PRELIMINARY TITLE

CHAPTER I
GENERAL PROVISIONS
ART. 1. NAME OF DECREE
Labor Code of the Philippines
LABOR LEGISLATION - consists of statutes,
regulations and jurisprudence governing the
relations between capital and labor, by providing for
certain standards of terms and conditions of
employment or providing a legal framework within
which these terms and conditions and the
employment relationship may be negotiated,
adjusted and administered.
- body of statutes, rules and doctrines that
defines State policies on labor and employment,
and governs the rights and duties of workers and
employers respecting terms and conditions of
employment by prescribing certain standards
therefore, or by establishing a legal framework
within which better terms and conditions of work
could be obtained through collective bargaining or
other concerted activity.

It is divided into:
Labor Standards ( Books I IV )
Labor Relations (Books V VII )

LABOR STANDARDS - the minimum

requirements prescribed by existing laws, rules
and regulations relating to :
1. wages
2. hours of work
3. cost-of-living allowance
4. other monetary and welfare benefits,
including occupational safety, and health
standards. (Maternity Childrens Hospital vs
Sec of Labor G.R. No. 78909. June
30,1989)

LABOR RELATIONS LAW that which defines

the status, rights, and duties and the institutional
mechanisms that govern the individual and
collective interactions of employers, employees or
their representatives.

ART. 2. DATE OF EFFECTIVITY

The Labor Code took effect on November 1, 1974
(six months after its promulgation on May 1,1974)
SEVEN (7) BASIC RIGHTS OF WORKERS AS
GUARANTEED BY THE CONSTITUTION:
( Art.13, Sec.3, 2nd par. Consti.)
(POWEERSC)
1. Right to Participate in Policy & DecisionMaking Processes affecting their rights and
benefits as may be provided by law
2. Right to Organize Themselves
3. Right to Work Under Humane Conditions
4. Right to Engage in Peaceful Concerted
Activities including Strike in accordance
with law
5. Right to Enjoy Security of Tenure
6. Right to Receive a Living Wage
7. Right to Share in the Fruits of Production
8. Right to Conduct Collective Bargaining or
Negotiation with Management

CONSTITUTIONAL PROVISIONS THAT

GUARANTEE THE RIGHTS OF WORKERS,
PROTECT THEIR SPECIAL INTEREST, OR
PROMOTE THEIR GENERAL WEFARE:
1. Protection to Labor (Sec. 3, Article XIII)
2. Right of workers to form unions (Sec.3,
Article XIII, second paragraph, Bill of
Rights)
3. Principle of shared responsibility (third
paragraph, Article XIII)
4. Right of employers to profit (last paragraph,
Article XIII, section 3)
5. Employment of women workers (Sec. 14,
Article XIII)
RELATED LAWS:
1. CIVIL CODE:

Art. 1700. The relations between capital

and labor are not merely contractual. They
are so impressed with public interest that
labor contracts must yield to the common
good. Therefore, such contracts are subject
to the special laws on labor unions,
collective bargaining, strikes and lockouts,
closed shop, wages, working conditions,
hours of labor and similar subjects.

Art. 1701. Neither capital nor labor shall act

oppressively against the other, or impair the
interest or convenience of the public.

Art. 1703. No contract which practically

amounts to involuntary servitude, under any
guise whatsoever, shall be valid.

-The law which seeks to stabilize the

relation between employers and employees, to
forestall and thresh out their differences through the
encouragement of collective bargaining and the
settlement of labor disputes through conciliation,
mediation, and arbitration.
EMPLOYER - one who employs the services of
others; one for whom employees work and who
pays their wages or salaries.
EMPLOYEE - one who works for an employer; a
person working for salary or wages
- shall not be limited to the employees of
a particular employer; it shall include any
individual whose work has ceased as a result of or
in connection with any current labor dispute or
because of unfair labor practice IF he has not
obtained any other
1. Substantially equivalent and
2. Regular employment

2. REVISED PENAL CODE:

-

Art. 289. Formation, maintenance and

prohibition of combination of capital or labor

through violence or threats. The penalty of

arresto mayor and a fine not exceeding 300
pesos shall be imposed upon any person who,
for the purpose of organizing,
- maintaining or preventing coalitions or
capital or labor, strike of laborers or lock-out of
employees, shall employ violence or threats in
such a degree as to compel or force the
laborers or employers in the free and legal
exercise of their industry or work, if the act
shall not constitute a more serious offense in
accordance with the provisions of this Code.
3. SPECIAL LAWS:

SSS Law
GSIS Law
Agrarian Reform Law
13th Month Pay Law
Magna Carta for Public Health Workers

AIM, REASON, JUSTIFICATION OF LABOR

LAWS:
- raison detre : SOCIAL JUSTICE
the humanization of laws and the equalization
of social and economic forces by the State so
that justice in its rational and objectively secular
conception may at least be proximated.
- constitutional basis: Art.2, Secs.9 &10

Section 9.
The State shall promote a
just and dynamic social order that will
ensure the prosperity and independence of
the nation and free the people from poverty
through policies that provide adequate
social services, promote full employment, a
rising standard of living, and an improved
quality of life for all.

Section 10.
The State shall promote
social justice in all phases of national
development.

BASIS OR FOUNDATION OF LABOR LAWS:

POLICE POWER
- "states authority to enact legislation that
may interfere with personal liberty or property in
order to promote the general welfare." (PASEI vs.
Drilon, G.R.No.L-81958. June 30,1988)

ART. 3. DECLARATION OF BASIC POLICY

(1)The State shall: [PEAR]

a. promote full employment,
b. ensure equal work opportunities
regardless of sex, age or creed, and
c. afford protection to labor,
d. regulate the relations between workers
and employers.

(2)The State shall assure the right of workers

to: [JSSC]
a. just and humane conditions of work
b. self-organization
c. security of tenure

d. collective bargaining
ART. 4.
LABOR

CONSTRUCTION IN FAVOR OF

The rule is applicable if there is a doubt as to

the meaning of the legal and contractual provision.
If the provision is clear and unambiguous, it must
be applied in accordance with its express terms.
In interpreting the Constitutions protection to
labor and social justice provisions and the labor
laws and rules and regulations implementing the
Constitutional mandate, the SC adopts the liberal
approach which favors the exercise of labor
rights.(Meralco vs. NLRC, G.R.No. 78763. Jul.12,
1989)
While the Constitution is committed to the
policy of social justice and the protection of the
working class, it should not be supposed that every
labor dispute shall be automatically resolved in
favor of labor. As held in Colgate Palmolive
Philippines vs Ople( G.R.No. 73681. June
30,1988), it is mandated that there be equal
protection and respect not only the laborers side
but also the management and/or employers side.
The law, in protecting the rights of the laborer,
authorizes neither oppression nor self-destruction of
the employer.
MANAGEMENT PREROGATIVE (SMB vs Ople,
G.R.No. 53515. Feb.8,1989)
- Except as limited by special laws, an
employer is free to regulate, according to his own
discretion and judgment, all aspects of employment,
including:
HIRING,
WORK
ASSIGNMENTS,
WORKING METHODS, TIME PLACE AND
MANNER OF WORK, TOOLS TO BE USED,
PROCESSES TO BE FOLLOWED, SUPERVISION
OF WORKERS, WORKING REGULATIONS,
TRANSFER
OF
EMPLOYEES,
WORK
SUPERVISION, LAY-OFF OF WORKERS, AND
DISCIPLINE, DISMISSAL AND RECALL OF
WORKERS. (HW5T2PLSD)
MANAGEMENT RIGHTS: [CPST ]
C
P
S
T

Right to conduct business

Right to prescribe rules
Right to select and hire employees
Right to transfer or discharge employees

ART.5. RULES AND REGULATIONS

The rules and regulations issued by the DOLE
shall become effective 15 days after announcement
of their adoption in newspapers of general
circulation.

It is true that police power is the domain of

the legislature, but it does not mean that
such an authority may not be lawfully
delegated. The Labor Code itself vests the
Department of Labor and Employment with
rule-making powers in the enforcement
whereof. (PASEI vs Drilon)

ART. 6. APPLICABILITY
The LC applies to all workers, whether agricultural
or non-agricultural, including employees in a
government corporation incorporated under the
Corporation Code.
PURPOSE: intended to encourage workers to seek
employment in agricultural enterprises instead of
migrating to already over crowded urban areas to
find work in industrial establishments.
- It is important to distinguish if the
employee is employed in a GOCC with an original
charter or not. ( see discussion in Art. 244)
AGRICULTURAL OR FARM WORKER - one
employed in an agricultural or farm enterprise and
assigned to perform tasks which are directly related
to the agricultural activities of the employer, such as
cultivation and tillage of the soil, dairying, growing
and harvesting of any agricultural and horticultural
commodities, the raising of livestock or poultry, and
any activity performed by a farmer as an incident to
or in conjunction with such farming operations.
- There may be in one employer both
agricultural as well as industrial workers.

