e on'y )ot!&e /$!c$ !nduces t$e co)p'!nnt to prt /!t$ t$e t$!n( of &'ue.
21
Dou#le jeopardy will not set in
>0 2ia#ilities
/i0 2ocal recruitment agency
/ii0 ;oreign employer
They are jointly and severally lia#le for any violation of the recruitment
agreement and the contracts of employment.
38
/a0 Theory of imputed $nowledge
Enowledge of the agent is $nowledge of the principal.
Ascri#es the $nowledge of the agent to the principal employer not the other way
around.
39
A rule in insurance law that any information material to the transaction either
possessed #y the agent at the time of the transaction or acquired #y him #efore its
completion is deemed to #e the $nowledge of the principal at least so far as the
transaction is concerned even though in fact the $nowledge is not communicated to
the principal at all.
40
38 9$!s :o!nt nd so'!dry '!%!'!ty !)posed %y '/ (!nst recru!t)ent (enc!es nd fore!(n
e)p'oyers !s )ent to ssure t$e ((r!e&ed /or,er of !))ed!te nd suff!c!ent py)ent of /$t !s
due $!). 4f t$e recru!t)ent;p'ce)ent (ency !s :ur!d!c' %e!n(, t$e corporte off!cers nd
d!rectors nd prtners s t$e cse )y %e, s$'' t$e)se'&es %e :o!nt'y nd so'!dr!'y '!%'e /!t$ t$e
corport!on or prtners$!p for t$e c'!)s nd d)(es. (Becmen Service Exporter and Promotion v.
Cuaresma, 7.R. Nos. 182978<79, Apr!' 7, 2009)
39 Rovels Enterprises, Inc. v. Ocampo, 7.R. No. 136821, .cto%er 17, 2002, 391 S1RA 176= vide Air France v.
Court of Appeals, et al., 211 -$!'. 601 (1983).
40 Leonor v. Filipinas Compania, 48 .7 243
22
/iii0 Solidary lia#ility
41
h0 Pre-termination of contract of migrant wor$er
'ules on 'epatriation of 5verseas Cor$ers.
Cithout fault of the wor$er :is repatriation shall #e #orne #y the local
agency and!or principal over the
1. wor$er and his personal #elongings1
2. remains of the deceased wor$er and
his personal #elongings.
42
;ault of the migrant wor$er Shall #e #orne #y the migrant wor$er
43
41 see *!%!'!t!es, supr
42 Sec. 15, pr. 1, R.A. 8042
43 4%!d.
23
In cases of war epidemic disasters
calamities or other similar events
Shall #e #orne #y 5CCA without
prejudice to reim#ursement #y the principal
or local agency.
44
9nderage migrant wor$er Shall #e mandatory upon discovery done
#y the responsi#le officers of the foreign
service where the underage migrant wor$er
is found.
45
Seafarer P5P,A 4emo +ircular (o. ??-@7 provides
that a seaman can #e repatriated without
cause if the vessel arrives at a convenient
port within three /=0 months #efore the
e)piration of his contract #ut only upon
payment of
. all his earned wages1
%. leave pay for the entire contract1
c. termination pay of one /30 month
#asic salary if seaman has at least
ten /3A0 months original contract.
46
44 !d. -r. 2
45 Sec. 16, !d.
46 PCL Sippin! Pils. vs."LRC, 511 S1RA 44 (2006)
24
#. Direct hiring

Feneral 'ule. An employer may only hire ;ilipino wor$er for overseas
employment through P5,A or entities authori"ed #y D52,.
,)ceptions. Direct hiring #y
1. International organi"ations
2. 4em#ers of the diplomatic corps1
3. (ame hires1 and
4. Such other employers as may #e allowed #y the Dept. of
2a#or.
2. Regulation and !nforcement
a. Suspension or cancellation of license or authority
The Secretary of 2a#or shall have the power to suspend or cancel any license or
authority to recruit employees for overseas employment for violation of rules and
regulations issued #y the Department of 2a#or the P5,A or for violations of this and
other applica#le laws Feneral 5rders and 2etters of Instructions.
47
#. 'egulatory and visitorial powers of the D52, secretary
'egulatory
47 Art. 35, *%or 1ode
25
powers 8isitorial powers
3. 'estrict and regulate the
recruitment and
placement activities of all agencies.
6. Issue orders and promulgate rules and
'egulations.
3. Access to employer-s records and
premises at any time of the
day or night
whenever wor$ is #eing underta$en.
6. To copy from said records
=. Guestion any employee and
investigate
any fact condition or matter which may
#e necessary to determine violations or
which may aid in the enforcement of the
2a#or +ode and of any la#or law wage
order or rules and regulation issued
pursuant thereto.
c. 'emittance of foreign e)change earnings
Feneral 'ule. It shall #e mandatory for all 5;Cs to remit a portion of their
foreign e)change earnings to their families dependents and!or
#eneficiaries ranging from ?AH <AH depending on the wor$er-s
$indof jo#.
48

48 Ru'e >444, ?oo, 444, -.+A Ru'es
26
,)ceptions. 3.
The wor$er-s immediate family mem#ers #eneficiaries and dependents
are residing with him a#road.
6. Immigrants and ;ilipino professionals and employees wor$ing
with
the 9( agencies or speciali"ed #odies.
=. ;ilipino servicemen wor$ing in 9.S. military installations.
49

d. Prohi#ited activities
50
3. ;urnishing or pu#lishing any false notice!information!document related to
recruitment!employment
6. ;ailure to file reports required #y S2,
=. Inducing or attempting to induce a wor$er already employed to quit his
employment in order to offer him another unless the transfer is designed to
li#erate awor$er from oppressive terms and conditions
D.'ecruitment!placement of wor$ers in!jo#s harmful to
pu#lic health or morality or to the dignity of the country
?. ,ngaging directly or indirectly in the management of a travel agency
49 Reso'ut!on No. 1<83, 4nter<A(ency 1o))!ttee for 4)p'e)entt!on of +... 857
50 Art. 34
27
7. Su#stituting or altering employment contracts without approval of D52,
>.+harging or accepting any amount greater than that specified #y D52, or
ma$e a wor$er pay any amount greater than actually received #y him
<. +ommitting any act of misrepresentation to secure a license or authority
@.Influencing or attempting to influence any person!entity not to employ any
wor$er who has not applied of employment through his agency
3A.5#structing or attempting to o#struct inspection #y S2, or #y
his representatives
33.Cithholding or denying travel documents from applicant wor$ers #efore
departure for monetary considerations other than authori"ed #y law

36. Franting a loan to an 5;C which will #e used for payment of legal
and
allowa#le placement fees

3=.'efusing to condone or renegotiate a loan incurred #y an 5;C after his
employment contract has #een prematurely terminated through no fault of his or
her
5wn.

3D. ;or a suspended recruitment!manning agency to engage in any $ind of
recruitment activity including the processing of pending wor$ersB applications1 and
3?. ;or a recruitment!manning agency or a foreign principal!employer to pass on
the 5;C or deduct from his or her salary the payment of the cost of insurance
fee premium or other insurance related charges as provided under the compulsory
wor$erBs
insurance coverage.
37. Imposing a compulsory and e)clusive arrangement where#y an 5;C is
required to.
a. Avail a loan only from specifically designated institutions entities
or persons1
#. 9ndergo health e)aminations only from
specifically designated medical
entities or persons e)cept seafarers whose medical
e)amination cost is shouldered #y the shipowner
28
c. 9ndergo training of any $ind only from designated institutions
entities or persons e)cept for recommendatory trainings mandated #y
principals!shipowners.
51

C. LABOR STANDARDS
1. "ours of #ork
52
a. +overage!,)clusions
+overage ,)clusions
51 Sec. 6, R.A. 10022
52 #or, dy@ )ens 24 consecut!&eA$our per!od /$!c$ co))ences fro) t$e t!)e t$e e)p'oyee re(u'r'y
strts to /or,. 4t does not necessr!'y )en t$e ord!nry c'endr dy fro) 12"00 )!dn!($t to 12"00
)!dn!($t un'ess t$e e)p'oyee strts to /or, t t$!s unusu' $our.
@#or, /ee,@ !s /ee, cons!st!n( of 168 consecut!&e $ours or 7 consecut!&e 24A$our /or, dys
%e(!nn!n( t t$e s)e $our nd on t$e s)e c'endr dy ec$ c'endr /ee,.
Reduct!on of e!($tA$our /or,!n( dy A not pro$!%!ted %y '/ pro&!ded t$ere !s no reduct!on !n py of
/or,ers.
Bours of /or, of prtAt!)e /or,ers A py)ent of /(e s$ou'd %e !n proport!on on'y to t$e $ours
/or,ed.
29
,mployees in all esta#lishments and
underta$ings whether for profit or not.
3. Fovernment employees
6. 4anagerial employees
53

=. ;ield personnel
54
D. 4em#ers of the family of the employer
who are dependent on him for support
53 9$ose /$ose pr!)ry duty cons!sts of t$e )n(e)ent of t$e est%'!s$)ent !n /$!c$ t$ey re
e)p'oyed or deprt)ent or su%d!&!s!on t$ereof, nd ot$er off!cers or )e)%ers of t$e
)n(er!' stff.
9$ey )ust )eet '' of t$e ff. cond!t!ons, n)e'y"
1.-r!)ry duty" )n(e)ent of t$e est%'!s$)ent !n /$!c$ t$ey re e)p'oyed or of
deprt)ent or su%<d!&!s!on t$ereof=
2. 1usto)r!'y or re(u'r'y d!rect t$e /or, of 2 or )ore e)p'oyees
3.Bs t$e ut$or!ty to $!re or f!re ot$er e)p'oyees of 'o/er rn,= or t$e!r su((est!ons nd
reco))endt!ons s to t$e $!r!n( nd f!r!n( nd s to t$e pro)ot!on or ny c$n(e of sttus of
ot$er e)p'oyees re (!&en prt!cu'r /e!($t.
4.+6ecute under (ener' super&!s!on /or, 'on( spec!'!0ed or tec$n!c' '!nes re5u!r!n( spec!'
tr!n!n(, e6per!ence, or ,no/'ed(e
5. +6ecute under (ener' super&!s!on spec!' ss!(n)ent nd ts,s= nd
6. Co not de&ote )ore t$n 20D of t$e!r $ours /or,ed to ct!&!t!es /$!c$ re not d!rect'y nd
c'ose'y re'ted to perfor)nce of t$e /or, descr!%ed. (Art. 82223)
54 NonA(r!cu'tur' e)p'oyees /$o re(u'r'y perfor) t$e!r dut!es /y fro) t$e pr!nc!p' p'ce of
%us!ness or %rnc$ off!ce of t$e e)p'oyer nd /$ose ctu' $ours of /or, !n t$e f!e'd cnnot %e
deter)!ned /!t$ reson%'e cert!nty
30
domestic helpers
?. Persons in the personal service of
another and
7. Cor$ers who are paid #y results
#. (ormal :ours of Cor$
,ight /<0 hours per day in a general wor$ing day.
a0 +ompressed wor$ wee$
55
The normal wor$wee$ is reduced to less than 7 days #ut the total num#er
of wor$ hours of D< hours per wee$ shall remain. The normal wor$day is increased
to more
than < hours #ut not to e)ceed 36 hours without corresponding overtime premium.
The concept can #e adjusted accordingly depending on the normal wor$ wee$ of
the company.
56
c. 4eal &rea$
,very employee is entitled to not less than one /30 hour /or 7A minutes0 time-off
for regular meals. &eing time-off it is not compensa#le hours wor$ed and employee is
free to do anything he wants e)cept to wor$. If he is required to wor$ while eating he
should #e compensated therefor.
If meal time is shortened to not less than twenty /6A0 minutes - compensa#le
hours wor$ed.
If shortened to less than 6A minutes - considered coffee #rea$ or rest period of
short duration and therefore compensa#le.
55 See s$orten!n( of /or, /ee, (under 1. Bours of #or,), supr
56 Ceprt)ent Ad&!sory .rder No. 2, Ser!es of 2009
31
d. Caiting time
+onsidered compensa#le if waiting is an integral part of the employeeBs wor$ or
he is required or engaged #y the employer to wait.
e. 5vertime wor$
57
5vertime Pay
5vertime wor$ Cor$ #eyond eight /<0 hours of wor$ within
the wor$er-s 6D hour wor$day.
58
57 7ener' Ru'e" No e)p'oyee )y %e co)pe''ed to render o&ert!)e /or, (!nst $!s /!''.
+6cept!ons"
. #$en t$e country !s t /r or /$en ny ot$er nt!on' or 'oc' e)er(ency $s %een dec'red %y t$e
Nt!on' Asse)%'y or t$e 1$!ef +6ecut!&e
%. #$en o&ert!)e /or, !s necessry to pre&ent 'oss of '!fe or property or !n cse of !))!nent dn(er to
pu%'!c sfety due to ctu' or !)pend!n( e)er(ency !n t$e 'oc'!ty cused %y ser!ous cc!dent, f!re, f'oods,
typ$oons, ert$5u,e, ep!de)!c or ot$er d!ssters or c')!t!es=
c. #$en t$ere !s ur(ent /or, to %e perfor)ed on )c$!nes, !nst''t!ons or e5u!p)ent, or !n order to
&o!d ser!ous 'oss or d)(e to t$e e)p'oyer or so)e ot$er cuses of s!)!'r nture
d. #$en t$e /or, !s necessry to pre&ent 'oss or d)(e to per!s$%'e (oods=
e. #$en t$e co)p'et!on or cont!nut!on of /or, strted %efore t$e 8t$ $our !s necessry to pre&ent
ser!ous o%struct!on or pre:ud!ce to t$e %us!ness or opert!ons of t$e e)p'oyer= nd
f. #$en o&ert!)e /or, !s necessry to &!' of f&or%'e /et$er or en&!ron)ent' cond!t!ons /$ere
perfor)nce or 5u'!ty of /or, !s dependent t$ereon.
#$en n e)p'oyee refuses to render e)er(ency o&ert!)e /or, under ny of t$e fore(o!n( cond!t!ons, $e
)y %e d!s)!ssed on t$e (round of !nsu%ord!nt!on or /!''fu' d!so%ed!ence of t$e '/fu' order of t$e
e)p'oyer.
58 4n co)put!n( o&ert!)e /or,, @re(u'r /(e@ or @%s!c s'ry@ )ens @cs$@ /(e on'y /!t$out
deduct!on for fc!'!t!es pro&!ded %y t$e e)p'oyer.
@-re)!u) py@ )ens t$e dd!t!on' co)penst!on re5u!red %y '/ for /or, perfor)ed /!t$!n 8 $ours
on nonA /or,!n( dys, suc$ s rest dys nd spec!' dys.
@.&ert!)e py@ )ens t$e dd!t!on' co)penst!on for /or, perfor)ed %eyond 8 $ours. +&ery
e)p'oyee ent!t'ed to pre)!u) py !s 'so ent!t'ed to t$e %enef!t of o&ert!)e py.
32
5vertime Pay The additional compensation for wor$ performed #eyond eight
/<0 hours a day within the wor$er-s 6D-hour wor$day regardless
whether the wor$ covers 6 calendar days.
f. (ight Cor$ (ight shift differential
(ight Cor$ Cor$ at night during a period of not less
than seven />0 consecutive hours including
the interval from midnight to five o-cloc$
in the morning.
59
(ight shift differential The additional compensation of ten percent
/3AH0 of an employee-s regular wage for
each hour of wor$ performed #etween 3A
p.m. and 7 a.m.

g. Part-time wor$
Chen a wor$er is contracted for anything less than the #asic full-time hours.
h. +ontract for piece wor$
59 R.A. No. 10151
33
The contractor #inds himself to e)ecute a piece of wor$ for the employer in
consideration of a certain price or compensation. The contractor may either employ only
his la#or or s$ill or also furnish the material.
60
2. #ages
61
a. Cage vs. salary
Cages Salaries
+ompensation for manual la#or
62
also $nown as I#lue collared wor$ersJ pai
d at stated times and measured #y the day
wee$ month or season.
Paid to Iwhite collared wor$ersJ and denot
es a higher degree of employment or a
superior grade of services and implies a
position in office.
60 Art. 1713, 11
61 Ender t$e 1!&!' 1ode, !t !s )ndted t$t t$e '%orerFs /(es s$'' %e p!d !n 'e(' currency. Ender t$e
*%or 1ode nd !ts !)p'e)ent!n( ru'es, s (ener' ru'e, /(es s$'' %e p!d !n 'e(' tender nd t$e use of
to,ens, pro)!ssory notes, &ouc$ers, coupons or ny ot$er for) ''e(ed to represent 'e(' tender !s
pro$!%!ted e&en /$en e6press'y re5uested %y t$e e)p'oyee
+6cept!ons "
A. -y)ent t$rou($ uto)ted te''er )c$!ne (A9G) of %n,s pro&!ded t$e fo''o/!n( cond!t!ons re
)et"
1. t$e A9G syste) of py)ent !s /!t$ t$e /r!tten consent of t$e e)p'oyees concerned=
2. 9$e e)p'oyees re (!&en reson%'e t!)e to /!t$dr/ t$e!r /(es fro) t$e %n, fc!'!ty /$!c$ t!)e,
!f done dur!n( /or,!n( $ours, s$'' %e cons!dered co)pens%'e $ours /or,ed=
3. 9$e syste) s$'' ''o/ /or,ers to rece!&e t$e!r /(es /!t$!n t$e per!od or fre5uency nd !n t$e
)ount prescr!%ed under t$e *%or 1ode, s )ended=
4. 9$ere !s %n, or A9G fc!'!ty /!t$!n rd!us of one (1) ,!'o)eter to t$e p'ce of /or,=
5. Epon re5uest of t$e concerned e)p'oyee;s, t$e e)p'oyer s$'' !ssue record of py)ent of
/(es,%enef!ts nd deduct!ons for prt!cu'r per!od=
6. 9$ere s$'' %e n dd!t!on' e6penses nd no d!)!nut!on of %enef!ts nd pr!&!'e(es s resu't of t$e
A9G syste) of py)ent=
7. 9$e e)p'oyer s$'' ssu)e respons!%!'!ty !n cse t$e /(e protect!on pro&!s!ons of '/ nd
re(u't!ons re not co)p'!ed /!t$ under t$e rrn(e)ent
62 s,!''ed or uns,!''ed
34
Indicates inconsidera#le pay for a lower or
less responsi#le character of employment.
Suggests a larger and more permanent or
fi)ed compensation for more important
services.
Feneral 'ule.
(ot su#ject to e)ecution

,)ceptions.

De#ts incurred for food shelter
clothing and medical attendance.

Su#ject to e)ecution
#. 4inimum wage defined 4inimum wage setting
4inimum wage - lowest wage rate fi)ed #y law that an employer can pay his
employees.
63
63 9$e e)p'oyer cnnot e6e)pt $!)se'f fro) '!%!'!ty to py )!n!)u) /(es %ecuse of poor f!nnc!'
cond!t!on of t$e co)pny= t$e py)ent of )!n!)u) /(es !s not dependent on t$e e)p'oyerFs %!'!ty to
py (#e Raco v. $unicipalit% of Ili!an, 7.R. N.. *A23542).
9$e cceptnce %y n e)p'oyee of t$e /(es p!d $!) /!t$out o%:ect!on does not (!&e r!se to estoppe'
prec'ud!n( $!) fro) su!n( for t$e d!fference %et/een t$e )ount rece!&ed nd t$e )ount $e s$ou'd
$&e rece!&ed pursunt to &'!d )!n!)u) /(e '/ /$ere !t does not pper t$t t$e e)p'oyer c$n(ed
$!s pos!t!on to $!s o/n pre:ud!ce.
35
In the determination of the regional minimum wages the 'egional &oard shall
among other relevant factors consider the following.
a0 The demand for living wages
#0 Cage adjustment visavis the consumer price inde)
c0 The cost of living and changes or increases therein
d0 The needs of wor$ers and their families
e0 The need to induce industries to invest in the countryside
f0 Improvements in standards of living
g0 The prevailing wage levels
h0 ;air return of the capital invested and capacity to pay of employers
i0 ,ffects on employment generation and family income
j0 The equita#le distri#ution of income and wealth along the imperatives of
economic and social development
c. 4inimum wage of wor$ers paid #y results
30 Cor$ers paid #y results
All wor$ers paid #y results including homewor$ers and those who are paid on
piece rate ta$ay pa$yaw or tas$ #asis shall receive not less than the prescri#ed
minimum wage rates under the 'egional Cage 5rders for normal wor$ing hours which
shall not e)ceed eight /<0 hours a day or a proportion thereof.
60 Apprentices
=0 2earners
Cage of apprentices and learners shall in no case #e less than seventy-five />?H0
percent of the applica#le minimum wage rates.
D0 Persons with disa#ility
A qualified disa#led employee shall #e su#ject to the same terms and conditions
of employment and the same compensation privileges #enefits fringe #enefits or
allowances as a qualified a#le #odied person.
64

64 Sec. 5 of RA 7277 or t$e G(n 1rt for C!s%'ed -erson
36
d. +ommissions
Direct remunerations received #y an agent salesman e)ecutor #ro$er or trustee
calculated as a percentage on the amount of his transactions or on the profit to the
principal.
e. Deductions from wages
Feneral 'ule Cage deduction is strictly prohi#ited.
,)ceptions.
65
3. Cith employees- consent.
65 ''o/%'e deduct!ons
37
a. SSS payments
#. Philhealth payments
c. +ontri#utions to Pag-I&IF ;und
d. value of meals and other facilities
e. payments to third persons with employees consent
f. deduction of a#sences
6. Cithout employees- consent.
a. wor$er-s insurance acquired #y the employer
#. union dues where the right to chec$-off has #een recogni"ed #y
the employer
c. cases where the employer is authori"ed #y law or regulations
issued #y the Secretary of 2a#or
d. de#ts of the employee to the employer which have #ecome due
and demanda#le
f. (on-diminution of #enefits
66
This principle mandates that the reduction or diminution or withdrawal #y
employers of any #enefits supplements or payments as provided in e)isting laws
individual agreements or collective #argaining agreements #etween wor$ers and
employers or voluntary employer practice or policy is not allowed.
67
The #enefits #eing given to employees cannot #e ta$en #ac$ or reduced
unilaterally #y the employer #ecause the #enefits have #ecome part of the employment
contract written or unwritten.
68

66 9$e ru'e !s pp'!c%'e !f !t !s s$o/n t$t t$e (rnt of t$e %enef!ts !s"
?sed on n e6press po'!cy= or
Bs r!pened !nto prct!ce o&er 'on( per!od of t!)e,
9$e prct!ce !s cons!stent nd de'!%erte= nd
4t !s not due to n error !n t$e construct!on; pp'!ct!on of dou%tfu' or d!ff!cu't 5uest!on of '/.
67 See Art. 100
38
>. ;acilities vs. supplements
;acilities Supplements
Items of e)penses necessary for the
la#orer-s and his family-s e)istence and
su#sistence #ut does not include tools of
the trade or articles or services primarily
for the #enefit of the employer or necessary
to the conduct of the employer-s #usiness.
,)tra remuneration or special privileges or
#enefits given to or received #y the
la#orers over and a#ove their ordinary
earnings or wages.
69
;orms part of the wage Independent of wage
Deducti#le from wage (ot wage deducti#le
68 +6cept!on"
9o correct n error, ot$er/!se, !f t$e error !s not corrected for reson%'e t!)e, !t r!pens !nto
co)pny po'!cy nd e)p'oyees cn de)nd !t s )tter of r!($t.
69Ato& Bi! 'ed!e $inin! Co. v. Ato& Bi! 'ed!e $utual Benefit Assoc., 7.R. No. *<7349, Hu'y 19, 1955
39
;or the #enefit of the wor$er and his
family.
Franted for the convenience of the
employer.
<. Cage Distortion
70
!'ectification
A wage distortion happens when a wage order increasing the rates of wages
removes or significantly reduces the pay advantage of one position of employees over
another. This change has to #e corrected. +orrection of a wage distortion must first #e
done in the companyBs grievance machinery provided for in the +&A. If the distortion
isnBt resolved there the ne)t step is voluntary ar#itration. In case the company has no
+&A or recogni"ed la#or union the employers and wor$ers have to reach an agreement
to correct the distortion. If they canBt agree they have to #ring the pro#lem to the (+4&.
If after 3A days in the (+4& there isnBt any correction the ne)t place to go is the (2'+.
Cage distortions cannot #e the cause of a stri$e or loc$out.
71
The correction of
a wage distortion should #e done #y negotiation or ar#itration.
@. Divisor to determine daily rate
The divisor is 6?A which is arrived at #y su#tracting the ?6 Sundays ?6
Saturdays the 3A regular holidays and Decem#er =3 or a total of 33? off-days from the
=7? days of the year or a difference of 6?A days.
72
+. 'est Periods
70 +'e)ents"
1. An e6!st!n( $!errc$y of pos!t!ons /!t$ correspond!n( s'ry rtes.
2. A s!(n!f!cnt c$n(e or !ncrese !n t$e s'ry rte of 'o/er py c'ss /!t$out correspond!n(
!ncrese !n t$e s'ry rte of $!($er one=
3. 9$e e'!)!nt!on of t$e d!st!nct!on %et/een t$e 2 (roups or c'sses= nd
4. 9$e #C e6!sts !n t$e s)e re(!on of t$e country (A''!nce 9rde En!ons &. N*R1, 7.R. No. 140689,
8e%. 17, 2004)
71 Ila( n! $an!!a!a(a vs. "LRC, 198 S1RA 586
40
3. Cee$ly rest day
(ot less than twenty-four /6D0 consecutive hours after every si) /70 consecutive
normal wor$ days.
The employer shall determine and schedule the wee$ly rest day of his employees
su#ject to collective #argaining agreement and to such rules and regulations as the
Secretary of 2a#or and ,mployment may provide.
73
6. ,mergency rest day wor$
In the following cases.
3. Actual or impending emergencies caused #y serious accident fire flood
typhoon earthqua$e epidemic or other disaster or calamity to prevent loss of life and
property or imminent danger to pu#lic safety1
6. 9rgent wor$ to #e performed on the machinery equipment or installation to
avoid serious loss which the employer would otherwise suffer1
=. A#normal pressure of wor$ due to special circumstances where the employer
cannot ordinarily #e e)pected to resort to other measures1
D. To prevent loss or damage to perisha#le goods1
?. The nature of the wor$ requires continuous operations and the stoppage of
wor$ may result in irrepara#le injury or loss to the employer1 and
7. 5ther analogous or similar circumstances as determined #y the Secretary of
2a#or and ,mployment.
74
72 See CB)C Emplo%ees *nion vs. +aco,o C. Clave and Commercial Ban& - )rust Co., 7.R. No. *A49582,
Hnury 7, 1986
73 Art. 91 ()
41
+. :oliday pay
75
! Premium pay
76
+overage ,)clusions
:oliday pay Applies to all employees 3. Fovernment employees whether
employed #y the (ational Fovernment or
any of its political su#divisions including
those employed in government-owned and!or
controlled corporations with original charters
or created under special laws1
6. Those of retail and service esta#lishments
regularly employing less than ten /3A0
wor$ers1
=. :ousehelpers and persons in the personal
service of another1
74 Art. 92
75 A dyFs py (!&en %y '/ to n e)p'oyee e&en !f $e does not /or, on re(u'r $o'!dy. 4t !s '!)!ted to
t$e e'e&en (11) re(u'r $o'!dys '!sted %y '/. 9$e e)p'oyee s$ou'd not $&e %een %sent /!t$out
py on t$e /or,!n( dy preced!n( t$e re(u'r $o'!dy.
76 Add!t!on' co)penst!on for /or, perfor)ed on sc$edu'ed rest dy or $o'!dy
42
D. 4anagerial employees if they meet all of
the following conditions.
D.3 Their primary duty is to manage the
esta#lishment in which they are employed
or of a department or su#division thereof1
D.6 They customarily and regularly direct
the wor$ of two or more employees therein1
D.=. They have the authority to hire or fire
other employees of lower ran$1 or their
suggestions and recommendations as to
hiring firing and promotion or any other
change of status of other employees are
given particular weight.
?. 5fficers or mem#ers of a managerial staff
if they perform the following duties and
responsi#ilities.

