LABOR LAW LABOR STANDARDS BY ATTY.

AMADO ADQUILEN

Labor Standards
DECLARATION OF BASIC POLICY
The state shall afford full protection to labor, promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and regulate the relations between workers and
employers. The state shall ensure the rights of workers to self-organization, collective bargaining,
1
security of tenure and just and humane conditions of work. (Read Article XIII, 1987 Constitution)
WHAT IS LABOR STANDARDS?
Labor Standards shall refer to the minimum requirements prescribed by existing laws,
rules and regulations and other issuance relating to wages, hours of work, cost of living
allowances and other monetary and welfare benefits, including those set by occupational
safety and health standards.
DEFINITION OF TERMS:

1
2
3
4
5
6

1.

EMPLOYER includes any person acting directly or indirectly in the interest of an

employer in relation to an employer and shall include the Government and all its
branches, subdivision and instrumentalities, all government owned and controlled
2
corporation and institutions, as well as non-profit institutions or organizations.

2.

EMPLOYER Includes any person acting in the interest of an employer, directly or

indirectly. The term shall not include any labor organization or any of its officers or
3
agents except when acting as employer.

3.

EMPLOYEE means any person compulsorily covered by the GSIS under CA 18, as
amended, including the member of the Armed Forces of the Philippines, an any person
employed as casual, emergency, temporary, substitute or contractual, or any person
4
compulsorily covered by the SSS under RA 1161.

4.

EMPLOYEE includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless this Code so explicitly states. It
shall include any individual whose work has ceased as a result of or in connection
with any current labor dispute or because of any unfair labor practice if he has not
5
obtained any other substantially equivalent and regular employment.

5.

INDIRECT EMPLOYER any person, partnership, association or corporation which,

NOT being an employer, contracts with an independent contractor for the performance of
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any work, task, job or project.

6.

EMPLOYER OF HOMEOWNERS includes any person, natural or artificial who for his
account, or benefit, or on behalf of any person residing outside the country, directly or
indirectly or through any employer, agent, contractor, sub-contractor or any other person:

Article
Article
Article
Article
Article
Article

3, Labor Code of the Philippines, as amended

97 (b) Labor Code of the Philippines, as amended
212(e) Labor Code of the Philippines, as amended
167 (g) - Labor Code of the Philippines, as amended
212 (f) - Labor Code of the Philippines, as amended
107 Labor Code of the Philippines, as amended

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7.

a.

Delivers, or causes to be delivered, any goods, articles or materials to be

processed or fabricated in or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions; or

b.

Sells any goods, articles or materials to be processed or fabricated in or about a

home and then rebuys them after such processing, either himself or through
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some other persons.

HOUSEHOLD EMPLOYER any person who engages the services of a house helper.
For purposes of this Title, the head of the family shall be deemed the house helpers
8
employer.

NOTES: Class, remember that under your labor laws, a home worker is not a house
helper or domestic servant .
BOOK I
PRE-EMPLOYMENT
RECRUITMENT AND PLACEMENT OF WORKERS
WHAT DOES THE TERM RECRUITMENT AND PLACEMENT EMBRACE?
The term "recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment, locally or abroad, whether for
profit or not: Provided, That any person or entity which, in any manner, offers or promises
for a fee employment to two or more persons shall be deemed engaged in recruitment
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and placement.
NOTES: Any person who commits the prohibited acts enumerated in Art. 13(b) of the Labor
code shall be liable under Art. 38(a) thereof which considers any recruitment activity undertaken
by non-licensed or non-holders of authority as illegal.
WHAT IS REPUBLIC ACT NO. 8042 AND DULY APPROVED OF THE SENATE AND HOUSE
OF REPRESENTATIVE OF THE PHILIPPINES IN CONGRESS ASSEMBLED ON JUNE 7,
1995?
It is an Act to institute the policies of overseas employment and establish a higher
standard of protection and promotion of the welfare of migrant workers, their families, and
overseas Filipinos in distress and for other purposes.
As its short title, the Act shall be known and cited as the Migrant Workers and Overseas
Filipinos Act of 1995.
WHO IS A MIGRANT WORKER?
Migrant worker refers to a person who is to be engaged or has been engaged in a
remunerated activity in a state which he or she is not a legal resident; to be used
interchangeably with Overseas Filipino Worker.
Article 155, Labor Code of the Philippines, as amended
Circular 21-V, Implementing Guidelines on the Social Security Coverage of house
helpers,
9 Article 13(b) ) - Labor Code of the Philippines, as amended
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8

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WHAT ARE THE RELIEF GRANTED BY LAW TO AN ILLEGALLY DISMISSED OVERSEAS

FILIPINO WORKER UNDER REPUBLIC ACT NO. 8042?
In case of termination of overseas employment without just cause, or valid or authorized
cause as defined by law or contract, the worker shall be entitled to the full reimbursement
of his placement fee with interest at twelve percent per annum, plus his salaries for the
unexpired portion of his employment contract or three month for every year of the
unexpired term, whichever is less.
NOTES: As in the case of an illegally dismissed domestic helper/servant, Article 279 of the
Labor Code does not apply. Do not reinstate an illegally terminated OFW to Saudi Arabia, he
might come home in a sealed casket.
WHEN WILL YOU CONSIDER ILLEGAL RECRUITMENT AN OFFENSE INVOLVING
ECONOMIC SABOTAGE?
Illegal recruitment when committed by a SYNDICATE or in large scale shall be
considered an offense involving economic sabotage.
WHEN WOULD YOU CONSIDER ILLEGAL RECRUITMENT AS HAVING BEEN COMMITTED
BY A SYNDICATE OR IN LARGE SCALE?
Illegal recruitment is committed in large scale if it is perpetrated against three or more
persons individually or as a group. Its requisites are as follows: 1) the person charged
with the crime must have undertaken recruitment activities as so defined by law; 2) the
same person does not have a license or authority to do such; and 3) the questioned act is
committed against three or more persons. For this offense, Art 39(a) of the Labor Code
10
imposes the penalty of life imprisonment and a fine of one hundred thousand pesos.
WHAT ARE THE ELEMENTS OF ILLEGAL RECRUITMENT?
The elements of Illegal Recruitment are as follows:
1.

That the offender had no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers;

2.

That the offender undertakes either any activity within the meaning of recruitment and
the placement as defined by Art. 13(b) or any prohibited practice enumerated under
Art. 34 of the Labor Code of the Philippines.

WHAT ARE THE KINDS OF ILLEGAL RECRUITMENT

There are at least four (4) kinds/types of illegal recruitment under the law:

10

a.

One is SIMPLE recruitment committed by a licensee or holder of authority. The

law penalizes such offender with imprisonment of not less than 2 years nor more
than 5 years or a fine of not less than P10,000.00 nor more than P50,000.00, or
both such imprisonment and fine;

b.

Any person who is neither a licensee nor a holder of authority commits the
second type of illegal recruitment. The penalty imposed for such offense is:
imprisonment of not less than 4 years nor more than 8 years or a fine of not less

People vs. Saley, GR No. 121179, July 2, 1998

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than P20,000.00 nor more than P100,000.00 or both such imprisonment and fine
at the discretion of the court.
c.

The third type of illegal recruitment refers to offenders who either commit the
offense ALONE OR WITH ANOTHER PERSON against 3 or more persons
individually or as a group;

d.