Agricultural workers receive salaries lower than

the prescribed minimum for industrial and
commercial employees.

CHAPTER II
EMANCIPATION OF TENANTS
(Note: not included as per SC Memo)
(amended by RA 6657, CARL)

at least 15 years of age; and

actually tilling the land or directly
managing the farm

LANDS NOT COVERED:

livestock and poultry farms

those covered by homestead patents
residential subdivisions

EMANCIPATION PATENT - the title issued to the

tenant upon compliance with all the requirements of
the government. It represents the full emancipation
of the tenant from the bondage of the soil.
PROHIBITION
INTENDED TO:

AGAINST

ALIENATION

IS

1. preserve the landholding in the hands of the

owner-tiller and his heirs;
2. minimize land speculation; and
3. prevent a return to the regime of land
ownership by a few.

BOOK ONE
PRE-EMPLOYMENT
TITLE I
RECRUITMENT AND PLACEMENT OF
WORKERS
CHAPTER I
GENERAL PROVISIONS

ARTS. 7-11.

ART. 13. DEFINITIONS

Constitutional basis : Art.XIII, Sec.4

The Sate shall, by law, undertake an agrarian
reform program founded on the right of farmers and
regular farmworkers, who are landless, to own
directly or collectively the lands they till or, in the
case of other farmworkers, to receive a just share
of the fruits thereof. To this end, the State shall
encourage and undertake the just distribution of all
agricultural lands, subject to such priorities
andreasonable retention limits as the Congress
may prescribe, taking into account ecological,
developmental, or equity considerations, and
subject to the payment of just compensation. In
determining retention limits, the State shall respect
the rights of small landowners. The State shall
further provide incentives for voluntary landsharing.

(a) WORKER - any member of the labor force,

whether employed or unemployed

- Share tenancy has been abolished placing

in its stead leasehold system.
- Under Art. 8, the land covered by operation
land transfer must be private agricultural land,
tenanted, primarily devoted to rice and/or corn,
and more than seven hectares in area.
PRESENT RETENTION LIMITS:
- 5 hectares per landowner and 3 hectares
per child provided the child is:

(b) RECRUITMENT AND PLACEMENT - any act of

(CEC-TUHP) canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers,
and includes (RCPA) 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
and placement.
- The number of persons dealt with is not an
essential ingredient of the act of recruitment and
placement of workers. The proviso merely creates a
presumption.(PP vs Panis, G.R. No. L-58674-77.
July 11, 1986)
ELEMENTS OF ENGAGING IN RECRUITMENT
& PLACEMENT ACTIVITIES:
These conditions must concur to constitute
recruitment & placement.
1. The complainant had a distinct
impression that the accused had the power
to send complainant abroad for work; and
2. The complainant was convinced to part
with his money in order to be so employed.

(PP vs. Goce, G.R.No.113161. Aug. 29,

1995)
ART. 16. PRIVATE RECRUITMENT
ENTITIES AUTHORIZED TO RECRUIT:
1.Public employment offices
2.Private recruitment entities
3.Private employment agencies
4.Shipping
or
manning
agents
or
representatives
5.The POEA
6.Construction contra ctors if authorized by the
DOLE and the Construction Industry Authority
7.Members of the diplomatic corps (but hiring
must also go thru POEA)
8.Other persons or entities as may be
authorized by the DOLE secretary
ART. 17. (POEA)
The POEA has taken over the functions of the
OEDB & NSB.
4 GOVT AGENCIES WHICH ARE GIVEN THE
DUTY TO PROMOTE MIGRANT WORKERS
WELFARE:
1. DOLE
2. POEA
3. OWWA
4. DFA
PRINCIPAL FUNCTIONS OF THE POEA: (FPD)
1. formulation, implementation, & monitoring
of overseas employment of Filipino workers
2. protection of their rights to fair and
equitable employment practices
3. deployment of Filipino workers through
government-to-government hiring
REGULATORY FUNCTION OF THE POEA:
- regulates private sector participation in the
recruitment and overseas placement of workers
through its licensing and registration system.
ADJUDICATORY FUNCTIONS OF THE POEA:
1.All cases which are administrative in character,
involving or arising out of violations of rules and
regulations relating to licensing and registration
of recruitment and employment agencies or
entities; and
2.Disciplinary action cases and other special
cases which are administrative in character,
involving employers, principals, contracting
3. partners and Filipino Migrant Workers
GROUNDS FOR DISCIPLINARY
(Under the MWA of 1995) :

ACTION

1. Commission of a felony punishable by the laws

of the Philippines or by the host country;
2. Drug addiction or possession or trafficking of
prohibited drugs;
3. Desertion or abandonment;
4. Drunkenness, especially where the laws of the
of the host country prohibit intoxicating drinks;
5. Gambling, especially where the laws of the host
country prohibit the same;
6. Initiating or joining a strike or work stoppage
where the laws of the host country prohibit
strikes or similar actions;

7. Creating trouble at the worksite or in the vessel;

8. Embezzlement of company funds or of money
and properties of a fellow
9. worker entrusted for delivery to kins or relatives
in the Philippines;
10. Theft or robbery;
11. Prostitution;
12. Vandalism or destroying company property;
13. Gunrunning or possession of deadly weapons;
14. Unjust refusal to depart for the worksite after all
employment and travel documents have been
duly approved by the appropriate government
agencies; and
15. Violation of the laws and sacred practices of the
host country and unjustified breach of
government approved employment contract by
a worker.
WHERE TO FILE DISCIPLINARY ACTION
CASES
- Rule VII of Book VII of the POEA Rules
provides that complaints for breach of discipline
against a contract worker shall be filed with the
Adjudication Office or Regional Office of the POEA,
as the case may be. The POEA may motu propio
undertake disciplinary action against a worker for
breach of discipline. It shall establish a system of
watchingand blacklisting of overseas contract
workers.
JURISDICTION
TRANSFERRED
TO
THE
LABOR ARBITERS OF THE NLRC (Sec. 10, RA
8042):
- claims arising out of an employeremployee relationship or by virtue of any law or
contract involving Filipino workers for overseas
deployment including claims for actual, moral,
exemplary and other forms of damages.
VENUE: Money claims or claims for damages
should be filed before the Regional Arbitration
branch of the NLRC where the complainant resides
or
where
the
principal
office
of
the
respondent/employer is situated, at the option of the
complainant..
COMPROMISE AGREEMENT: Consistent with the
policy encouraging amicable settlement of labor
disputes, Sec 10, RA 8042 allows resolution by
compromise of cases filed with the NLRC.
RULE ON PREMATURE TERMINATION OF
CONTRACT
1. RULE: Termination before the agreed
termination date based not on lawful or valid
ground, employer will pay employee corresponding
to the unexpired portion of the employment contract
(Tierra Intl Construction Corp. vs. NLRC)
2. HOWEVER, under R.A. 8042,
Cut-off date: JULY 15, 1995
- illegally dismissed employees are entitled
to full reimbursement of his placement fee with
interest at 12% per annum PLUS salary for
unexpired portion of his employment OR for three
(3) months for every year of the unexpired term
whichever is less
- However, SC clarified in the case of
Marsaman Manning Agency vs. NLRC (G.R.No.

127195. Aug.25,1999) that a plain reading of

section 10 clearly reveals that the choice of which
amount to award an illegally dismissed OCW, i.e.
whether his salaries for the unexpired portion of his
employment contract or 3 months salary for every
year of the unexpired term whichever is less, comes
into play ONLY when the employment contract
concerned has a term of at least 1 year or more.
This is evident from the words for every year of
the unexpired term which follows the salaries x xxx
for three months.
- Under Section 10, RA 8042, the claim for
unpaid salaries of overseas workers should be
whichever is less between salaries for unexpired
portion of the contract or 3 months for every year
of the remaining unexpired portion of the contract
(in case contract is one year or more) (SKIPPERS
PACIFIC,INC. VS. MIRA, ET AL. NOV. 21, 2002)
- The basis for the award of backwages is the
parties employment contract, stipulating the wages
and benefits.
N.B. SIGNING A SATISFACTION RECEIPT IS
NOT A WAIVER! Any agreement to receive less
compensation that what the worker is entitled to
recover is INVALID (MR Yard Crew Union vs. PNR)
RULE ON SIDE AGREEMENTS
An agreement that diminishes the employees
pay and benefits as contained in a POEA
approved contract is void, unless such subsequent
agreement is approved by POEA.. (Chavez vs.
Bonto-Perez. G.R.No. 109808. Mar.1,1995)
MINIMUM REQUIREMENTS OR EMPLOYMENT
CONDITIONS
OF
OVERSEAS
EMPLOYMENT PRESCRIBED BY POEA :
1.Guaranteed wages for regular working hours
and overtime pay for services rendered beyond
regular working hours in accordance with the
standards established by the POEA;
2.Free Transportation from point of hire to site of
employment and return;
3.Free emergency medical and dental treatment
and facilities;
4.Just causes for termination of the contract or of
the services of the workers;
5.Workmens compensation benefits and war
hazard protection;
6.Repatriation of workers remains and properties
in case of death to the point of hire, or if this is
not possible, the proper disposition thereof;
7.Assistance on remittance of workers salaries,
allowances or allotments to his beneficiaries;
and
8.Free and adequate board and lodging facilities
or compensatory food allowance at prevailing
cost of living standards at the jobsite

ART. 18. BAN ON DIRECT HIRING

GENERAL RULE:
Direct hiring of Filipino
workers by a foreign employer is NOT
allowed.