?.3 Primarily perform wor$ directly
related to management policies of their
employer1
?.6 +ustomarily and regularly e)ercise
discretion and independent judgment1
?.= /a0 'egularly and directly assist a
proprietor or managerial employee in the
management of the esta#lishment or
su#division thereof in which he or she is
employed1 or /#0 e)ecute under general
supervision wor$ along speciali"ed or
technical lines requiring special training
e)perience or $nowledge1 or /c0 e)ecute
under general supervision special
assignments and tas$s1 and
?.D Do not devote more than twenty
percent /6AH0 of their hours wor$ed in a
wor$wee$ to activities which are not directly
and closely related to the performance of the
wor$ descri#ed in paragraphs ?.3 ?.6 and
?.= a#ove.
43
7. ;ield personnel and other employees
whose time and performance is unsupervised
#y the employer including
those who are engaged on tas$ or contract
#asis purely commission #asis or those who
are paid a fi)ed amount for performing wor$
irrespective of the time consumed in the
performance thereof.
Premium pay Applies to all employees 3. Fovernment employees whether
employed #y the (ational Fovernment or
any of its political su#divisions including
those employed in government-owned and!or
controlled corporations with original charters
or created under special
laws1
6. 4anagerial employees if they meet all of
the following conditions.
6.3 Their primary duty is to manage the
esta#lishment in which they are employed
or of a department or
su#division thereof1
6.6 They customarily and regularly direct
the wor$ of two or more employees therein1
6.= They have the authority to hire or fire
other employees of lower ran$1 or their
suggestions and recommendations as to
hiring firing and promotion or any other
change of status of other employees are given
particular weight.

=. 5fficers or mem#ers of a managerial staff
if they perform the following duties and
responsi#ilities.

=.3 Primarily perform wor$ directly
related to management policies of their
employer1

=.6 +ustomarily and regularly e)ercise
discretion and independent judgment1
44

=.= /a0 'egularly and directly assist a
proprietor or managerial employee in the
management of the esta#lishment or
su#division thereof in which he or she is
employed1 or /#0 e)ecute under general
supervision wor$ along speciali"ed or
technical lines requiring special training
e)perience or $nowledge1 or /c0
e)ecute under general supervision special
assignments and tas$s1 and
=.D Do not devote more than twenty
percent /6AH0 of their hours wor$ed in a
wor$wee$ to activities which are not directly
and closely related to the performance of the
wor$ descri#ed in paragraphs =.3 =.6 and
=.= a#ove.
D. :ousehelpers and persons in the personal
service of another1
?. Cor$ers who are paid #y results including
those who are paid on piece rate ta$ay
pa$yaw or tas$ #asis and other nontime
wor$ if their output rates are in accordance
with the standards prescri#ed in the
regulations or where such rates have #een
fi)ed #y the Secretary of 2a#or and
,mployment1
7. ;ield personnel if they regularly perform
their duties away from the principal or
#ranch office or place of #usiness of the
employer and whose actual hours of wor$ in
the field cannot
#e determined with reasona#le certainty.
Teachers piece wor$ers ta$ay seasonal wor$ers seafarer
,mployees 'ule
Private school teachers
77
3. ': during semestral vacations
- (ot entitled to :P
45
6. ': during +hristmas vacation
- Shall #e paid :P
Paid #y.
3. results or
6. output
78

:P shall not #e less than his average daily earnings
for the last > actual wor$ days preceding
the ':1 Provided. :P shall not #e less than the
statutory minimum wage rate.
Seasonal Cor$ers 4ay not #e paid the required :P during offseason
where
they are not at wor$.
Cor$ers having no
regular wor$ days
Shall #e entitled to :P
Seafarers

Shall #e entitled to :P
$. Leaves
77 8cu'ty )e)%ers of co''e(es nd un!&ers!t!es
78 -!ece /or, py)ent
46
a. Service Incentive 2eave
79
,very employee who has rendered at least one /30 year of service
80
shall #e
entitled to a yearly service incentive leave of five /?0 days with pay.
#. 4aternity 2eave
81
A covered female employee who has paid at least three /=0 monthly maternity
contri#utions in the twelve /360-month period preceding the semester of her child#irth
a#ortion or miscarriage and who is currently employed shall #e paid a daily maternity
#enefit equivalent to one hundred percent /3AAH0 of her present #asic salary allowances
and other #enefits or the cash equivalent of such #enefits for 7A days or >< days in case of
caesarian delivery.
c. Paternity 2eave
82
79 4t !s 5 dys 'e&e /!t$ py for e&ery e)p'oyee /$o $s rendered t 'est 1 yr. of ser&!ce. 4t !s
co))ut%'e to !ts )oney e5u!&'ent !f not used or e6$usted t t$e end of yer.
80 Ser&!ce for not 'ess t$n 12 )ont$s, /$et$er cont!nuous or %ro,en rec,oned fro) t$e dte
t$e e)p'oyee strted /or,!n(, !nc'ud!n( ut$or!0ed %sences nd p!d re(u'r $o'!dys un'ess t$e
/or,!n( dys !n t$e est%'!s$)ent s )tter of prct!ce or po'!cy, or t$t pro&!ded !n t$e
e)p'oy)ent contrct !s 'ess t$n 12 )ont$s, !n /$!c$ cse s!d per!od s$'' %e cons!dered s
one yer. (Sec. 3, Ru'e >, ?oo, 444, 4RR)
81
Gtern!ty %enef!ts, '!,e ot$er %enef!ts (rnted %y t$e SSS, re (rnted to e)p'oyees !n '!eu of /(es
nd, t$erefore, )y not %e !nc'uded !n co)put!n( t$e e)p'oyeeFs 13t$A)ont$ py for t$e c'endr yer.
>o'untry or se'fAe)p'oyed )e)%ers re not ent!t'ed to t$e )tern!ty %enef!t %ecuse to %e ent!t'ed
t$ereto, correspond!n( )tern!ty contr!%ut!ons s$ou'd %e p!d %y e)p'oyers. >o'untry or se'fAe)p'oyed
)e)%ers $&e no e)p'oyers so t$ey do not $&e )tern!ty contr!%ut!ons.
82 1ond!t!ons to ent!t'e)ent"
47
Franted to a married male employee in the private and pu#lic sector allowing him
not to report for wor$ for seven />0 days #ut continues to earn the compensation therefor.
d. Parental 2eave
83
9$e )'e e)p'oyee !s
1. *e(''y )rr!ed to, nd !s co$%!t!n( /!t$ t$e /o)n /$o de'!&ers t$e %%y
2. +)p'oyee of pr!&te or pu%'!c sector=
3. .n'y for t$e f!rst 4 de'!&er!es (!nc'ude c$!'d%!rt$ or ny )!scrr!(e)

of
'e(!t!)te spouse /!t$ /$o) $e !s co$%!t!n(=
nd
4.Not!fy $!s e)p'oyer of t$e pre(nncy of $!s 'e(!t!)te spouse nd t$e e6pected dte of suc$
de'!&ery
9$e ptern!ty %enef!ts )y %e en:oyed %y t$e 5u'!f!ed e)p'oyee %efore, dur!n( or fter t$e de'!&ery %y
$!s /!fe. Bo/e&er, t$e tot' nu)%er of dys s$'' not e6ceed se&en (7) /or,!n( dys for ec$ de'!&ery.
9$!s %enef!t s$'' %e &!'ed of not 'ter t$n s!6ty (60) dys fter t$e dte of s!d de'!&er
4t !s not con&ert!%'e to cs$ !f not &!'ed of.
83 Repu%'!c Act No. 8972 (An Act -ro&!d!n( for ?enef!ts nd -r!&!'e(es to So'o -rents nd 9$e!r 1$!'dren,
Appropr!t!n( 8unds 9$erefor nd for .t$er -urposes), ot$er/!se ,no/n s I9$e So'o -rentsF #e'fre
Act of 2000. 9$!s 'e&e pr!&!'e(e !s n dd!t!on' 'e&e %enef!t /$!c$ !s seprte nd d!st!nct fro) ny ot$er
'e&e %enef!ts pro&!ded under e6!st!n( '/s or (ree)ents.
1ond!t!ons to ent!t'e)ent"
1. Be or s$e )ust f'' )on( t$ose referred to s so'o prent
2. Gust $&e t$e ctu' nd p$ys!c' custody of t$e c$!'d or c$!'dren
3. Gust $&e t 'est rendered ser&!ce of one (1) yer to $!s or $er e)p'oyer
4. Be or s$e )ust re)!n so'o prent
48
2eave #enefits of not more than seven />0 wor$ing days every year granted to a
solo parent
84
employee to ena#le him!her to perform parental duties and responsi#ilities
where physical presence is required.
e. 2eaves for victims of violence against women
85
A female employee who is a victim of violence
86
is entitled to a paid
leave of 3A days in addition to other paid leaves e)tendi#le when the necessity arises
as specified in the protection order.
87
84 Any !nd!&!du' /$o f''s under ny of t$e ff. cte(or!es"
1. A /o)n /$o (!&es %!rt$ s resu't of rpe nd ot$er cr!)es (!nst c$st!ty e&en /!t$out
f!n' con&!ct!on of t$e offender, pro&!ded, 9$t t$e )ot$er ,eeps nd r!ses t$e c$!'d=
2. -rent 'eft so'o or 'one /!t$ t$e respons!%!'!ty of prent$ood due to"
. Cet$ of spouse=
%. Cetent!on or ser&!ce of sentence of spouse for cr!)!n' con&!ct!on for t 'est 1 yr=
c. -$ys!c' nd;or )ent' !ncpc!ty of spouse
d. *e(' seprt!on or de fcto seprt!on fro) spouse for t 'est 1 yr s 'on( s $e;s$e !s
entrusted /!t$ t$e custody of t$e c$!'dren=
e. Nu''!ty or nnu')ent of )rr!(e s decreed %y court or %y c$urc$ s 'on( s
$e;s$e !s entrusted /!t$ t$e custody of t$e c$!'dren=
f. A%ndon)ent of spouse for t 'est 1 yr=
3. En)rr!ed )ot$er;ft$er /$o $s preferred to ,eep nd rer $!s or $er c$!'d;c$!'dren
!nsted of"
. $&!n( ot$ers cre for t$e) or
%. (!&e t$e) up to /e'fre !nst!tut!on=
4. Any ot$er person /$o so'e'y pro&!des"
. prent' cre nd
%. support to c$!'d or c$!'dren=
5. Any f)!'y )e)%er /$o ssu)es t$e respons!%!'!ty of $ed of f)!'y s resu't of t$e"
. det$,
%. %ndon)ent,
c. d!sppernce or
d. pro'on(ed %sence of t$e prents or so'o prent.
A c$n(e !n t$e sttus or c!rcu)stnce of t$e prent c'!)!n( %enef!ts under t$!s Act, suc$
t$t $e;s$e !s no 'on(er 'eft 'one /!t$ t$e respons!%!'!ty of prent$ood, s$'' ter)!nte $!s;$er e'!(!%!'!ty
for t$ese %enef!ts. (Sec.3)
85 under R.A. 9262
49
f. Special 2eave &enefit for Comen
88
Any female employee regardless of age and civil status shall #e entitled to a
special leave #enefit under such terms and conditions provided herein.
The employee is entitled to special leave #enefit of two /60 months with full pay
#ased on her gross monthly compensation.
%. &ervice Carge
This is a charge collected #y hotels restaurants and similar esta#lishments
and shall #e distri#uted at the rate of.

+overed ,mployees 4anagement

<?H

3?H
86 p$ys!c', se6u', or psyc$o'o(!c'
87 Sec. 43, 1
st
pr., !%!d
88 R.A. 9710
1ond!t!ons for +nt!t'e)ent"
1. S$e $s rendered t 'est s!6 (6) )ont$s cont!nuous ((re(te e)p'oy)ent ser&!ce for t$e 'st t/e'&e
(12) )ont$s pr!or to sur(ery=
2. S$e $s f!'ed n pp'!ct!on for spec!' 'e&e /!t$ $er e)p'oyer /!t$!n reson%'e per!od of t!)e
fro) t$e e6pected dte of sur(ery or /!t$!n suc$ per!od s )y %e pro&!ded %y co)pny ru'es nd
re(u't!ons or co''ect!&e %r(!n!n( (ree)ent= nd
3. S$e $s under(one sur(ery due to (yneco'o(!c' d!sorders s cert!f!ed %y co)petent p$ys!c!n.
50
,qually distri#uted among them 3. To answer for losses and #rea$ages and
6. Distri#uted to employees receiving more than
P6AAA a month at the discretion of the
management.
The share of the employee shall #e distri#uted and paid to them not less than
once every 6 wee$s or twice a month at intervals not e)ceeding 37 days.
'. (irteent )13t* Mont Pa+
All ran$-and-file employees are entitled to a 3=th-month pay
89
regardless of the
amount of #asic salary that they receive in a month if their employers are not
otherwise
e)empted from paying the 3=th month pay. Such employees are entitled to the 3=
th
month pay regardless of their designation or employment status and irrespective of the
method #y which their wages are paid provided that they have wor$ed for at least one /30
month during a calendar year.
90
%. &eparation Pa+
89 8or)s"
1$r!st)s %onus=
G!dyer %onus=
-rof!t s$r!n( py)ents= nd
.t$er cs$ %onuses )ount!n( to not 'ess t$n1;12 of !ts %s!c s'ry
90 Re&!sed 7u!de'!nes on t$e 4)p'e)entt!on of t$e 13 Gont$ -y */
4t !s !n t$e nture of /(es. 9$!s !s yerAend py est%'!s$ed %y -.C. 851 /$!c$ !s e5u!&'ent to 1;12 of
t$e tot' %s!c s'ry erned %y n e)p'oyee /!t$!n t$e c'endr yer, /$!c$ !s de)nd%'e s 'e('
o%'!(t!on. 4t )y %e (!&en nyt!)e %ut not 'ter t$n Cece)%er 24.
+6c'us!on;+6e)pt!ons fro) co&er(e"
1. 7o&ern)ent e)p'oyees
2. Bouse$o'd $e'pers
3. +)p'oyees p!d pure'y on co))!ss!on %s!s
4. +)p'oyees 'redy rece!&!n( 13t$ )ont$ py
51
Separation pay is given to employees in instances covered #y Articles 6<= and
6<D of the 2a#or +ode of the Philippines. An employee-s entitlement to separation pay
depends on the reason or ground for the termination of his or her services. An employee
may #e terminated for just cause
91
and other similar causes as enumerated under Article
6<6 of the 2a#or +ode and generally may not #e entitled to separation pay. 5n the other
hand where the termination is for authori"ed causes separation pay is due.
'. Retirement Pa+
3. ,ligi#ility
,mployees shall #e retired upon reaching the age of si)ty /7A0 years or more #ut
not #eyond si)ty-five /7?0 years old Kand have served the esta#lishment for at least five
/?0 yearsL.
6. Amount
The minimum retirement pay shall #e equivalent to one-half /3!60 month salary
92

for every year of service a fraction of at least si) /70 months #eing considered as one /30
whole year.
=. 'etirement #enefits of wor$ers paid #y results
The #asis for the determination of the salary for fifteen /3?0 days shall #e their
average daily salary /ADS0. The ADS is derived #y dividing the total salary or earnings
for the last twelve months rec$oned from the date of retirement #y the num#er of actual
91 !.e., (ross nd $%!tu' ne('ect of duty, frud, or co))!ss!on of cr!)e
92 8or t$e purpose of co)put!n( ret!re)ent py, @oneA$'f )ont$ s'ry@ s$'' !nc'ude '' of t$e fo''o/!n("
1. 8!fteen (15) dys s'ry %sed on t$e 'test s'ry rte=
2. 1s$ e5u!&'ent of f!&e (5) dys of ser&!ce !ncent!&e 'e&e=
3. .neAt/e'ft$ (1;12) of t$e t$!rteent$A)ont$ py.
(1;12 6 365;12 J .083 6 30.41 J 2.5)
9$us, IoneA$'f )ont$ s'ryK !s e5u!&'ent to 22.5 dys (Capitol 'ireless, Inc. vs. .onora,le Secretar%
$a. "ieves R. Confesor, 7. R. No. 117174, No&e)%er 13, 1996).
52
wor$ing days in that particular period provided that the determination of rates of
payment #y results are in accordance with the esta#lished regulations.
D. 'etirement #enefits of part-time wor$ers
I5ne month salaryJ for every year of service under 'A >7D3 after satisfying the
following conditions precedent for optional retirement.
/a0 there is no retirement plan #etween the employer and the employee and /#0 the
employee should have reached the age of si)ty /7A0 years and should have rendered at
least five /?0 years of service with the employer.
Applying the foregoing principle the components of retirement #enefit of part-
time wor$ers may li$ewise #e computed at least in proportion to the salary and related
#enefits due them.
?. Ta)a#ility
'A (o. <D6D e)tended the income ta) e)emption of retirement #enefits under 'A
D@3> to those received #y officials and employees in the private sector under the
provisions of 'A (o. >7D3. '.A. (o. >7D3 requires employers in the a#sence of
retirement plan or agreement to pay employees upon reaching the age of si)ty years or
more #ut not #eyond si)ty-five years and who have rendered at least five /?0 years in the
said esta#lishment a retirement #enefit equivalent to at least one-half month for every
year of service. +ompared to 'A (o. D@3> 'A (o. >7D3 specifies a shorter length of
service #ut longer age requirement.
The &I' held in various rulings that the ta) e)emption privilege granted to
retirement #enefits under 'A (o. >7D3 can only #e invo$ed when there is no e)isting
retirement plan +&A or other applica#le employment contract in the esta#lishment. In
the presence of a retirement plan duly approved #y the &I' +&A or applica#le
employment contract providing for retirement #enefits the same shall #e followed
provided that it shall not #e less than those provided under 'A (o. >7D3.
,. #omen #orkers
a. Provisions against discrimination
It shall #e unlawful for any employer to discriminate against any woman
employee with respect to terms and conditions of employment solely on account of her
se).
The following are acts of discrimination.
53
a. Payment of a lesser compensation including wage salary or other form of
remuneration and fringe #enefits to a female employees as against a male employee for
wor$ of equal value1 and

#. ;avoring a male employee over a female employee with respect to promotion
training opportunities study and scholarship grants solely on account of their se)es.
+riminal lia#ility for the willful commission of any unlawful act as provided in this
Article or any violation of the rules and regulations issued pursuant to Section 6 hereof
shall #e penali"ed as provided in Articles 6<< and 6<@ of this +ode. Provided That the
institution of any criminal action under this provision shall not #ar the aggrieved
employee from filing an entirely separate and distinct action for money claims which
may include claims for damages and other affirmative reliefs. The actions here#y
authori"ed shall proceed independently
of each other.
93
#. Stipulation against marriage
Chether as a condition of employment or continuation of employment
3. A woman employee shall not get married or
6. 9pon getting married a woman employee shall #e deemed resigned or
separated or to actually dismiss discharge discriminate or otherwise prejudice a woman
employee merely #y reason of her marriage.
94
c. Prohi#ited Acts
3. Denying any woman employee the #enefits provided for #y law or to discharge
any woman employed #y him for the purpose of preventing her from enjoying any of the
#enefits provided for #y law.
93 Art. 135
94 Art. 136
A /o)n /or,er )y not %e d!s)!ssed on t$e (round of d!s$onesty for $&!n( /r!tten
LFs!n('eK on t$e spce for c!&!' sttus on t$e pp'!ct!on s$eet, contrry to t$e fct t$t s$e /s
)rr!ed. (P)-) Co. v. "LRC, 7.R. No. 118978, Gy 23, 1997)
54
6. Discharging such woman on account of her pregnancy or while on leave or in
confinement due to her pregnancy1
=. Discharging or refusing the admission of such woman upon returning to her
wor$ for fear that she may again #e pregnant.
95
d. Anti-Se)ual :arassment Act
96

The Act punishes se)ual harassment if the same is.
3. wor$-related1 or
6. ,ducation-related1 or
=. training-related.
97
Se)ual harassment may #e committed #y an.

3. ,mployee
95 Art. 137
96 R.A. 7877
A dec'res se6u' $rss)ent un'/fu' !n t$e e)p'oy)ent, educt!on or tr!n!n( en&!ron)ent.
97 Sec. 3, !d.
55
6. 4anager
=. Supervisor
D. Agent of the employer
?. Teacher instructor professor
7. +oach trainer or
>.Any other person who having authority influence or moral ascendancy
over another in a wor$ or training or education environment.
a. Demands
#. 'equests or
c.
'equires any se)ual favor from the other regardless of whether the
demandrequest or requirement for su#mission is accepted #y the o#ject of
'.A.<>>>.
98

-. !mplo+ment of Minors
99

Feneral 'ule ,)ceptions
98 !%!d.
4t !s not necessry t$t t$e de)nd, re5uest or re5u!re)ent of se6u' f&or %e rt!cu'ted !n
cte(or!c' )nner. 4t )y %e d!scerned, /!t$ e5u' cert!tude, fro) t$e cts of t$e offender.
*!,e/!se, !t !s not essent!' t$t t$e de)nd re5uest or re5u!re)ent %e )de s cond!t!on
for cont!nued e)p'oy)ent or for pro)ot!on to
$!($er pos!t!on. 4t !s enou($ t$t t$e respondentFs cts resu't !n cret!n( n !nt!)!dt!n(, $ost!'e or
offens!&e en&!ron)ent for t$e e)p'oyee. (#omin!o v. Ra%ala, 7.R. No. 155831, 8e%. 18, 2008)
99 R.A. 7678, R.A. 9231
56
3. (o person under 3< years of age will
#e allowed to #e employed in an underta$in
g
which is ha"ardous or deleterious
in nature.
6. (o employer shall discriminate against
any person in respect to terms and
conditions of employment on account of his
age.

A. &elow 3? yrs. 5ld
3. The child
100
wor$s directly under
the
sole responsi#ility of his parents or
guardians who employ mem#ers of
his family su#ject to the following
conditions.
a. ,mployment does not endanger
the child-s safety health and morals
#. ,mployment does not impair the
child-s normal dev-t.
c. ,mployerparent or legal guardian
provides the child with the primary
and!or secondary education prescri#ed
#y the Dept. of ,ducation
6. The child-s employment or
participation in pu#lic entertainment
or information through cinema theater
radio or television
is essential provided.
a. ,mployment contract is concluded
#y the child-s parents or legal guardian
100 9$e ter) @c$!'d@ s$'' pp'y to '' persons under e!($teen (18) yers of (e.
57
#. Cith the e)press agreement of
the child concerned if possi#le and
c. The approval of D52, the
following must #e complied
with.
i. The employment does not
involve advertisement or commercials
promoting alcoholic #everages
into)icating drin$s to#acco and its #y
products or e)hi#iting violence
ii. there is a written contract
approved #y D52,
iii. the conditions provided in
the first instance are met.
&. A#ove 3? #ut #elow 3< % may #e
employed in any nonha"ardous wor$
+. A#ove 3< % no prohi#ition
58
3. A child #elow fifteen /3?0 years of age
101
may #e allowed to wor$ for not more
than twenty /6A0 hours a wee$. Provided That the wor$ shall not #e more than four /D0
hours at any given day1
6. A child fifteen /3?0 years of age #ut #elow eighteen /3<0 shall not #e allowed to
wor$ for more than eight /<0 hours a day and in no case #eyond forty /DA0 hours a wee$1
=. (o child #elow fifteen /3?0 years of age shall #e allowed to wor$ #etween eight
oBcloc$ in the evening and si) oBcloc$ in the morning of the following day and no child
fifteen /3?0 years of age #ut #elow eighteen /3<0 shall #e allowed to wor$ #etween ten
oBcloc$ in the evening and si) oBcloc$ in the morning of the following day.
102
1011$!'dren %e'o/ f!fteen (15) yers of (e s$'' not %e e)p'oyed e6cept"
(1) #$en c$!'d /or,s d!rect'y under t$e so'e respons!%!'!ty of $!s;$er prents or 'e(' (urd!n nd
/$ere on'y )e)%ers of $!s;$er f)!'y re e)p'oyed" -ro&!ded, $o/e&er, 9$t $!s;$er e)p'oy)ent
ne!t$er endn(ers $!s;$er '!fe, sfety, $e't$, nd )or's, nor !)p!rs $!s;$er nor)' de&e'op)ent"
-ro&!ded, furt$er, 9$t t$e prent or 'e(' (urd!n s$'' pro&!de t$e s!d c$!'d /!t$ t$e prescr!%ed pr!)ry
nd;or secondry educt!on= or
(2) #$ere c$!'dMs e)p'oy)ent or prt!c!pt!on !n pu%'!c entert!n)ent or !nfor)t!on t$rou($ c!ne),
t$eter, rd!o, te'e&!s!on or ot$er for)s of )ed! !s essent!'" -ro&!ded, 9$t t$e e)p'oy)ent contrct !s
conc'uded %y t$e c$!'dMs prents or 'e(' (urd!n, /!t$ t$e e6press (ree)ent of t$e c$!'d concerned, !f
poss!%'e, nd t$e ppro&' of t$e Ceprt)ent of *%or nd +)p'oy)ent" -ro&!ded, furt$er, 9$t t$e
fo''o/!n( re5u!re)ents !n '' !nstnces re str!ct'y co)p'!ed /!t$"
() 9$e e)p'oyer s$'' ensure t$e protect!on, $e't$, sfety, )or's nd nor)' de&e'op)ent of t$e
c$!'d=
(%) 9$e e)p'oyer s$'' !nst!tute )esures to pre&ent t$e c$!'dMs e6p'o!tt!on or d!scr!)!nt!on t,!n( !nto
ccount t$e syste) nd 'e&e' of re)unert!on, nd t$e durt!on nd rrn(e)ent of /or,!n( t!)e= nd
(c) 9$e e)p'oyer s$'' for)u'te nd !)p'e)ent, su%:ect to t$e ppro&' nd super&!s!on of co)petent
ut$or!t!es, cont!nu!n( pro(r) for tr!n!n( nd s,!''s c5u!s!t!on of t$e c$!'d.
4n t$e %o&e e6cept!on' cses /$ere ny suc$ c$!'d )y %e e)p'oyed, t$e e)p'oyer s$'' f!rst secure,
%efore en((!n( suc$ c$!'d, /or, per)!t fro) t$e Ceprt)ent of *%or nd +)p'oy)ent /$!c$ s$''
ensure o%ser&nce of t$e %o&e re5u!re)ents. (Sect!on 12, R.A. No. 7610, s )ended %y R. A. No. 9231,
Cece)%er 19, 2003).
102Sec. 12AA, R.A. No. 7610, s )ended %y R. A. No. 9231, Cece)%er 19, 2003.
59
D. (o child shall #e employed as a model in any advertisement directly or
indirectly promoting alcoholic #everages into)icating drin$s to#acco and its #yproducts
gam#ling or any form of violence or pornography.
103
1.. "ouseelpers
104