A syndicate or a group of 3 or more persons conspiring and confederating with

one another in carrying out the act circumscribed by the law commits the fourth
th
(4 ) type of illegal recruitment by law.
rd

th

For the 3 and 4 types of illegal recruitment, the law prescribes the penalty of life
11
imprisonment and a fine of P100,000.00.
NOTES: Class, please note that the real nature of a criminal charge is determined not from
the technical name given by the fiscal appearing in the title of the information but by the actual
recital of facts appearing in the complaint or information. Thus, where the allegations in the
information clearly set forth the essential elements of the crime charged, the constitutional right of
the accused to be informed of the nature and cause of his accusations is not violated.
Thus, if it is shown by the prosecution that the person charged is not licensed or authorized to
recruit overseas workers, and undertook recruitment activities defined under Article 34 of the
Labor Code and he recruited 4 persons, the crime of illegal recruitment in large scale is
12
committed.
13

In People vs. Benzon Ong, the Supreme Court said that: In order to prove Illegal Recruitment,
it must be shown that the accused-appellant gave the complainants the distinct impression that
he had the power or ability to send complainants abroad for work such that the latter were
convinced to part with their money in order to be employed.
MAY THE CONVICTION OF A PERSON FOR ILLEGAL RECRUITMENT UNDER THE LABOR
CODE BAR THE PUNISHMENT OF THE OFFENDER FOR ESTAFA UNDER THE REVISED
PENAL CODE?
NO. Illegal recruitment is a malum prohibitum offense where criminal intent of the
accused is not necessary for conviction while estafa is malum in se which requires
criminal intent to warrant conviction. Under Art. 316 par. 2(a) of the Revised Penal Code,
the elements of the offense (estafa) are that the accused has defrauded another by
abuse of confidence or by means of deceit and that damage or prejudice capable of
pecuniary estimation is caused to the offended parties. If these elements are clearly
shown, then conviction for illegal recruitment under a special law (such as the labor code)
and estafa under the Revised Penal Code may be had.
NOTES: Generally, recruitment of a person for employment without the necessary
recruiting permit or authority from the appropriate government offices constitute illegal recruitment
and where some other crimes or felonies are committed in the process, conviction under the labor
14
code does not preclude punishment under other statutes.

11
12
13
14

People vs. Sadiosa, G.R. No. 107084, May 15, 1998

. Abaca vs. CA, G.R. no. 127162, Jan. 5, 1998
People vs. Benzon Ong, GR NO. 119594, January 18, 2000
People vs. Calonzo, 262 SCRA 534 [1996]

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AFTER THE EXECUTION OF THEIR EMPLOYMENT CONTRACT, THREE RECRUITS LEFT

FOR SAUDI ARABIA. A FEW DAYS AFTER THEIR ARRIVAL, THEY WERE ASKED TO SIGN
A SECOND CONTRACT WHERE SOME OF THE PROVISIONS OF THEIR ORIGINAL
CONTRACT WERE BEING CHANGED TO INCREASE THE NUMBER OF THEIR WORK
HOURS WITH A CORRESPONDING INCREASE IN THEIR SALARIES, WHICH INCREASE
WAS NEVER GIVEN.
TWO MONTHS AFTER, THEY WERE AGAIN ASKED TO SIGN A
THIRD CONTRACT WHERE THEIR NUMBER OF WORK HOURS WAS INCREASED. WHEN
THEY REFUSED TO SIGN THE THIRD CONTRACT, THEY WERE BEING TERMINATED AND
REPATRIATED TO THE PHILIPPINES. WAS THERE A CONTRACT SUBSTITUTION?
Yes. The first contract was duly approved by the POEA and both parties are bound by
what is stated in that contract up to its expiration. The intention to increase the number of
hours of work, even with the corresponding increase in pay, is clearly a violation of the
contract approved by the POEA, and the amendments is contrary to law, morals, good
15
customs and public policy and hence must be shunned.
Besides the proposed salary
increase corresponding to the increase in number of work hours may just have been a
16
mere ploy because the promised increased in pay was never given.
MAY A FILIPINO APPLY DIRECTLY WITH A PROSPECTIVE FOREIGN EMPLOYER?
No. The law provides that no employer may hire a Filipino worker for overseas
employment except through the Boards and entities authorized by the Department of
Labor and Employment. However, direct hiring by members of the diplomatic corps,
international organizations, and such other employers as may be allowed by the
17
Department of Labor and Employment is exempted from this provision.
REGULATION OF RECRUITMENT
AND PLACEMENT ACTIVITIES
ON RECRUITMENT, WHAT DO YOU MEAN BY THE TERM LICENSE AND AUTHORITY?
IS IT TRANSFERABLE?
A LICENSE is a document issued by the DOLE authorizing a person, or entity to operate
a private employment agency, while an AUTHORITY is a document issued by the DOLE
authorizing a person or association to engage in recruitment and placement activities as
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private recruitment agency.
No license or authority shall be used directly or indirectly by any person other than the
one in whose favor it was issued or any place other than that stated in the license or
authority, no may such a license or authority be transferred, conveyed or assigned to any
19
other person or entity.
NOTES: Class, remember your general rule that recruitment of persons for employment
without the necessary recruiting permit or authority from the appropriate government offices
constitutes illegal recruitment and where some crimes or felonies are committed in the process,
20
conviction under the labor code does not preclude punishment under other statutes.

Art. 1306, Civil Code of the Philippines; Book III, Title 1, Chapter 1, Art. 83, Labor
code, as amended
16 PHILSA v. Secretary of Labor, GR 103144, SC 3rd Div., J. Gonzaga-Reyes, April 4,
2001
17 Article 18, Labor Code of the Philippines, as amended
18 People vs. De Leon, 267 SCRA 644
19 Article 29, Labor Code of the Philippines, as amended
20 People vs. Calonzo, 262 SCRA 534 [1996]
15

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IS A LOCAL RECRUITMENT AGENCY LIABLE FOR UNPAID WAGES OF WORKERS IT

DEPLOYED ABROAD?
Yes, a recruitment agency is solidarily liable for the unpaid salaries of a worker it
recruited for employment with a foreign principal. Section 10, Rule V of the Implementing
Regulations of the Labor Code provides that before recruiting any worker, the private
employment agency shall submit the following documents: x x x (2) Power of the agency
to sue and be sued jointly and solidarily with the principal or foreign based employer for
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any violations of the recruitment agreement, and the contract of employment.
In other
words, the liability of the principal may be enforced to the full extent against the
recruitment agency.
EMPLOYMENT OF NON-RESIDENT ALIENS
MAY A NON-RESIDENT ALIEN BE PERMITTED TO WORK IN THE PHILIPPINES? IF SO,
UNDER WHAT CONDITIONS?
Yes, a non-resident alien may be permitted to work in the Philippines. Any alien seeking
admission to the Philippines for employment purposes and any domestic or foreign
employer who desires to engage an alien for employment in the Philippines shall obtain
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an employment permit for the Department of Labor and Employment.
This is however subject to the determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of application to perform the
services for which the alien is desired.
WHO MUST APPLY FOR ALIEN EMPLOYMENT PERMIT (AEP)?
They are:
1.
2.
3.
4.

Foreign nationals seeking employment or admission to the Philippines to gain

employment;
Non-resident foreign nationals actually working in the Philippines under any form of
contract of employment;
Non-resident foreign nationals admitted to the Philippines on non-working visas and
who wish to seek employment;
Missionaries or religious workers who intend to engage in gainful employment.