EXCEPTIONS:
1. Direct hiring by:
a. the members of the diplomatic corps;
b. international organizations; and
c. such other employers as may be allowed
by DOLE
2. named hirees individual workers who are
able to secure contracts for overseas employment
on their own efforts and representations without
the assistance or participation or any agency
RATIONALE OF THE PROHIBITION
Filipino workers hired directly by a foreign
employer without government intervention may not
be assured of the best possible terms and
conditions of work. The foreign employer must also
be protected as he may chance upon a Filipino
worker who does not possess sufficient knowledge
for which he is employed.
ART. 22. MANDATORY REMITTANCE OF
FOREIGN EXCHANGE EARNINGS
MANDATORY REMITTANCE
REQUIREMENTS:
- It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign exchange
earnings to their families, dependents, and/or
beneficiaries in the country.
-The POEA Rules (Book III, Rule VIII) prescribe
the percentages of foreign exchange remittance
ranging from 50% to 80% of the basic salary,
depending on the workers kind of job.

CHAPTER II
NATURE
OF JOB

partners, is also an officer, member of the

board or partner of a corporation engaged
in the business of a travel agency;
FOREIGN EXCHANGE REMITTANCE

Seamen or mariners

80% of the basic salary

Workers for Filipino Contractors and Construction

Companies

70% of the basic salary

Doctors, engineers, teachers, nurses, and other

professionals whose employment contract provide for
lodging facilities

70% of the basic salary

All other professionals without board and lodging:

50% of the basic salary

Domestic and other service of workers

50% of the basic salary

REGULATIONS OF RECRUITMENT AND

PLACEMENT ACTIVITIES
ART. 25. PRIVATE SECTOR PARTICIPA-TION
IN THE RECRUITMENT AND PLACE-MENT OF
WORKERS

(interlocking officers)
4. Persons, partnerships, or corporations
which have derogatory records;
- such as but not limited to those directed
to be included in the list of persons and
entities issued by POEA pursuant to:
a) those certified to have derogatory record

QUALIFICATIONS FOR PARTICIPATION IN THE

OVERSEAS EMPLOYMENT PROGRAM:

b)

1. Citizenship requirement (Art.27,LC)

Filipino
citizens,
partnerships
or
corporations
at least 75% of the authorized and voting
capital stock of which is owned and
controlled by Filipino citizens
2. Capitalization (Art. 28, LC)
For single proprietorship or partnership Minimum capitalization of two (2) million in
case of
For corporations - a minimum paid up capital
of 2 million provided that in those with
existing licenses shall , within 4 years from
effectivity hereof, increase their capitalization
or paid-up capital, as the case maybe, to two
million pesos at the rate of two hundred fifty
thousand pesos (P250,000) every year
3. Those not otherwise disqualified by law or
guidelines to engage in the recruitment and
placement of workers for overseas employment.

c)

THE
FF.
ARE
DISQUALIFIED
FROM
RECRUITMENT & PLACEMENT OF WORKERS
FOR OVERSEAS EMPLOYMENT WHETHER FOR
PROFIT OR NOT: (TOCDP2)
1. Travel agencies and sales agencies of
airline companies; (art.26,LC)
2. Officers or members of the board of any
corporation or members in a partnership
engaged in the business of a travel agency;
3. Corporations and partnerships, when any of
its officers, members of the board or

d)

or information by NBI or by the Anti-illegal

Recruitment Branch of POEA
those against whom probable cause or
prima facie finding of guilt or illegal
recruitment of other related cases exist
those convicted for illegal recruitment or
other related cases and /or crimes involving
moral turpitude
those agencies whose licenses have been
previously cancelled or revoked by POEA
for violation of RA 8042, PD 442 as
amended and their implementing rules and
regulations as well as the Labor Codes
implementing rules and regulations

5. Persons employed in the Department of

Labor or in other
6. government agencies directly involved in
overseas employment program and their
relatives within the 4th degree of
consanguinity or affinity; or
7. Those whose license has been previously
canceled or revoked( POEA Rules &
Regulations governing the Recruitment &
Employment of Land-Based Overseas
Workers of 2002 )
ART. 29. NON-TRANSFERABILITY
LICENSE OR AUTHORITY

OF

- No license or authority shall be used

directly or indirectly by any person other than
the one in whose favor it was issued or at any
place other than that stated in the license or
authority, nor may such license or authority be
transferred, conveyed or assigned to any other
person or entity.
- Licensees or holders of authority or their
duly authorized representatives may as a rule,

undertake recruitment and placement activities only

at their authorized official addresses. (Under
existing regulations, they may be allowed to
conduct provincial recruitment and/or job fairs only
upon written authority from POEA)
- Change of ownership or relationship of
single proprietorship licensed to engage in
overseas employment shall cause the automatic
revocation of the license.
ART. 31. BONDS
- All applicants for license or authority shall post
such cash and surety bonds as determined by the
Sec. of Labor.
PURPOSE: ( GE )
1. To guarantee compliance with prescribed
recruitment
procedures,
rules
and
regulations, and terms and
2. conditions of employment as may be
appropriate;
3. To ensure prompt and effective recourse
against such companies when held liable
for applicants or workers claim (Finman
General Assurance vs Innocencio. G.R.No.
90273-75. Nov.15,1989)
Cash bond filed by applicants for license or
authority is not subject to garnishment by a
judgment creditor of the agency
- POEA: possesses the power to enforce
liability under cash or surety bonds
ART. 32. FEES TO BE PAID BY WORKERS
- Any person applying with a private feecharging employment agency for employment
assistance shall not be charged any fee until he
has obtained employment though its efforts or has
actually commenced employment.
- Fees paid shall always be covered with the
appropriate receipt clearly showing the amount
paid.
POEA: has the power to :
1. suspend/cancel license
2. order the refund/reimbursement of such
fees as may have been illegally collected
3. award damages to repair the injury caused
to the victim

ART. 34. PROHIBITED PRACTICES

It shall be unlawful for any individual, entity,
licensee, or holder of authority:
1. To charge or accept, directly or indirectly, any
amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay
any amount greater than that actually received
by him as a loan or advance;

2. To furnish or publish any false notice or

information or document in relation to
recruitment or employment;
3. To give any false notice, testimony, information
or document or commit any act of
misrepresentation for the purpose of securing a
license or authority under this Code;
4. To induce or attempt to induce a worker already
employed to quit his employment in order to
offer him another unless the transfer is
designed to liberate the worker from oppressive
terms and conditions of employment;
5. To influence
6. or attempt to influence any person or entity not
to employ any worker who has not applied for
employment through his agency;
7. To engage in the recruitment or placement of
jobs harmful to public health or morality or to
the dignity of the Republic of the Philippines;
8. To obstruct inspection by the Secretary of Labor
or by his duly authorized representatives;
9. To fail to file reports on the status of
employment,
placement,
vacancies,
remittances of foreign exchange earnings,
separation from jobs,
10. departures and such other matters or
information as may be required by the
Secretary of Labor;
11. To substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing thereof by
the parties up to and including the periods of
expiration of the same without the approval of
the Secretary of Labor;
12. To become an officer or member of the Board of
any corporation
13. engaged directly or indirectly
in the
management of a travel agency; and
14. To withhold or deny travel documents from
applicant workers before departure for
monetary or financial considerations other than
those authorized under this Code and its
implementing rules and regulations.
ART. 35. SUSPENSION AND/OR CANCELLATION OF LICENSE OR AUTHORITY
-

authority - document issued by DOLE

authorizing a person or association to engage
in recruitment and placement activities as a
private recruitment entity (Art.13 f, LC)

license - a document issued by the

Department of Labor authorizing a person or
entity to operate a private employment agency.