A househelper is synonymous to domestic servant

a. Any person male or female1
#. Cho renders services in and a#out the employers home and1
c. Services are usually necessary or desira#le for the maintenance
and
enjoyment thereof and
d. 4inisters e)clusively to the personal comfort and enjoyment of
employers- family.
105


:ousehelpers shall #e paid the following minimum wage rates1
/30 ,ight hundred pesos /P<AA.AA0 a month for househelpers in 4anila Gue"on
Pasay and +aloocan cities and municipalities of 4a$ati San Muan 4andaluyong
4untinlupa (avotas 4ala#on ParaNaque 2as PiNas Pasig 4ari$ina 8alen"uela
Taguig and Pateros in 4etro 4anila and in highly ur#ani"ed cities1
103 Sec. 14, R.A. No. 7610, s )ended %y R. A. No. 9231, Cece)%er 19, 2003.
104 *%or 1ode s )ended %y R.A. No. 7655, n Act 4ncres!n( t$e G!n!)u) #(e of Bouse$e'pers
105 9$e c$!'dren nd re't!&es of $ouse$e'per /$o '!&e under t$e e)p'oyersF roof nd /$o s$re
t$e cco))odt!ons pro&!ded for t$e $ouse$e'per %y t$e e)p'oyer s$'' not %e dee)ed s
$ouse$e'pers !f;t$ey re not ot$er/!se en((ed s suc$ nd re not re5u!red to perfor) ny
su%stnt!' $ouse$o'd /or,. (Sec 3, Ru'e N44, ?oo, 444, 4RR)
9$e def!n!t!on of $ouse$e'per cnnot %e !nterpreted to !nc'ude $ouse$e'p or 'undry /o)en
/or,!n( !n stff$ouses of co)pny. (APE/ $inin! CO., Inc., v. "LRC, 7.R. No. 94951, Apr!' 22, 1991)
60
/60 Si) hundred fifty pesos /P7?A.AA0 a month for those in other chartered cities
and first class municipalities1 and
/=0 ;ive hundred fifty pesos /P??A.AA0 a month for those in other municipalities1
Provided that the employees shall review the employment contracts of their
househelpers every three /=0 years with the end in view of improving the terms and
conditions thereof.
Provided further that those househelpers who are receiving at least 5ne thousand
pesos /P3AAA.AA0 shall #e covered #y the Social Security System /SSS0 and #e entitled to
all the #enefits provided thereunder.
106
:ousehold Service under the +ivil +ode.
:ousehold service shall always #e reasona#ly compensated. Any
stipulation that household service is without compensation shall #e void. Such
compensation shall #e in addition to the house helperBs lodging food and medical
attendance.
107
The head of the family shall furnish free of charge to the house helper
106 R.A. 7655, Sec. 1, )end!n( Art. 143 of t$e *%or 1ode
107 Art. 1689
61
suita#le and sanitary quarters as well as adequate food and medical attendance.
108
If the house helper is under the age of eighteen years the head of the
family shall give an opportunity to the house helper for at least elementary
education. The cost of such education shall #e a part of the house helperBs
compensation unless there is a stipulation to the contrary.
109
(o contract for household service shall last for more than two years.
:owever such contract may #e renewed from year to year.
110
The house helperBs clothes shall #e su#ject to stipulation. :owever any
contract for household service shall #e void if there#y the house helper cannot
afford to acquire suita#le clothing.
111
The head of the family shall treat the house helper in a just and humane
108 Art. 1690
109 Art. 1691
110 Art. 1692
111 Art. 1693
62
manner. In no case shall physical violence #e used upon the house helper.
112
:ouse helpers shall not #e required to wor$ more than ten hours a day.
,very house helper shall #e allowed four daysB vacation each month with pay.
113
In case of death of the house helper the head of the family shall #ear the
funeral e)penses if the house helper has no relatives in the place where the head
of the family lives with sufficient means therefor.
114
If the period for household service is fi)ed neither the head of the family
nor the house helper may terminate the contract #efore the e)piration of the term
e)cept for a just cause. If the house helper is unjustly dismissed he shall #e paid
the compensation already earned plus that for fifteen days #y way of indemnity. If
the house helper leaves without justifia#le reason he shall forfeit any salary due
him and unpaid for not e)ceeding fifteen days.
115
If the duration of the household service is not determined either #y
stipulation or #y the nature of the service the head of the family or the house
helper may give notice to put an end to the service relation according to the
following rules.
112 Art. 1694
113 Art. 1695
114 Art. 1696
115 Art. 1697
63
/30 If the compensation is paid #y the day notice may #e given on any day
that the service shall end at the close of the following day1
/60 If the compensation is paid #y the wee$ notice may #e given at the
latest on the first #usiness day of the wee$ that the service shall #e terminated at
the end of the seventh day from the #eginning of the wee$1
/=0 If the compensation is paid #y the month notice may #e given at the
latest on the fifth day of the month that the service shall cease at the end of the
month.
116
9pon the e)tinguishment of the service relation the house helper may
demand from the head of the family a written statement on the nature and duration
of the service and the efficiency and conduct of the house helper.
117
11. !mplo+ment of "omeworkers
:omewor$ers refer to wor$ers who perform in or a#out their homes any
processing of goods or materials in whole or in part which have #een furnished directly
or indirectly #y an employer or contractor and thereafter to #e returned to the latter. The
term does not include those situated within the premises or compound of an employer or
contractor where wor$ performed therein is under the active or personal supervision #y
or for the latter.
The employer is required to pay the homewor$er or the contractor or su#-
contractor for the wor$ performed immediately upon receipt of the finished goods or
articles. Chen payment is made to a contractor or su#-contractor the homewor$er shall
#e paid within one /30 wee$ after the contractor or su#contractor has collected the goods
or articles from the homewor$er.
118
116 Art. 1698
117 Art. 1699
64
Chenever an employer contracts with a contractor in this regard the employer
should provide in such contract that the employees or homewor$ers of the contractor and
the latter-s su#contractor shall #e paid in accordance with these regulations. In the event
that such contractor or su#contractor fails to pay the wages or earnings of his employees
or homewor$ers such employee shall #e jointly and severally lia#le with the contractor
or su#contractor to the wor$ers of the latter to the e)tent that the wor$ is performed
under such contract in the same manner as if the employees or homewor$ers were
directly engaged #y the employer.
119
(o deductions shall me made from the homewor$er-s earnings for the value of
materials lost destroyed soiled or otherwise damaged unless the following conditions are
met.
a0 the homewor$er concerned is clearly shown to #e responsi#le for the loss or
damage.
#0 the employee is given reasona#le opportunity to show cause why deductions
should not #e made.
c0 the amount of such deductions is fair and reasona#le and shall not e)ceed the
actual loss or damage1 and
d0 the deduction is made at such rate that the amount deducted does not e)ceed 6A
percent of the homewor$er-s earnings in a wee$.
120
12. /pprentices and Learners
118 Co)est!c or $ouse$o'd ser&!ceK )ens ser&!ce !n t$e e)p'oyerFs $o)e /$!c$ !s usu''y necessry
or des!r%'e for t$e )!ntennce nd en:oy)ent t$ereof nd !nc'udes )!n!ster!n( to t$e person' co)fort
nd con&en!ence of t$e )e)%ers of t$e e)p'oyerFs $ouse$o'd, !nc'ud!n( ser&!ces of f)!'y dr!&ers (Art.
141, 2
nd
pr.)
Ru'e N444, ?oo, 444, Secs. 3 O 4, .R
119 !%!d, Sec. 8, .R.
120 Ru'e N444, Sec. 5, .R. 9$!s !s to ensure t$e $o)e/or,erFs r!($t to due process.
65
Apprentice - a wor$er who is covered #y a written apprenticeship agreement with
an employer.

2earner - a person hired as a trainee in industrial occupations which are non-
apprenticea#le and which may #e learned through practical training on the jo# for a
period not e)ceeding three /=0 months whether or not such practical training is
supplemented #y theoretical instructions.
2earnership Apprenticeship
(ature
Training on the jo# in semi-s$illed and othe
r
industrial occupation or trades which are
nonapprenticea#le and which may #e
learned thru practical training on the jo# in
a relatively short period of time.
Training in trades which
are apprenticea#le
that is practical training on the jo#
supplemented #y related theoretical
instruction for more than = months.
Duration of training
Cith commitment to employ the learner as
a regular employer if he desires upon
completion of learnership.
(o commitment to hire
In case of pretermination of contract
+onsidered a regular employee if pre-
termination occurs after 6 months of trainin
g and the dismissal is without fault of the
learner.
Cor$er not considered
as regular employee.
66
+overage
Semis$illed!Industrial occupations
:ighly technical industries and only in
industrial occupation
There is a list of learna#le trades #y T,SD
A
(o list
Critten agreement
'equire 2earnership Agreement 'equires Apprenticeship Agreement
M. Persons wit disabilit+
121
3. Definition
5ne whose earning capacity is impaired #y age physical or mental deficiency1 or
injury.
6. 'ights of persons with disa#ility
3. ,qual opportunity for employment
6. Sheltered employment
122

=. Apprenticeship
121 R.A. No. 7277, s )ended %y R.A. No. 9442
122 9$e (o&Ft s$'' ende&or to pro&!de t$e) /or, !f su!t%'e e)p'oy)ent for d!s%'ed persons cnnot
%e found t$rou($ open e)p'oy)ent
67
D. 8ocational reha#ilitation
123
?. 8ocational guidance and counseling.
=. Prohi#ition on discrimination against persons with disa#ility
(o disa#le person shall #e denied access to opportunities for suita#le
employment. A qualified disa#led employee shall #e su#ject to the same terms
and conditions of employment and the same compensation privileges #enefits
fringe #enefits incentives or allowances as a qualified a#le #odied person. ;ive
percent /?H0 of all casual emergency and contractual positions in the Departments of
Social Celfare and Development1 :ealth1 ,ducation +ulture and Sports1 and other
government agencies office or corporations engaged in social development shall #e
reserved for disa#led persons.
124

D. Incentives for employers
,ntitled to an additional deduction from their gross income equivalent to twenty-
five percent /6?H0 of the total amount paid as salaries and wages to disa#led persons.
Provided however That such entities present proof as certified #y the Department of
2a#or and ,mployment that disa#led persons are under their employ. Provided further
That the disa#led employee is accredited with the Department of 2a#or and ,mployment
and the Department of :ealth as to his disa#ility s$ills and qualifications.
Private entities that improve or modify their physical facilities in order to provide
reasona#le accommodation for disa#led persons shall also #e entitled to an additional
deduction from their net ta)a#le income equivalent to fifty percent /?AH0 of the direct
123 )ens to de&e'op t$e s,!''s nd potent!'s of d!s%'ed /or,ers nd en%'e t$e) to co)pete !n t$e
'%or )r,et
124 9$e G(n 1rt str!ct'y pro$!%!ts d!scr!)!nt!on (!nst 5u'!f!ed d!s%'ed person, e&en s t$e '/
(!&es !ncent!&es to e)p'oyers of d!s%'ed persons.
68
costs of the improvements or modifications. This does not apply to improvements or
modifications of facilities required under 0atas Pambansa 0ilang =DD.
125
D. TERMINATION OF EMPLOYMENT
1. !mplo+er1!mplo+ee Relationsip
a. ;our-fold Test
. Selection and engagement of employee1
%. Payment of wages1
c. Power of dismissal1 and
d. Power of control
126

#. Einds of ,mployment
125 Sec. 8, R.A. 7277
126 t$e )ost !)portnt test
69
3. Pro#ationary ,mployment
,mployment where the employee upon his engagement.
3. Is made to undergo a trial period
2. During which the employer determines his fitness to qualify for regular
employment
=. &ased on reasona#le standards made $nown to the employee at the time
of
engagement.
127

Feneral 'ule Pro#ationary employment shall not e)ceed si) months from the
date the employee started wor$ing.
,)ceptions 3. when it is covered #y an apprenticeship agreement stipulating a
longer period1 or
6. when the parties to an employment contract agree otherwise
127 Sec 6, Ru'e 4, ?oo, >4, 4RR
9$e ser&!ces of n e)p'oyee /$o $s %een en((ed on pro%t!onry %s!s )y %e ter)!nted
on'y for :ust cuse, /$en $e f!'s to 5u'!fy s re(u'r e)p'oyee !n ccordnce /!t$ reson%'e
stndrds prescr!%ed %y t$e e)p'oyer.
70
such as when the same is esta#lished #y company policy or when
the same is required #y the nature of the wor$ to #e performed #y
the employee
6. 'egular employment
128
Chere.
i. the employee has #een engaged to perform activities which are usually
necessary or desira#le in the usual #usiness or trade of the employer.
ii. the employee has rendered at least one /30 year of service whether such
service is continuous or #ro$en with respect to the activity in which he is employed and
his employment shall continue while such activity e)ists.
iii. the employee is allowed to wor$ after a pro#ationary period.
/D0 Project employment
Chere the employment has #een fi)ed for a specific project or underta$ing the
completion or termination of which has #een determined at the time of the engagement of
the employee.
/?0 Seasonal employment
Chere the wor$ or service to #e performed #y the employee is seasonal in nature
and the employment is for the duration of the season.
/D0 +asual employment
128 Re(u'r!0t!on !s not )n(e)ent prero(t!&e= !t !s t$e nture of e)p'oy)ent t$t deter)!nes !t. 4t !s )ndte of t$e '/. (PAL v. Pascua, 7.R. No. 143258, Au(. 15, 2003)
Re(u'r e)p'oy)ent does not )en per)nent e)p'oy)ent. A pro%t!onry e)p'oyee %eco)es
re(u'r e)p'oyee fter 6 )ont$s. A re(u'r e)p'oyee )y on'y %e
ter)!nted for :ust;ut$or!0ed cuses.
9$e prct!ce of enter!n( !nto e)p'oy)ent contrcts /$!c$ /ou'd pre&ent t$e /or,ers fro)
%eco)!n( re(u'r s$ou'd %e struc, do/n s contrry to pu%'!c po'!cy nd )or's. (*niversal Ro,ina
Corp. v. Catapan!, 7.R. No. 164736, .ct. 14, 2005)
71
Chere an employee is engaged to perform a jo# wor$ or service which is merely
incidental to the #usiness of the employer and such jo# wor$ or service is for a definite
period made $nown to the employee at the time of engagement.
/?0 ;i)ed term employment
(ot limited to those #y nature seasonal or for specific projects with pre-
determined dates of completion provided under the 2a#or +ode. They also include
contracts to which the parties #y free choice have assigned a specific date of termination
c. Mo# contracting
It refers to an arrangement where#y a principal agrees to put out or farm out with
a contractor or su#contractor the performance or completion of a specific jo# wor$ or
service within a definite or predetermined period regardless of whether such jo# wor$ or
service is to #e performed or completed within or outside the premises of the principal.
a. Article 3A7 to Article 3A@ of the 2a#or +ode
Chenever an employer enters into a contract with another person for the
performance of the former-s wor$ the employees of the contractor and of the latter-s
su#contractor if any shall #e paid in accordance with the provisions of this +ode. In the
event that the contractor or su#contractor fails to pay the wages of his employees in
accordance with this +ode the employer shall #e jointly and severally lia#le with his
72
contractor or su#contractor to such employees to the e)tent of the wor$ performed under
the contract in the same manner and e)tent that he is lia#le to employees directly
employed #y him. The Secretary of 2a#or and ,mployment may #y appropriate
regulations restrict or prohi#it the contracting out of la#or to protect the rights of wor$ers
esta#lished under this +ode. In so prohi#iting or restricting he may ma$e appropriate
distinctions #etween la#or-only contracting and jo# contracting as well as differentiations
within these types of contracting and determine who among the parties involved shall #e
considered the employer for purposes of this +ode to prevent any violation or
circumvention of any provision of this +ode.
There is Ola#or-onlyO contracting where the person supplying wor$ers to an
employer does not have su#stantial capital or investment in the form of tools equipment
machineries wor$ premises among others and the wor$ers recruited and placed #y such
person are performing activities which are directly related to the principal #usiness of
such employer. In such cases the person or intermediary shall #e considered merely as an
agent of the employer who shall #e responsi#le to the wor$ers in the same manner and
e)tent as if the latter were directly employed #y him.
129
The provisions of the immediately preceding article shall li$ewise apply to any
person partnership association or corporation which not #eing an employer contracts
with an independent contractor for the performance of any wor$ tas$ jo# or project.
130

An employer or indirect employer may require the contractor or su#contractor to
furnish a #ond equal to the cost of la#or under contract on condition that the #ond will
answer for the wages due the employees should the contractor or su#contractor as the
case may #e fail to pay the same.
131
129 Art. 106
130 Art. 107
131 Art. 108
73
The provisions of e)isting laws to the contrary notwithstanding every employer
or indirect employer shall #e held responsi#le with his contractor or su#contractor for any
violation of any provision of this +ode. ;or purposes of determining the e)tent of their
civil lia#ility under this +hapter they shall #e considered as direct employers.
132
#. Department 5rder (o. 3<-A
133
c. Department +ircular (o. A3-36
134
d. ,ffects of 2a#or-5nly +ontracting
i. The su#contractor will #e treated as the agent or intermediary of the principal.
Since the act of an agent is the act of the principal representations made #y the
su#contractor to the employees will #ind the principal.
ii. The principal will #ecome the employer as if it directly employed the wor$ers
engaged to underta$e the su#contracted jo# or service. It will #e responsi#le to them for
all their entitlements and #enefits under the la#or laws.
iii. The principal and the su#contractor will #e solidarily treated as the employer.
iv. The employees will #ecome employees of the principal.
135
132 Art. 109
133 See Reference
134 4%!d.
135 No. 13, C.*+ -r!)er on 1ontrct!n( nd Su%contrct!n(, +ffects of Ceprt)ent .rder No. 3, Ser!es of
2001.
74
If the la#or-only contracting activity is underta$en #y a legitimate la#or
organi"ation a petition for cancellation of union registration may #e filed against it.
136
e. Trilateral relationship in jo# contracting
The relationship in a contracting or su#contracting arrangement where there is a
contract for a specific jo# wor$ or service #etween the principal and the contractor and a
contract of employment #etween the contractor and its wor$ers. There are three /=0
parties involved in these arrangements. the principal who decides to farm out a jo# wor$
or service to a contractor1 the contractor who has the capacity to independently underta$e
the performance of the jo# wor$ or service1 and the contractual wor$ers engaged #y the
contractor to accomplish the jo# wor$ or service.
137

2. 2ismissal from !mplo+ment
/30 Must +auses
/a0 Serious misconduct
138
or willful diso#edience
139
/#0 Fross
140
and ha#itual neglect
141
of duties
136 4%!d.
137 Sec. 3 ()), Ceprt)ent .rder No. 18AA
75
/c0 ;raud
142
or willful #reach of trust
143

/d0 A#andonment of employment
144
/e0 Termination of employment pursuant to a 9nion
Security +lause
145
/f0 Totality of infractions doctrine
146
/60 Authori"ed +auses
/a0 'edundancy
147
'etrenchment and +losure
138 9rns(ress!on of so)e est%'!s$ed nd def!n!te ru'e of ct!on, for%!dden ct, dere'!ct!on of duty,
/!''fu' !n c$rcter, nd !)p'!es /ron(fu' !ntent nd not )ere error !n :ud()ent.
7r&e nd ((r&ted c$rcter nd not )ere'y tr!&!' or un!)portnt= Gust %e !n connect!on /!t$ t$e
/or, of t$e e)p'oyee.
139 +'e)ents"
Ass!'ed conduct )ust $&e %een /!''fu' or !ntent!on', /!''fu'ness c$rcter!0ed %y /ron(fu',
per&erse )ent' tt!tude
4t )ust %e est%'!s$ed t$t t$e s!d orders, re(u't!ons or !nstruct!ons re
Reson%'e nd '/fu'
Suff!c!ent'y ,no/n to t$e e)p'oyee
4n connect!on /!t$ $!s dut!es
1404)p'!es /nt or %sence of or f!'ure to e6erc!se s'!($t cre of d!'!(ence or t$e ent!re %sence of
cre. 4t e&!nces t$ou($t'ess d!sre(rd of conse5uences /!t$out e6ert!n( ny effort to &o!d t$e).
Bo/e&er, suc$ ne('ect )ust not on'y %e (ross %ut $%!tu' !n c$rcter (+ud% Pils. v. "LRC, 7.R. No.
111934, Apr!' 29, 1998)
141 4)p'!es repeted f!'ure to perfor) oneFs dut!es o&er per!od of t!)e, depend!n( upon t$e
c!rcu)stnce
76
'edundancy 'etrenchment +losure
,)ists where the services of
an employee are in e)cess
of what would reasona#ly
#e demanded #y the actual
requirements of the
enterprise.
A position is redundant
+utting of e)penses and
includes the reduction of
personnel. It is a
management prerogative
a means to protect and
preserve the employer-s
via#ility and ensure his
survival. To #e an
The reversal of fortune
of the employer where#y
there is a complete
cessation
of #usiness operations
to prevent further financial
drain upon an employer
who cannot pay anymore
142 1o))!ss!on of frud %y n e)p'oyee (!nst t$e e)p'oyer /!'' necessr!'y resu't !n t$e 'tterMs 'oss of
trust nd conf!dence !n t$e for)er. -roof of 'oss !s not re5u!red under t$!s (round.
143 'oss of trust nd conf!dence
4n order to const!tute :ust cuse for d!s)!ss', t$e ct co)p'!ned of s$ou'd %e I/or,Are'tedK nd
)ust s$o/ t$t t$e e)p'oyee concerned !s unf!t to cont!nue to /or, for t$e e)p'oyer.
Re5u!s!tes
1. 9$e 'oss of conf!dence )ust not %e s!)u'ted=
2. 4t s$ou'd not %e used s su%terfu(e for cuses /$!c$ re !''e(', !)proper or un:ust!f!ed=
3. 4t )y not %e r%!trr!'y sserted !n t$e fce of o&er/$e')!n( e&!dence to t$e contrry=
4. 4t )ust %e (enu!ne, not )ere ftert$ou($t, to :ust!fy er'!er ct!on t,en !n %d f!t$= nd
5. 9$e e)p'oyee !n&o'&ed $o'ds pos!t!on of trust nd conf!dence.
144 9$e f!'ure to report for /or, or %sence /!t$out &'!d or :ust!f!%'e reson nd c'er !ntent!on to
se&er t$e e)p'oyerAe)p'oyee re't!ons$!p
145 4n t$e cse of Ala,an! Countr% Clu,, Inc. vs. "LRC, 27.R. No. 170287, 8e%. 14, 20083, t$e Supre)e
1ourt dec'red t$t !n ter)!nt!n( t$e e)p'oy)ent of n e)p'oyee %y enforc!n( t$e un!on secur!ty c'use,
t$e e)p'oyer needs on'y to deter)!ne nd pro&e t$t"
77
when it is superfluous.
An employer has no legal
o#ligation to $eep on the
payroll employees more
than the num#er needed for
the operation of the
#usiness.
authori"ed cause it must #e
affected in good faith and
for the retrenchment
which is after all a
drastic recourse with
serious consequences for
the livelihood of the
employee-s or otherwise
his employees since
#usiness
has already stopped.