(Research aid: Department Order No. 1 series of 1999

SHOULD AN ALIEN STILL SECURE AN EMPLOYMENT PERMIT TO WORK HERE IN THE
PHILIPPINES IF THE SOURCE OF HIS COMPENSATION STILL COMES FROM HIS
EMPLOYER BASED OUTSIDE THE PHILIPPINES?
Yes, the employment permit shall be required, regardless of the source of funds to pay
the compensation and other benefits and the nature and duration of employment, parttime or temporary.

WHAT ARE THE DOCUMENTS REQUIRED TO SUPPORT THE APPLICATION FOR ALIEN
EMPLOYMENT PERMIT?
Eastern Assurance & Surety Corp. vs. Secretary of Labor, GR Nos. 79436-50,
January 17, 1990
22 Article 40, Labor Code of the Philippines, as amended
21

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The following documents must accompany the application:

1.

2.

Curriculum vitae duly signed by the applicant indicating his educational background, his
work experience and other data showing that he possesses technical skills in his trade or
profession;
Contract of employment between the employer and applicant which shall embody the
following, among others:
a.
b.
c.

That the applicant will comply with all laws, rules and regulations of the
government of the Philippines;
That the employer binds himself to train at least two (2) Filipino under studies for
a period determined by the Secretary of Labor and Employment; and
That the applicant shall not engage in any other gainful employment other that
what is issued under the permit.

In case of an elected officers such as Chairman of the Board, Members of the Board of
Trustees/Directors, President of Corporations and Partnerships, resolutions or
certification attesting to the election of the applicant, accompanied by copy of Articles of
Incorporation or Partnership or By-Law.
3.

The employer states under oath, within 30 days upon arrival of the alien worker, that
shall:
a.

Designate at least two (2) understudies for every alien worker. Such
understudies must be the most ranking regular employees in the section or
department for which the expatriates are being hired to ensure the actual transfer
of technology; and

b.

Submit to the Regional Office for approval an understudy program for the
understudies. The Regional Office shall supervise the training program in
accordance with the standards established by the Secretary.

The permit may be revoked for non-compliance by the employer of the above
requirements.
4.

A certification, under oath, by employer on the period required to effect transfer of

technology as indicated in the understudy training program.

Research Aids:
Department Order No. 25, Series of 1996
Department Order No. 4 & 4a, Series of 1996
Department Order No. 1, Series of 1999

BOOK II
NATIONAL MANPOWER DEVELOPMENT PROGRAM
WHAT GOVERNMENT AGENCY IS RESPONSIBLE FOR THE COUNTRYS TECHNICAL
EDUCATION, PLANNING AND DEVELOPMENT? WHAT IS IT SUPPOSE TO ACCOMPLISH?
Implementation of the National Manpower Development Program was the responsibility
of the National Manpower and Youth Council. But the NMYC has been replaced by and
its functions absorbed by the Technical Educations and Skills Development Authority
(TESDA) created under RA 7796, known as the TESDA Act of 1994.

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It is the goals and objectives of the Act to:

1.
2.
3.
4.
5.

Promote and strengthen the quality of technical education and skills development
program to attain international competitiveness;
Focus technical education and skills development on meeting the changing demands
for quality middle level-manpower;
Encourage critical and creative thinking by disseminating the scientific and technical
knowledge base of middle level manpower development programs;
Recognize and encourage the complementary roles of public and private institutions
in technical education and skills development and training systems; and
Inculcate desirable values through the development of moral character with emphasis
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on work ethic, self-discipline, self-reliance and nationalism.
TRAINING AND EMPLOYMENT
OF SPECIAL WORKERS

WHAT KIND OF JOBS MAY AN EMPLOYER HIRE APPRENTICES?

Only employers in the highly technical industries may employ apprentices and only in
apprenticeable occupations approved by the Minister of Labor and Employment (now
24
Secretary of DOLE).
NOTES: Apprenticeship program needs the prior approval of the Secretary of the
Department of Labor and Employment. Failing which, the apprentice is not classified as such
but a regular employee.
WHAT IS AN APPRENTICEABLE OCCUPATION?
An apprenticeable occupation means any trade, form of employment or occupation which
requires more than three months of practical training on the job supplemented by related
25
theoretical instruction.
WHO IS A LEARNER?
Learners are persons hired as trainees in semi-skilled and other industrial occupations,
which are non-apprenticeable and which may be learned through practical training on the
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job in a relatively short period of time which shall not exceed three months.
DISTINGUISH A LEARNERSHIP FROM AN APPRENTICESHIP?
Learnership and apprenticeship differ in the focus and the terms of training. A learner trains in a
semi-skilled job or in an industrial occupation that require training for less than three months. An
apprentice on the other hand, trains in a skilled or highly skilled job or in a job found only in a
highly technical industry. The period or duration of which exceeds three months.
WHO ARE HANDICAP WORKERS? WHEN MAY THEY BE EMPLOYED?
Handicap workers are those whose earning capacity is impaired by age or physical or
27
mental deficiency or injury.
They may be employed when their employment is
23
24
25
26

Section 3, RA 7796, otherwise known as the TESDA Act of 1994

Article 60, Labor Code of the Philippines, as amended
Article 57 (c), Labor Code of the Philippines, as amended
Article 73, Labor Code of the Philippines, as amended

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necessary to prevent curtailment of employment opportunities and when it does not

28
create unfair competition in labor costs or impair or lower working standards.
BOOK III
CONDITIONS OF EMPLOYMENT
WORKING CONDITIONS: DEFINED.
Working conditions refer to the terms and circumstances affecting the employment of an
employee, including policies, programs and regulations governing his employment status,
work and work relationships. The working conditions, as a rule, are determined by the
employer.
This authority of management is called, quite loosely, management
prerogative.
WHO ARE EXEMPTED FROM COVERAGE OF ARTS. 82-96 OF THE LABOR CODE ON
HOURS OF WORK?
1.
2.
3.
4.
5.
6.
7.

Government employees;
Managerial employees;
Field personnel;
Employees who are family members dependent for support;
Domestic helpers;
Persons engaged in personal service;
Workers paid by results as determined by the Secretary of Labor.

WHAT IS THE SO-CALLED FOUR-FOLD TEST IN DETERMINING THE EXISTENCE OF

EMPLOYER-EMPLOYEE RELATIONSHIP?
The four-fold tests in determining the existence of employer-employee relationship are as
follows:
1.
2.
3.
4.

The power to hire or selection and engagement;

Payment of wages;
Power to dismiss; and
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Power of control (essential element).

NOTES: The right to control shall refer to the rights reserved to the person for whom the
services performed, to determine not only the ends to be achieved, but also the manner and
means to be used in reaching that end.
CITE AN OBSERVATION OF THE HONORABLE SUPREME COURT AS TO THE
CONSEQUENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.
The question of whether an employer-employee relationship exists in a certain situation
CONTINUES TO BEDEVIL THE COURTS. Some businessmen try to avoid the bringing
about of an employer-employee relationship in their enterprise because that judicial
relation spawns obligation to be connected with workmens compensation, social
30
security, medicare, minimum wage, termination pay, and unionism.