GROUNDS FOR REVOCATION OF LICENSE:

(IVEE)
1. incurring an accumulated three counts of
suspension by an agency based on final
and executory orders within the validity
period of its license
2. violation/s of the conditions of license;
3. engaging in act/s of misrepresentation for
the purpose of securing a license or
renewal thereof;
4. engaging in the recruitment or placement of
workers to jobs harmful to the public health
or morality or to the dignity of the Republic
of the Philippines;,(POEA 2000 Rules)


GROUNDS
FOR
SUSPENSION/
CANCELLATION OF LICENSE: (CD2SP)

e)

1. Charging a fee before the worker is

2.
3.
4.
5.

employed or in excess of the authorized

amount;
Doing recruitment in places outside its
authorized area;
Deploying workers without processing
through the POEA; and
Substituting
or
altering
employment
contracts;
Publishing job announcements without the
POEAs prior approval (Sec.4, Rule2, Book
IV ,POEA Rules)

NON-LICENSEE OR NON-HOLDER OF
AUTHORITY - any person, corporation or entity
which has not been issued a valid license or
authority to engage in recruitment and placement
by the Secretary of Labor, or whose license or
authority has been suspended, revoked, or
cancelled by the POEA and the Secretary. (PP vs.
Diaz 259 scra 441.1996)
-

The DOLE Secretary and the POEA

Administrator exercise concurrent jurisdiction
to suspend or cancel a license. (TransAction
Overseas
Corp.vs
Sec.
of
Labor.
G.R.No.109583. Sept.5,1997)

CHAPTER III

f)

g)

h)
i)

j)

k)

MISCELLANEOUS PROVISIONS
ART. 38. ILLEGAL RECRUITMENT (as per RA
8042 otherwise known as the Migrant
Workers Act of 1995)
ILLEGAL RECRUITMENT - Any act of
canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers and includes
referring contract services, promising or advertising
for employment abroad, whether for profit or not
when undertaken by a non-licensee or non-holder
of authority; PROVIDED that any such nonlicensee or non-holder of authority who in any
manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so
engaged. It shall likewise include the commission
of the following prohibited acts whether committed
by a non-licensee or non-holder of authority or a
licensee or holder of authority. (Sec.6, RA 8042)
a) To charge or accept, directly or
indirectly, any amount greater than that
specified in the schedule of allowable
fees prescribed by the Secretary of
Labor, or to make a worker pay any
amount greater than that
b) actually received by him as a loan or
advance
c) To furnish or publish any false notice or
information or document in relation to
recruitment or employment;
d) To give any false notice, testimony,
information or document or commit any
act of misrepresentation for the
purpose of securing a license

l)
m)
n)
o)
p)

or
authority
under
the
Labor
Code;
To induce or attempt to induce a worker
already
employed
to
quit
his
employment in order to offer him
another unless the transfer is designed
to liberate the worker from oppressive
terms and conditions of employment;
To influence or attempt to influence any
person or entity not to employ any
worker who has not applied for
employment through his agency;
To engage in the recruitment or
placement of jobs harmful to public
health or morality or to the dignity of the
Republic of the Philippines;
To obstruct inspection by the Secretary
of Labor or by his duly authorized
representatives;
To fail to file reports on the status of
employment, placement, vacancies,
remittances of foreign exchange
earnings,
separation
from
jobs,
departures and such other matters or
information as may be required by the
Secretary of Labor;
To substitute or alter employment
contracts approved and verified by the
Department of Labor from the time of
actual signing thereof by the parties up
to and including the periods of
expiration of the same without the
approval of the Secretary of Labor;
For an officer or agent of a recruitment
or placement agency to become an
officer or member of the Board of any
corporation
engaged
directly
or
indirectly
in the management of a
travel agency;
To withhold or deny travel documents
from applicant
workers before departure for monetary
or financial considerations other than
those
authorized under this Code and its
implementing rules and regulations;
Failure to actually deploy without valid
reason as determined by DOLE; and
Failure to reimburse expenses incurred
by the worker in connection with his
documentation and processing for
purposes of deployment, in cases
where the deployment does not actually
take place without the workers fault.

Recruitment and placement activities of

agents or representatives appointed by a licensee,
whose appointments were not previously
authorized by the POEA shall likewise constitute
illegal recruitment.
QUALIFYING CIRCUMSTANCES THAT WOULD
MAKE ILLEGAL RECRUITMENT AS AN
OFFENSE
INVOLVING
ECONOMIC
SABOTAGE:
I. When illegal recruitment is committed
by a SYNDICATE

if it is carried out by a group of

three (3) or more persons
conspiring and
confederating with one another

II. When illegal recruitment is committed in a

LARGE SCALE

if it is committed against three (3)

or more persons

These circumstances only qualify the

offense. They do not define the offense themselves.
- When the labor Code speaks of illegal
recruitment committed against three (3) or more
persons individually or as a group, it must be
understood as referring to the number of
complainants in each case who are complainants
therein, otherwise, prosecutions for single crimes of
illegal recruitment can be cumulated to make out a
case of large scale illegal recruitment. In other
words, a
conviction for large scale illegal
recruitment must be based on a finding in each
case of illegal recruitment of three or more persons
whether individually or as a group (PEOPLE VS.
SPS KARL AND YOLANDA REICHL, MAR. 7,
2002).
CONSEQUENCES OF CONVICTION:
(AFC)
1. automatic revocation of the license or
authority(Art.39 e,LC)
2. forfeiture of the cash and surety
bonds(Art.39 e,LC)
3. conviction for
the crime of estafa
provided all the elements of the crime are
present (PP vs Calonzo. G.R.No.11515055. sept.27,1996)
EFFECT OF REPEATED REHIRING OF
SEAMEN
Still contractual employees despite of
repeated rehirings for more than 20 years. They do
not become regular employees (MILLARES VS.
NLRC, MAR. 14, 2000).

VENUE
OF ACTIONS
ON
ILLEGAL
RECRUITMENT:
RTC of the province or city:
1. where the offense was committed; or
2. where the offended party resides at the time of
the commission of the offense
at the option of the complainant

 SUMMARY OF RULES ON PRESCRIPTIVE PERIOD & PENALTY:

ILLEGAL RECRUITMENT
Prescriptive Period
Penalty

REGULAR

AS AN ECONOMIC SABOTAGE

5 years

20 years

PRISION MAYOR & FINE

(not more than 500,000 but
not less than 200,000

LIFE IMPRISONMENT & FINE (not more

than 1M but not less than 500,000

N.B. maximum penalty shall be imposed if the person

illegally recruited is less than 18 years of age or committed
by a non-licensee or non-holder of authority

TITLE II

(c) A designation by the employer of 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.
-

The employer shall submit a training

program for his understudies to the Bureau
within thirty (30) days upon arrival of the
alien workers.

Purpose of understudy : to ensure the

actual transfer of technology.

Instances where there is no need for

employer to designate understudies:
1. elected
board
members
in
multinational companies
2. artists / athletes
3. missionaries
4. lecturers/ instructors / trainors
5. foreign technicians who install
equipments

EMPLOYMENT OF NON-RESIDENT ALIENS

ART. 40. EMPLOYMENT PERMIT OF NONRESIDENT ALIENS
- No alien seeking employment, whether on
resident or non-resident status, may enter the
Philippines without first securing an employment
permit from the Department of Labor and
Employment (Bureau of Local Employment).
- If an alien enters the country under a nonworking visa and wishes to be employed thereafter,
he may only be allowed to be employed upon
presentation of a duly approved employment
permit.
Requirements before an alien can work in the
Philippines:
a) Work permit from DOLE - BLE
b) Working visa from Bureau of Immigration

Understudy any qualified Filipino citizen

designated by a local employer to be trained by a
foreign national allowed to work in the country by
virtue of an employment permit granted him by the
Secretary under an approved understudy training
program (Implementing Rules, Book 1, Rule 1,
Section 1[1]).

REQUIREMENTS FOR EMPLOYMENT PERMIT

APPLICATION (Section 5, LC
Implementing Rules)

ISSUANCE OF EMPLOYMENT PERMIT (Section

6, LC Implementing Rules)

The application for an employment permit shall be

accompanied by the following:

- The Secretary of Labor and Employment may

issue an employment permit to the applicant based
on:

(a) Curriculum vitae duly signed by the applicant

indicating his educational background, his work
experience and other data showing that he
possesses high technical skills in his trade or
profession;
(b) Contract of employment between the employer
and the principal which shall embody the
following, among others;
1) That the non-resident alien worker shall

comply with all applicable laws and rules

and regulations of the Philippines;
2) That the non-resident alien worker and
the employer shall bind themselves to train
at least two (2) Filipino understudies for a
period to be determined by the Secretary of
Labor and Employment; and
3) That he shall not engage in any gainful
employment other than that for which he
was issued a permit.

a) Report of the Bureau Director as to the

availability or non-availability of any
person in the Philippines who is
competent, able, and willing to do the
job for which the services of the
applicant are desired at the time
of application to perform the services
for which the alien is desired.
b) His assessment as to whether or not
the employment of the applicant will
redound to the national interest;
c) Admissibility of the alien as certified by
the Commission on Immigration and
Deportation;
d) The recommendation of the Board of
Investments or other appropriate
government agencies if the applicant
will be employed in preferred areas of
investments or in accordance with

imperatives
of
developments; and
e) Payment of a P100.00 fee.

economic

- For an enterprise registered in preferred

areas of investments, said employment permit may
be issued upon recommendation of the government
agency charged with the supervision of said
enterprise.
DURATION OF EMPLOYMENT PERMIT
(Section 7, LC Implementing Rules)
- Subject to renewal upon showing of good
cause, the employment permit shall be valid for a
minimum period of one (1) year starting from the
date of its issuance unless sooner revoked by the
Secretary of Labor and Employment for violation of
any provisions of the Code or of these Rules.
PROHIBITION AGAINST EMPLOYMENT OF ALIENS
A. GENERAL RULE.
-

Foreigners may not be employed in

certain nationalized business.