(1) t$e un!on secur!ty c'use !s pp'!c%'e=
(2) t$e un!on !s re5uest!n( for t$e enforce)ent of t$e un!on secur!ty pro&!s!on !n t$e 1?A= nd
(3) t$ere !s suff!c!ent e&!dence to support t$e un!onFs dec!s!on to e6pe' t$e e)p'oyee fro) t$e un!on.
9$e fore(o!n( re5u!s!tes const!tute :ust cuse for ter)!nt!n( n e)p'oyee %sed on t$e 1?AFs un!on
secur!ty pro&!s!on.
+)p'oyer s$ou'd st!'' fford due process to t$e e6pe''ed un!on!sts. A't$ou($ t$e Supre)e 1ourt $s ru'ed
t$t un!on secur!ty c'uses e)%od!ed !n t$e 1?A )y %e &'!d'y enforced nd t$t d!s)!ss's pursunt
t$ereto )y '!,e/!se %e &'!d, t$!s does not erode t$e fund)ent' re5u!re)ent of due process. 9$e
reson %e$!nd t$e enforce)ent of un!on secur!ty c'uses /$!c$ !s t$e snct!ty nd !n&!o'%!'!ty of
contrcts, cnnot o&err!de oneFs r!($t to due process.
146 1o(nte offenses ru'e
C!s)!ss' due to repet!t!on of re'ted offenses, e&en !f 'redy pun!s$ed /!t$ 'ess pun!t!&e snct!ons.
4t !s t$e tot'!ty, not t$e co)prt)ent'!0t!on of co)pny !nfrct!ons t$t t$e e)p'oyee $s
co))!tted, /$!c$ :ust!f!es t$e pen'ty of d!s)!ss' ($ERALCO v. "LRC, 7.R. No. 114129, .ct. 24, 1996).
147 A pos!t!on !s redundnt /$en !t !s superf'uous.
An e)p'oyer $s no 'e(' o%'!(t!on to ,eep on t$e pyro'' e)p'oyees )ore t$n t$e nu)%er needed
for t$e opert!on of t$e %us!ness.
78
laidoff.
/#0 Disease or illness
148
!. The employee suffers from a disease1
ii. :is continued employment is prohi#ited #y law or prejudicial to his
health or to the health of his coemployees.
149
iii. Cith a certification #y competent pu#lic health
authority that the disease is
incura#le within 7 months despite due medication and treatment.
150

=. Due Process
) Twin-notice requirement
148 ?urden of proof rests on t$e e)p'oyer. 1o)pny p$ys!c!n !s not Ico)petent pu%'!c $e't$ ut$or!ty.K
Ged!c' cert!f!cte !ssued %y co)pny doctor !s not suff!c!ent
149 Sec.8, Ru'e 4, ?oo, >4, 4RR
150 Solis v. "LRC, 7.R. No. 116175, .ct. 28,1996
79
A written notice should #e served to the employee specifying the ground!s
for termination and giving the said employee reasona#le opportunity to e)plain.
151


A written notice of termination - If termination is the decision of the
employer it should #e served on the employerindicating that upon due considerations of
all the circumstance grounds have #een esta#lished to justify his
termination at least one month prior to his termination.
152

#0 :earing1 meaning of opportunity to #e heard
A formal hearing or conference #ecomes mandatory only when requested #y the
employee in writing or su#stantial evidentiary disputes e)ist or a company rule or
practice requires it or when similar circumstances justify it
OAmple opportunity to #e heardO means any meaningful opportunity
153
given to
the employee to answer the charges against him and su#mit evidence in support of his
defense whether in a hearing conference or some other fair just and reasona#le way.
The Oample opportunity to #e heardO standard in the 2a#or +ode prevails over the
Ohearing or conferenceO requirement in the implementing rules and regulations.
c. 'eliefs for illegal dismissal
151 9$!s f!rst /r!tten not!ce )ust ppr!se t$e e)p'oyee t$t $!s ter)!nt!on !s %e!n( cons!dered
due to t$e cts stted !n t$e not!ce. (Pil. Pi00a Inc. v. Bun!a,on!, 7.R. No. 154315, Gy 9, 2005)
152 S!n('e not!ce of ter)!nt!on does not co)p'y /!t$ t$e re5u!re)ents of t$e '/. (Alde!uer -
Co., Inc. vs. .one%line )om,oc)
7.R. No. 147633, Hu'y 28, 2008)
153 &er%' or /r!tten
80
/30 'einstatement
154
. Pending appeal
The decision of the 2a#or Ar#iter reinstating a dismissed or separated employee
insofar as the reinstatement aspect is concerned shall immediately #e e)ecutory even
pending appeal. The employee shall either #e admitted #ac$ to wor$ under the same
terms and conditions prevailing prior to his dismissal or separation or at the option of the
employer merely reinstated in the payroll. The posting of a #ond #y the employer shall
not stay the e)ecution for reinstatement.
155
#. Separation pay
156
in lieu of 'einstatement
4ay #e viewed in D ways.
3. In lieu of reinstatement in illegal dismissal cases where ,e is ordered
reinstated #ut reinstatement is not feasi#le.
154 restort!on to stte fro) /$!c$ one $s %een re)o&ed
155 Art. 223, 3
rd
pr., *1
156 Re!nstte)ent cn no 'on(er %e effected !n &!e/ of t$e 'on( pss(e of t!)e or %ecuse of t$e
re'!t!es of t$e s!tut!on.
4t !s t$e )ount t$t n e)p'oyee rece!&es t t$e t!)e of $!s se&ernce fro) t$e ser&!ce nd !s
des!(ned to pro&!de t$e e)p'oyee /!t$ t$e /$ere/!t$' dur!n( t$e per!od t$t $e !s 'oo,!n( for not$er
e)p'oy)ent.
Seprt!on py !s py%'e to n e)p'oyee /$ose ser&!ces re &'!d'y ter)!nted for ut$or!0ed cuses
(Art!c'e 283 nd 284).
An e)p'oyee d!s)!ssed for :ust cuse !s not ent!t'ed to seprt!on py (Art!c'e 282).
+6cept!on"
#$ere t$e e)p'oyee !s d!s)!ssed for cuses ot$er t$n ser!ous )!sconduct or t$ose ref'ect!n( on $!s
)or' c$rcter, seprt!on py )y %e ''o/ed s )esure of soc!' :ust!ce
81
6. As ,r-s statutory o#ligation in cases of legal termination due to
authori"ed causes under Art. 6<= and 6<D
157
of the 2+.
=. As financial assistance as an act of social justice and even in case of legal
dismissal under Art. 6<6
158
of the 2+.
D. As employment #enefit granted in +&A or company policy.
159
/60 &ac$wages
160
a. +omputation
157 see Reference
158 4%!d.
159 -o5u!0, 2005
82
;ollowing several decisions of the Supreme +ourt the following #enefits in
addition to the #asic salary should #e ta$en into account in the computation of
#ac$wages if applica#le.
3. ;ringe #enefits or their monetary equivalent.
161

6. Increases in compensation and other #enefits including 3=
th
month pay
162
=. Transportation and emergency allowances
163

D. :oliday pay vacation and sic$ leaves and service incentive leaves
164

?. Must share in the service charges
165

160 9$ere !s resu'tnt str!ned re't!ons or !rretr!e&%'e estrn(e)ents %et/een t$e e)p'oyer nd
t$e e)p'oyee /$ere t$e e)p'oyee concerned occup!es pos!t!on of trust nd conf!dence nd !t !s '!,e'y
t$t !f re!nstted n t)osp$ere of nt!pt$y nd nt(on!s) )y %e (enerted s to d&erse'y ffect t$e
eff!c!ency nd product!&!ty of t$e e)p'oyee.
A for) of re'!ef t$t restores t$e !nco)e of t$e e)p'oyee t$t /s 'ost %y reson of t$e un'/fu'
d!s)!ss'.
8u'' ?c,/(es $&e to %e p!d %y n e)p'oyer s prt of t$e pr!ce or pen'ty $e $s to py for !''e(''y
d!s)!ss!n( $!s e)p'oyee. .t$er %enef!ts )ust %e p!d !n dd!t!on to %c,/(es. 9$e co)putt!on s$ou'd
%e %sed on t$e /(e rte 'e&e' t t$e t!)e of t$e !''e(' d!s)!ss' nd not !n ccordnce /!t$ t$e 'test,
current /(e 'e&e' of t$e e)p'oyeeFs pos!t!on.
161 Acesite Corporation vs. "LRC, 1. R. "o. 234567, +an. 48, 466
162 )raders .ouse, Inc. vs. "LRC, 1. R. "o. 246899, #ec. 42, 2::7, 566 SCRA 586
163 Santos vs. "LRC, 1. R. "o. 98942, Sept. 42, 2:79; Soriano vs. "LRC, 1. R. "o. L<93326, Oct. 49, 2:79..
83
7. Fasoline car and representation allowances
166

>. Any other allowances and #enefits or their monetary equivalent.
167

The computation of said #enefits should #e up to the date of reinstatement as
provided under Article 6>@
168
of the 2a#or +ode.
169

%. 2imited #ac$wages
An illegally dismissed employee is entitled to reinstatement to his previous
position without loss of seniority rights and #ac$wages for a period of three /=0 years
164 St. Louise Colle!e of )u!ue!arao vs. "LRC, 1. R. "o. 9=42=, Au!. 52, 2:7:; On service incentive
leave, see Fernande0 vs. "LRC, 1. R. "o. 2637:4, +an. 47, 2::7, 473 SCRA 2=:..
165 $arana( .otels - Resort Corporation vs. "LRC, 1. R. "o. 245776, Fe,. 45, 2:::>.
166 1onso'!dted Rur' ?n, 21(yn ?alle%@, Inc. vs. "LRC, 1. R. "o. 245726, +an. 46, 2:::, 562 SCRA
445.
167 ?'ue C!ryCorporation vs. "LRC, 1. R. "o. 24:7=5, Sept. 2=, 2:::.
168 See Reference
84
without qualification and deduction.
170
If reinstatement is no longer feasi#le the employer
may #e ordered to pay in addition to #ac$wages separation pay as provided #y law.O
/d0 Preventive Suspension
171
During pendency of the investigation if the wor$er-s continued employment
poses a serious and imminent threat to life and property of employer or of his co-
employees.
172
+an #e e)tended provided the employer pays the suspended employee his wages
and other #enefits.
/e0 +onstructive dismissal
An involuntary resignation resorted to when continued employment #ecomes
impossi#le unreasona#le or unli$ely1 when there is a demotion in ran$ or a diminution
169 Fernande0 vs. "LRC, supr.
170 Gercury Cru( Ru'e
171 Ru'e pend!n( ppe'"
-re&ent!&e suspens!on !s pun!t!&e 'redy= $ence, !f e6onerted, t$e e)p'oyee )ust %e re!nstted nd
co)pensted for t$e per!od of $!s suspens!on
Suspens!on %eyond 30 dys r!pens to d!s)!ss'
172 G6 per!od" 30 dys
85
in pay1 or when a clear discrimination insensi#ility or disclaim #y an employer #ecomes
un#eara#le to an employee.
173
E. MANAGEMENT PREROGATIE
174
173 Leonardo v. "LRC, 7.R. No.125303, Hune 16, 2000
An e)p'oyee !s dee)ed construct!&e'y d!s)!ssed /$ere $!s sttus !s c$n(ed fro) re(u'r to csu'.
174 Limitations in its exercise
!. Gn(e)entMs prero(t!&es )ust %e /!t$out %use of d!scret!on (San $i!uel Bre(er% Sales Force
*nion AP)1'O> vs. Ople (170 S1RA 25 219893)
!!. 4t )ust %e du'y est%'!s$ed t$t t$e prero(t!&e %e!n( !n&o,ed !s c'er'y )n(er!' one.
!!!. 4t !s c!rcu)scr!%ed %y '!)!tt!ons found !n '/, co''ect!&e %r(!n!n( (ree)ent, or t$e (ener'
pr!nc!p'es of f!r p'y nd :ust!ce (*niversit% of Sto. )omas vs. "LRC, 190 S1RA 758 219903).
So 'on( s co)pnyMs )n(e)ent prero(t!&es re e6erc!sed !n (ood f!t$ for t$e d&nce)ent of
t$e e)p'oyerMs !nterest nd not for t$e purpose of defet!n( or c!rcu)&ent!n( t$e r!($ts of t$e e)p'oyees
under spec!' '/s or under &'!d (ree)ents, t$!s 1ourt /!'' up$o'd t$e) (San $i!uel Bre(er% Sales
Force *nion AP)1'O> vs. Ople case>
86
1. 2iscipline
175
The employer-s right to conduct the affairs of his #usiness according to its own
discretion and judgment includes the prerogative to instill discipline in its employees and
to impose penalties including dismissal upon erring employees. This is a management
prerogative where the free will of management to conduct its own affairs to achieve its
purpose ta$es form. The only criterion to guide the e)ercise of its management
prerogative is that the policies rules and regulations on wor$-related activities of the
employees must always #e fair and reasona#le and the corresponding penalties when
prescri#ed commensurate to the offense involved and to the degree of the infraction.
176
Instilling discipline among its employees is a #asic management right and
prerogative. 4anagement may lawfully impose reasona#le penalties such as dismissal
upon an employee who transgresses the company rules and regulations.
177

2. (ransfer of emplo+ees
178
175 su%:ect to reson%'e re(u't!on %y t$e Stte !n t$e e6erc!se of !ts po'!ce po/er. (Assoc!ted *%or
En!onsA9E1- &s. N*R1, 7. R. No. 120450, 8e%. 10, 1999= -*C9 &s. N*R1, 276 S1RA 1 219973).
176 St. G!c$e'Fs 4nst!tute &s. Sntos, 7. R. No. 145280, Cec. 4, 2001= 1onso'!dted 8ood 1orport!on &s.
NR*1, 315 S1RA 129, 139 219993
177 Ce'es, Hr. &s. N*R1, 7. R. No. 121348, Grc$ 9, 2000.
87
The Supreme +ourt has recogni"ed and upheld the prerogative of management to
transfer an employee from one office to another within the #usiness esta#lishment
provided there is no demotion in ran$ or diminution of salary #enefits and other
privileges1 and the action is not motivated #y discrimination made in #ad faith or
effected as a form of punishment or demotion without sufficient cause. This is a privilege
inherent in the employer-s right to control and manage its enterprise effectively.
179
3. Productivit+ standard
The practice of a company in laying off wor$ers #ecause they failed to ma$e the
wor$ quota has #een recogni"ed in this jurisdiction.
180
;ailure to o#serve prescri#ed standards of wor$ or to fulfill reasona#le wor$
assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency
is understood to mean failure to attain wor$ goals or wor$ quotas either #y failing to
complete the same within the allotted reasona#le period or #y producing unsatisfactory
results. This management prerogative of requiring standards may #e availed of so long as
they are e)ercised in good faith for the advancement of the employerBs interest.
181
178 Hur!sprudent!' (u!de'!nes"
() trnsfer !s )o&e)ent fro) one pos!t!on to not$er of e5u!&'ent rn,, 'e&e' or s'ry /!t$out %re,
!n t$e ser&!ce or 'ter' )o&e)ent fro) one pos!t!on to not$er of e5u!&'ent rn, or s'ry=
(%) t$e e)p'oyer $s t$e !n$erent r!($t to trnsfer or ress!(n n e)p'oyee for 'e(!t!)te %us!ness
purposes=
(c) trnsfer %eco)es un'/fu' /$ere !t !s )ot!&ted %y d!scr!)!nt!on or %d f!t$ or !s effected s
for) of pun!s$)ent or !s de)ot!on /!t$out suff!c!ent cuse=
(d) t$e e)p'oyer )ust %e %'e to s$o/ t$t t$e trnsfer !s not unreson%'e, !ncon&en!ent, or pre:ud!c!'
to t$e e)p'oyee

179 $endo0a vs. Rural Ban& of Luc,an, 7. R. No. 155421, Hu'y 7, 2004= Ben!uet Electric Cooperative vs.
Fian0a, 7. R. No. 158606, Grc$ 9, 2004.
180 Pilippine American Em,roideries vs. Em,roider% and 1arment 'or&ers, 26 S1RA 634, 639.
88
3. 4rant of 0onus
&y definition a O#onusO is a gratuity or act of li#erality of the giver which the
recipient has no right to demand as a matter of right
182
.

It is something given in addition
to what is ordinarily received #y or strictly due the recipient. The granting of a #onus is
#asically a management prerogative which cannot #e forced upon the employer who may
not #e o#liged to assume the onerous #urden of granting #onuses or other #enefits aside
from the employeeBs #asic salaries or wages
183
especially so if it is incapa#le of doing so.
$. Cange of working ours
Cell-settled is the rule that management retains the prerogative whenever
e)igencies of the service so require to change the wor$ing hours of its employees.
184

The employer has the prerogative to control all aspects of employment in his
#usiness organi"ation such as hiring wor$ assignments wor$ing methods time place
and manner of wor$ tools to #e used processes to #e followed supervision of wor$ers
181 Buiser v. Leo!ardo, +r., 131 S1RA 151, 158 (1984).
182 )raders Ro%al Ban& v. "LRC, 189 S1RA 274 219903 citin! Ara!on v. Ce,u Portland Cement Co., 61 ..7.
4567.
183 Bama%a Point .otel v. "LRC, 177 S1RA 160 (1989).
184 Sime #ar,% Pilipinas, Inc. vs. "LRC, 7.R. No. 119205, 15 Apr!' 1998, 289 S1RA 86
89
wor$ing regulations transfer of employees wor$ supervision lay-off of wor$ers and the
discipline dismissal and recall of wor$ers.
185

%. Rules on Marriage between emplo+ees of competitor1emplo+ers
The rule is that unless the employer can prove that the reasona#le demands of the
#usiness require a distinction #ased on marital status and there is no #etter availa#le or
accepta#le policy which would #etter accomplish the #usiness purpose an employer may
not discriminate against an employee #ased on the identity of the employee-s
spouse.
186
This is $nown as the #ona fide occupational qualification e)ception.
Since the finding of a #ona fide occupational qualification justifies an employer-s
no-spouse rule the e)ception is interpreted strictly and narrowly #y these state courts.
There must #e a compelling #usiness necessity for which no alternative e)ists other than
the discriminatory practice.
187
To justify a #ona fide occupational qualification the
employer must prove two factors. /30 that the employment qualification is reasona#ly
related to the essential operation of the jo# involved1 and /60 that there is a factual #asis
for #elieving that all or su#stantially all persons meeting the qualification would #e
una#le to properly perform the duties of the jo#.
188
185 Consolidated Food Corporation, et al. vs. "LRC, et al., 7. R. No. 118647, Sept. 23, 1999.
186 see $uller v. BP Exploration AAlas&a> Inc., 923 -.2d 783, 73 8!r +)p'.-rc.1s. (?NA) 579, 69
187 A. 7!tt!n, 1$''en(!n( NoASpouse +)p'oy)ent -o'!c!es As Gr!t' Sttus C!scr!)!nt!on" A ?'nc!n(
Approc$, 33 #yne *. Re&. 1111 (Spr!n(, 1987).
188 R!c$rd 7. 8'ood nd Pe''y A. 1$!'', 9$e R!&er ?end Cec!s!on nd Bo/ 4t Affects Gun!c!p'!t!esF
-ersonne' Ru'e nd Re(u't!ons, 4''!no!s Gun!c!p' Re&!e/, Hune 1993, p. 7
90
The concept of a #ona fide occupational qualification is not foreign in our
jurisdiction. The Supreme +ourt has employed the standard of reasona#leness of the
company policy which is parallel to the #ona fide occupational qualification requirement.
In the case of 2uncan /ssociation of 2etailman1P(4#5 and Pedro (ecson v. 4la6o
#ellcome Pilippines7 8nc.
189
it passed on the validity of the policy of a pharmaceutical
company prohi#iting its employees from marrying employees of any competitor
company. It held that Fla)o has a right to guard its trade secrets manufacturing formulas
mar$eting strategies and other confidential programs and information from competitors.
It considered the prohi#ition against personal or marital relationships with employees of
competitor companies upon Fla)o-s employees reasona#le under the circumstances
#ecause relationships of that nature might compromise the interests of Fla)o. In laying
down the assailed company policy it recogni"ed that Fla)o only aims to protect its
interests against the possi#ility that a competitor company will gain access to its secrets
and procedures
'. Post1emplo+ment ban
Chether such an agreement would #e held valid and #inding will depend on its
reasona#leness in relation to the parties concerned as well as to its pu#lic policy.
F. SOCIAL AND !ELFARE LEGISLATION
1. &&& Law
190

a. +overage
189 7.R. No. 162994, Septe)%er 17, 2004
190 R.A. 8282
91
i. +ompulsory upon all employees not over si)ty /7A0 years of age and their
employers. In the case of domestic helpers their monthly income shall not #e less than
5ne thousand pesos /P3AAA.AA0 a month.
191
ii. Spouses who devote full time to managing the household and family affairs
unless they are also engaged in other vocation or employment which is su#ject to
mandatory coverage may #e covered #y the SSS on a voluntary #asis.
iii. ;ilipinos recruited #y foreign-#ased employers for employment a#road may #e
covered #y the SSS on voluntary #asis.
#. ,)clusions from coverage
192
i. Agricultural la#or when performed #y a share or leasehold tenant or wor$er who
is not paid any regular daily wage or #ase pay and who does not wor$ for an
uninterrupted period of at least si) months in a year1
193

191 A'so co)pu'sory upon suc$ se'fAe)p'oyed persons s )y %e deter)!ned %y t$e 1o))!ss!on under
suc$ ru'es nd re(u't!ons s !t )y prescr!%e, !nc'ud!n( %ut not '!)!ted to t$e fo''o/!n("
1.A'';se'fAe)p'oyed;profess!on's=
2. -rtners nd s!n('e propr!etors of %us!nesses=
3.Actors nd ctresses, d!rectors, scr!pt/r!ters nd ne/s correspondents /$o do not f'' /!t$!n t$e
def!n!t!on of t$e ter) @e)p'oyee@
4.-rofess!on';t$'etes,;coc$es,;tr!ners;nd;:oc,eys=;nd
5.4nd!&!du' fr)ers nd f!s$er)en.
En'ess ot$er/!se spec!f!ed !n t$e '/, '' pro&!s!ons of t$e SSS *A# pp'!c%'e to co&ered e)p'oyees
s$'' 'so %e
192
Sec. 8(:) of Soc!' Secur!ty Act (As )ended %y Sec. 5, -.C. No. 735, SA1975).
193
As )ended %y Sec. 4, R.A. 2658
92
ii. Domestic service in a private home1
iii. ,mployment purely casual and not for the purposes of occupation or #usiness
of the employer1
iv. Service performed #y an individual in the employ of his son daughter or
spouse and service performed #y a child under the age of twenty-one years in the employ
of his parents1
v. Service performed on or in connection with an alien vessel #y an employee if
he is employed when such vessel is outside the Philippines1
vi. Service performed in the employ of the Philippine Fovernment or an
instrumentality or agency thereof1
vii. Service performed in the employ of a foreign government or international
organi"ation or their wholly-owned instrumentality. Provided however That his
e)emption notwithstanding any foreign government international organi"ation or their
wholly-owned instrumentality employing wor$ers in the Philippines or employing
;ilipinos outside of the Philippines may enter into an agreement with the Philippine
Fovernment for the inclusion of such employees in the SSS e)cept those already covered
#y their respective civil service retirement systems. Provided further That the terms of
such agreement shall conform with the provisions of this Act on coverage and amount of
payment of contri#utions and #enefits. Provided finally That the provisions of this Act
shall #e supplementary to any such agreement
194
.
viii. Such other services performed #y temporary employees who may #e
e)cluded #y regulation of the +ommission. ,mployees of #ona fide independent
contractors shall not #e deemed employees of the employer engaging the services of said
contractors
195
.
c. &enefits
i. 4onthly pension1
ii. Dependents-pension 1
3@D
As )ended %y Sec. 1, R.A. 3839= Sec. 3, R.A. 4857= nd Sec. 5, -.C. No. 735, SA1975
3@?
As )ended %y Sec. 5, -.C. No. 735, SA1975
93
iii. 'etirement #enefits1
iv. Death #enefits1
v. Permanent disa#ility #enefits1
vi. ;uneral #enefit1
vii. Sic$ness #enefit1
viii. 4aternity leave #enefit.
d. &eneficiaries
i. The dependent spouse until he or she remarries
ii. The dependent legitimate legitimated or legallyadopted and illegitimate
children who shall #e the primary #eneficiaries of the mem#er.
iii. In their a#sence the dependent parents who shall #e the secondary
#eneficiaries of the mem#er.
iv. In the a#sence of all the foregoing any other person designated #y the mem#er
as his!her secondary #eneficiary.
2. 4&8& Law
196
a. +overage
+ompulsory for all employees receiving compensation who have not reached the
compulsory retirement age irrespective of employment status.
#. ,)clusions from coverage
i. 4em#ers of the Armed ;orces of the Philippines and the Philippine (ational
Police su#ject to the condition that they must settle first their financial o#ligation with
the FSIS and
ii. +ontractuals who have no employer and employee relationship with the
agencies they serve.
c. &enefits
196
R.A. 8291
94
i. 4onthly Pension1
ii. Separation &enefits1
iii. 9nemployment or Involuntary Separation &enefits1
iv.'etirementP&enefits1
v. Permanent Disa#ility &enefits1
vi. Temporary Total Disa#ility &enefits1
vii. Survivorship &enefits1
viii.;uneralP&enefits1
i). +ompulsory 2ife Insurance &enefit1
). 5ptional Insurance and!or pre-need coverage em#racing life health
hospitali"ation education memorial plans and such other plans as may #e designed #y
the FSIS for the mem#er and!or his dependents.
d. &eneficiaries
i. Primary #eneficiaries- The legal dependent spouse until he!she remarries and
the dependent children1
ii. Secondary #eneficiaries- The dependent parents and su#ject to the restrictions
on dependent children the legitimate descendants
3. Limited Portabilit+ Law
197

9nder this law an employee who has wor$ed in #oth the private and pu#lic
sectors and has #een covered #y #oth the Fovernment Service Insurance System /FSIS0
and the Social Security System /SSS0 shall have his credita#le services or contri#utions
in #oth Systems credited to his service or contri#ution record in each of the Systems
which shall #e summed up for purposes of old age disa#ility survivorship and other
#enefits in case the covered mem#er does not qualify for such #enefits in either or #oth
Systems without the totali"ation.
3. !mplo+ee9s Compensation
198
% +overage and when compensa#le
197
R.A. 7699
95
+overage in the State Insurance ;und shall #e compulsory upon all employers and
their employees not over si)ty years of age. Provided That an employee who is over
si)ty years of age and paying contri#utions to qualify for the retirement or life insurance
#enefit administered #y the System shall #e su#ject to compulsory coverage. Provided
further That in case of an employee who is #oth covered #y the SSS and FSIS only his
employment under the FSIS shall #e considered for purposes of his coverage.
The State Insurance ;und shall #e lia#le for compensation to the employee or his
dependents e)cept when the disa#ility or death was occasioned #y the employeeBs
into)ication willful intention to injure or $ill himself or another notorious negligence or
otherwise provided under this Title.
G. LABOR RELATIONS LA!
1. Rigt to &elf1organi:ation
199
The right to join assist or form la#or organi"ations for collective #argaining and
to engage in lawful concerted activities for the same purpose or for their mutual aid and
protection.
198
-.C. No. 626
96
Any employee
200
whether employed for a definite period or not shall #eginning
on the first day of his!her service #e eligi#le for mem#ership in any la#or organi"ation.
201
a. Cho may unioni"e for purposes of collective #argaining
All persons employed in.
+ommercial
Industrial 0 enterprises
Agricultural 0 whether operating for profit or not
+harita#le
'eligious 0 Institutions
,ducational

199
+)p'oyees of (o&ern)ent corport!ons est%'!s$ed under t$e 1orport!on 1ode (/!t$out or!(!n'
c$rters) s$'' $&e t$e r!($t to or(n!0e nd to %r(!n co''ect!&e'y /!t$ t$e!r respect!&e e)p'oyers. A''
ot$er e)p'oyees !n t$e c!&!' ser&!ce s$'' $&e t$e r!($t to for) ssoc!t!ons for purposes not contrry to
'/.
7ener' ru'e" A'' '!ens, ntur' or :ur!d!c', s /e'' s fore!(n or(n!0t!ons re str!ct'y pro$!%!ted fro)
en((!n( d!rect'y or !nd!rect'y !n '' for)s of trde un!on ct!&!t!es /!t$out pre:ud!ce to nor)' contcts
%et/een -$!'!pp!ne '%or un!ons nd reco(n!0ed !nternt!on' '%or centers.
+6cept!on" A'!en e)p'oyees /!t$ &'!d /or,!n( per)!ts !ssued %y t$e C.*+ )y e6erc!se t$e r!($t to
se'fAor(n!0t!on nd :o!n or ss!st '%or or(n!0t!ons for purposes of co''ect!&e %r(!n!n(, !f t$ey re
nt!on's of country /$!c$ (rnts t$e s)e or s!)!'r r!($ts to 8!'!p!no /or,ers, s cert!f!ed %y t$e
Ceprt)ent of 8ore!(n Aff!rs.
200
9$ree cte(or!es of e)p'oyees"
. Gn(er!'=
%. Super&!sory= nd
c. Rn,AndAf!'e.
201
!%!d.= See 'so Art. 277= No. 10, ?s!c A)end)ents under R. A. 6715, prepred %y Ge)%ers of t$e SenteA
Bouse 1onference 1o))!ttee of 1on(ress.
97
2i$ewise.
Am#ulant wor$ers
Intermittent wor$ers
'ural wor$ers
Cor$ers with no definite employers
Itinerant wor$ers
Self-employed
Specific +overage.