27
28
29
30

Article 78, Labor Code of the Philippines, as amended

Article 79, Labor Code of the Philippines, as amended
AFP Mutual Benefits Association Inc. vs. NLRC, 267 SCRA 47
Mafino Trading Corp. vs. Ople, 70 SCRA

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AS ONE OF THE CRITERIA IN THE DETERMINATION OF THE EXISTENCE OF EMPLOYEREMPLOYEE RELATIONSHIP, IT IS ESSENTIAL FOR AN EMPLOYER TO ACTUALLY
EXERCISE THE SO-CALLED CONTROL TEST?
The power or control refers to the existence of the power and not necessarily to the
actual exercise thereof. It is not essential, in other words, for the employer to actually
31
supervise the performance of duties to wield that power.
In short, an employer-employee relationship exists where the person for whom the
services are performed reserves a right to control not only the end to be achieved but
32
also the means to be used in reaching such an end
but, consider that not every form of
control in relation to the service being rendered may be accorded the effect of
establishing an employer-employee relationship as when an underwriter, who from time
to time is bound by company policies, memo, circular, rules and regulations, is also not
indicative of control.
EXPLAIN THE BASIC PRECEPT FAIR DAYS WAGE FOR A FAIR DAYS LABOR.
A fair days wage for a fair days labor governs the relations between labor and capital
and remains a basic factor in determining employees wages. If there is no work
performed by the employee, there can be no wage or pay unless the laborer was able,
willing, and ready to work but was prevented by management or was illegally locked out,
33
suspended or dismissed.
DISTINGUISH FACILITIES FROM SUPPLEMENTS.
Supplements constitute extra remuneration or special privileges or benefits given to or
received by the laborer over and above their ordinary earnings or wages.
Facilities, on the other hand, are items of expense necessary for the laborers and his
familys existence and subsistence, so that by express provision of law, they form part of
the wage and when furnished by the employer are deductible therefrom, since if they are
34
not so furnished, the laborer would spend and pay for them just the same.
STATE THE GENERAL PRINCIPLE ON A WORKERS ENTITLEMENT TO SERVICE
INCENTIVE LEAVE OF FIVE DAYS EACH YEAR?
Under Article 95 (a) of the Labor Code, every employee who has rendered at least one
year of service shall be entitled to a yearly incentive leave of five days with pay.
NOTES: Since a service incentive leave is clearly demandable after one year of service
whether continuous or broken- or its equivalent period, and is one of the benefits which would
have accrued if an employee was not otherwise illegally dismissed. It is fair and legal that its
computation should be up to the date of reinstatement as provided under Article 279 of the Labor
35
Code, as amended.
WHAT IS THE MEANING OF ONE YEAR OF SERVICE IN DETERMINING THE 5-DAYS
SERVICE INCENTIVE LEAVE OF A COVERED EMPLOYEE?
31
32
33
34
35

Equitable Banking Corp. vs. NLRC, 273 SCRA 352

Algon Engineering Construction Corp. vs. NLRC, 280 SCRA 188
Philippine Airlines vs. NLRC, GR No. 55159, June 22, 1989
Atok Big Wedge Assn. vs. Atok Big Wedge Co., 97 Phil 294
Vivian Imbuido vs. NLRC, et.al, GR No. 114734, March 31, 2000

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The phrase one-year of service of the employee means service within 12 months,
whether continuous or broken, reckoned from the date the employee started working.
The period includes authorized absence, unworked weekly rest days, and paid regular
holidays. Where by individual or collective agreement, practice or policy the period of
working days is less than 12 months, said period shall be considered as one year for the
purpose of determining entitlement to the service incentive leave.
BY EXPRESS PROVISION OF LAW, WHO ARE NOT ENTITLED TO SERVICE INCENTIVE
LEAVE?
The following are, by express provision of law not entitled to Service Incentive Leave:
a.

Those from the government and any of its political subdivisions, including
government owned and controlled corporation;

b.

Domestic helpers and persons in the personal service of another;

c.

Managerial employees or members of the managerial staff as defined in Book III

of the Labor Code;

d.

Field personnel and other employees whose performance is unsupervised by the

employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof;

e.

Those who are already enjoying the benefits provided therein;

f.

Those enjoying vacation leave with pay of at least five days; and

g.

Those employed in establishments regularly employing LESS THAN TEN

EMPLOYEES.

HOW ARE SERVICE CHARGES DISTRIBUTED OR SHARED?

The sharing shall be 85% equally distributed to all employees except managerial
employees and 15% for the employer to answer for the losses or breakage or to be
distributed to the managerial employees, as the case may be.
Where the company stopped collecting service charges, the average shall previously
enjoyed by the employees for the past twelve (12) months immediately preceding such
stoppage shall be integrated with their basic wages.

WHAT IS RA 8187 ALL ABOUT AND WHEN DID IT TAKE EFFECT?

It is an act granting paternity leave of seven (7) days with full pay to all married MALE
employees in the private and public sector for the FIRST FOUR (4) deliveries of the
legitimate spouse with whom he is cohabiting and for other purposes. It took effect on
July 5, 1996
NOTES: Class, read the copy of the Revised Implementing Rules and Regulations of RA
8187 for the Private Sector hereunder reproduced in full.

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Again, please note that under this law, an Employee refers to any person who performs services
for another and receives compensation therefor, provided an employer-employee relationship
exists between them. How about your employee as defined in Article 97 (c) and Article 212 (f)
of your Labor Code? You know what I mean
Department of Labor and Employment / Department of Health
Revised Implementing Rules and Regulations of Republic Act 8187
For the Private Sector
Pursuant to Republic Act No. 8187 entitled An Act Granting Paternity
Leave of Seven (7) days With full Pay to All married Male Employees in
the Private and Public Sectors For the First Four (4) deliveres of the
Legitimate Spouse With Whom He is Cohabiting And For Other
Purposes, the following Revised Rules and Regulations are hereby
issued:
Section 1. Definition of Terms As used in these Rules, the following
terms shall have the meaning as indicated hereunder:
a.

b.

c.
d.

e.

Paternity Leave refers to the leave benefits granted to a

married male employee allowing him not to report for work
for seven (7) days but continues to earn the compensation
therefor, on the condition that his spouse has delivered a
child or suffered a miscarriage for the purpose of lending
support to his wife during her period of recovery and/or in
nurshing of the newly born child.
Employee refers to any person who performs services for
another and receives compensation therefor, provided an
employer-employee relationship exists between them.
Delivery refers to childbirth or miscarriage.
Spouse refers to the lawful wife. For this purpose, lawful
wife refers to a woman who is legally married to the male
employee concerned.
Cohabiting refers to the obligation of the husband and wife
to live together.

Section 2. Coverage. Every married male employee in the private sector

shall be entitled to paternity leave benefits of seven (7) days with full pay
for the first four deliveries by his lawful spouse under such terms and
conditions as hereinafter provided.
The rules on paternity leave of employees in the public sector shall be
promulgated by the Civil Service Commission.
Section 3. Conditions to entitlement of paternity leave benefits. A
married male employee shall be entitled to paternity benefits provided
that:
a.
b.
c.
d.

Page 19 of 25

he is an employee at the time of delivery of his child;

he is cohabiting with his spouse at the time she gives birth or
suffers a miscarriage;
he has applied for paternity leave in accordance with Section
4 hereof; and
his wife has given birth or suffered a miscarriage.