Section 2-A of the Anti-Dummy Law

prohibits the employment of aliens in
entities that own or control a right,
franchise, privilege, property or business
whose exercise or enjoyment is reserved
by law only to Filipinos or to corporations or
associations whose capital should be at
least 60% Filipino-owned.

B. EXCEPTIONS:
1. where the Secretary of Justice
specifically authorizes the employment
of technical personnel;
2. where the aliens are elected members
of the board of directors or governing
body of corporations or association in
proportion
to
their
allowable
participation in the capital of such
entities; (DOJ Opinion No.143)

BOOK TWO
HUMAN RESOURCES DEVELOPMENT
TITLE I
NATIONAL MANPOWER DEVELOPMENT
PROGRAM
CHAPTER I
NATIONAL POLICIES AND
ADMINISTRATIVE MACHINERY FOR THEIR
IMPLEMENTATION
ART. 43. STATEMENT OF OBJECTIVES OF
NATIONAL MANPOWER DEVELOPMENT
PROGRAM
1. to develop human resources;
2. to establish training institutions; and
3. to formulate such integrated plans, policies,
& programs that will ensure efficient and
proper
allocation,
development
and
optimum utilization of the nation's
manpower,
and
thereby
promote
employment and accelerate economic and
social growth.
ART. 44. DEFINITIONS
a. MANPOWER - that portion of the nations
population which has actual or potential capability
to contribute directly to the production of goods
and services.
b. ENTREPRENEURSHIP - training for selfemployment or assisting individual or small
industries within the purview of Title II of the
Labor Code.

TITLE II
TRAINING AND EMPLOYMENT OF SPECIAL
WORKERS
CHAPTER I
APPRENTICES
Types of Special Workers:
1. Apprentice
2. Learner
3. Handicapped
ART. 57. STATEMENT OF OBJECTIVES FOR
THE TRAINING & EMPLOYMENT OF
SPECIAL WORKERS

The
promotion,
development,
and
maintenance of apprenticeship programs shall
have the following objectives:
(a) To help meet the needs or demands of the
economy for trained manpower in the
widest possible range of employment;
(b) To establish a national apprenticeship
program through the participation of
employers, workers, government, civic and
other groups; and

(c) To establish apprenticeship standards for

the protection of apprentices and

upgrading of skills.
ART. 58. DEFINITION OF TERMS
a. APPRENTICESHIP - practical training on the
job supplemented by related theoretical
instruction
b. APPRENTICE - a worker who is covered by a
written apprenticeship agreement with an
individual employer or any of the entities
recognized under this chapter
c. APPRENTICEABLE OCCUPATION - any
trade, form of employment or occupation which
requires more than 3 months of practical
training on the job supplemented by related
theoretical instruction
d. APPRENTICESHIP
AGREEMENT
an
employment contract wherein the employer
binds himself to train the apprentice and the
apprentice in turn accepts the terms of training
e.
ON-THE-JOB TRAINING practical work
experience through actual participation in
productive activities given to or acquired by an
apprentice
f. HIGHLY TECHNICAL INDUSTRIES a trade,
business, enterprise, industry or other activity,
which is engaged in the application of advanced
technology.

ART.
59.
APPRENTICES

QUALIFICATIONS

OF

Qualifications of an Apprentice:
(15 VA )
1. at least 15 years of age;
[ provided that those who are at least 15 years
of age but less than eighteen may be eligible
for apprenticeship only in non-hazardous
occupations and the apprenticeship agreement
shall be signed in his behalf by the parent or
guardian or authorized representative of DOLE]
2. possess vocational aptitude and capacity for
appropriate tests; and
3. possess the ability to comprehend and follow
oral and written instructions
[ FYI: The apprenticeable age under art. 59 LC is 14 but it is 15
under the Implementing Rules. The question of variance is
rendered moot and academic by RA 7610 which explicitly
prohibits employment of children below 15 yrs. of age. RA 7610
recognizes certain exceptions, but being an apprentice is not
one of the exceptions.]

Trade and industry associations may, recommend

to the Secretary of Labor and Employment
appropriate
educational
qualifications
for
apprentices
in
certain
occupations.
Such
qualifications, if approved, shall be the educational
requirements
for
apprenticeship
in
such
occupations unless waived by an employer in favor
of an applicant who has demonstrated exceptional
ability.

ART. 60. EMPLOYMENT OF APPRENTICES

 WHO MAY EMPLOY:

-

Only employers in highly technical industries

may employ apprentices and only in
apprenticeable occupations as determined by
the Secretary of Labor.

- Either party to an agreement may terminate

the same after the probationary period only for
a valid cause.
How action may be Initiated.
1. upon complaint of any interested person
2. upon DOLEs own initiative
APPEAL (art.66,LC)

REQUESITES FOR A VALID APPRENTICESHIP:

decision of authorized agency of DOLE
1. Qualifications of the apprentice
2. Apprenticeship agreement duly executed
and signed which shall contain the ff:
(art.61, LC )
a. the duration of apprenticeship which shall
not exceed 6 months
b. the wage rates below the legal minimum
wage which in no case shall start below
75% of the applicable minimum wage in the
place where he is working { i.e.
compensation which must not be less than
75% of the applicable minimum wage
except on-the-job training (OJT)

3. Apprenticeship program duly approved by

the DOLE ( Nitto Enterprises vs. NLRC.
G.R.No. 114337. Sept. 29,1995)
[otherwise, theres a possibility that
apprentice may become a regular
employee]
4. Period of apprenticeship shall not exceed 6
months

ART. 62. SIGNING OF APPRENTICESHIP

AGREEMENT

Who shall sign

Agreement:

Every apprenticeship agreement shall be

signed by the employer or his duly authorized
representative and by the apprentice.
An apprenticeship agreement with a minor shall
be signed in his behalf by his parent or
guardian, or if the latter is not available, by an
authorized representative of the Department of
Labor and Employment.

ART. 63.
PROGRAMS

the

Apprenticeship

VENUE OF APPRENTICESHIP

Within 5 days fr. receipt of

decision

Secretary of DOLE
[Sec of DOLEs decision is final & executory]

EXHAUSTION
OF
REMEDIES: (art.67,LC)
-

ADMINISTRATIVE

No person shall institute any action for the

enforcement of any apprenticeship agreement
or for damages for breach thereof, unless he
has exhausted all available administrative
remedies.
The plant apprenticeship committee shall have
initial responsibility for settling differences
arising out of apprenticeship agreements.

ART. 70. VOLUNTARY ORGANIZATION OF

APPRENTICESHIP PROGRAM
GENERAL RULE - The organization of
apprenticeship program shall be primarily a
voluntary undertaking of employers.
EXCEPTION (Instances when organization of
program is compulsory):
1. when national security or particular
requirements of economic development so
demand;
2. where services of foreign technicians are
utilized
by
private
companies
in
apprenticeable trades
ART. 71. DEDUCTIBILITY OF TRAINING
COSTS

ON-THE-JOB TRAINING OF APPRENTICES

MAY BE UNDERTAKEN IN:
(a) the plant, shop or premises of the employer or
firm concerned if the apprenticeship program is
organized by an individual employer or firm;
(b) the premises of one or several firms designated
for the purpose by the organizer of the program
if such organizer is an association of
employers, civic group and the like; and
(c) DOLE Training Center or other public training
institutions with which the Bureau has made
appropriate arrangements.