Supervisory employees
202

Terminated employees who are contesting their termination
Aliens with valid wor$ permit
Fovernment employees
(ew employees
8glesia ni ;risto mem#ers
Security guards
/30 Cho cannot form join or assist la#or organi"ations
As a general rule only top and middle managers are not allowed to join any la#or
organi"ation.
;irst-line managers
203
are allowed to join a supervisory union #ut not the union of
ran$-and-file employees or vice-versa. In fact the law does not allow mi)ed mem#ership
of #oth supervisory and ran$-and-file employees in one union. A union with such mi)ed
202
Not e'!(!%'e for )e)%ers$!p !n '%or un!on of t$e rn,AndAf!'e e)p'oyees %ut )y for), :o!n or ss!st
seprte '%or un!ons of t$e!r o/n.
A un!on /$ose )e)%ers$!p !s )!6ture of super&!sors nd rn,AndAf!'e !s not nd cnnot %eco)e
'e(!t!)te '%or or(n!0t!on
A 'oc' super&!sorFs un!on s$ou'd not %e ''o/ed to ff!'!te /!t$ t$e nt!on' federt!on of un!on of
rn,AndAf!'e e)p'oyees /$ere t$t federt!on ct!&e'y prt!c!ptes !n un!on ct!&!ty !n t$e co)pny nd
t$e rn,AndAf!'e e)p'oyees re d!rect'y under t$e ut$or!ty of t$e super&!sory e)p'oyees
203
or super&!sory e)p'oyees
98
mem#ership is no union at all. It cannot e)ercise the rights of a legitimate la#or
organi"ation.
2. 0argaining unit
The group or cluster of jo#s or positions that supports the la#or organi"ation
which is applying for registration within the employer-s esta#lishment
'efers to a group of employees sharing mutual interests within a given employer
unit comprised of all or less than all of the entire #ody of employees in the employer unit
or any specific occupational or geographical grouping within such employer unit.
/a0 Test to determine the constituency of an appropriate #argaining unit
Any of the following four /D0 modes may #e used.
a. Su#stantial mutual interests principle or community or mutuality of interests
rule.
The employees sought to #e represented #y the collective #argaining agent must
have su#stantial mutual interests in terms of employment and wor$ing conditions as
evinced #y the type of wor$ they perform. It is characteri"ed #y similarity of employment
status same duties and responsi#ilities and su#stantially similar compensation and
wor$ing conditions
204
.
#. Flo#e doctrine
205
The determining factor is the desire of the wor$ers themselves. +onsequently a
certification election should #e held separately to choose which representative union will
#e chosen #y the wor$ers
206
.
204
San $i!uel Corporation Emplo%ees *nion<P)1'O vs. Confesor, 7. R. No. 111262, Sept. 19, 1996, 262
S1RA 81, 98
205
/!'' of t$e e)p'oyees
206
99
c. +ollective #argaining history.
,nunciates that the prior collective #argaining history and affinity of the
employees should #e considered in determining the appropriate #argaining unit.
:owever the Supreme +ourt has categorically ruled that the e)istence of a prior
collective #argaining history is neither decisive nor conclusive in the determination of
what constitutes an appropriate #argaining unit.
207

d. ,mployment status.
The determination of appropriate #argaining unit #ased thereon is considered an
accepta#le mode.
208

/#0 8oluntary 'ecognition
209
See 'so $ecanical #epartment La,or *nion sa Pilippine "ational Rail(a%s vs. CIR, 7. R. No. *A28223,
Au(. 30, 1968.
207
San $i!uel Corporation vs. La!uesma, 7. R. No. 100485, Sept. 21, 1994= "ational Association of Free
)rade *nions vs. $ainit Lum,er #evelopment Compan% 'or&ers *nion, 7. R. No. 79526, Cec. 21, 1990)
208
Rot$en%er( on *%or Re't!ons, pp. 482A510.
209
+ffect of &o'untry reco(n!t!on"
8ro) t$e t!)e of record!n(, t$e un!on s$'' en:oy t$e r!($ts, pr!&!'e(es nd o%'!(t!ons of n e6c'us!&e
%r(!n!n( representt!&e
>o'untry c,no/'ed(e)ent cn .N*Q t,e p'ce /$en t$ere !s no d!spute s to /$t un!on counts !n
!ts )e)%ers ):or!ty of t$e e)p'oyees.
>o'untry reco(n!t!on !s poss!%'e on'y !n n unor(n!0ed est%'!s$)ent. 4n n or(n!0ed sett!n(, t$e
e)p'oyer cnnot &o'untr!'y reco(n!0e ny ne/ un!on %ecuse Art. 256, *1- re5u!res t$e e)p'oyer to
cont!nue reco(n!0!n( nd de'!n( /!t$ t$e !ncu)%ent un!on !f !t $s not %een proper'y rep'ced %y
not$er un!on.
100
8oluntary recognition of #argaining agent is the free and voluntary act of the
employer of e)tending and conferring full recognition to a union as the sole and e)clusive
#argaining representative of the employees in an appropriate #argaining unit for
purposes of collective #argaining. This is allowed when there is only one union operating
in the #argaining unit.
/30 'equirements
1. Su#mission to D52, of a joint statement
210
attesting to the voluntary
recognition.
2. The joint- statement
211
must #e pu#lished for 3? consecutive days in 6
conspicuous places in the esta#lishment or +&9 where the union see$s to
operate
c. Certification election
It refers to the process of determining through secret #allot the sole and e)clusive
#argaining representative of the employees in an appropriate #argaining unit for
purposes of collective #argaining.
/a0 In an unorgani"ed esta#lishment
+ertification election shall #e OautomaticallyO conducted upon the filing of a
petition for certification election #y a legitimate la#or organi"ation. :owever it must #e
emphasi"ed that the petitioner-union should have a valid certificate of registration1
otherwise it has no legal personality to file the petition for certification election.
210
%y t$e e)p'oyer nd un!on pres!dent
211
9$e :o!ntAstte)ent s$ou'd stte t$e ppro6!)te nu)%er of e)p'oyees !n t$e 1?E, cco)pn!ed %y t$e
n)es nd s!(ntures of t 'est ):or!ty of t$e )e)%ers of t$e 1?E support!n( t$e &o'untry
reco(n!t!on=
9$e :o!ntAstte)ent s$ou'd stte t$t t$ere re no ot$er **.Fs opert!n( /!t$!n t$e 1?E
9$e :o!ntAstte)ent )ust %e su%)!tted to t$e Re(!on' .ff!ce /!t$!n 30 dys fro) dte of reco(n!t!on
101
/#0 In an organi"ed esta#lishment
The following are the requisites for certification election in organi"ed
esta#lishments.
3. A petition questioning the majority status of the incum#ent #argaining
agent is filed #efore the D52, within the 7A-day freedom period1
6. Such petition is verified1 and
=. The petition is supported #y the written consent of at least twenty-five
percent /6?H0 of all employees in the #argaining unit
d. Run1off election
It refers to an election #etween the la#or unions receiving the two /60 highest
num#er of votes when a certification election which provides for three /=0 or more
choices results in no choice receiving a majority of the valid votes cast1 provided that the
total num#er of votes for all contending unions is at least fifty percent /?AH0 of the
num#er of votes cast.
/a0 'equirements
1. A valid election too$ place #ecause majority of the +&9 mem#ers voted
2. The election presented at least three choices
3. (ot one of the choices o#tained the majority of the valid votes
4. The total votes of the unions is at least ?AH of the votes cast
5. There is no unresolved challenge of voter or election protest
e. Re1run election
Ta$es place.
3. If one choice receives a plurality of the vote and the remaining choices results i
n a tie1 or
6. If all choices received the same num#er of votes.

In #oth instances the no union is also a choice.
102
f. Consent election
212
It refers to the election voluntarily agreed upon #y the parties with or without the
intervention of the Department of 2a#or and ,mployment to determine the issue of
majority representation of all the wor$ers in the appropriate collective #argaining unit.
In hearing a petition for a +, the 4ed-Ar#iter may persuade the contending
unions to agree to a consent election. If the unions do agree the 4ed-Ar#iter shall enter
in the minutes of the hearing the fact of the agreement and then cause the immediate
scheduling of the pre-election conference.
g. Affiliation and disaffiliation of the local union from the mother union
/30 Su#stitutionary doctrine
213
This principle states that even during the effectivity of a collective #argaining
agreement e)ecuted #etween employer and employees thru their agent the employees
212
9$e $o'd!n( of &'!d consent e'ect!on, upon t$e !ntercess!on of t$e )edAr%!ter, %rs t$e $o'd!n( of 1+
for one yer.
#$ere no pet!t!on for 1+ $d %een f!'ed %ut t$e prt!es t$e)se'&es $&e (reed to $o'd consent
e'ect!on, t$e resu'ts of t$e e'ect!on /!'' N.9 %r not$er 1+, EN*+SS t$e /!nn!n( un!on $d %een
e6tended &o'untry reco(n!t!on %y t$e e)p'oyer
1onsent e'ect!on !s seprte nd d!st!nct process nd $s not$!n( to do /!t$ t$e !)port nd effect of
cert!f!ct!on e'ect!on. Ne!t$er does !t s$orten t$e ter)s of n e6!st!n( 1?A nor ent!t'e t$e prt!c!pnts
t$ereof to !))ed!te'y rene(ot!te n e6!st!n( 1?A 't$ou($ !t does not prec'ude t$e /or,ers fro)
e6erc!s!n( t$e!r r!($t to c$oose t$e!r so'e nd e6c'us!&e %r(!n!n( representt!&e fter t$e e6p!rt!on of
t$e 60Ady freedo) per!od.
213
+)p'oyees cnnot re&o,e t$e &'!d!ty of &'!d'y e6ecuted 1?A /!t$ t$e!r e)p'oyer %y t$e s!)p'e
e6ped!ent of c$n(!n( t$e!r co''ect!&e %r(!n!n( (ent
9$e ne/ (ent )ust respect t$e su%s!st!n( 1?A
+)p'oyer cnnot rene(e on t$e 1?A, e6cept to ne(ot!te /!t$ t$e )n(e)ent for t$e s$orten!n(
t$ereof
4npp'!c%'e to person' undert,!n( of deposed un!on= e.(. " no str!,e st!pu't!on
103
can change said agent #ut the contract continues to #ind then up to its e)piration date.
They may #argain however for the shortening of said e)piration date.
In formulating the Osu#stitutionaryO doctrine the only consideration involved is
the employeesB interest in the e)isting #argaining agreement. The agentBs interest never
entered the picture.
In fact the justification for said doctrine was.
... That the majority of the employees as an entity under the statute is
the true party in interest to the contract holding rights through the agency of the
union representative. Thus any e)clusive interest claimed #y the agent is
defeasi#le at the will of the principal.
214
h. 9nion dues and special assessments
9nion dues Special assessments

'egular monthly contri#utions paid
#y the
mem#ers to the union in e)change for
the #enefits given to them #y the +&A
and to finance the activities of the union in
representing the union.
These are assessments for any purpose
or o#ject other than those e)pressly
provided #y the la#or organi"ation-s
constitution and #ylaws.
'equirements for validity
&y o#taining the individual written
authori"ation duly signed #y the employee
which must specify.
&y written resolution approved #y majorit
y of
all the mem#ers at the meeting called for
that purpose.
216
214
Ben!uet Consolidated Inc. vs. BCI Emplo%ees - ' *nion<PAFL*, 23 S1RA, 465, 471
216
Art.241
104
3. Amount
6. Purpose
=. &eneficiary
215

i. Agency fees
217
/a0 'equisites for assessment
i. The employee is part of the #argaining unit
ii. :e is not a mem#er of the union
iii. :e partoo$ of the #enefits of the +&A
2. Rigt to Collective 0argaining
218
215
4%!d.,(o)
217
4t !s n )ount e5u!&'ent to un!on dues, /$!c$ nonAun!on )e)%er pys to t$e un!on %ecuse
$e %enef!ts fro) t$e 1?A ne(ot!ted %y t$e un!on.
218
1o''ect!&e ?r(!n!n( A(ree)ent (1?A) refers to t$e ne(ot!ted contrct %et/een 'e(!t!)te '%or
or(n!0t!on nd t$e e)p'oyer concern!n( /(es, $ours of /or, nd '' ot$er ter)s nd cond!t!ons of
e)p'oy)ent !n %r(!n!n( un!t. 9$e 1?A !s dee)ed t$e '/ %et/een t$e prt!es dur!n( !ts '!fet!)e. 4ts
pro&!s!ons re construed '!%er''y.
*e(' pr!nc!p'es pp'!c%'e to 1o''ect!&e ?r(!n!n( A(ree)ent"
A propos' not e)%od!ed !n 1?A !s not prt t$ereof.
G!nutes of 1?A ne(ot!t!on A no effect !f !ts contents re not !ncorported !n t$e 1?A.
G,!n( pro)!se dur!n( t$e 1?A ne(ot!t!on !s not cons!dered %d f!t$.
Ad)nt stnce resu't!n( !n !)psse, not %d f!t$.
9$e C.*+ Secretry cnnot order !nc'us!on of ter)s nd cond!t!ons !n 1?A /$!c$ t$e '/ nd t$e
prt!es d!d not !ntend to ref'ect t$ere!n.
S!(n!n( %onus, not de)nd%'e under t$e '/.
A''e(t!ons of %d f!t$, /!ped out /!t$ s!(n!n( of 1?A.
9er) ('!fet!)e) of 1?A
Representt!on spect (so'e nd e6c'us!&e sttus of cert!f!ed un!on)" A 9$e ter) !s 5 yers /$!c$ )ens
t$t no pet!t!on 5uest!on!n( t$e ):or!ty sttus of t$e !ncu)%ent %r(!n!n( (ent s$'' %e entert!ned %y
105
a. Duty to #argain collectively
The performance of the mutual o#ligation of the employer and the sole #argaining
representative to meet promptly e)peditiously Q in good faith Q agree on Cages :ours
of Cor$ Q 5ther terms Q conditions of employment /C:50.
30 Chen there is a#sence of a +&A
It is the performance of a mutual o#ligation.
3. To meet and convene promptly and e)peditiously in good faith /F;0
6. ;or the purpose of negotiating an agreement with respect to
wages hours of wor$ and all other terms and conditions of employment
=. Including proposals for adjusting any grievances or questions
arising under such agreement1 and
D. To e)ecute a contract incorporating such agreements if requested #y either
party.
219
60 Chen there is a +&A
3. Chen there is a +&A the duty to #argain collectively shall also mean that
neither party shall terminate nor modify such agreement during its lifetime.
6. ,ither party can serve a written notice to terminate or modify the
agreement at least 7A days prior to its e)piration date.
=. It shall #e the duty of #oth parties to $eep
the status quo and to continue in full force and effect the terms and conditions
#. +ollective &argaining Agreement /+&A0
C.*+ nd no cert!f!ct!on e'ect!on s$'' %e conducted outs!de of t$e 60Ady freedo) per!od.
A'' ot$er pro&!s!ons (/$!c$ refer to %ot$ econo)!c nd nonAecono)!c pro&!s!ons e6cept
representt!on)" S$'' %e rene(ot!ted not 'ter t$n t$ree (3) yers fter !ts e6ecut!on.
219
Art. 252
106
1) 4andatory provisions of +&A
. Cages Q :ours of Cor$
%. 5ther terms Q conditions
c. 5ther modes of compensation
d. Cor$ shifts
e. 8acation Q holidays
f. &onuses
(. Pensions Q retirement plans
$. Seniority
!. Transfers
:. 2ay-offs
,. Cor$load
'. Cor$ rules Q regulations
). 'ent of company houses
n. 9nion security agreements
An employer does not commit 92P #y insisting to the point of a #argaining
impasse on the inclusion in a contract of a management prerogative clause or a union
discipline clause or a no stri$e clause.
/30 Frievance Procedure
The internal rules of procedure esta#lished #y the parties in their +&A with
voluntary ar#itration as the terminal step which are intended to resolve all issues arising
from the implementation and interpretation of their +&A. It refers to the system of
grievance settlement at the plant level as provided in the collective #argaining
agreement. It usually consists of successive steps starting at the level of the complainant
and his immediate supervisor and ending when necessary at the level of the top union
and company officials
All grievances su#mitted to the grievance machinery
220
which are not settled
within seven />0 calendar days from the date of their su#mission shall automatically #e
referred to voluntary ar#itration prescri#ed in the +&A.
;or this purpose parties to a +&A shall name and designate in advance a
8oluntary Ar#itrator or panel of 8oluntary Ar#itrators or include in the agreement a
220
9$e )ec$n!s) for t$e d:ust)ent nd reso'ut!on of (r!e&nces r!s!n( fro) t$e !nterprett!on or
!)p'e)entt!on of 1?A nd t$ose r!s!n( fro) t$e !nterprett!on or enforce)ent of co)pny personne'
po'!c!es. 4t !s prt of t$e cont!nu!n( process of co''ect!&e %r(!n!n(.
107
procedure for the selection of such 8oluntary Ar#itrator or panel of 8oluntary Ar#itrators
prefera#ly from the listing of qualified 8oluntary Ar#itrators duly accredited #y the
(+4&. In case the parties fail to select a 8oluntary Ar#itrator or panel of 8oluntary
Ar#itrators the (+4& shall designate the 8oluntary Ar#itrator or panel of 8oluntary
Ar#itrators as may #e necessary pursuant to the selection procedure agreed upon in the
+&A which shall act with the same force and effect as if the Ar#itrator or panel of
Ar#itrators has #een selected #y the parties as descri#ed a#ove.
/60 8oluntary Ar#itration
'efers to the mode of settling la#or-management disputes #y which the parties
select a competent trained and impartial third person who shall decide on the merits of
the case and whose decision is final and e)ecutor.
221
/=0 (o Stri$e-(o 2oc$out +lause
The Ino stri$e no loc$outJ clause in the +&A applies only to economic
stri$es. It does not apply to 92P stri$es.
222

Such no-stri$e provision in the +&A only #ars stri$es which are economic in
nature #ut not stri$es grounded on unfair la#or practices.
223

The Supreme +ourt consistently ruled in a long line of cases that a stri$e is illegal
if staged in violation of the I(o Stri$e!(o 2oc$out +lauseJ in the +&A stating that a
221
Sect!on 1 2d3, Ru'e 44, N1G? Re&!sed -rocedur' 7u!de'!nes !n t$e 1onduct of >o'untry Ar%!trt!on
-roceed!n(s 2.ct. 15, 20043.
222
Bence, !f t$e str!,e !s founded on n unf!r '%or prct!ce of t$e e)p'oyer, str!,e dec'red %y t$e
un!on cnnot %e cons!dered &!o't!on of t$e no str!,e c'use. ($aster Iron La,or *nion v. "LRC,
7.R. No. 92009, 8e%. 17, 1993)
223
$S$1<*'P vs. Ramos, 326 S1RA 428 (2000), c!t!n( $aster Iron La,or *nion vs. "LRC 219 S1RA 47
219933).
108
stri$e which is in violation of the terms of the +&A is illegal especially when such
terms provide for conclusive ar#itration clause.
224
/D0 2a#or 4anagement +ouncil
The Department shall promote the formation of la#ormanagement councils
in organi"ed and unorgani"ed esta#lishments to ena#le the wor$ers to participate in
policy and decisionma$ing processes in the esta#lishment insofar as
said processes will directly affect their rights #enefits and welfare e)cept those
which are covered #y collective #argaining agreements or are
traditional areas of #argaining.

The Department shall promote other la#or management cooperation
schemes and upon its own initiative or upon the request of #oth parties may assist in
the formulation and development of programs and projects on
productivity occupational safety and health improvement of quality of wor$ life
product quality improvement and other similar schemes.
225

#0 Duration
/30 ;or economic provisions and
/60 ;or non-economic provisions
Three /=0 years after the e)ecution of the
+&A.
/=0 ;reedom period Si)ty /7A0 days
224
Filcon $anufacturin! Corporation vs. La&as $an!!a!a(a sa Filcon<La&as $an!!a!a(a La,or Center
2*G8A*G*13, 7. R. No. 150166, Hu'y 26, 2004.
225
Sec. 1, Ru'e NN4, ?oo, >, 4RR
109
3. <nion &ecurit+
a0 9nion security clauses1 closed shop union shop maintenance of
mem#ership shop etc.
+losed-shop agreement The employer underta$es not to employ any individual
who is not a mem#er of the contracting union and the
said individual once employed must for the duration of
the agreement remain a mem#er of the union in good
standing as a condition for continued employment.
226
Semi-closed shop agreement- :as no requirement for the employee to remain as
mem#er of the contracting union in good standing as a
condition for continued employment.
9nion shop agreement Stipulation where#y any person can #e employed #y the
employer #ut once employed such employee must
within a specific period #ecome a mem#er of the
contracting union and remain as such in good standing
for continued employment for the duration of the +&A.
4aintenance of mem#ership
clause
The agreement does not require non-mem#ers to join the
contracting union #ut provides that those who are
mem#ers thereof at the time of the e)ecution of the +&A
and those who may thereafter on their own volition
#ecome mem#ers must for the duration of the agreement
maintain their mem#ership in good standing as a
226
does not $&e ny retroct!&!ty
pp'y on'y to ne/ $!res
+6cept!ons"
. e)p'oyees %e'on(!n( to ny re'!(!ous sect /$!c$ pro$!%!t ff!'!t!on of t$e!r )e)%ers /!t$ ny '%or
or(n!0t!on re not co&ered %y suc$ (ree)entR9$e free e6erc!se of re'!(!ous %e'!ef !s super!or to
contrct r!($ts (?ictoriano vs. Eli0alde Rope 'or&ers).
%. )e)%ers of t$e r!&' un!on re not co&ered %y suc$ rrn(e)ent.
110
condition for continued employment in the company for
the duration of the +&A.
Preferential shop agreement An agreement where#y the employer merely agrees to
give preference to the mem#ers of the #argaining union
in hiring promotion or filing vacancies and retention in
case of lay-off. The employer has the right to hire from
the open mar$et if union mem#ers are not availa#le
Agency shop agreement An agreement where#y employees must either join the
union or pay to the union as e)clusive #argaining agent
a sum equal to that paid #y the mem#ers.
227

#0 +hec$-off1 union dues agency fees
9nion Dues Agency ;ees
Is deducted from mem#ers for the payment
of union dues
Is deducted from nonmem#ers of the
#argaining agent /union0 for the enjoyment
of the #enefits under the +&A
227
9$!s !s d!rected (!nst I8R++ R4C+RK e)p'oyees /$o %enef!t fro) un!on ct!&!t!es /!t$out contr!%ut!n(
support to t$e un!on, to pre&ent s!tut!on of nonAun!on )e)%ers enr!c$!n( t$e)se'&es t t$e e6pense
of un!on )e)%ers.
+)p'oyee )e)%ers of not$er;r!&' un!on re not cons!dered free r!ders s!nce /$en t$e un!on 2(ent3
%!ds to %e t$e %r(!n!n( (ent, !t &o'untr!'y ssu)ed t$e respons!%!'!ty of represent!n( '' t$e e)p'oyees
!n t$e ppropr!te %r(!n!n( un!t.
111
4ay not #e deducted from the salaries of
the union mem#ers without the written
consent of the wor$ers affected
4ay #e deducted from the salary of the ,es
without their written consent.
3. <nfair Labor Practice in Collective 0argaining
/a0 &argaining in #ad faith
The good faith or #ad
faith is an inference to #e drawn from the facts and is largely a
matter for the (2'+-s e)pertise. The charge of #ad faith should #e raised while the
#argaining is in progress.
228

/#0 'efusal to #argain
A union violates its duty to #argain collectively #y entering negotiations with
a fi)edpurpose of not reaching an agreement or signing a contract.
/c0 Individual #argaining
It is an unfair la#or practice for an employer operating under a collective
#argaining agreement to negotiate or to attempt to negotiate with his employees
individually in connection with changes in the agreement.
The #asis of the prohi#ition regarding individual #argaining with the stri$ers is
that although the union is on stri$e the employer is still under o#ligation to #argain with
the union as the employeesB #argaining representative.
229

/d0 &lue s$y #argaining
228
4nstnces"
1. Ce'y of ne(ot!t!ons
2. 4)pos!n( t!)e '!)!t on ne(ot!t!ons
229
$elo Poto Suppl% Corporation vs. "ational La,or Relations Board, 321 E.S. 332
112
It means ma$ing e)aggerated or unreasona#le proposals.
230

/e0 Surface #argaining
It means Igoing through the motions of negotiatingJ without any legal intent to
reach an agreement.
231

It involves the question of whether or not the employers
conduct demonstrates an unwillingness to #argain in good faith or is merely
hard #argaining.
232

5ccurs when the employer constantly changes
its position over the agreement.
$. <nfair Labor Practice
() (ature of 92P
i. violate the constitutional right of wor$ers and employees to self-organi"ation1
ii. are inimical to the legitimate interests of #oth la#or and management
including their right to #argain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect
230
Artur A. Sloane and Fred 'itne%, La,or Relations, 9t Edition 2::2, p. 2:3
#$et$er or not t$e un!on !s en((ed !n %'ue<s,y %r(!n!n( !s deter)!ned %y t$e e&!dence presented %y
t$e un!on s to !ts econo)!c de)nds. 9$us, !f t$e un!on re5u!res e6((erted or unreson%'e
econo)!c de)nds, t$en !t !s (u!'ty of E*-. (Standard Cartered Ban& v. Confessor, 7.R. No. 114974,
Hune 16, 2004)
231
Standard Cartered Ban& Emplo%ees *nion C"*BE@ vs. Confesor, 1. R. "o. 22=:9=, +une 28, 466=>.
232
4%!d.
113
iii. disrupt industrial peace1 and hinder the promotion of healthy and sta#le la#or-
management relations and mutual respect.
233
/#0 92P of ,mployers
234
i. To interfere with restrain or coerce employees in the e)ercise of their right to
self-organi"ation1
ii. To require as a condition of employment that a person or an employee shall not
join a la#or organi"ation or shall withdraw from one to which he #elongs1
235
iii. To contract out services or functions #eing performed #y union mem#ers when
such will interfere with restrain or coerce employees in the e)ercise of their rights to
self-organi"ation1
236