Section 4. Application for Leave. the married male employee shall

apply for paternity leave with his employer within a reasonable period of
time from the expected date of delivery by the pregnant spouse, or within
such period as may be provided by company rules and regulations or by
collective bargaining agreement; provided that prior application for leave
shall not be required in case of miscarriage.
Section 5. Availment Paternity leave benefits shall be granted to the
qualified employee after the delivery by his wife, without prejudice to an
employer allowing an employee to avail of the benefit before or during
the delivery; provided, that the total number of days shall not exceed
seven (7) days for each delivery.
Section 6. Benefits The employee is entitled to his full pay, consisting
of basic salary, for seven (7) days during which he is allowed not to
report fro work; provided that his pay shall not be less than the mandated
minimum wage.
Section 7. Non-commutation of benefits. In the event that the paternity
leave benefit is not availed of, said leave, shall not be convertible to
cash.
Section 8. Non-diminution Clause. Nothing in these Rules shall be
construed to reduce or replace any existing benefits of any kind granted
under existing laws, decrees, executive orders, or any contract,
agreement or policy between employer and employee.
Section 9. Crediting of existing benefits. Where a male employee is
already enjoying the paternity leave benefits by reason of contract, a
company policy or collective bargaining agreement, the following rules
shall apply.
a) If the existing paternity leave benefit is greater than the
benefit herein provided, the greater shall prevail;
b) If the existing paternity leave is less than that provided
herein, such existing benefit shall be adjusted to the extent
of the difference.
However, where a contract, company policy or collective bargaining
agreement provides for an emergency or contingency leave without
specific provisions on paternity leave, the paternity leave as herein
provided shall apply in full.
Section 10. Penalty. Any person, corporation, trust, firm, partnership,
association or entity found violating any provision of these Rules shall be
penalized by a fine not exceeding twenty five thousand pesos
(P25,000.00) or imprisonment of not less than thirty (30) days nor more
than six (6) months.
If the violation is committed by a corporation, trust or firm, partnership,
association or any other entity, the penalty of imprisonment shall be
imposed on the entitys responsible officer, including but not limited to,
the president, vice president, chief executive officer, general manager,
managing director or partner directly responsible therefor.

Page 20 of 25

Section 11. Transitory provisions All qualified employees whose

spouse delivered a chilled or suffered a miscarriage on or after July 5,
1996 are entitled to paternity leave, subject to the conditions prescribed
in Section 3, paragraphs (a) and (b).
Section 12. Repealing Clause All laws, ordinances, rules, regulations,
issuances, or parts thereof which are inconsistent with these Rules are
deemed repealed or modified accordingly.
Section 13. Separability Clause If any provisions or portion of these
Rules is declared void or unconstitutional, the remaining portions or
provisions hereof shall continue to be valid and effective.
Section 14. Effectivity These Revised Rules shall take effect on 05
July 1996.
th

Signed this 13 day of March 1997 in the City of Manila.

(sgd) LEONARDO QUISUMBING
Secretary
Department of Labor and Employment
(sgd) CARMENCITA REODICA
Secretary
Department of Health
ON THE OTHER HAND, WHAT IS MATERNITY BENEFIT?
Maternity benefit is a cash allowance granted to female member (SSS) who was unable
to work due to child birth or miscarriage (Guidelines on RA 8282 effective may 24, 1997)
WHAT ARE THE CONDITIONS REQUIRED BY LAW IN ORDER TO BE ENTITLED TO
MATERNITY BENEFITS?
The conditions are as follows:
1.
2.
3.
4.

Maternity benefits shall be paid for the first four (4) deliveries including miscarriages;
The fifth delivery shall no longer be paid even if no availment were made on the previous
deliveries (beginning March 13, 1973);
The member has given the required notification to SSS prior to date of contingency;
She has paid at least three (3) months of maternity contributions within the twelve month
period immediately before the semester of contingency.

WHO ARE ELIGIBLE UNDER THE LAW TO RECEIVE MATERNITY BENEFITS?

ALL female members, including self-employed and voluntary members with qualifying
contributions using the new contributions schedule shall be entitled to maternity benefit.
Every pregnant woman employee in the private sector whether MARRIED or
UNMARRIED, is entitled to maternity leave benefits.
HOW MANY DAYS WOULD COMPRISE THE MATERNITY LEAVE OF A COVERED SSS
MEMBER?
For normal delivery or miscarriage, it is sixty (60) days and seventy eight (78) days for
caesarian cases.

Page 21 of 25

TH

IN COMPUTING THE 13 MONTH PAY OF A FEMALE EMPLOYEE, DOES THE LAW

(PD 851) PROVIDE FOR THE INCLUSION OF THE MATERNITY LEAVE BENEFIT IN
COMPUTING THE SAME.
Maternity benefits, like other benefits granted by the SSS, are granted to employees in
th
lieu of wage and, therefore, MAY NOT be included in computing the employees 13
month pay for the calendar year.
MAY AN EMPLOYEE COLLECT THE CASH EQUIVALENT OF HIS FIVE-DAYS SERVICE
INCENTIVE LEAVE UNDER ARTICLE 95 OF THE LABOR CODE BEYOND THE THREE
YEAR PRESCRIPTIVE PERIOD OF CLAIMING MONEY CLAIMS ARISING OUT OF AN
EMPLOYER-EMPLOYEE RELATIONSHIP UNDER ARTICLE 291 OF THE LABOR CODE?
Yes. Service Incentive Leave is a right which accrues to every employees who have
served within twelve (12) months, whether continuous or broken reckoned from the date
of the employee has started working, including authorized absences, and paid regular
holidays x x x and shall be commutable to its money equivalent if not used or exhausted
at the end of the year. The law does not prohibit its commutation. Moreover, to limit the
award of the Service Incentive Leave to three years would run contrary to the ruling of the
36
court in Bustamante vs. NLRC
which provides inter alia that: an illegally dismissed
employee is entitled to reinstatement to his former position without loss of seniority rights
and privileges and to his full backwages, inclusive of allowances, and to his other benefits
or their monetary equivalent computed from the time his compensation was withheld from
him up to the time of his actual reinstatement as provided under Art. 279 of the Labor
Code as amended by RA 6715.
WHAT IS THE RELATIVELY OBSCURE CONCEPT OF WAGE DISTORTION?
The principle may be summarily stated in the following manner:
a.

The concept of wage distortion assumes an existing grouping or classification of

employees which establishes distinction among such employees or some relevant or
legitimate basis. This classification is reflected in a differing wage rate for each of the
existing classes of employees.

b.

Wage distortions have been the result of government decreed increases in minimum
wages. There are, however, other causes of wage distortions, like the merger of two
(2) companies (with differing classifications of employees and different wage rates
here the surviving company absorbs all the employees of the dissolved corporation

IS THE EMPLOYER UNDER AN OBLIGATION TO RESTORE THE HISTORICAL GAP

BETWEEN THE HEIRARCHY OF POSITIONS IN THE EVENT OF WAGE DISTORTION
RESULTING FROM A MANDATED INCREASE IN THE MINIMUM WAGE?
No. It is sufficient for the employer to maintain a semblance of a gap for workers hired
after the wage increase. For the present employees, it is mandatory for the employer to
correct the distortion through the grievance procedure under their CBA and by voluntary
arbitration if it remains unresolved.
WHAT ARE THE PENALTIES, IF ANY, IMPOSED BY LAW UPON ANY EMPLOYER WHO
FAILS TO PAY THE PRESCRIBED MINIMUM WAGE RATES IN ACCORDANCE WITH
THE MINIMUM WAGE LAW OR WAGE ORDERS.

36

Bustamante, et.al vs. NLRC, 265 SCRA 61, November 28, 1996

Page 22 of 25

Any employer, including corporations, partnerships, or associations, who fail to pay the
prescribed wage rates in accordance with the Minimum Wage Law or Wage Order will be
penalized as follows:
a.
b.

c.
d.

fine of not less than P 25,000.00 nor more than P100,000.00; or

imprisonment of not les than two (2) years nor more than four (4) years; or
both at the discretion of the court. The convicted employer shall not be
entitled to benefits under probation law (unenforced sentence)
pay an amount equivalent to double the unpaid difference in wages owing to
the employees;
finally, criminal liability for any crime provided for in RA 6727 (as amended by
RA 8188)

WHEN IS A BONUS DEMANDABLE?