ARTS.
65-67.
VIOLATION
APPRENTICESHIP AGREEMENT

REQUISITES FOR TAX DEDUCTIONS IN CASE

EMPLOYERS
HAVE
APPRENTICESHIP
PROGRAMS: (PED)

OF

INVESTIGATION
OF
VIOLATION
OF
APPRENTICESHIP AGREEMENT: (art.65,LC)

An additional deduction from taxable income of

of the value of labor training expenses
incurred for developing the productivity and
efficiency of apprentices shall be granted to the
person
or
enterprise
organizing
an
apprenticeship program. Provided, That such
program is duly recognized by the Department
of labor: Provided, further, That such deduction
shall not exceed ten percent (10%) of direct
labor wage: And provided, finally, That the
person or enterprise who wishes to avail
himself or itself of this incentive should pay his
apprentices the minimum wage.

1. the program must be duly recognized by

the Department of Labor;

2. the deduction shall not exceed 10% of

direct labor wage; and
3. the employer must pay his apprentices the
minimum wage

ART. 72.
COMPENSATION

APPRENTICES

WITHOUT

APPRENTICES MAY BE HIRED WITHOUT

COMPENSATION WHERE TRAINING ON THE
JOB IS:
1. required by the school;
2. required by the Training Program
Curriculum;
3. a requisite for Graduation; or
4. a requisite for Board Examination
LIABILITY OF A WORKING SCHOLAR
- Under this article the student is not
considered an employee. But if he causes injury or
damage to a third person, the school may be held
liable under the civil code,
- There is no employer-employee relationship
between students on one hand, and schools,
colleges or universities on the other, where there is
written agreement between them under which the
former agree to work for the latter in exchange for
the privilege to study free of charge, provided the
students are given real opportunities, including such
facilities as may be reasonable and necessary to
finish their chosen courses under such agreement.
( Rule X. Sec. 14, Book III, Implementing Rules)
Section 14, Rule X, Book III of the Rules
implementing the Labor code was promulgated by
the Secretary of Labor only for the purpose of
administering and enforcing the provisions of the
Labor Code on conditions of employment. In other
words, Rule X is merely a guide to the enforcement
of the substantive law on labor. The Court, thus,
makes the distinction and so holds that Section 14,
Rule X, Book III of the Rules is not the decisive law
in a CIVIL SUIT for damages instituted by an injured
person during a vehicular accident against a
working student of a school and against the school
itself. The present case does not deal with a labor
dispute on conditions of employment between an
alleged employee and an alleged employer. It
invokes a claim brought by one for damages for
injury caused by the patently negligent acts of a
person, against both doer-employee and his
employer. Hence, the reliance on the implementing
rule on labor to disregard the primary liability of an
employer under Article 2180 of the Civil Code is
misplaced. An implementing rule on labor cannot be
used by an employer as a shield to void liability
under the substantive provisions of the Civil Code.
Filamer Christian Institute vs IAC [G.R. No.
75112. August 17, 1992.]

APPRENTICESHIP

LEARNERSHIP

CONCEPT

Practical training on the job

supplemented
by
related
theoretical instruction.

Hiring of persons as trainees in semiskilled and other industrial occupations

which are non-apprenticeable and which
may be learned thru practical training on
the job in a relatively short period of time.

DURATION

Not less than 3 months practical

training on the job but not
more than 6 months

Practical training on the job not to

exceed 3 months.

No commitment to hire

With a commitment to employ the learner

as regular employee if he desires upon
completion of learnership

EFFECT OF
PRETERMINATION

In case of pretermination of the

apprenticeship agreement, the
worker is not considered as a
regular employee

Learner is considered as a regular

employee in case of pretermination of
contract after 2 mos. of training and the
dismissal is without fault of the learner

FOCUS OF TRAINING

Highly-skilled
or
technical
industries and only in industrial
occupation

Semi-skilled/ industrial occupations

(non-apprenticeable)

DOLES PRIOR APPROVAL

Agreement requires Doles prior

approval for its validity

Does not require Doles prior approval but

merely subj. to inspection

EXHAUSTION OF ADM.
REMEDIES IN CASE OF
BREACH OF CONTRACT

Exhaustion is a precondition for

filing action

Exhaustion of adm. remedies is not

required

ERS COMMITMENT TO HIRE

CHAPTER II
LEARNERS
ART. 73. LEARNERS DEFINED
LEARNERS - persons hired as trainees in semiskilled and other industrial occupations which are
non-apprenticeable and which may be learned
through practical training on the job in a relatively
short period of time which shall not exceed 3
months.
LEARNERSHIP AGREEMENT - refers to the
employment and training contract entered into
between the employer and the learner.
ART. 74. WHEN LEARNERS MAY BE HIRED
CONDITIONS FOR HIRING LEARNERS:
- Learners may be employed when:
1. no experienced workers are available
2. the employment of learners being
necessary to prevent curtailment of
employment opportunities, and
3. such employment will not create unfair
competition in terms of labor costs nor
impair working standards.
ART. 75. CONTENTS OF LEARNERSHIP
AGREEMENT

AGREEMENT SHALL INCLUDE :

1. The names and addresses of the employer
and the learner;
2. The occupation to be learned and the
duration of the training period which shall
not exceed three (3) months;
3. The wage of learner which shall be at least
75 percent of the applicable minimum
wage; and
4. A commitment to employ the learner, if he
so desires, as a regular employee upon
completion of training.
- A learner who has worked during the first two
months shall be deemed a regular employee if
training is Terminated by the employer before the
end of the stipulated period through no fault of the
learner.

ART. 76. LEARNERS IN PIECEWORK

- Learners in piecework/incentive rate jobs are
to be paid in full for the work done during
the training period.

CHAPTER III
HANDICAPPED WORKERS
ART. 78. DEFINITION

 HANDICAPPED WORKERS - those whose

earning capacity is impaired by age or physical or
mental deficiency or injury (table 2)
HANDICAPPED WORKER
Art. 78. LC

- There must be a link between the deficiency and

the work which entitles the employer to lessen the
workers wage.

HANDICAPPED PERSON
RA 7277
(Magana Carta for Disabled Persons)

those whose earning capacity is impaired by

age or physical or mental deficiency or injury

Those suffering from restriction or different abilities, as

a result of a mental, physical or sensory impairment, to
perform an activity in the manner or within the range
considered normal for a human being;

ART. 79. WHEN EMPLOYABLE

Handicapped workers may be employed when:

if their handicap is not such as to effectively

impede the performance of job operations
in the particular occupations for which they
are hired

BOOK THREE

1. their employment is necessary to prevent

curtailment of employment opportunities
2. it does not create unfair competition in labor
costs or impair or lower working standards.
Subject to the provisions of the Code,
handicapped workers may be hired as
regular workers, apprentices or learners IF
their handicap is not such as to effectively
impede the performance of job operations in
the particular occupations for which they were
hired.

EQUAL OPPORTUNITY FOR EMPLOYMENT

( SEC.5 RA 7277)
- No disable person shall be denied access to
opportunities for suitable employment. Qualified
disabled employees shall be subject to the same
terms and conditions of employment and the
same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified
able-bodied person. Even a handicapped worker
can acquire the status of a regular employee.
Duration of employment - no minimum, no
maximum. Dependent on agreement but it is
necessary that there is a specific duration
ART. 80. EMPLOYMENT AGREEMENT
CONTENTS OF EMPLOYMENT AGREEMENT
-

An employer who hires a handicapped worker

shall enter into an employment agreement with
the latter which shall include:
1. The names and addresses of the employer
and the handicapped worker;
2. The rate of pay of the handicapped worker
which shall not be less than seventy-five
(75%) percent of the legal minimum wage;
3. The nature of work to be performed by the
handicapped worker; and
4. The duration of the employment.

ART. 81. ELIGIBILITY FOR APPRENTICESHIP

- Subject to the appropriate provisions of this
Code, handicapped workers may be hired as
apprentices or learners:

CONDITIONS OF EMPLOYMENT
TITLE I
WORKING CONDITIONS AND REST
PERIODS
CHAPTER I
HOURS OF WORK
ART. 82. COVERAGE
Title I, Book III of the Labor Code dealing
with hours of work, weekly rest periods, holidays,
service incentive leaves and service charges,
covers all employees in all establishments, whether
for profit or not, except the following employees
(GMOFMDPW):
1. Government employees
2. Managerial employees
3. Officers
and
members
of
the
managerial staff
4. Field personnel
5. Members of the family of the employer
who and dependent on him for support
6. Domestic helpers
7. Persons on the personal service of
another
8. Workers paid by result

TYPE OF EMPLOYEE

REASON WHY NOT COVERED

GOVERNMENT EMPLOYEES
(those employed in GOCCs not
incorporated
under
the
the
Corpo.Code)

because terms and conditions of employment are governed by

Civil Service Law, rules and regulations.

MANAGERIAL EMPLOYEES

because they are employed by reason of their special training,

experience or knowledge. The value of their work ca
nnot be measured in terms of hours.

NONAGRICULTURAL
FIELD
PERSONNEL
(Union of Filipino Employees vs
Vivar. G.R. No. 79255. January
22,1992)

because they are on their own in the field and the number of
hours of actual work they render cannot be reasonably ascertained;
it would be grossly unfair to require the employer to pay them
benefits such as overtime compensation.