233
'%orA)n(e)ent re't!ons unst%'e
234
.n'y t$e off!cers nd (ents of corport!ons, ssoc!t!ons or prtners$!ps /$o $&e ctu''y prt!c!pted
!n, ut$or!0ed or rt!f!ed unf!r '%or prct!ces s$'' %e $e'd cr!)!n''y '!%'e.
235
.,.. ye''o/ do( contrct=
236
9$e ct of n e)p'oyer !n $&!n( /or, or cert!n ser&!ces or funct!ons %e!n( perfor)ed %y un!on )e)%ers
contrcted out !s not (ener''y n unf!r '%or prct!ce ct. 4t !s on'y /$en t$e contrct!n( out of :o%,
/or, or ser&!ce %e!n( perfor)ed %y un!on )e)%ers /!'' !nterfere /!t$, restr!n or coerce e)p'oyees !n
t$e e6erc!se of t$e!r r!($t to se'fAor(n!0t!on t$t !t s$'' %e un'/fu' nd s$'' const!tute unf!r '%or
prct!ce (Art. 248 2c3, *1= Sec. 6 2f3, Ceprt)ent .rder No. 18A02, Ser!es of 2002, 28e%. 21, 2002).
114
iv. To initiate dominate assist or otherwise interfere with the formation or
administration of any la#or organi"ation including the giving of financial or other
support to it or its organi"ers or supporters1
237
v. To discriminate in regard to wages hours of wor$ and other terms and
conditions of employment in order to encourage or discourage mem#ership in any la#or
organi"ation. (othing in this +ode or in any other law shall stop the parties from
requiring mem#ership in a recogni"ed collective #argaining agent as a condition for
employment e)cept those employees who are already mem#ers of another union at the
time of the signing of the collective #argaining agreement. ,mployees of an appropriate
#argaining unit who are not mem#ers of the recogni"ed collective #argaining agent may
#e assessed a reasona#le fee equivalent to the dues and other fees paid #y mem#ers of the
recogni"ed collective #argaining agent if such non-union mem#ers accept the #enefits
under the collective #argaining agreement. Provided that the individual authori"ation
required under Article 6D6 paragraph /o0 of this +ode shall not apply to the non-
mem#ers of the recogni"ed collective #argaining agent1
vi. To dismiss discharge or otherwise prejudice or discriminate against an
employee for having given or #eing a#out to give testimony under this +ode1
vii. To violate the duty to #argain collectively as prescri#ed #y this +ode1
viii. To pay negotiation or attorney-s fees to the union or its officers or agents as
part of the settlement of any issue in collective #argaining or any other dispute1 or
i). To violate a collective #argaining agreement.
238
/c0 92P of 2a#or 5rgani"ations
i. To restrain or coerce employees in the e)ercise of their right to self-
organi"ation. :owever a la#or organi"ation shall have the right to prescri#e its own
rules with respect to the acquisition or retention of mem#ership1
237
.,.. co)pny un!on
238
%ut on'y !f (ross !n c$rcter
115
ii. To cause or attempt to cause an employer to discriminate against an employee
including discrimination against an employee with respect to whom mem#ership in such
organi"ation has #een denied or to terminate an employee on any ground other than the
usual terms and conditions under which mem#ership or continuation of mem#ership is
made availa#le to other mem#ers1
iii. To violate the duty or refuse to #argain collectively with the employer
provided it is the representative of the employees1
i). To cause or attempt to cause an employer to pay or deliver or agree to pay or
deliver any money or other things of value in the nature of an e)action for services
which are not performed or not to #e performed including the demand for fee for union
negotiations1
239
v. To as$ for or accept negotiation or attorney-s fees from employers as part of the
settlement of any issue in collective #argaining or any other dispute1 or
vi. To violate a collective #argaining agreement.
3. Rigt to Peaceful Concerted /ctivities
a. ;orms of +oncerted Activities
Stri$e
240
2oc$out
241
Pic$eting
242
239
.,.. fet$erA%edd!n(
240
Su))ry of pr!nc!p'es (o&ern!n( str!,es"
1. A str!,e or 'oc,out !s !''e(' !f ny of t$e 'e(' re5u!s!tes (enu)erted %o&e) !s not co)p'!ed /!t$.
-rocedur' re5u!re)ents re )ndtory.
2. A str!,e or 'oc,out !s !''e(' !f !t !s %sed on nonAstr!,e%'e !ssues (e.(., !nterAun!on or !ntrAun!on
d!sputes or /(e d!stort!on).
3. A str!,e or 'oc,out !s !''e(' !f t$e !ssues !n&o'&ed re 'redy su%:ect of co)pu'sory or &o'untry
r%!trt!on or conc!'!t!on or t$e steps !n (r!e&nce )c$!nery re not e6$usted.
4. A str!,e or 'oc,out !s !''e(' !f un'/fu' )ens /ere e)p'oyed or pro$!%!ted cts or prct!ces /ere
co))!tted (e.(., Ese of force, &!o'ence, t$rets, coerc!on, etc.= ?rr!cdes, %'oc,des nd o%struct!ons of
!n(ress to 2entrnce3 or e(ress fro) 2e6!t3 t$e co)pny pre)!ses).
5. A str!,e or 'oc,out !s !''e(' !f t$e not!ce of str!,e or not!ce of 'oc,out !s 'redy con&erted !nto
pre&ent!&e )ed!t!on cse. (See furt$er d!scuss!on %e'o/).
116
Any temporary stoppage of
wor$ #y the concerted
action of the employees as a
result of an industrial or
la#or dispute. It consists
not only of concerted wor$
stoppages #ut also
slowdowns mass leaves sit
downs attempts to damage
destroy or sa#otage plant
equipment and facilities and
similar activities.
Any temporary refusal of an
employer to furnish wor$ as
a result of an industrial or
la#or dispute.
The right of wor$ers to
peacefully march to and fro
#efore an esta#lishment
involved in a la#or dispute
generally accompanied #y
the carrying and display of
signs placards and #anners
intended to inform the
pu#lic a#out the dispute.

#. Cho may declare a stri$e or loc$outR
3.Any certified or duly recogni"ed #argaining representative may declare
a stri$ein cases of #argaining deadloc$ and unfair la#or practice.
2i$ewise the employer may declare a loc$out in the same cases.
6. A str!,e or 'oc,out !s !''e(' !f st(ed !n &!o't!on of t$e INoAStr!,e, NoA*oc,outK c'use !n t$e
co''ect!&e %r(!n!n( (ree)ent.
7. A str!,e or 'oc,out !s !''e(' !f st(ed !n &!o't!on of te)porry restr!n!n( order or n !n:unct!on or
ssu)pt!on or cert!f!ct!on order.
8. A str!,e !s !''e(' !f st(ed %y )!nor!ty un!on.
9. A str!,e or 'oc,out !s !''e(' !f conducted for un'/fu' purpose;s (e.(." Str!,e to co)pe' d!s)!ss' of
e)p'oyee or to co)pe' t$e e)p'oyer to reco(n!0e t$e un!on or t$e soAc''ed IEn!onAReco(n!t!on Str!,eK)
10. 9$e 'oc' un!on nd not t$e federt!on !s '!%'e to py d)(es !n cse of !''e(' str!,e.
241
7rounds for *oc,out
1. 1o''ect!&e %r(!n!n( ded'oc,
2. E*- ct of un!on
242
or pecefu' p!c,et!n(
117
6. In the a#sence of a certified or duly recogni"ed #argaining
representative any legitimate la#or organi"ation in the esta#lishment may declare a
stri$e #ut only on theground of unfair la#or practice.
243
c. 'equisites for a valid stri$e
d. 'equisites for a valid loc$out
3. It must #e #ased on a valid and factual ground1

6. A stri$e or loc$out (5TI+, shall #e filed with the (ational +onciliation
and 4ediation &oard /(+4&0 at least 3? days #efore the intended date of the
stri$e or loc$out if the issues raised are unfair la#or practices or at least =A
days #efore the intended date thereof if the issue involves #argaining deadloc$.

=. In cases of dismissal from employment of union officers duly elected in
accordance with the union constitution and #ylaws which may constitute union
#usting where the e)istence of the union is threatened the 3?day cooling
off period shall not apply and the union may ta$e action immediately after the
stri$e vote is conducted and the result thereof su#mitted to the Department of
2a#or and ,mployment.
D. A stri$e must #e approved #y a majority vote of the mem#ers of the 9nion
and a loc$out must #e approved #y a majority vote of the mem#ers of the &oard
of Directors of the +orporation or Association or of the partners in a partnership
o#tained #y secret #allot in a meeting called for that purpose.
?. A stri$e or loc$out vote shall #e reported to the (+4& D52,
'egional
&ranch at least > days #efore the intended stri$e or loc$-out su#ject to the cooling
off period.
243
Sec. 2, Ru'e N444 ?oo, >, .)n!%us Ru'es 4)p'e)ent!n( 9$e *%or 1ode, s )ended
118
7. In the event the result of thestri$e!loc$out #allot is filed within the cooling-
off period the >day requirement shall #e counted from the day following the
e)piration of the coolingoff period.
244

In case of dismissal from employment of union officers which may constitute
union #usting the time requirement for the filing of the (otice of Stri$e shall #e
dispensed with #ut the stri$e vote requirement #eing mandatory in character shall
Iinevery caseJ #e complied with.
>. The dispute must not #e the su#ject of an assumption of jurisdiction #y the
President or the Secretary of 2a#or and ,mployment a certification for compulsory
ar#itration or su#mission to compulsory or voluntary ar#itration nor a su#ject of a
pending case involving the same grounds for the stri$e or loc$out.
e. 'equisites for lawful pic$eting
(o person engaged in pic$eting shall commit any act of violence coercion or
intimidation or o#struct the free ingress to or egress from the employer-s premises for
lawful purposes or o#struct pu#lic thoroughfares.
245
f. Assumption of jurisdiction #y the Secretary of 2a#or or +ertification of
the 2a#or dispute to the (2'+ for compulsory ar#itration
3. 5n intended or impending stri$e or loc$out - automatically enjoined even if a
4otion for 'econsideration is filed.
6. 5n actual stri$e or loc$out - stri$ers or loc$ed out employees should
immediately return to wor$ and employer should readmit them #ac$.
244
"SF' vs. OveDera, 7.R. No. 59743, Gy 31, 1982
245
Art. 264 (e), s )ended
119
=. 5n cases filed or may #e filed - All shall #e su#sumed!a#sor#ed #y the assumed
or certified case e)cept when the order specified otherwise. The parties to the case
should inform the D52, Secretary of pendency thereof.
g. (ature of Assumption 5rder or +ertification 5rder
The D52, Secretary may assume jurisdiction over a la#or dispute or certify it to
the (2'+ for compulsory ar#itration if in his opinion it may cause or li$ely to cause a
stri$e or loc$out in an industry indispensa#le to the national interest.
246
h. ,ffect of defiance of Assumption or +ertification 5rders
A stri$e that is underta$en after the issuance #y the Secretary of 2a#or and
,mployment of an assumption or certification order #ecomes a prohi#ited activity and
thus illegal pursuant to the second paragraph of Article 67D
247
of the 2a#or +ode. The
union officers and mem#ers as a result are deemed to have lost their employment status
for having $nowingly participated in an illegal stri$e. Stated differently from the moment
a wor$er defies a return-to-wor$ order he is deemed to have a#andoned his jo#. The loss
of employment results from the stri$ing employees- own act - an act which is illegal an
act in violation of the law and in defiance of authority.
248

i. Illegal Stri$e
/30 2ia#ility of union officers
5nly the union officers during the stri$e are lia#le.
246
9$e -res!dent )y 'so e6erc!se t$e po/er to ssu)e :ur!sd!ct!on o&er '%or d!spute
247
See Reference
248
Pilippine Airlines, Inc. vs. Brillantes, 7. R. No. 119360, .ct. 10, 1997
120
The penalty of dismissal could #e imposed only on union officers serving and
acting as such during the period of illegal stri$e
249
.
As a necessary implication if employees acted as union officers after said stri$e
they may not #e held lia#le and therefore could not #e terminated.
250
/60 2ia#ility of ordinary wor$ers
The mere declaration of the illegality of stri$e would result in the termination of
employment of union officers. They are deemed to have lost their employment status.
This adverse consequence does not apply to ordinary union mem#ers e)cept when they
participated in the commission of illegal acts in the course of the stri$e in which case
they shall #e deemed to have also lost their employment status.
(1) 2ia#ility of employer
In case of non-compliance #y the employer with the return-to-wor$ order issued
in connection with the assumption!certification of the la#or dispute he may #e held lia#le
to pay #ac$wages damages and other positive or affirmative reliefs even criminal
prosecution against him.
251

,mployers who refuse to re-admit returning wor$ers may #e lia#le upon filing of
proper petition for the payment of wages and other #enefits from the date of actual
refusal until the wor$ers are re-admitted.
252
/=0 Caiver of illegality of stri$e
249
Lapanda% 'or&ers *nion vs. "LRC, 248 S1RA 95, 106.
250
CCBPI Postmix 'or&ers *nion vs. "LRC, 7. R. No. 114521, No&. 27, 1998
251
Art. 2632(= Sec. 4, Ru'e 4N, Ru'es of -rocedure of t$e N*R1, s )ended %y N*R1 Reso'ut!on No. 01A02,
Ser!es of 2002).
121
Chen an employer accedes to the peaceful settlement #ro$ered #y the
(2'+ #y agreeing to accept all employees who had not yet returned to wor$ it
waives the issue of the illegality of the stri$e.
253


j. Injunctions
/30 'equisites for 2a#or Injunctions
(o temporary or permanent injunction or restraining order in any case involving
or growing out of la#or disputes shall #e issued #y any court or other entity.
,)ceptions.
1. Chen prohi#ited or unlawful acts are #eing or a#out to #e committed
that will cause grave or irrepara#le damage to the complaining party.
254
2. 5n the ground of national interest
3. The S2, or the (2'+ may see$
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.
255
/60 OInnocent &ystander 'uleO
The innocent #y stander must show.

252
No. 24, 7u!de'!nes 7o&ern!n( *%or Re't!ons
253
Reformist *nion v. "LRC, 7.R. No. 120482,Hn. 27, 1997
254
Art. 2182e3
122
3. +ompliance with the grounds specified
in 'ule ?< of the 'ules of +ourt and
6. That it is entirely different from without any connection whatsoever to
either party to the dispute and therefore its interests are totally foreign to the conte)t
thereof.
256
". PROCEDURE AND #URISDICTION
1. Labor /rbiter
a. Murisdiction
257
255
Art. 2632(3
256
$SF )ire - Ru,,er v. CA, 7.R. 128632, Au(. 5, 1999
257
9$e :ur!sd!ct!on !s or!(!n' nd e6c'us!&e !n nture. *%or Ar%!ters $&e no ppe''te :ur!sd!ct!on.
123
30 versus 'egional Director
2a#or Ar#iter 'egional Director
124
,)clusive and original jurisdiction
to hear and decide the following cases
258

involving all wor$ers.
3. 92P cases
6. Termination disputes
:as jurisdiction over claims for recovery of
wages simple money claims and other
#enefits provided that.
3. the claim must arise from employer-
employee relationship1
6. the claimant does not see$
258
4nc'ud!n( t$e fo''o/!n( cses"
1. #(e d!stort!on cses on'y !n unor(n!0ed est%'!s$)ents. 4n or(n!0ed est%'!s$)ents, :ur!sd!ct!on
!s &ested /!t$ >o'untry Ar%!trtors.
2. A'' )onetry c'!)s of .&erses 8!'!p!no #or,ers r!s!n( fro) e)p'oyerA e)p'oyee re't!ons$!p or %y
&!rtue of ny '/ or contrct !n&o'&!n( 8!'!p!no /or,ers for o&erses dep'oy)ent, !nc'ud!n( c'!)s for
ctu', )or', e6e)p'ry nd ot$er for)s of d)(es.
3. 4''e(' d!s)!ss' cses of e)p'oyees of coopert!&es, %ut not )e)%ers of coopert!&es %ecuse t$ey
re not e)p'oyees.
4. 1ses !n&o'&!n( e)p'oyees of (o&ern)entAo/ned or contro''ed corport!ons /!t$out or!(!n'
c$rters (or(n!0ed under t$e 1orport!on 1ode). 9$ey $&e no :ur!sd!ct!on !f ent!ty $s or!(!n' c$rter.
*%or Ar%!ters $&e no :ur!sd!ct!on o&er ter)!nt!on of corporte off!cers nd stoc,$o'ders /$!c$,
under t$e '/, !s cons!dered !ntrAcorporte d!spute.
*%or Ar%!ters $&e no :ur!sd!ct!on o&er '%or cses !n&o'&!n( ent!t!es !))une fro) su!t. +6cept!on"
/$en s!d ent!t!es perfor) propr!etry ct!&!t!es (s d!st!n(u!s$ed fro) (o&ern)ent' funct!ons).
125
=. If accompanied with a claim
for reinstatement those that wor$ers file
involving wages rates of pay hours of
wor$ and other terms and conditions of
employment
4. +laims for actual moral
e)emplary and other forms of damages
reinstatement1 and
=. the aggregate money claim of each
employee does not e)ceed P?AAA.AA
262
262
Art. 129
126
arising from employer
employee relations
5. +ases arising from any
violation of Art. 67D
259
including
questions involving the legality of stri$es
and loc$outs1
7. ,)cept claims for ,mployment
+ompensation Social Security
Philhealth
and maternity #enefits all other claims
arising from employer employee relations
Including those of persons in domestic or
household service involving an amount
e)ceeding P?AAA regardless of whether
accompanied with a claim
for reinstatement.
>. 4onetary claims of overseas
contract wor$ers arising from employer
employee relations1
260
<. Cage distortion disputes in
unorgani"ed esta#lishments not voluntarily
settled #y the parties1
261
259
See Reference
260
under t$e G!(rnt #or,erFs Act of 1995, s )ended %y R.A. 10022
127

@. ,nforcement of compromise
agreements when there is non-compliance
#y any of the parties1 and
3A. 5ther cases as may #e provided
#y law.
#. 'einstatement pending appeal
The decision of the 2A reinstating a dismissed or separated employee shall #e
e)ecutory even pending appeal.
263
The employee shall either #e.
261
pursunt to R.A. 6727
263
9$e post!n( of %ond %y t$e e)p'oyer s$'' not sty t$e e6ecut!on of re!nstte)ent
+&en !f t$e order of re!nstte)ent of t$e *A !s re&ersed on ppe', !t !s o%'!(tory on t$e prt of
128
i. Admitted #ac$ to wor$ under the same terms and conditions prevailing prior to
the dismissal or separation1 or
ii. At the option of the employer merely reinstated into the payroll.
c. 'equirements to perfect appeal to (2'+
264
The appeal is perfected if.
i. ;iled within the reglementary period provided in Sec. 3 of this 'ules
ii. 8erified #y the appellant himself in accordance with
Sec. D 'ule > of the 'ules of +ourt as amended
iii. In the form of a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof the relief prayed for
and with a statement of the date the appellant received the appealed decision
resolution or order
iv. In = legi#ly typewritten or printed copies
v. Accompanied #y
/30 proof of payment of the required appeal fee1
/60 posting of a cash or surety #ond1
t$e e)p'oyer to re!nstte nd py t$e /(es of t$e d!s)!ssed e)p'oyee dur!n( t$e per!od of ppe'
unt!' re&ers' %y t$e $!($er court. .n t$e ot$er $nd,
!f t$e e)p'oyee $s %een re!nstted dur!n( t$e ppe' per!od nd suc$ re!nstte)ent order !s re&ersed
/!t$ f!n'!ty, t$e e)p'oyee !s not re5u!red to re!)%urse /$te&er s'ry $e rece!&ed for $e !s
ent!t'ed to suc$, )ore so !f $e ctu''y rendered ser&!ces dur!n( t$e per!od. (Pfi0er v. ?elasco, 7.R.
No. 177467, Grc$ 9, 2011)
En'ess t$ere !s restr!n!n( order, !t !s )!n!ster!' upon t$e *A to !)p'e)ent t$e order of
re!nstte)ent nd !t !s )ndtory on t$e e)p'oyer to co)p'y t$ere/!t$. (1arcia v. PAL, 7.R. No.
164856, Hn. 20, 2009)
264
Appe' fro) t$e dec!s!on of t$e *%or Ar%!ter !s %rou($t %y ord!nry ppe' to t$e N*R1 /!t$!n ten (10)
c'endr dys fro) rece!pt %y t$e prty of t$e dec!s!on.
129
/=0 a certificate of nonforum shopping1 and
/D0 proof of service upon the other parties.

4ere notice of appeal without complying with the other requisites aforestated
shall not stop the running of the period for perfecting an appeal.
2. National Labor Relations Commission )NLRC*
a. Murisdiction
265
,)clusive 5riginal ,)clusive Appellate
3. Injunction in ordinary la#or disputes to
enjoin or restrain any actual or threatened
commission of any or all prohi#ited or
unlawful acts or to require the performance
of a particular act in any la#or dispute
which if not restrained or performed
forthwith may cause grave or irrepara#le
damage to any party.
6. Injunction in stri$es or loc$outs under
Article 67D of the 2a#or +ode.
=. +ertified la#or disputes causing or
li$ely to cause a stri$e or loc$out in an
industry indispensa#le to the national
3. All cases decided #y the 2a#or Ar#iters
including contempt cases.
6. +ases decided #y the D52,
'egional Directors or his duly
authori"ed :earing 5fficers
266
involving
recovery of wages simple money claims
and other #enefits not e)ceeding P?AAA
and not accompanied #y claim for
reinstatement.
265
C!st!nct!on %et/een t$e :ur!sd!ct!on of t$e *%or Ar%!ters nd t$e N*R1.
9$e N*R1 $s e6c'us!&e ppe''te :ur!sd!ct!on on '' cses dec!ded %y t$e *%or Ar%!ters. 9$e N*R1 does
not $&e or!(!n' :ur!sd!ct!on on t$e cses o&er /$!c$ *%or Ar%!ters $&e or!(!n' nd e6c'us!&e
:ur!sd!ct!on (see %o&e enu)ert!on). 4f c'!) does not f'' /!t$!n t$e e6c'us!&e or!(!n' :ur!sd!ct!on of
t$e *%or Ar%!ter, t$e N*R1 cnnot $&e ppe''te :ur!sd!ct!on t$ereo&er.
266
under Art. 129
130
interest certified to it #y the Secretary of
2a#or and ,mployment for compulsory
ar#itration.
#. ,ffect of (2'+ reversal of 2a#or Ar#iter-s order of reinstatement
,ven if the order of reinstatement of the 2a#or Ar#iter is reversed on appeal it is
o#ligatory on the part of the employer to reinstate and pay the wages of the dismissed
employee during the period of appeal until reversal #y the higher court.
5n the other hand if the employee has #een reinstated during the appeal period
and such reinstatement order is reversed with finality the employee is not required to
reim#urse whatever salary he received for he is entitled to such more so if he actually
rendered services during the period.
In other words a dismissed employee whose case was favora#ly decided #y the
2a#or Ar#iter is entitled to receive wages pending appeal upon reinstatement which is
immediately e)ecutory. 9nless there is a restraining order it is ministerial upon the 2a#or
Ar#iter to implement the order of reinstatement and it is mandatory on the employer to
comply therewith.
c. 'emedies
The employer is practically left with no effective contra-remedy that may forestall
or stay the e)ecution of a 2a#or Ar#iter-s order for immediate reinstatement pending
appeal. All that the employer has is to avail of any of the following options.
3. actual reinstatement of the employee to his wor$ under the same terms and
conditions prevailing prior to his dismissal or separation1 or
6. reinstatement of the employee in the payroll of the company without requiring
him to report #ac$ to his wor$.
267
;ailing to e)ercise any of the options the employer can #e compelled under pain
of contempt to pay instead the salary of the employee. The employee should not #e left
without any remedy in case the employer unreasona#ly delays reinstatement. The
unjustified refusal of the employer to reinstate an illegally dismissed employee entitles
the employee to payment of his salaries.
268
The entitlement of the dismissed employee to
his salaries occasioned #y the unjustified refusal of the employer to reinstate him
267
Art. 223= Eam,oan!a Cit% 'ater #istrict vs. Buat, 232 S1RA 587
131
#ecomes effective from the time the employer failed to reinstate him despite the issuance
of a writ of e)ecution.
269
If despite several writs of e)ecution the employer still refuses to reinstate the
employee the remedy is not the grant of additional #ac$wages to serve as damages #ut to
file a motion to cite the employer for contempt.
270

d. +ertified cases
Signifies that the (2'+-s cases are certified #y law and any cases which
happened within the proceedings are considered final unless appeals are made.
271
3. 0ureau of Labor Relations )0LR* = Med /rbiters
268
Pioneer )exturi0in! Corporation vs. "LRC, 280 S1RA 806 21997
269
RoFuero vs. Pilippine Air Lines, Inc. cse
270
Cristian Literature Crusade vs. "LRC, 171 S1RA 712, Apr!' 10, 1989= See 'so Industrial and )ransport
EFuipment, Inc. vs. "LRC, 7. R. No. 113592, Hn. 15, 1998
271
en./!,!ped!.or(
132
. Murisdiction
The &2' has original and e)clusive jurisdiction over the following.
3. IInter-union disputesJ or Irepresentation disputesJ which refer to cases
involving petition for certification election filed #y a duly registered la#or organi"ation
which is see$ing to #e recogni"ed as the sole and e)clusive #argaining agent of the ran$-
and-file employees in the appropriate #argaining unit of a company firm or
esta#lishment.
6. IIntra-union disputesJ or Iinternal union disputesJ which refer to disputes or
grievances arising from any violation of or disagreement over any provision of the
constitution and #y-laws of the union including any violation of the rights and conditions
of union mem#ership provided for in the 2a#or +ode.
=. All disputes grievances or pro#lems arising from or affecting la#or-
management relations in all wor$places e)cept those arising from the interpretation or
implementation of the +&A which are su#ject of grievance procedure and!or voluntary
ar#itration.
The &2' no longer handles Iall la#or management disputes1J rather its
functions and jurisdiction are largely confined to.
3. 9nion matters
6. +ollective #argaining registry and
=. 2a#or education
The &2' has appellate jurisdiction over decisions of the 'egional Director in
cases involving cancellations of certificates of registration of la#or unions.
133
3. National Conciliation and Mediation 0oard )NCM0*
. (ature of proceedings
(on-litigious in nature. They are not governed #y technical rules applica#le to
court or judicial proceedings #ut they must at all times comply with the requirements of
due process
%. +onciliation vs. 4ediation
+onciliation 4ediation
+onceived of as
a mild form of intervention
#y a neutral third party
A mild intervention #y a neutral third
party
The conciliator4ediator relying on his
persuasive e)pertise who ta$es an active
role in assisting parties #y trying to $eep
disputants tal$ing facilitating other
procedural niceties carrying
messages #ac$ and forth #etween the
parties and generally#eing
a good fellow who tries to $eep
thingscalm and forwardloo$ing in a tense
situation.
The conciliator-mediator where#y he
Starts advising the parties or offering
solutions or alternatives to the pro#lems
with the end in view of assisting them
towards voluntarily reaching their own
mutually accepta#le settlement of the
dispute.
It is the process where a disinterested
=rd party meets with management and
la#or at their request or otherwise
during a la#or dispute or in collective
#argaining conferences and #y cooling
tempers aids in reaching an agreement.
It is when a =rd party studies each
side of the dispute then ma$es
proposals for
the disputants to consider. The mediator
cannot ma$e an award nor render a
decision.
134
#. Preventive 4ediation
'efer to the potential la#or disputes which are the su#ject of a formal or
informal request for conciliation and mediation assistance sought #y either or #oth
parties or upon the initiative of the
(+4& to avoid the occurrence of actual la#or disputes.