A bonus is demandable:
1.
2.
3.
4.

When made part of a wage/salary/compensation;

If the promise of the bonus is made at the time the contract between the employer
and the employee was entered into;
If it is additional compensation which the employer promised and agreed to give
without any conditions imposed for its payment; or
When the giving of such bonus has formed part of the company practice. As a
company practice, it should have been done over a long period of time and shown to
37
have been consistent and deliberate.

WHAT IS THE PURPOSE OF HOLIDAY PAY?

It is meant to prevent diminution of the monthly income of workers on account of work
38
interruptions.
WHAT IS THE METHOD OF COMPUTING FOR OVERTIME PAY, DAILY WAGE, AND
HOURLY RATE, AND HOURLY RATE?
a.
b.
c.

Overtime Pay = Hourly rate + Premium rate

Daily wage = (Basic annual rate + Fringe benefits) / No. of days worked in a year;
Hourly rate = Daily wage / 8 hours

CITE THE RATIONALE/REASONS REQUIRED BY LAW IN PAYING OVERTIME PAY.

1.
2.

3.

To compensate the worker for his physical and mental efforts for hours worked beyond
the normal eight hours;
Also, it could be viewed as a penalty imposed by society on the employer. The worker is
granted an additional pay in concept of penalty for having been deprived of time for
relaxation, amusement or sports and for opportunity to contribute the community or other
business engagement.
Finally, the requirement of overtime pay is a governmental measure to promote full
employment, because it forces employers to hire more workers for every 8 hour period.

WHAT ARE THE REASONS

DIFFERENTIAL PAY?

37
38

THAT

JUSTIFY

THE

PAYMENT

OF

NIGHT

SHIFT

Luzon Stevedoring Corp. vs. CIR citing Manila Electric Cooperative vs. Quisumbing.
Jose Rizal College vs. NLRC

Page 23 of 25

1.
2.
3.

Lack of sunlight could cause anemia or tuberculosis, eye strain and exposure to
accidents is common;
Attendant danger when traveling to and from work at night;
Disruption of normal home life.

Research Aid:
Principles of Legislation by: Andrews
WHEN IS A WORKPLACE CONSIDERED HAZARDOUS?
A workplace is considered hazardous:
1.

When the nature of the work exposes workers to dangerous environmental elements,
contamination or work conditions including ionization, radiation, chemicals, fire,
flammable substances, noxious components, and the like;

2.

When the workers are engaged in construction work, logging, firefighting, mining,
quarrying, blasting, stevedoring, dock work, deep sea fishing, and mechanized farming;

3.

Where the workers are engaged in the manufacture or handling of explosives and other
pyrotechnic products;

4.

Where the workers use or are exposed to heavy or power driven machinery or equipment
and where they have exposed to power-driven tools.

WHAT IS THE MINIMUM EMPLOYABLE AGE?

No child below fifteen years of age shall be employed, except when he works directly
under the sole responsibility of his parents or guardian and his employment does
39
not in anyway interfere with his schooling.
HOW ABOUT PERSONS BETWEEN 15 AND 18 YEARS OF AGE?
Any person between 15 and 18 years of age may be employed for such number of hours
and such periods of the day as determined by the Secretary of Labor in appropriate
40
regulations.
ARE TAXI DRIVERS PAID ON COMMISSION/PERCENTAGE BASIS EMPLOYEES OF THE
TAXI OWNER/OPERATOR WHO OWNS THE UNIT BEING DRIVEN BY THE FORMER?
Yes. The doctrine that relationship between jeepney owners/operators on one hand and
jeepney drivers on the other under the boundary system is that of employer-employee
and not of lessor-lessee is applicable BY ANALOGY to the relationship between the taxi
41
owner/operators and taxi drivers.
MAY A TAXI OWNER/OPERATOR VALIDLY REQUIRE HIS BOUNDARY SYSTEM DRIVERS
TO DEPOSIT A CERTAIN AMOUNT TO DEFRAY SHORTAGE (S) IN THE BOUNDARY
AGREED UPON BY THEM?
It depends. If the requirement to make deposits from which deductions to defray any
shortage(s) in the agreed sum or boundary is a recognized one, or which is necessary or
39
40
41

Article 139, Paragraph (a)

Article 139, Paragraph (b)
Martinez vs. NLRC, 272 SCRA 793

Page 24 of 25

desirable as determined by the Secretary of Labor in appropriate rules and regulations

under Article 114 of the Labor Code, the same is VALID.
But, if there is no showing that the Secretary of Labor has recognized the same as
practice in the taxi industry, it is NOT VALID. More so if we consider the intent of the law
which provides the rules on deposit for loss or damage to tools, materials or equipment
supplied by the employer. It does not permit deposits to defray any deficiency which
taxi drivers may incur in the remittances of his boundary.
ONE HUNDRED TEN ATTENDANTS OF MAALIKAYA MASSAGE AND HEALTH CLINIC
WERE REQUIRED TO RENDER SERVICE FOR SIX (6) DAYS A WEEK, ARE THEY
ENTITLED TO 30% ADDITIONAL COMPENSATION BASED ON THEIR REGULAR WAGE
DURING THEIR SATURDAY WORK AND ASSUMING THAT THE CLINIC IS LOCATED IN A
PLACE WITH AT LEAST ONE MILLION POPULATION?
No. The term hospital or clinic as used in Art. 83 of the Labor Code, as amended, shall
mean a place devoted primarily to the maintenance and operation of facilities for the
diagnosis, treatment and care of individuals suffering from illness, disease, injury or
deformity, or in need of obstetrical or other medical and nursing care. Therefore, since
Maalikaya is a massage clinic, and not within the contemplation of the term under the
law, the 110 attendants cannot claim for the 30% additional compensation of their
Saturday work.
MAY A LABOR UNION ACT AS LABOR CONTRACTOR OR ENGAGE IN WHAT WE CALL
CABO SYSTEM?
No. A labor union who acts as a labor contractor or engage in cabo system or otherwise
engaging in any activity prohibited by law risks the cancellation of its registration as a
labor union.
A cabo system under labor relations law may be an individual, or group of person or a
labor union operating under the guise of an employer when in truth and in fact they are
not. They are, in truth what we call the labor-only contractors who prey on the
predicament of gullible workers.
WHAT IS THE TEST TO DETERMINE THE EXISTENCE OF INDEPENDENT
CONTRACTORSHIP?
The test to determine the existence of independent contractorship is whether one
claiming to be an independent contractor has contracted to do work according to his own
methods and without being subject to control of the employer except only as to the result
of the work.
WHEN AN INSURANCE AGENT DEEMED AN INDEPENDENT CONTRACTOR OF AN
INSURANCE COMPANY.
42

In Insular Life Insurance Co. vs. NLRC,

there is no employer-employee relationship
between a commission agent and an investment company.
The former is an
independent contractor where said agent and others similarly placed are (a) paid
compensation in the form of commissions based on percentages of their status, any
balance of commission earned being payable to their legal representatives in the event of
death or resignation, (b) required to put up performance bond, (c) subject to a set of rules
and regulations governing the performance of their duties under the agreement with the
company and termination of their services for certain causes, (d) not required to report for
42