MEMBERS OF THE FAMILY of the

employer who are dependent upon
him for support

the amounts given by the employer by way of support may far

exceed the benefits to which the employee is entitled under the
provisions of the Title

DOMESTIC
HELPERS
and
persons in the personal service of
another

terms and conditions of employment are governed by the

provisions of Chapter III, Title III of the present Book.

Workers who are paid BY

RESULTS, such as those on piece
rates or task basis

their compensation is based on the work accomplished and not

on the time they spend in accomplishing the work.

The aforementioned employees are not entitled to:

overtime pay

premium pay for rest days and holidays

night shift differential pay

holiday pay

service incentive leave

service charges.
- Importance of determining the existence of
employer-employee
relationship:
Labor
standards and conditions apply only if there is er-ee
relationship.

ELEMENTS OF EMPLOYER-EMPLOYEE
RELATIONSHIP: (Enero vs NLRC. G.R. No.
120969. Jan. 22, 1998)
1. selection and engagement of the employee;
2. the payment of wages;
3. power of dismissal; and
4. control test
- CONTROL
TEST
refers
to
the
employers power to control or right to control
the employee not only as to the result of the
work to be done but also as to the means and
methods by which the same is to be
accomplished.
-

This last element is the most important

index of the existence of the
relationship.

EMPLOYEE - A natural person who is hired,

directly or indirectly, by a natural or juridical
person to perform activity related to the
business of the hirer who, directly or through
an agent, supervises or controls the work
performance and pays the salary or wage of
the hire.
- shall not be limited to the employees of a
particular employer; it shall include any
individual whose work has ceased as a result of
or in connection with any current labor dispute
or because of unfair labor practice IF he has not
obtained any other:
1. Substantially equivalent and
2. Regular employment

ARE SUPERVISORS MANAGERS?

- The main issue presented is whether supervisory
employees, as defined in Article 212 (m), Book V of
the Labor Code, should be considered as officers or
members of the managerial staff under Article 82,
Book III of the same Code, and hence are not
entitled to overtime rest day and holiday pay.
- Article 212 (m) should be made to apply only to
the provisions on Labor Relations, while the right of
said employees to the questioned benefits should
be considered in the light of the meaning of a
managerial employee and of the officers or
members of the managerial staff, as contemplated
under Article 82 of the Code and Section 2, Rule I
Book III of the implementing rules. In other words,
for purposes of forming and joining unions,
certification elections, collective bargaining, and so
forth, the union members are supervisory
employees. In terms of working conditions and rest
periods and entitlement to the questioned benefits,
however, they are officers or members of the
managerial staff, hence they are not entitled
thereto. National Sugar Refinaries vs NLRC.
G.R. No. 101761. March 24, 1993.

MANAGERIAL EMPLOYEES
LABOR STANDARDS
Article 82

MANAGERIAL EMPLOYEES
LABOR RELATIONS
Article 212 (m)

Used only for purposes of Book III

Used only for purposes of Book V

those whose primary duty consists of the management

of the establishment in which they are employed
or of a department or subdivision thereof and to
other members of the managerial staff

one who is vested with powers or prerogatives to lay

down and execute management policies and /or to
hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees.

Supervisors are members of the managerial staff

does not include supervisors

GOVERNMENT EMPLOYEES - refers only to

employees
of
government
agencies,
instrumentalities or political subdivisions and of
government corporations that are NOT
incorporated under the Corporation Code, i.e.,
those which have original charters.
WORKERS PAID ON PIECE-RATE BASIS those who are paid a standard amount for every
piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent
in producing the same.
WORKERS PAID BY RESULT - those who are
paid based on the work completed and not on
the time spent in working.
FIELD PERSONNEL - non-agricultural employees
who regularly perform their duties away from
the principal place of business or branch office
of the employer, and whose actual hours of
work in the field cannot be determined with
reasonable certainty.
DOMESTIC HELPERS/ PERSONS RENDERING
PERSONAL SERVICES
- those who :
1. perform services in the employers home
which are usually necessary and desirable
for the maintenance or enjoyment thereof,
or
2. minister
to
the
personal
comfort,
convenience or safety of the employer,
as well as the members of the employers
household.
-

The existence of employment relationship is

determined by law and not by contract.

WHEN NOT DEEMED A DOMESTIC HELPER:

1. House personnel hired by a ranking
company official paid for by the company
itself to maintain a staff house provided for
the official are not domestic helpers but
regular employees of the company. (Cadiz
vs. Phil. Sinter Corp. NLRC Case No.71729, July 3,1979)
2. A family cook who is later assigned to
work as a watcher and cleaner of the
employers
business
establishment
becomes an industrial worker entitled to
receive wages and benefits flowing from

such status. (Villa vs Zaragosa & Assoc.

OP Decision No,0183, Aug. 5,1977)
-

Whether or not an employer-employee

relationship exists between the parties is a
question of fact. The findings of the NLRC
are accorded not only respect but finality if
supported by substantial evidence

MERCIDAR FISHING CORP. VS NLRC

[G.R. No. 112574. October 8, 1998.]

UNION OF FILIPINO EMPLOYEES VS VIVAR

[G.R. No. 79256. January 20, 1992.]

Fishermen in a fishing voyage are not field

personnel.

Outside salesmen are field personnel.

During the entire course of their fishing

voyage, fishermen employed by petitioner have
no choice but to remain on board its vessel.
Although they perform non-agricultural work
away from petitioner's business offices, the fact
remains that throughout the duration of their
work they are under the effective control and
supervision of petitioner through the vessel's
patron or master.

"The reasons for excluding an outside salesman are

fairly apparent. Such a salesman, to a greater extent,
works individually. There are no restrictions respecting
the time he shall work and he can earn as much or as
little, within the range of his ability, as his ambition
dictates. In lieu of overtime he ordinarily receives
commissions as extra compensation. He works away
from his employer's place of business, is not subject to
the personal supervision of his employer, and his
employer has no way of knowing the number of hours
he works per day."

Note: Under Rule 25.1 of the Rules Implementing Republic Act No. 8850, otherwise known as the Philippine Fisheries Code of 1998,
fishworkers on board any fishing vessel engaged in fishing operations shall be classified as field personnel, as defined under Section 82 of
the Philippine Labor Code, as amended, and shall not be subject to the regulations on normal working hours and overtime.

PURPOSES:
1. to safeguard the health and welfare of the
laborer and
2. to minimize unemployment by utilizing
different shifts

MANAGEMENT PREROGATIVE - Except as

otherwise limited by special laws, an employer is
free to regulate, according to his own discretion and
judgment, all aspects of employment, including
hiring, work assignments, working methods, time,
place, and manner of work, tools to be used,
processes to be followed, supervision of workers,
working regulations, transfer of employees, work
supervision, lay-off of workers and discipline,
dismissal and recall of workers. (SMB vs Ople)
-

NOTES:
- It is not prohibited to have normal hours of
work of less than 8hours/day. What the law
regulates is work hours exceeding eight.
8-hour labor law prescribes the maximum but
not the minimum. Therefore, part-time work, or
a days work of less than 8 hours is not
prohibited.
NORMAL HOURS OF WORK OF HEALTH
PERSONNEL
-

recognizes the right of the employer to

advance its interest to prescribe standards of
work and impose reasonable quotas or work
assignments, and failure on the part of the
employees to meet the requirement, imposed in
good faith, constitutes a just cause for his
dismissal.

Health personnel in government service are

excluded from the coverage of Arts.82-96.
Their work hours, night shift differential pay, and
other employment benefits are specified in RA
7305.

It is possible for an employee to work for 2

calendar days.
e.g. If Xs work schedule is from 5:00 pm of Monday
up to 10 a.m of Tuesday, his work day covers 2
calendar days.

WORK DAY
-

For health personnel in cities and municipalities

with a population of at least 1M or in hospitals
and clinics with a bed capacity of at least 100:
regular office hours shall be 8 hours a
day for five days a week, or 40 hours a
week, exclusive of time for meals.
in case of exigencies, they may work for
6 days or for 48 hours, but they shall be
entitled to an additional compensation of
at least 30% of their regular wage for
work performed on the 6th day.

New owner/management group has no

obligation to re-employ workers who freely
and voluntarily accepted their separation
pay and other benefits.
A change of
ownership in a business concern is not
proscribed by law.