$. 25L! Regional 2irectors
a. Murisdiction
272
%. 25L! &ecretar+
a. 8isitorial and ,nforcement Powers
273
8isitorial Powers ,nforcement Powers
272
see 1. supr
273
>!s!tor!' nd enforce)ent po/er %y Secretry of *%or or du'y ut$or!0ed representt!&e
1. Access to e)p'oyerMs records nd pre)!ses
2. R!($t to copy records
3. R!($t to 5uest!on ny e)p'oyee
4. 4n&est!(te ny fct, cond!t!on or )tter /$!c$ )y %e necessry to
5. .rder nd d)!n!ster, fter due not!ce nd $er!n(, co)p'!nce /!t$ t$e *%or Stndrds pro&!s!ons
6. 4ssue /r!ts of e6ecut!on to t$e ppropr!te ut$or!ty for enforce)ent of t$e!r orders
7. .rder stopp(e of /or, or suspens!on of opert!ons /$en nonAco)p'!nce /!t$ '/ nd
!)p'e)ent!n( re(u't!ons poses (r&e nd !))!nent dn(er to t$e $e't$ nd sfety of /or,ers !n t$e
/or,p'ce (on'y Secretry of *%or $s t$!s po/er)
A Ber!n( /!t$!n 24 $ours
A +)p'oyer '!%'e for s'r!es dur!n( suspens!on of opert!ons !f found to $&e cused t$e &!o't!on
A No 9R. or 9e)porry;-er)nent !n:unct!on )y %e !ssued %y n !nfer!or court o&er ny cse !n&o'&!n(
t$e enforce)ent orders !ssued
135
3. Access to employer-s records and
premises at any time of the day or
night
whenever wor$ is #eing underta$en therein
6. To copy from said records
=. Guestion any employee and
investigate
any fact condition or matter which
may
#e necessary to determine violations or
which may aid in the enforcement of
the
2a#or +ode and of any la#or law
wage
order or rules and regulation issued
pursuant thereto.
3. Issue compliance orders
6. Issue writs of e)ecution for the
enforcement of their orders e)cept in
cases where the employer contests the
findings of the la#or officer and raise
issues supported #y documentary proof
which were not considered in the
course
of inspection
=.5rder stoppage of wor$ or
suspension of operation when non
compliance with the law or implementing
rules and regulations poses grave and
imminent danger to health and safety of
wor$ers in the wor$place
#. Power to suspend effects of termination
The Secretary of the Department of 2a#or may suspend the effects of the
termination pending resolution of the dispute in the event of a prima facie finding #y the
appropriate official of the Department of 2a#or and ,mployment #efore whom such
dispute is pending that the termination may cause a serious la#or dispute or is in
implementation of a mass lay-off.
274
c. Assumption of jurisdiction
Chen in his opinion there e)ists a la#or dispute causing or li$ely to cause a
stri$e or loc$out in an industry indispensa#le to the national interest the Secretary of
274
Art. 277, 'st sentence
136
2a#or and ,mployment may assume jurisdiction over the dispute and decide it or certify
the same to the +ommission for compulsory ar#itration. Such assumption or certification
shall have the effect of automatically enjoining the intended or impending stri$e or
loc$out as specified in the assumption or certification order. If one has already ta$en
place at the time of assumption or certification all stri$ing or loc$ed out employees shall
immediately return-to-wor$ and the employer shall immediately resume operations and
readmit all wor$ers under the same terms and conditions prevailing #efore the stri$e or
loc$out. The Secretary of 2a#or and ,mployment or the +ommission may see$ 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.
275
d. Appellate jurisdiction
3. 5rders issued #y the duly authori"ed representative of the Secretary of 2a#or
and
,mployment under Article 36<
276
may #e appealed to the latter.
6. Denial of application for union registration or cancellation of union
registration
originally rendered #y the &ureau of 2a#or 'elations /&2'0 may #e appealed to the
Secretary of 2a#or and ,mployment.
277
=. Decisions of the 4ed-Ar#iter in certification election cases are appeala#le to
the
D52, Secretary.
278
e. 8oluntary ar#itration powers
275
Art. 263 ((), 1
st
pr.
276
>!s!tor!' nd +nforce)ent -o/er
277
4f or!(!n''y rendered %y t$e Re(!on' .ff!ce, ppe' s$ou'd %e )de to t$e ?*R.
137
To prevent la#or rows from escalating into full-#lown stri$es and wor$ stoppages
the D52, Secretary may refer pending la#or disputes to voluntary ar#itration as a
mechanism to e)peditiously and efficiently dispose the la#or cases through its e)isting
corps of accredited voluntary ar#itrators /A8As0. 8oluntary ar#itration as a means of
settling disputes avoids lengthy and e)pensive litigations that cause delays in the
dispensation of la#or justice and is effective as an alternative dispute settlement
mechanism.
4. 4rievance Maciner+ and >oluntar+ /rbitration
1. &ub?ect matter of grievance
A dispute or controversy arises over the implementation or interpretation of a
+&A or from the implementation or enforcement of company personnel policies and
either the union or the employer invo$es the grievance machinery provision for the
adjustment or resolution of such dispute or controversy.
2. >oluntar+ /rbitrator
a0 Murisdiction
5riginal and e)clusive jurisdiction over.
3. All unresolved grievances arising from the.
a. Implementation or interpretation of the +&A
#. Interpretation or enforcement of company personnel policies
6. Cage distortion issues arising from the application of any wage
orders in organi"ed esta#lishments
=. Those arising from interpretation and implementation of
productivity incentive programs under '.A. 7@>3
D. 8iolations of +&A provisions which are not gross in character
279
are no longer treated as 92P and shall #e resolved as grievances under the +&A
278
Art. 259
Cec!s!ons of GedAAr%!ters !n !ntrAun!on d!sputes re ppe'%'e to t$e ?*R
138
?. Any other la#or disputes upon agreement #y the parties including
92P and #argaining deadloc$.
280
#0 Procedure
The 8oluntary Ar#itrator or panel of 8oluntary Ar#itrators shall have the power to
hold hearings receive evidences and ta$e whatever action is necessary to resolve the
issue or issues su#ject of the dispute including efforts to effect a voluntary settlement
#etween parties. All parties to the dispute shall #e entitled to attend the ar#itration
proceedings. The attendance of any third party or the e)clusion of any witness from the
proceedings shall #e determined #y the 8oluntary Ar#itrator or panel of 8oluntary
Ar#itrators. :earing may #e adjourned for cause or upon agreement #y the parties.
9nless the parties agree otherwise it shall #e mandatory for the 8oluntary Ar#itrator or
panel of 8oluntary Ar#itrators to render an award or decision within twenty /6A0 calendar
days from the date of su#mission of the
dispute to voluntary ar#itration.
281

c0 'emedies
Awards or decisions of voluntary ar#itrator #ecome final and e)ecutory after ten
/3A0 calendar days from receipt of copies of the award or decision #y the parties.

&oth parties shall comply voluntarily and faithfully with the award. In instances
of noncompliance #y either or #oth parties a motion to enforce!e)ecute the award may #e
filed with the voluntary ar#itrator who may issue a writ of e)ecution requiring either the
sheriff of the (ational 2a#or 'elations +ommission or the regular courts or any pu#lic
official whom the parties may designate in the su#mission agreement to e)ecute the final
decision or award. In the a#sence of the voluntary ar#itrator or in case of his incapacity
279
Art. 262
280
Art. 261
281
Art. 262AA
139
the motion shall #e filed with the 2a#or Ar#iter in the region having jurisdiction over the
wor$place. The filing of a motion for the issuance of writ of e)ecution is without
prejudice to any other action the aggrieved party may ta$e against the non-complying
party such as a petition for contempt or imposition of fines and penalties.
282

,. Court of /ppeals
a. 'ule 7? 'ules of +ourt
A party may avail itself of the civil action for certiorari where the tri#unal #oard
or office e)ercising juridical functions.
:as acted without or in e)cess of jurisdiction1 and or
Cith grave a#use of discretion and praying that judgments #e rendered annulling
or modifying the proceedings as the law requires of such tri#unal #oard or officer
It may #e filed not later than 7A days from notice of the judgment order or
resolution. &oth S+ and +A has jurisdiction over the action1 however in line with the
doctrine of minatory of warts the petition should initially #e presented to the lower of the
two courts that is the +A.
-. &upreme Court
a. 'ule D? 'ules of +ourt
A party desiring to appeal #y certiorari from a judgment or final order or
resolution of the +ourt of Appeals the &andiganba+an the 'egional Trial +ourt or other
courts whenever authori"ed #y law may file with the Supreme +ourt a verified petition
for review on certiorari. The petition shall raise only questions of law which must #e
distinctly set forth.
283
1.. Prescription of /ctions
282
Ru'e >44, Secs. 6 O 7, !d.
283
Sec. 1
140
5ffenses penali"ed
under the 2+
= years
92P 5ne /30 year from accrual of
such 92P1 otherwise forever
#arred.
284
4oney +laims = years from the time the cause
of action accrued1 otherwise
forever #arred
All money claims accruing prior to
the effectivity of the 2+
Cithin one /30 year from the
date of effectivity in accordance
with I''1 otherwise they shall
forever #e #arred
Cor$men-s +ompensation claims
accruing prior to the effectivity of
the 2+ and #etween (ov. 3 3@>D
Dec. =3 3@>D
Dec. =3 3@>D shall #e filed not
later than 4ar. =3 3@>? #efore the
appropriate regional offices of the
Department of 2a#or
285
Illegal Dismissal +ases D years. It commences to run from
the date of formal dismissal.
286

284
Art. 290
285
Art. 291
141
Include. Pertinent Supreme +ourt decisions up to Manuary =3 6A3=.
Re$erence
Article =D. Prohi#ited practices. It shall #e unlawful for any individual entity licensee or holder
of authority.
To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowa#le fees prescri#ed #y the Secretary of 2a#or or to ma$e a wor$er pay any
amount greater than that actually received #y him as a loan or advance1
To furnish or pu#lish any false notice or information or document in relation to
recruitment or employment1
To give any false notice testimony information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this +ode.
To induce or attempt to induce a wor$er already employed to quit his employment in
order to offer him to another unless the transfer is designed to li#erate the wor$er from oppressive
terms and conditions of employment1
To influence or to attempt to influence any person or entity not to employ any wor$er
who has not applied for employment through his agency1
To engage in the recruitment or placement of wor$ers in jo#s harmful to pu#lic health or
morality or to the dignity of the 'epu#lic of the Philippines1
To o#struct or attempt to o#struct inspection #y the Secretary of 2a#or or #y his duly
authori"ed representatives1
To fail to file reports on the status of employment placement vacancies remittance of
foreign e)change earnings separation from jo#s departures and such other matters or
information as may #e required #y the Secretary of 2a#or.
286
$endo0a v. "LRC, 7.R. No. 122481, Gr. 5, 1998
142
To su#stitute or alter employment contracts approved and verified #y the Department of
2a#or from the time of actual signing thereof #y the parties up to and including the periods of
e)piration of the same without the approval of the Secretary of 2a#or1
To #ecome an officer or mem#er of the &oard of any corporation engaged in travel
agency or to #e engaged directly or indirectly in the management of a travel agency1 and
To withhold or deny travel documents from applicant wor$ers #efore departure for
monetary or financial considerations other than those authori"ed under this +ode and its
implementing rules and regulations.
A'TI+2, 33A. Cor$er preference in case of #an$ruptcy. - In the event of #an$ruptcy or
liquidation of an employer-s #usiness his wor$ers shall enjoy first preference as regards their
wages and other monetary claims any provisions of law to the contrary notwithstanding. Such
unpaid wages and monetary claims shall #e paid in full #efore claims of the government and
other creditors may #e paid. /As amended #y Section 3 'epu#lic Act (o. 7>3? 4arch 63
3@<@0.
A'TI+2, 36@. 'ecovery of wages simple money claims and other #enefits. - 9pon complaint
of any interested party the 'egional Director of the Department of 2a#or and ,mployment or any
of the duly authori"ed hearing officers of the Department is empowered through summary
proceeding and after due notice to hear and decide any matter involving the recovery of wages
and other monetary claims and #enefits including legal interest owing to an employee or person
employed in domestic or household service or househelper under this +ode arising from
employer-employee relations. Provided That such complaint does not include a claim for
reinstatement. Provided further That the aggregate money claims of each employee or
househelper does not e)ceed ;ive thousand pesos /P?AAA.AA0. The 'egional Director or hearing
officer shall decide or resolve the complaint within thirty /=A0 calendar days from the date of the
filing of the same. Any sum thus recovered on #ehalf of any employee or househelper
pursuant to this Article shall #e held in a special deposit account #y and shall #e paid on order
of the Secretary of 2a#or and ,mployment or the 'egional Director directly to the employee or
househelper concerned. Any such sum not paid to the employee or househelper #ecause he
cannot #e located after diligent and reasona#le effort to locate him within a period of three /=0
years shall #e held as a special fund of the Department of 2a#or and ,mployment to #e used
e)clusively for the amelioration and #enefit of wor$ers. Any decision or resolution of the
'egional Director or hearing officer pursuant to this provision may #e appealed on the same
grounds provided in Article 66= of this +ode within five /?0 calendar days from receipt
of a copy of said decision or resolution to the (ational 2a#or 'elations +ommission which
shall resolve the appeal within ten /3A0 calendar days from the su#mission of the last pleading
required or allowed under its rules. The Secretary of 2a#or and ,mployment or his duly
authori"ed representative may supervise the payment of unpaid wages and other monetary claims
and #enefits including legal interest found owing to any employee or househelper under this
+ode. /As amended #y Section 6 'epu#lic Act (o. 7>3? 4arch 63 3@<@0.
A'TI+2, 63>. Murisdiction of the 2a#or Ar#iters and the +ommission. -
/a0 ,)cept as otherwise provided under this +ode the 2a#or Ar#iters shall have original and
e)clusive jurisdiction to hear and decide within thirty /=A0 calendar days after the su#mission of
the case #y the parties for decision without e)tension even in the a#sence of stenographic notes
the following cases involving all wor$ers whether agricultural or non- agricultural.
143
3. 9nfair la#or practice cases1
6. Termination disputes
=. If accompanied with a claim for reinstatement those cases that wor$ers may file
involving wages rates of pay hours of wor$ and other terms and conditions of employment1
D. +laims for actual moral e)emplary and other forms of damages arising from the
employer- employee relations1
?. +ases arising from any violation of Article 67D of this +ode including questions
involving the legality of stri$es and loc$outs1 and
7. ,)cept claims for ,mployees- +ompensation Social Security 4edicare and maternity
#enefits all other claims arising from employer-employee relations including those of persons in
domestic or household service involving an amount e)ceeding five thousand pesos /P?AAA.AA0
regardless of whether accompanied with a claim for reinstatement.
/#0 The +ommission shall have e)clusive appellate jurisdiction over all cases decided #y 2a#or
Ar#iters.
/c0 +ases arising from the interpretation or implementation of collective #argaining agreement
and those arising from the interpretation or enforcement of company personnel policies shall #e
disposed of #y the 2a#or Ar#iter #y referring the same to the grievance machinery and voluntary
ar#itration as may #e provided in said agreements. /As amended #y Section @ 'epu#lic Act (o.
7>3? 4arch 63 3@<@0.
A'TI+2, 67D. Any union officer who $nowingly participates in an illegal stri$e and any
wor$er or union officer who $nowingly participates in the commission of illegal acts during a
stri$e may #e declared to have lost his employment status. Provided That mere participation of a
wor$er in a lawful stri$e shall not constitute sufficient ground for termination of his employment
even if a replacement had #een hired #y the employer during such lawful stri$e. /paragraph 60

A'TI+2, 6>@. Security of tenure. - In cases of regular employment the employer shall not
terminate the services of an employee e)cept for a just cause or when authori"ed #y this Title. An
employee who is unjustly dismissed from wor$ shall #e entitled to reinstatement without loss of
seniority rights and other privileges and to his full #ac$wages inclusive of allowances and to
his other #enefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of Any union officer who $nowingly participates in an
illegal stri$e and any wor$er or union officer who $nowingly participates in the commission of
illegal acts during a stri$e may #e declared to have lost his employment status. Provided That
mere participation of a wor$er in a lawful stri$e shall not constitute sufficient ground for
termination of his employment even if a replacement had #een hired #y the employer during
such lawful stri$e