GR No. 84484, November 15, 1989

Page 25 of 25

work at any time, nor to devote their time exclusively to working for the company not to
submit a record of their activities, and who finally shouldered their own selling and
transportation expenses.
Logically, the line should be drawn between rules that merely serve as guidelines
towards the achievement of the mutually desired result without dictating the means or
methods to be employed in attaining it, and those that control or fix the methodology and
bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it. The distinction acquires
particular relevance in the case of an enterprise affected with public interest, as is the
business of insurance, and is on that account subject to regulation by the State with
respect, not only to the relations between insurer and insured but also to the internal
affairs of the insurance company.
WHEN IS THERE LABOR-ONLY CONTRACTING?
There is labor-only contracting where the person supplying workers to an employer does
not have substantial capital or investment in the form of tools, equipment, machineries,
work premises, are performing activities which are directly related to the principal
business of the employer. In such cases, the person or intermediary shall be considered
merely as an agent of the employer who shall be responsible to the workers in the same
43
manner and extent as if the latter were directly employed by him.
In other words,
laway lang ang puhunan!
NOTES: Should the contractor fail to pay the wages of his employees in accordance with
the Labor Code, the employer who contracted out the jobs becomes jointly and severally liable
with the contractor to the extent of the work performed under the contract as if such employer
44
were the employer of the contractors employee
AS TO PURPOSE, WHAT DIFFERS SEPARATION PAY FROM RETIREMENT PAY?
Separation pay is a statutory right designed to provide the employee with the wherewithal
during the period that he is looking for another employment while retirement benefits are
intended to help the employee enjoy the remaining years of his life lessening the burden
of worrying for his financial support and a form of reward for his loyalty and service to the
45
employer.
ARE SEAMEN ENTITLED TO OVERTIME PAY FOR EVERY HOUR IN EXCESS OF REGULAR
WORKING HOURS THAT THEY WERE ON BOARD THEIR VESSEL EACH DAY,
IRRESPECTIVE OF WHETHER THEY ARE ACTUALLY PUT TO WORK DURING THOSE
HOURS?
No. The correct criterion in determining whether or not sailors are entitled to overtime pay
is not therefore, whether they were on board and cannot leave the ship beyond the
regular eight working hours a day, but whether they actually rendered service in excess
46
of said number of hours.

Article 106, Labor Code of the Philippines, as amended

Philippine Bank of Communications vs. NLRC, GR No. 66598, December 16, 1996
45 Aquino et.al vs. NLRC, 206 SCRA 118
46 National Shipyard and Steel Corp vs. CIR, et.al 113 Phil 870 cited in Stot-Niessen
Marine Services Inc. vs. NLRC 264 SCRA 307
43
44

Page 26 of 25

WHAT IS THE GENERAL PRINCIPLE IN DETERMINING THE PAY/RATE OF WORKERS

PAID BY RESULTS UNDER ARTICLE 101 OF THE LABOR CODE?
The Secretary of Labor shall regulate the payment of wages by results, including pakyao,
piecework and other non-tie work, in order to ensure the payment of fair and reasonable
wage rates, preferably through time and motion studies or in consultation with
representatives of workers and employers organization.
Furthermore, all workers paid by results, shall receive NOT LESS THAN THE
APPLICABLE STATUTORY MINIMUM WAGE RATES for normal working hours which
shall not exceed eight hours a day or a proportion thereof for work less than the normal
working hours.
WHO IS A PROJECT EMPLOYEE?
A project employee is one whose period of employment has been fixed for specific
project or phase thereof, the completion or termination of which has been pre-determined
at the date he was hired. He may be transferred from one project to another whether on
regular or irregular basis but is required that (1) such project employee should be
terminated at the completion of each project or phase thereof. (2) Further, that each
terminated is reported to the Public Employment Office of the DOLE regional office for
47
statistical purposes and as indicator that, indeed, the worker is a project employee.
EXAMPLE: Kulas may be hired merely for painting work of one project (a building). Upon
completion of the painting of the building, his employment must be terminated. Should the worker
be needed again, for say, carpentry work in another project (another building), he must be rehired
under another contract. A project employee cannot be deemed to have been hired for a series of
48
projects especially if each project is expected to be for long duration.
CITE THE INDICATORS OF PROJECT EMPLOYMENT
They are:

47
48

1.

The duration of the specific/identified undertaking for which the worker is engaged is
reasonably determined;

2.

Such duration, as well as the specific work/service to be performed, is defined in an

employment agreement and is made clear to the employee at the time of hiring;

3.

The work/service performed by the employee is in connection with the particular

project/undertaking for which he is engaged;

4.

The employee, while not employed awaiting engagement, is free to offer his services
to any other employer;

5.

The termination of his employment in the particular project/undertaking is reported to

the DOLE Regional Office having jurisdiction over the workplace within thirty (30)
days following the date of his separation from work using the prescribed form on
employees termination/dismissal/suspension;

Department Order No. 19 [1993]

Nogante vs. NLRC, 185 SCRA 21 [1990]

Page 27 of 25

6.

An undertaking in the employment contract by the employer to pay completion bonus

49
to the project employee as practiced by most construction companies. (optional).

NOTES: Employers, especially in the construction industry, must file as many reports on
termination as there are construction projects actually finished to show that in fact his workers are
project employees who were hired and rehired for various projects and/or other phases thereof.
50
Failure to do so could mean that his workers are truly regular employees.
WHO IS A CONTRACTUAL EMPLOYEE?
He is one whose work is for a short duration and the work assignment may possibly be
related to the usual business or trade of the employer.
NOTES: If the worker is hired and re-hired in different periods to do the same work for the
employer, it is sufficient proof of the necessity and indispensability of the service. When such
work exceeds One (1) year, an employee may be entitled to be considered a REGULAR
employee.
For Example: Jimmy Calamba was hired by the Baguio Country Club to do various task
intermittently as gardener, laborer and dishwasher. He was hired and re-hired for more than one
(1) year. The Supreme Court held: Although the employee was hired for Fixed Periods but
repeatedly hired until he accumulated more than one year of service, the continuing need for his
services were sufficient evidence of the necessity and indispensability of his services to the
51
business of his employer. Jimmy Calamba was considered as a regular employee.
WHO IS A PROBATIONARY EMPLOYEE?
A probationary employee is one on trial by an employer during which the employer
determines whether or not he is qualified for permanent employment. A probationary
appointment is made to afford the employer an opportunity to observe the fitness of a
probationary employee while at work, and to ascertain whether he will become a proper
52
and efficient employee.
WHAT ARE THE RIGHTS, IF ANY, OF A PROBATIONARY EMPLOYEE?
Probationary employees, notwithstanding their limited tenure, are also entitled to security
of tenure. Thus, except for just cause as provided by law, or under the employment
53
contract, a probationary employee cannot be terminated.
WHEN MAY A PROBATIONARY EMPLOYEE BE TERMINATED?
A probationary employee may be terminated on two (2) grounds:
1.

For just cause; or

Samson vs. NLRC, et.al. 253 SCRA 112 [1996]

Violeta vs. NLRC, 280 SCRA 500 [1997]; Philippine National Construction Corp. vs.
NLRC, 174 SCRA 191 [1989]
51 Baguio Country Club Corporation vs. NLRC, 206 SCRA 643 [1992]
52 International Catholic Migration Commission vs. NLRC, GR No. 72222, January 30,
1989; in rel. to Article 281, Labor Code of the Philippines, as amended
53 Phil. Federation of Credit Cooperatives vs. NLRC, GR No. 1210701, December 11,
1998
49
50

Page 28 of 25

2.

When he fails to qualify as a regular employee in accordance with reasonable

standards made known by the employer to the employee at the time of his
54
engagement.

WHAT IS THE PURPOSE OF PROBATIONARY EMPLOYMENT?

The purpose is to afford the employer the opportunity to observe the fitness of the
employee while at work and to ascertain whether he will become a proper and efficient
employee.
DOES THE WORD PROBATIONARY REFER TO THE LENGTH OF PERIOD?
No. The word probationary referes to the PURPOSE of the trial period and not its length.
NOTES: On the part of the employee during the probationary period, he will seek to prove
to the employer that he has the qualifications and skills necessary to met reasonable standards
55
made known to him by the employer on the date he was hired.
MAY THE PARTIES OT A COLLECTIVE BARGAINING AGREEMENT AGREE ON A LONGER
PERIOD OF PROBATIONARY EMPLOYMENT, SAY EIGHTEEN (18) MONTHS?
Yes, if the probationary employee is covered by a duly approved apprenticeship
agreement in a job calling for more than three (3) months to obtain proficiency via
practical training on the job supplemented by related theoretical instruction and only in
56
highly technical industries. This is referred to as an apprenticeable occupation.
WHAT IS AN APPRENTICEABLE OCCUPATION UNDER THE TESDA LAW?
It is an occupation officially endorsed by a Tripartite body and approved for
57
apprenticeship by the Authority.
WHAT IS TRIPARTISM?
Tripartism, as contemplated in our labor laws, is representation of the three sectors the
public or the government, the employer, and the workers in policy making bodies of the
government.
EXAMPLES where tripartism is some government agencies or instrumentalities are
observed:
1.
2.
3.
4.
5.
6.
7.

National Labor Relations Commission;

National Wages and Productivity Board;
Employees Compensation Commission;
POEA Governing Board;
Philippine Health Insurance Corporation;
Social Security Commission; and
GSIS Board of Trustees.

54

Philippine Manpower Services vs. NLRC, 224 SCRA 691

International Catholic Migration Commission vs. NLRC, 169 SCRA 606 [1989]
Article 58 (c), Labor Code of the Philippines, as amended.
Section 4 (m) RA 7796 or the TESDA Law

55
56
57

Page 29 of 25

IS TRIPARTISM AS A KIND OF REPRESENTATION IN POLICY MAKING BODIES OF

PRIVATE ENTERPRISES ORDAINED?
No. What is provided for, for the private sector, is workers participation in policy and
decision making processes directly affecting their rights, benefits, and welfare under
Article 211 and 255 of the Labor Code. But such participatory right does not mean
representation or membership in the corporate board.

NOTES: Better Still, know your Labor Code provision on tripartism by heart.
ARTICLE 275. Tripartism and tripartite conferences.
(a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and
employers shall, as
far as practicable, be represented in decision and policy-making bodies
of the government.
(b) The Secretary of Labor and Employment or his duly authorized representatives may from time
to time call a national, regional, or industrial tripartite conference of representatives of
government, workers and employers for the consideration and adoption of voluntary codes of
principles designed to promote industrial peace based on social justice or to align labor
movement relations with established priorities in economic and social development. In calling
such conference, the Secretary of Labor and Employment may consult with accredited
representatives of workers and employers. (As amended by RA 6715)
HOW LONG IS THE PROBATIONARY PERIOD OF PROFESSORS, INSTRUCTORS AND
TEACHERS IN PRIVATE SCHOOLS?
Three (3) years pursuant to paragraph 76 of the Manual of Regulations for Private Schools, to wit:
Full time teachers who have rendered three consecutive years of satisfactory service shall be
considered permanent.
WHAT ARE THE REQUISITES FOR A TEACHER IN THE PRIVATE SECTOR TO ACQUIRE
PERMANENT EMPLOYMENT?
(a) The teacher is a full time teacher;
(b) The teacher must have rendered three (3) consecutive years of service; and
(c) Such service must have been satisfactory.
WHO IS A FULL TIME TEACHER?
He is one whose total working day is devoted to the school, has no other regular
remunerative employment, and is paid on a regular monthly basis regardless of the
number of teaching hours.
IN COLLEGE, WHAT IS THE NORMAL TEACHING LOAD OF A FULL TIME INSTRUCTOR?
It shall be eighteen (18) hours a month.
NOTES: A part time member of the faculty cannot acquire permanent employment under
the Manual of Regulation for Private Schools in relation to the Labor Code.

Page 30 of 25

MAY AN EMPLOYER AND THE EMPLOYEE VALIDLY AGREE TO EXTEND THE

PROBATIONARY PERIOD BEYOND SIX (6) MONTHS?
Yes. Such extension is valid if voluntarily agreed by both parties to afford the employee a
second chance to make good after having initially failed to prove his worth as an
employee. By voluntarily agreeing to an extension of the probationary period, the
employee affected in effect waived any benefit attaching to the completion of said period
if he still failed to make the grade during the period of extension. Nothing in the law
prohibits such a waiver for probationary employee to improve and further his prospects of
58
demonstrating his fitness for regular employment.
WHO IS A SEASONAL EMPLOYEE?
Is one who is hired to perform a task, the completion of which is pre-determined on the date he is
hired and the task is seasonal in nature and the employment is for the duration of the season.
EXAMPLES:
1. Sales clerks hired during Christmas holidays or during a peak sales period;
2. In agricultural undertakings when worker are hired to plant or harvest in the sugar, rice or
coconut industry.
ILLUSTRATIVE CASE: Seasonal Employee
FACTS: Maria was hired as a typist to help unclog the
employers files and is to handle the work brought about by the
seasonal increase in the volume of clerical work;
She was required to work beyond six (6) months.
Question: is Maria a Seasonal Employee?
Held: No. Maria cannot be considered as seasonal employee
since clerical work is necessary and desirable in maintaining the
business of the employer. She is a probationary employee who
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will become regular after the expiration of six (6) months.

WHAT ARE THE BASIC LABOR STANDARDS BENEFITS OR THE BASIC TERMS AND
CONDITIONS OF EMPLOYMENT OF SECURITY GUARDS?
Their employment status, terms and conditions of employment and the responsibilities of
security service contractors (private security agencies) are provided and defined by
Department Order No. 14 s. 2001, Guidelines Governing the Employment and Working
Conditions of Security Guards and Similar Personnel in the Private Security Industry.
The basic terms and conditions of employment of security guards are enumerated below:
a.

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59

Security guards must be duly licensed and must have passed physical and neurophysical examination required by PNP to entitle them to all benefits under the Labor

Mariwasa Manufacturing, Inc. vs. Leogardo Jr. GR No. 74246, January 26, 1989
Beta Electric Corporation vs. NLRC, 182 SCRA 384 [February 15, 1990]

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b.
c.

Code and other laws, including coverage of SSS, ECC, Philhealth and HDMF (Pagibig);
Basic wage of security guards shall not be less than the minimum wage rate for nonagricultural sector in the region where is assigned.
Statutory benefits.
1.
2.
3.

4.

5.

6.
7.
8.

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Basic salary for all actual work days and for the ten (10) regular holidays;
Allowance, if any, is prescribed by the applicable Regional Wage Order;
Premium pay of thirty percent (30%) of the daily rate for wok on special
holidays and rest days and an additional fifty percent (50%) whenever work
is performed during rest days and special holidays;
Overtime pay for work rendered beyond eight (8) hours equivalent to at
least twenty five percent (25%) of the regular wage plus thirty percent
(30%) if performed on regular holidays or on special holidays;
Night shift differential pay equivalent to ten percent (10%) of the regular
hourly rate for work rendered between 10:00pm to 6:00am the following
day;
Five (5) days per year service incentive leave, when qualified (leave with
pay);
Seven (7) days paternity leave for married guards;
th
13 month pay (1/12 of annual basic salary);