Art. 6<6. Termination #y employer. An employer may terminate an employment for any of the
following causes.
a. Serious misconduct or willful diso#edience #y the employee of the lawful orders of his
employer or representative in connection with his wor$1
144
#. Fross and ha#itual neglect #y the employee of his duties1
c. ;raud or willful #reach #y the employee of the trust reposed in him #y his employer or duly
authori"ed representative1
d. +ommission of a crime or offense #y the employee against the person of his employer or any
immediate mem#er of his family or his duly authori"ed representatives1 and
e. 5ther causes analogous to the foregoing.
Art. 6<=. +losure of esta#lishment and reduction of personnel. The employer may also terminate
the
employment of any employee due to the installation of la#or-saving devices redundancy
retrenchment to prevent losses or the closing or cessation of operation of the esta#lishment or
underta$ing unless the closing is for the purpose of circumventing the provisions of this Title #y
serving a written notice on the wor$ers and the 4inistry of 2a#or and ,mployment at least one
/30 month #efore the intended date thereof. In case of termination due to the installation of la#or-
saving devices or redundancy the wor$er affected there#y shall #e entitled to a separation pay
equivalent to at least his one /30 month pay or to at least one /30 month pay for every year of
service whichever is higher. In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of esta#lishment or underta$ing not due to serious #usiness losses or
financial reverses the separation pay shall #e equivalent to one /30 month pay or at least one-half
/3!60 month pay for every year of service whichever is higher. A fraction of at least si) /70
months shall #e considered one /30 whole year.
Art. 6<D. Disease as ground for termination. An employer may terminate the services of an
employee who has #een found to #e suffering from any disease and whose continued employment
is prohi#ited #y law or is prejudicial to his health as well as to the health of his co-employees.
Provided That he is paid separation pay equivalent to at least one /30 month salary or to one-half
/3!60 month salary for every year of service whichever is greater a fraction of at least si) /70
months #eing considered as one /30 whole year.
De%artment Order N&. '()A
Serie* &$ +,''
'92,S I4P2,4,(TI(F A'TI+2,S 3A7 T5 3A@ 5; T:, 2A&5' +5D, AS A4,(D,D
Section 3. Fuiding principles. +ontracting and su#contracting arrangements are e)pressly
allowed #y law and are su#ject to regulations for the promotion of employment and the
o#servance of the rights of wor$ers to just and humane conditions of wor$ security of tenure
self-organi"ation and collective #argaining. 2a#or-only contracting as defined herein shall #e
prohi#ited.
Section 6. +overage. These 'ules shall apply to all parties of contracting and su#contracting
arrangements where employer-employee relationships e)ist. It shall also apply to cooperatives
engaging in contracting or su#contracting arrangements.
145
+ontractors and su#contractors referred to in these 'ules are prohi#ited from engaging in
recruitment and placement activities as defined in Article 3=/#0 of the 2a#or +ode whether for
local or overseas employment.
Section =. Definition of terms. The following terms as used in these 'ules shall mean.
/a0 I&ond!sJ refers to the #ond under Article 3A< of the 2a#or +ode that the principal may require
from the contractor to #e posted equal to the cost of la#or under contract. The same may also
refer to the security or guarantee posted #y the principal for the payment of the services of the
contractors under the Service Agreement.
/#0 I+a#oJ refers to a person or group of persons or to a la#or group which in the guise of a la#or
organi"ation cooperative or any entity supplies wor$ers to an employer with or without any
monetary or other consideration whether in the capacity of an agent of the employer or as an
ostensi#le independent contractor.
/c0 I+ontractingJ or ISu#contractingJ refers to an arrangement where#y a principal agrees to put
out or farm out with a contractor the performance or completion of a specific jo# wor$ or service
within a definite or predetermined period regardless of whether such jo# wor$ or service is to #e
performed or completed within or outside the premises of the principal.
/d0 I+ontractorJ refers to any person or entity including a cooperative engaged in a legitimate
contracting or su#contracting arrangement providing either services s$illed wor$ers temporary
wor$ers or a com#ination of services to a principal under a Service Agreement.
/e0 I+ontractor-s employeeJ includes one employed #y a contractor to perform or complete a jo#
wor$ or service pursuant to a Service Agreement with a principal. It shall also refer to regular
employees of the contractor whose functions are not dependent on the performance or completion
of a specific jo# wor$ or service within a definite period of time i.e. administrative staff.
/f0 IIn-house agencyJ refers to a contractor which is owned managed or controlled directly or
indirectly #y the principal or one where the principal owns!represents any share of stoc$ and
which operates solely or mainly for the principal.
/g0 I(et ;inancial +ontracting +apacity /(;++03J refers to the formula to determine the
financial capacity of the contractor to carry out the jo# wor$ or services sought to #e underta$en
under a Service Agreement. (;++ is current assets minus current lia#ilities multiplied #y E
which stands for contract duration equivalent to. 3A for one year or less1 3? for more than one /30
year up to two /60 years1 and 6A for more than two /60 years minus the value of all outstanding or
ongoing projects including contracts to #e started.
3 'efers to the formula set out in the Implementing 'ules and 'egulations of 'epu#lic Act (o.
@3<D or An Act Providing for the 4oderni"ation Standardi"ation and 'egulation of the
Procurement Activities of the Fovernment and ;or 5ther Purposes.
/h0 IPrincipalJ refers to any employer whether a person or entity including government agencies
and government-owned and controlled-corporations who!which puts out or farms out a jo#
service or wor$ to a contractor.
/i0 I'ight to controlJ refers to the right reserved to the person for whom the services of the
contractual wor$ers are performed to determine not only the end to #e achieved #ut also the
manner and means to #e used in reaching that end.
146
/j0 IService AgreementJ refers to the contract #etween the principal and contractor containing the
terms and conditions governing the performance or completion of a specific jo# wor$ or service
#eing farmed out for a definite or predetermined period.
/$0 ISolidary lia#ilityJ refers to the lia#ility of the principal pursuant to the provision of Article
3A@ of the 2a#or +ode as direct employer together with the contractor for any violation of any
provision of the 2a#or +ode.
It also refers to the lia#ility of the principal in the same manner and e)tent that he!she is lia#le to
his!her direct employees to the e)tent of the wor$ performed under the contract when the
contractor fails to pay the wages of his!her employees as provided in Article 3A7 of the 2a#or
+ode as amended.
/l0 OSu#stantial capitalJ refers to paid-up capital stoc$s!shares of at least Three 4illion Pesos
/P=AAAAAA.AA0 in the case of corporations partnerships and cooperatives1 in the case of single
proprietorship a net worth of at least Three 4illion Pesos /P=AAAAAA.AA0.
/m0 ITrilateral 'elationshipJ refers to the relationship in a contracting or su#contracting
arrangement where there is a contract for a specific jo# wor$ or service #etween the principal
and the contractor and a contract of employment #etween the contractor and its wor$ers. There
are three /=0 parties involved in these arrangements. the principal who decides to farm out a jo#
wor$ or service to a contractor1 the contractor who has the capacity to independently underta$e
the performance of the jo# wor$ or service1 and the contractual wor$ers engaged #y the
contractor to accomplish the jo# wor$ or service.
Section D. 2egitimate contracting or su#contracting. +ontracting or su#contracting shall #e
legitimate if all the following circumstances concur.
/a0 The contractor must #e registered in accordance with these 'ules and carries a distinct and
independent #usiness and underta$es to perform the jo# wor$ or service on its own
responsi#ility according to its own manner and method and free from control and direction of
the principal in all matters connected with the performance of the wor$ e)cept as to the results
thereof1
/#0 The contractor has su#stantial capital and!or investment1 and
/c0 The Service Agreement ensures compliance with all the rights and #enefits under 2a#or 2aws.
Section ?. Trilateral relationship in contracting arrangements1 Solidary lia#ility. In legitimate
contracting or su#contracting arrangement there e)ists.
/a0 An employer-employee relationship #etween the contractor and the employees it engaged to
perform the specific jo# wor$ or service #eing contracted1 and
/#0 A contractual relationship #etween the principal and the contractor as governed #y the
provisions of the +ivil +ode.
In the event of any violation of any provision of the 2a#or +ode including the failure to pay
wages there e)ists a solidary lia#ility on the part of the principal and the contractor for purposes
of enforcing the provisions of the 2a#or +ode and other social legislation to the e)tent of the
wor$ performed under the employment contract.
147
:owever the principal shall #e deemed the direct employer of the contractor-s employee in cases
where there is a finding #y a competent authority of la#or-only contracting or commission of
prohi#ited activities as provided in Section > or a violation of either Sections < or @ hereof.
Section 7. Prohi#ition against la#or-only contracting. 2a#or-only contracting is here#y declared
prohi#ited. ;or this purpose la#or only contracting shall refer to an arrangement where.
/a0 The contractor does not have su#stantial capital or investments in the form of tools
equipment machineries wor$ premises among others and the employees recruited and placed
are performing activities which are usually necessary or desira#le to the operation of the
company or directly related to the main #usiness of the principal within a definite or
predetermined period regardless of whether such jo# wor$ or service is to #e performed or
completed within or outside the premises of the principal1 or
/#0 The contractor does not e)ercise the right to control over the performance of the wor$ of the
employee.
Section >. 5ther Prohi#itions. (otwithstanding Section 7 of these 'ules the following are here#y
declared prohi#ited for #eing contrary to law or pu#lic policy.
A. +ontracting out of jo#s wor$s or services when not done in good faith and not justified #y the
e)igencies of the #usiness such as the following.
/30 +ontracting out of jo#s wor$s or services when the same results in the termination or
reduction of regular employees and reduction of wor$ hours or reduction or splitting of the
#argaining unit.
/60 +ontracting out of wor$ with a I+a#oJ.
/=0 Ta$ing undue advantage of the economic situation or lac$ of #argaining strength of the
contractor-s employees or undermining their security of tenure or #asic rights or circumventing
the provisions of regular employment in any of the following instances.
/i0 'equiring them to perform functions which are currently #eing performed #y the regular
employees of the principal1 and
/ii0 'equiring them to sign as a precondition to employment or continued employment an
antedated resignation letter1 a #lan$ payroll1 a waiver of la#or standards including minimum
wages and social or welfare #enefits1 or a quitclaim releasing the principal contractor or from
any lia#ility as to payment of future claims.
/D0 +ontracting out of a jo# wor$ or service through an in-house agency.
/?0 +ontracting out of a jo# wor$ or service that is necessary or desira#le or directly related to
the #usiness or operation of the principal #y reason of a stri$e or loc$out whether actual or
imminent.
/70 +ontracting out of a jo# wor$ or service #eing performed #y union mem#ers when such will
interfere with restrain or coerce employees in the e)ercise of their rights to self-organi"ation as
provided in Art. 6D< /c0 of the 2a#or +ode as amended.
148
/>0 'epeated hiring of employees under an employment contract of short duration or under a
Service Agreement of short duration with the same or different contractors which circumvents
the 2a#or +ode provisions on Security of Tenure.
/<0 'equiring employees under a su#contracting arrangement to sign a contract fi)ing the period
of employment to a term shorter than the term of the Service Agreement unless the contract is
divisi#le into phases for which su#stantially different s$ills are required and this is made $nown
to the employee at the time of engagement.
/@0 'efusal to provide a copy of the Service Agreement and the employment contracts #etween
the contractor and the employees deployed to wor$ in the #argaining unit of the principal-s
certified #argaining agent to the sole and e)clusive #argaining agent /S,&A0.
/3A0 ,ngaging or maintaining #y the principal of su#contracted employees in e)cess of those
provided for in the applica#le +ollective &argaining Agreement /+&A0 or as set #y the Industry
Tripartite +ouncil /IT+0.
&. +ontracting out of jo#s wor$s or services analogous to the a#ove when not done in good faith
and not justified #y the e)igencies of the #usiness.
Section <. 'ights of contractor-s employees. All contractor-s employees whether deployed or
assigned as reliever seasonal wee$-ender temporary or promo jo##ers shall #e entitled to all
the rights and privileges as provided for in the 2a#or +ode as amended to include the following.
/a0 Safe and healthful wor$ing conditions1
/#0 2a#or standards such as #ut not limited to service incentive leave rest days overtime pay
holiday pay 3=th month pay and separation pay as may #e provided in the Service Agreement or
under the 2a#or +ode1
/c0 'etirement #enefits under the SSS or retirement plans of the contractor if there is any1
/d0 Social security and welfare #enefits1
/e0 Self-organi"ation collective #argaining and peaceful concerted activities1 and
/f0 Security of tenure.
Section @. 'equired contracts under these 'ules.
/a0 ,mployment contract #etween the contractor and its employee.
(otwithstanding any oral or written stipulations to the contrary the contract #etween the
contractor and its employee shall #e governed #y the provisions of Articles 6>@ and 6<A of the
2a#or +ode as amended. It shall include the following terms and conditions.
i. The specific description of the jo# wor$ or service to #e performed #y the employee1
ii. The place of wor$ and terms and conditions of employment including a statement of the wage
rate applica#le to the individual employee1 and
iii. The term or duration of employment that must #e co-e)tensive with the Service Agreement or
with the specific phase of wor$ for which the employee is engaged.
The contractor shall inform the employee of the foregoing terms and conditions of employment in
writing on or #efore the first day of his!her employment.
149
/#0 Service Agreement #etween the principal and the contractor. The Service Agreement shall
include the following.
i. The specific description of the jo# wor$ or service #eing su#contracted.
ii. The place of wor$ and terms and conditions governing the contracting arrangement to include
the agreed amount of the services to #e rendered the standard administrative fee of not less than
ten percent /3AH0 of the total contract cost.
iii. Provisions ensuring compliance with all the rights and #enefits of the employees under the
2a#or +ode and these 'ules on. provision for safe and healthful wor$ing conditions1 la#or
standards such as service incentive leave rest days overtime pay 3=th month pay and separation
pay1 retirement #enefits1 contri#utions and remittance of SSS Philhealth PagI#ig ;und and other
welfare #enefits1 the right to self-organi"ation collective #argaining and peaceful concerted
action1 and the right to security of tenure.
iv. A provision on the (et ;inancial +ontracting +apacity of the contractor which must #e equal
to the total contract cost.
v. A provision on the issuance of the #ond!s as defined in Section =/m0 renewa#le every year.
vi. The contractor or su#contractor shall directly remit monthly the employers- share and
employees- contri#ution to the SSS ,++ Philhealth and Pagi#ig.
vii. The term or duration of engagement. The Service Agreement must conform to the D52,
Standard +omputation and Standard Service Agreement which form part of these 'ules as
Anne)es IAJ and I&J.
Section 3A. Duties of the principal. Pursuant to the authority of the Secretary of 2a#or and
,mployment to restrict or prohi#it the contracting of la#or to protect the rights of the wor$ers and
to ensure compliance with the provisions of the 2a#or +ode as amended the principal as the
indirect employer or the user of the services of the contractor is here#y required to o#serve the
provisions of these 'ules.
Section 33. Security of tenure of contractor-s employees. It is understood that all contractor-s
employees enjoy security of tenure regardless of whether the contract of employment is co-
terminus with the service agreement or for a specific jo# wor$ or service or phase thereof.
Section 36. 5#servance of required standards of due process1 requirements of notice. In all cases
of termination of employment the standards of due process laid down in Article 6>>/#0 of the
2a#or +ode as amended and settled jurisprudence on the matter6 must #e o#served. Thus the
following is here#y set out to clarify the standards of due process that must #e o#served.
6 Eing of Eings Transport Inc. +laire dela ;uente and 4elissa 2im vs. Santiago 5. 4amac
F.'. (o. 3776A< /6@ Mune 6AA>01 and ;eli) &. Pere" and Amante F. Doria v. Philippine
Telegraph and Telephone +ompany and Mose 2uis Santiago F.'. (o. 3?6AD< /> April 6AA@0 /en
#anc Decision0.
I. ;or termination of employment #ased on just causes as defined in Article 6<6 of the +ode the
requirement of two written notices served on the employee shall o#serve the following.
/A0 The first written notice should contain.
150
/30 The specific causes or grounds for termination1
/60 Detailed narration of the facts and circumstances that will serve as #asis for the charge against
the employee. A general description of the charge will not suffice1
/=0 The company rule if any that is violated and!or the ground under Art. 6<6 that is #eing
charged against the employee1 and
/D0 A directive that the employee is given opportunity to su#mit a written e)planation within a
reasona#le period.
I'easona#le periodJ should #e construed as a period of at least five /?0 calendar days from
receipt of the notice to give the employee an opportunity to study the accusation consult a union
official or lawyer gather data and evidence and decide on the defenses against the complaint.
/&0 After serving the first notice the employer should afford the employee ample opportunity to
#e heard and to defend himself!herself with the assistance of his!her representative if he!she so
desires as provided in Article 6>>/#0 of the 2a#or +ode as amended.
IAmple opportunity to #e heardJ means any meaningful opportunity /ver#al or written0 given to
the employee to answer the charges against him!her and su#mit evidence in support of his!her
defense whether in a hearing conference or some other fair just and reasona#le way. A formal
hearing or conference #ecomes mandatory only when requested #y the employee in writing or
su#stantial evidentiary disputes e)ist or a company rule or practice requires it or when similar
circumstances justify it.
/+0 After determining that termination of employment is justified the employer contractor shall
serve the employee a written notice of termination indicating that. /30 all circumstances involving
the charge against the employees have #een considered1 and /60 the grounds have #een
esta#lished to justify the severance of their employment. The foregoing notices shall #e served on
the employee-s last $nown address.
II. ;or termination of employment #ased on authori"ed causes defined in Article 6<= of the 2a#or
+ode the requirement of due process shall #e deemed complied with upon service of a written
notice to the employee and the appropriate regional office of the Department of 2a#or and
,mployment at least thirty days #efore the effectivity of the termination specifying the ground or
grounds for termination.
III. If the termination is #rought a#out #y the completion of the contract or phase thereof no prior
notice is required. If the termination is #rought a#out #y the failure of a pro#ationary employee to
meet the reasona#le standards of the employer which was made $nown to the employee at the
time of his!her employment it shall #e sufficient that a written notice is served upon the
employee within a reasona#le time prior to the e)piration of the pro#ationary period.
Section 3=. ,ffect of termination of employment. The termination of employment of the
contractor employee prior to the e)piration of the Service Agreement shall #e governed #y
Articles 6<6 6<= and 6<D of the 2a#or +ode.
In case the termination of employment is caused #y the pre-termination of the Service Agreement
not due to authori"ed causes under Article 6<= the right of the contractor employee to unpaid
wages and other unpaid #enefits including unremitted legal mandatory contri#utions e.g. SSS
151
Philhealth Pag-i#ig ,++ shall #e #orne #y the party at fault without prejudice to the solidary
lia#ility of the parties to the Service Agreement.
Chere the termination results from the e)piration of the service agreement or from the
completion of the phase of the jo# wor$ or service for which the employee is engaged the latter
may opt for payment of separation #enefits as may #e provided #y law or the Service Agreement
without prejudice to his!her entitlement to the completion #onuses or other emoluments
including retirement #enefits whenever applica#le.
Section 3D. 4andatory 'egistration and 'egistry of 2egitimate +ontractors. +onsistent with the
authority of the Secretary of 2a#or and ,mployment to restrict or prohi#it the contracting out of
la#or to protect the rights of wor$ers it shall #e mandatory for all persons or entities including
cooperatives acting as contractors to register with the 'egional 5ffice of the Department of
2a#or and ,mployment /D52,0 where it principally operates.
;ailure to register shall give rise to the presumption that the contractor is engaged in la#or-only
contracting.
Accordingly the registration system governing contracting arrangements and implemented #y the
'egional 5ffices of the D52, is here#y esta#lished with the &ureau of Cor$ing +onditions
/&C+0 as the central registry.
Section 3?. 'equirements for registration. The application for registration as a contractor shall #e
filed at the D52, 'egional 5ffice in the region where it see$s to principally operate. The
applicant shall provide in the application form the following information.
/a0 The name and #usiness address of the applicant and the areas where it see$s to operate1
/#0 The names and addresses of officers if the applicant is a corporation partnership cooperative
or a la#or organi"ation1
/c0 The nature of the applicant-s #usiness and the industry or industries where the applicant see$s
to operate1
/d0 The num#er of regular wor$ers and the total wor$force1
/e0 The list of clients if any the num#er of personnel assigned to each client if any and the
services provided to the client1
/f0 The description of the phases of the contract including the num#er of employees covered in
each phase where appropriate1 and
/g0 Proof of compliance with su#stantial capital requirement as defined in Section =/l0 of these
'ules.
The application shall #e supported #y.
/a0 A certified true copy of a certificate of registration of firm or #usiness name from the
Securities and ,)change +ommission /S,+0 Department of Trade and Industry /DTI0
+ooperative Development Authority /+DA0 or from the D52, if the applicant is a la#or
organi"ation1
/#0 A certified true copy of the license or #usiness permit issued #y the local government unit or
units where the contractor operates1
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/c0 A certified listing with proof of ownership or lease contract of facilities tools equipment
premises implements machineries and wor$ premises that are actually and directly used #y the
contractor in the performance or completion of the jo# wor$ or service contracted out. In
addition the applicant shall su#mit a photo of the office #uilding and premises where it holds
office1
/d0 A copy of audited financial statements if the applicant is a corporation partnership
cooperative or a la#or organi"ation or copy of the latest IT' if the applicant is a sole
proprietorship1 and
/e0 A sworn disclosure that the registrant its officers and owners or principal stoc$holders or any
one of them has not #een operating or previously operating as a contractor under a different
#usiness name or entity or with pending cases of violations of these 'ules and!or la#or standards
or with a cancelled registration. In case any of the foregoing has a pending case a copy of the
complaint and the latest status of the case shall #e attached.
The application shall #e verified. It shall include a D52, certification of attendance to
orientation seminar on these 'ules and an underta$ing that the contractor shall a#ide #y all
applica#le la#or laws and regulations.
Section 37. ;iling and processing of application. The application with all supporting documents
shall #e filed in triplicate in the 'egional 5ffice where the applicant principally operates. (o
application for registration shall #e accepted unless all the requirements in the preceding Section
are complied with.
Section 3>. 8erification inspection. Cithin two /60 wor$ing days upon receipt of the application
with complete supporting documents the authori"ed representative of the 'egional Director shall
conduct a verification inspection of the facilities tools equipment and wor$ premises of the
applicant.
Section 3<. Approval or denial of the application. The 'egional 5ffice shall deny or approve the
application within one /30 wor$ing day after the verification inspection.
Applications that fail to meet the requirements set forth in Section 3? of these 'ules shall #e
denied.
Section 3@. 'egistration fee. Payment of registration fee of Twenty-;ive Thousand Pesos
/P6?AAA.AA0 shall #e required upon approval of the application.
9pon registration the 'egional 5ffice shall return one set of the duly-stamped application
documents to the applicant retain one set for its file and transmit the remaining set to the &ureau
of Cor$ing +onditions /&C+0 within five /?0 days from registration.
Section 6A. 8alidity of certificate of registration of contractors. The contractor shall #e deemed
registered only on the date of issuance of its +ertificate of 'egistration.
The +ertificate of 'egistration shall #e effective for three /=0 years unless cancelled after due
process. The same shall #e valid in the region where it is registered.
In case the contractor has Service Agreements or operates outside the region where it is
registered it shall request a duly authenticated copy of its +ertificate of 'egistration from the
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registering 'egional 5ffice and su#mit the same to the D52, 'egional 5ffice where it see$s to
operate together with a copy of its Service Agreement!s in the area for purposes of monitoring
compliance with these 'ules.
Section 63. 'enewal of registration. All registered contractors shall apply for renewal of their
+ertificates of 'egistration thirty /=A0 days #efore the e)piration of their registration to remain in
the roster of legitimate service contractors. The applicant shall pay a registration renewal fee of
Twenty-;ive Thousand Pesos /P6?AAA.AA0 to the D52, 'egional 5ffice.
+opies of all the updated supporting documents in letters /a0 to /e0 of Section 3? hereof shall #e
attached to the duly accomplished application form including the following.
/a0 +ertificate of mem#ership and proof of payment of SSS Philhealth &I' ,++ and Pag-I#ig
contri#utions for the last three /=0 years as well as loan amorti"ations1 and
/#0 +ertificate of pending or no pending la#or standards violation case!s with the (ational 2a#or
'elations +ommission /(2'+0 and Department of 2a#or and ,mployment /D52,0. The
pendency of a case will not prejudice the renewal of the registration unless there is a finding of
violation of la#or standards #y the D52, 'egional Director.
Section 66. Semi-annual reporting. The contractor shall su#mit in triplicate its su#scri#ed semi-
annual report using a prescri#ed form to the appropriate 'egional 5ffice. The report shall include.
/a0 A list of contracts entered with the principal during the su#ject reporting period1
/#0 The num#er of wor$ers covered #y each contract with the principal1
/c0 Proof of payment of remittances to the Social Security System /SSS0 the Pag-I#ig ;und
Philhealth ,mployees +ompensation +ommission /,++0 and &ureau of Internal 'evenue /&I'0
due its employees during the su#ject reporting period and of amorti"ation of declared loans due
from its employees1 and
/d0 A certified listing of all cases filed against the contractor #efore the (2'+
The 'egional 5ffice shall return one set of the duly-stamped report to the contractor retain one
set for its file and transmit the remaining set to the &ureau of Cor$ing +onditions /&C+0 within
five /?0 days from receipt thereof.
Section 6=. Frounds for cancellation of registration. The 'egional Director shall upon a verified
complaint cancel or revo$e the registration of a contractor after due process #ased on any of the
following grounds.
/a0 4isrepresentation of facts in the application1
/#0 Su#mission of a falsified or tampered application or supporting documents to the application
for registration1
/c0 (on-su#mission of Service Agreement #etween the principal and the contractor when required
to do so1
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/d0 (on-su#mission of the required semi-annual report as provided in Section 66 /Semi-annual
reporting0 hereof1
/e0 ;indings through ar#itration that the contractor has engaged in la#or-only contracting and!or
the prohi#ited activities as provided in Section > /5ther Prohi#itions0 hereof1
/f0 (on-compliance with la#or standards and wor$ing conditions1
/g0 ;indings of violation of Section < /'ights of contractor-s employees0 or Section @ /'equired
contracts0 of these 'ules1
/h0 (on-compliance with SSS the :D4; Pag-I#ig Philhealth and ,++ laws1 and
/i0 +ollecting any fees not authori"ed #y law and other applica#le rules and regulations.
Section 6D. Due process in cancellation of registration. +omplaint!s #ased on any of the grounds
enumerated in the preceding Section against the contractor shall #e filed in writing and under oath
with the 'egional 5ffice which issued the +ertificate of 'egistration.
The complaint!s shall state the following.
/a0 The name!s and address!es of the complainant!s1
/#0 (ame and address of the contractor1
/c0 The ground!s for cancellation1
/d0 Chen and where the action complained of happened1
/e0 The amount of money claim if any1 and
/f0 The relief!s sought.
9pon receipt of the complaint the 'egional Director shall direct the contractor with notice to the
complainant to file a verified answer!counter affidavit within ten /3A0 calendar days without
e)tension incorporating therein all pertinent documents in support of his!her defenses with proof
of service of a copy to the complainant. ;ailure to file an answer!counter affidavit shall constitute
a waiver on the part of the respondent. (o motion to dismiss shall #e entertained.
The 'egional Director or his duly authori"ed representative may conduct a clarificatory hearing
within the prescri#ed ten /3A0 calendar days within which to file a verified answer!counter
affidavit.
Cithin the said ten /3A0 calendar days period the contractor shall ma$e the necessary
corrections!rectifications on the violations that are immediately rectifia#le upon its own initiative
in order to #e fully compliant.
The 'egional Director may avail himself of all reasona#le means to ascertain the facts of the
case including conduct of inspection where appropriate and e)amination of informed persons.
The proceedings #efore the 'egional 5ffice shall #e summary in nature.
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The conduct of hearings shall #e terminated within fifteen /3?0 calendar days from the first
scheduled clarificatory hearing. The 'egional Director shall resolve the case within ten /3A0
wor$ing days from the date of the last hearing. If there is no necessity to conduct a hearing the
case shall #e resolved within ten /3A0 wor$ing days from receipt of the verified answer!counter
affidavit.
Any motion for reconsideration from the 5rder of the 'egional Director shall #e treated as an
appeal.
Section 6?. Appeal. The 5rder of the 'egional Director is appeala#le to the Secretary within ten
/3A0 wor$ing days from receipt of the copy of the 5rder. The appeal shall #e filed with the
'egional 5ffice which issued the cancellation 5rder. The 5ffice of the Secretary shall have thirty
/=A0 wor$ing days from receipt of the records of the case to resolve the appeal. The Decision of
the Secretary shall #ecome final and e)ecutory after ten /3A0 days from receipt thereof #y the
parties. (o motion for reconsideration of the Decision shall #e entertained.
Section 67. ,ffects of cancellation of registration. A final 5rder of cancellation shall divest the
contractor of its legitimate status to engage in contracting!su#contracting.
Such 5rder of cancellation shall #e a ground to deny an application for renewal of registration to
a contractor under the 'ules.
The cancellation of the registration of the contractor for engaging in la#or-only contracting or for
violation of any of the provisions of these 'ules involving a particular Service Agreement will
not however impair the validity of e)isting legitimate jo#contracting arrangements the contractor
may have entered into with other principals prior to the cancellation of its registration. Any valid
and su#sisting Service Agreement shall #e respected until its e)piration1 thereafter contracting
with a delisted contractor shall ma$e the principal direct employer of all employees under the
Service Agreement pursuant to Articles 3A7 and 3A@ of the 2a#or +ode.
Section 6>. ,ffects of finding of la#or-only contracting and!or violation of Sections >. < or @ of
the 'ules. A finding #y competent authority of la#or-only contracting shall render the principal
jointly and severally lia#le with the contractor to the latterBs employees in the same manner and
e)tent that the principal is lia#le to employees directly hired #y him!her as provided in Article
3A7 of the 2a#or +ode as amended.
A finding of commission of any of the prohi#ited activities in Section > or violation of either
Sections < or @ hereof shall render the principal the direct employer of the employees of the
contractor or su#contractor pursuant to Article 3A@ of the 2a#or +ode as amended.
Section 6<. 'etaliatory measures. Pursuant to Article 33< of the 2a#or +ode as amended it shall
#e unlawful for the principal contractor or any party privy to the contract or services provided to
refuse to pay or reduce the wages and #enefits and discharge or in any manner discriminate
against any wor$er who has filed any complaint or instituted any proceeding on wages /under
Title II &oo$ III of the 2a#or +ode0 la#or standards violation or has testified or is a#out to
testify in such proceedings.
Section 6@. ,nforcement of la#or standards and wor$ing conditions. +onsistent with Article 36<
/8isitorial and ,nforcement Power0 of the 2a#or +ode as amended the 'egional Director
through his!her duly authori"ed representatives shall conduct routine inspection of
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esta#lishments engaged in contracting arrangement regardless of the num#er of employees
engaged #y the principal or #y the contractor.
They shall have access to employer-s records and premises at any time of the day or night
whenever wor$ is #eing underta$en therein and the right to copy therefrom to question any
employee and investigate any fact condition or matter which may #e necessary to determine
violations or which may aid in the enforcement of the 2a#or +ode and of any la#or law wage
order or rules and regulations issued pursuant thereto.
The findings of the duly authori"ed representative shall #e referred to the 'egional Director for
appropriate action as provided for in Article 36< and shall #e furnished the collective #argaining
agent if any.
&ased on the visitorial and enforcement power of the Secretary of 2a#or and ,mployment in
Article 36< /a0 /#0 /c0 and /d0 the 'egional Director shall issue compliance orders to give effect
to the la#or standards provisions of the 2a#or +ode other la#or legislation and these 'ules.
Section =A. Duty to produce copy of contract #etween the principal and the contractor. The
principal or the contractor shall #e under an o#ligation to produce a copy of the Service
Agreement in the ordinary course of inspection. The contractor shall li$ewise #e under an
o#ligation to produce a copy of any contract of employment when directed to do so #y the
'egional 5ffice Director or his!her authori"ed representative.
Section =3. Tripartite implementation and monitoring of compliance1 9se of registration fees. A
region-#ased tripartite monitoring team on the o#servance of la#or standards in contracting and
su#contracting arrangements shall #e constituted as a su#committee of the 'egional Tripartite
Industrial Peace +ouncil /'TIP+0 within fifteen /3?0 days from the effectivity of these 'ules. It
shall su#mit a quarterly regional monitoring report to the D52, Secretary and to the (ational
Tripartite Industrial Peace +ouncil /(TIP+0. The &ureau of Cor$ing +onditions /&C+0 shall
ensure the implementation of this provision and shall conduct capacity #uilding to the mem#ers
of the regional tripartite monitoring team.
;or this purpose a portion of the collected registration fees shall #e used in the operation of the
region-#ased tripartite monitoring team including in the development of an internet-#ased
monitoring system and data#ase. It shall li$ewise #e used for transmittal of the monthly report of
all registered contractors to the &ureau of 2ocal ,mployment /&2,0 and in generating la#or
mar$et information.
Section =6. 5versight function of the (ational TIP+. The (ational Tripartite Industrial Peace
+ouncil /(TIP+0 as created under ,)ecutive 5rder (o. D@ Series of 3@@< as amended shall
serve as the oversight committee to verify and monitor the following.
/a0 ,ngagement in allowa#le contracting activities1 and
/#0 +ompliance with administrative reporting requirements.
Section ==. +ollective #argaining and!or Industry Tripartite +ouncil /IT+0. (othing herein shall
preclude the parties in collective #argaining agreements /+&As0 to determine the functions that
can or cannot #e farmed out or contracted out to a legitimate contractor including the terms and
conditions of the wor$ers- engagement under the arrangement provided the provisions of these
'ules are o#served.
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In industries with esta#lished Industry Tripartite +ouncils /IT+s0 the tripartite partners may
agree through a voluntary code of good practices on the functions or processes that can or
cannot #e contracted out to a legitimate contractor.
Section =D. ;inancial 'elief Program1 Tripartite +o-'egulation ,ngagement. A ;inancial 'elief
Program or 9nemployment Assistance ;und shall #e esta#lished for employees under a Service
Agreement or employees in transition from one Service Agreement to the ne)t. ;or this purpose
the (ational Tripartite Industrial Peace +ouncil /(TIP+0 upon the effectivity of this issuance
shall constitute a 2ocal Service Provider Tripartite Cor$ing Froup /2SP-TCF0 composed of
representatives of the sta$eholders in the industry. The 2SP-TCF shall.
/a0 'ecommend the mechanics and details in setting up the ;inancial 'elief Program or
9nemployment Assistance ;und with proposed funding sources #efore end of Mune 6A361 and
/#0 Draw-up the terms of a Tripartite +o-'egulation ,ngagement in ensuring full compliance
with la#or laws for approval!endorsement #y the (TIP+ including a proposed Ta#le of
Progressive 'ate of Increases in the minimum capitali"ation requirement at reasona#le intervals
to ensure that only legitimate contractors can engage in su#contracting arrangement.
Section =?. ,nrollment in D52, programs on improving compliance with la#or standards. ;or
purposes of ensuring compliance with la#or standards the principal and su#contractors covered
#y these 'ules are encourage to enroll and participate in the D52, Eapatiran Cor$ Improvement
for Small ,nterprise /CIS,0-TA8 Program /Department Advisory (o. A7 dated A> 4arch 6A330
and!or in the Incentivi"ing +ompliance Program /Department 5rder (o. 33?-330.
Section =7. +ontracting or su#contracting arrangements in the +onstruction and 5ther Industries.
+ontracting or su#contracting arrangements in the +onstruction Industry under the licensing
coverage of the Philippine +onstruction Accreditation &oard /P+A&0 shall #e covered #y the
applica#le provisions of these 'ules and shall continue to #e governed #y Department 5rder (o.
3@ Series of 3@@= /Fuidelines Foverning the ,mployment of Cor$ers in the +onstruction
Industry01 Department 5rder (o. 3= Series of 3@@< /Fuidelines Foverning the 5ccupational
Safety and :ealth in the +onstruction Industry01 and D52,-DPC:-DI2F-DTI and P+A&
4emorandum of Agreement-Moint Administrative 5rder (o. 3 Series of 6A33 /on coordination
and harmoni"ation of policies and programs on occupational safety and health in the construction
industry0.
In industries covered #y a separate regulation of the D52, or other government agency
contracting or su#contracting therein shall #e governed #y these 'ules unless e)pressly provided
otherwise.
Section =>. Prohi#ition on D52, officials or employees. Any official or employee of the D52,
or its attached agencies is prohi#ited from engaging or having any interest in any contracting or
su#contracting #usiness.
Section =<. (on-impairment of e)isting contracts1 (on-diminution of #enefits. Su#ject to the
provisions of Articles 3A7 to 3A@ of the 2a#or +ode as amended the applica#le provisions of the
+ivil +ode and e)isting jurisprudence nothing herein shall impair the rights or diminish the
#enefits #eing enjoyed #y the parties to e)isting contracting or su#contracting arrangements.
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The effectivity of +ertificates of 'egistration acquired under Department 5rder (o. 3< Series of
6AA6 issued on 63 ;e#ruary 6AA6 shall #e respected until e)piration.
Section =@. Supersession. All rules and regulations issued #y the Secretary of 2a#or and
,mployment inconsistent with the provisions of these 'ules are here#y superseded.
Section DA. Separa#ility +lause. If any provision or portion of these 'ules are declared void or
unconstitutional the remaining portions or provisions hereof shall continue to #e valid and
effective.
Section D3. ,ffectivity. This Department 5rder shall #e effective fifteen /3?0 days after
completion of its pu#lication in a newspaper of general circulation.
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