ART. 83. NORMAL HOURS OF WORK

- The normal hours of work of an employee shall
not exceed 8 hours a day
-

24 hr. period commencing from the time an

employee regularly starts to work

ART. 84. HOURS WORKED

HOURS WORKED SHALL INCLUDE:

CALENDAR DAY
-

24 hr. period commencing

ending at 11:59 pm

at 12 midnight and

1. all time during which an employee is required to

be on duty or to be at a prescribed workplace;

2. all time during which an employee is suffered or

permitted to work; and
3. rest periods of short duration during working
hours
4. meal period of less than twenty(20) minutes, it
becomes only a rest period and is thus
considered as work time
PRINCIPLES IN DETERMINING HOURS
WORKED: (Rule 1, Book II, Implementing Rules)
1. All hours are hours worked which the employee
is required to give to his employer, regardless of
whether or not such hour are spent in
productive labor or involve physical or mental
exertion.
2. An employee need not leave the premises of
the workplace in order that his rest period shall
not be counted, it being enough that he stops
working, may rest completely and may leave
his workplace, to go elsewhere whether within
or outside the premises of his workplace.

working hours because he had no replacement,

all time spent for such work shall be considered
as hours worked if the work is with the
knowledge of his employer or immediate
supervisor.
4. The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered time either if the
imminence of the resumption of work requires
the employees presence at the place of work or
if the interval is too brief to be utilized effectively
and gainfully in the employees own interest.
RULES ON HOURS OF WORK
A. WAITING TIME
- considered as hours worked if waiting:
1. is an integral part of his work; or
2. the employee is required or engaged by the
employer to wait
3. when employee is required to remain on
call in the employers premises or so close
thereto that he cannot use the time
effectively and gainfully for his own
purpose.

3. If the work performed was necessary, or it

benefited the employer, or the employee could
not abandon his work at the end of his normal

ENGAGED TO WAIT

WAITING TO BE ENGAGED

Su

- when waiting is an integral part of the job,

the time spent waiting is compensable

- idle time is not working time; it is not compensable

e.g. X works as a driver and his task is to drive a

truck to Botolan to load gravel and sand. While
gravel is being loaded, he engaged himself in a
karaoke session and then slept. Is the time spent
singing & sleeping compensable?
-Yes. Because he is engaged to wait for waiting is
an integral part of the job.

e.g. X works as a Victory Liner bus driver. His route is from

Manila to Zambales, leaving at 6am & arriving at 12 noon. He is
completely relieved from all duty until 6pm, when he again goes
on duty for the return trip to manila. Is his idle time working
time?
-No. Because during his idle time, he is specifically relieved
from all duty. He is merely waiting to be enegaged.

e.g. firemen playing cards in the fire station

WORKING WHILE ON CALL

- when employee is required to remain on call in
the employers premises or so close thereto
that he cannot use the time effectively and
gainfully for his own purpose.
- However, if he is not required to leave work at
his home or with company officials where he
may be reached, he is not considered working
while on call.
B. PRELIMINARY& POSTLIMINARY ACTIVITIES
- compensable when:
1. controlled or required by employer and
2. are pursued necessarily and primarily for
the employers benefit
*preliminary
* postliminary

: before work,
e.g. preparation for business
presentations
: after actual work,
e.g. OT

C. TRAVEL TIME

mmary of Rules
compensable:

when

travel

time

is

TRAVEL FROM HOME

TO WORK

TRAVEL THAT IS ALL IN

A DAYS WORK

TRAVEL AWAY FROM HOME

Normal travel from home to work

which is not work time

the time spent by an employee in

travel as part of his principal
activity, such as travel from jobsite
to jobsite during the workday;

travel that keeps an employee away from

home overnight;

Compensable, must be counted

as hours worked

Considered as work time when it cuts

across an employees workday

Generally:
-Not Compensable
Exception:
-where the worker is made to
work on an emergency call and
travel is necessary in proceeding
to the workplace, the time spent
on travel is compensable

N.B. In Travel from home to work, if same is via

shuttle service sponsored by the company, travel
time is not compensable because service is for the
benefit of the employee.
In travel away from home, if instruction was given
by the employer to the employee to go to a
warehouse and to go back to the main office
afterwards, the time traveled is considered as hours
worked; however, if instead of going back to the
office, the employee went home, only the travel to
the warehouse is considered as hours worked.
D. POWER INTERRUPTIONS
-compensable when:
a. 1st 20 minutes is compensable;
b. succeeding minutes not compensable
- but if despite the lapse of the 1 st 20
minutes the employees are required to
stay in their workplaces, such time is
compensable.
E. SEMESTRAL BREAK OF TEACHERS
- compensable hours worked for it is a form of
interruption beyond their control
F. LECTURES, MEETINGS, TRAININGS,
PROGRAMS
not counted as working time if all the following
conditions are met:
a. attendance is outside of the employees
regular working hours;
b. attendance is in fact voluntary; and
c. employee does not perform any productive
work during such attendance.
G. WORK HOURS OF SEAMEN
- presence on board for more than 8 hours a day
is required by the nature of their service
-

governed by the same rules as land based

employees. Thus, they must show sufficient
proof that said work is actually performed.

Conditions to be satisfied before a seaman be

entitled to overtime pay:
1. Actual rendition of overtime work
2. Submission of sufficient proof that said
work was actually performed

(because it substitutes for the hours that

the employee should have been in the
office.)

ART. 85. MEAL PERIODS

MEAL PERIODS
1. should not be less than sixty (60) minutes, and
is time-off/non-compensable
2. under specified cases, may be less than sixty
(60) minutes, but should not be less than twenty
(20) minutes and must be with full pay.
3. if less than twenty(20) minutes, it becomes only
a rest period and is thus considered as work
time
NOTE: the employee must be completely relieved
from duty. Otherwise, it is compensable as hours
worked.
- Mealtime is not compensable EXCEPT in the
ff. cases:
1. where the lunch period or meal time is
predominantly spent for the employers
benefit or
2. where it is less than 60 minutes.

SHORTENED
MEAL
BREAK
UPON
EMPLOYEES REQUEST
Employees may request that their meal period
be shortened so that they can leave work
earlier than the previously established
schedule.

REQUISITES:
1.
writing to a shortened meal period and are
willing to waive the overtime pay for such
shortened meal The employees voluntarily
agree in period;
2.
There will be no diminution whatsoever in
the salary and other fringe benefits of the
employees existing before the effectivity of the
shortened meal period;
3.
The work of the employees does not
involve strenuous physical exertion and they
are provided with adequate coffee breaks;
4.
The value of benefits is equal to the
compensation due them for the shortened meal
period;
5.
Overtime pay
will become due and
demandable after the new time schedule; and
6.
The arrangement is of temporary duration. (
BWC-WHSD Opinion N0.197)

ART. 86. NIGHT SHIFT DIFFERENTIAL ( NSD )

CONCEPT OF NSD
- additional compensation of not less than ten
percent (10%) of an employees regular wage for

every hour of work done between 10:00 PM and

6:00 AM, whether or not such period is part of the
workers regular shift.
-

If work done between 10 PM and 6 AM

is overtime work, then the 10% night
shift differential should be based on
the overtime rate.

NOT
WAIVABLE

Additional
compensation for nighttime work is
founded on PUBLIC POLICY. (Mercury
Drug vs Dayao. G.R. L-30452. Sept.
30,1982)

FORMULA
([ 10% x regular wage per hour) x no. of hours of
work performed between 10pm-6am]

SAMPLE ILLUSTRATION NO. 2 :

Daily Wage :
P800
Work Schedule:
8:00am 5:00 pm
OT :
5:00pm 12:00 mn

Step 1: get hourly wage rate

- Daily Wage divided by number of hours worked

e.g. P800 / 8 hrs.

= P100

Step 2: compute wage between 8:00pm -5:00 am

e.g. 8hrs x P100

= P800

Step 3: compute OT Premium Pay between 5:00pm

- 12mn
- [(25% x Wage per hour) + Wage per hour] x no.of OT
hours

SAMPLE ILLUSTRATION NO. 1 :

Daily Wage :

-----------P840

Total wage earned

P800
6:00pm 2:00 am

e.g.
(25% x P100)+100
= P125
x no.of OT hours (5pm-12mn) =
7hrs

Work Schedule:

------------

Step 1: get hourly wage rate

P875

- Daily Wage divided by number of hours worked

e.g. P800 / 8 hrs.

= P100

Step 4: compute NSD

- (10% of OTwage per hour x no. of hours of work
performed between 10pm-6am)

Step 2: compute wage between 6:00pm -2:00 am

e.g. 8hrs x P100
= P800

e.g. (10% x P125) x 2 hours

Step 3: compute NSD

COMPUTATION:
8am-5pm 8hrs x P100.00
5pm-12mn 7hrs x P125.00
NSD Pay 2hrs x P 12.50

- (10% of regular wage per hour x no. of hours of work

performed between 10pm-6am)

e.g. (10% x P100) x 4 hours

COMPUTATION:
6am-10pm 4hrs x P100
10pm-2am 4hrs x P100
NSD Pay
4hrs x P 10

=P40

Total wage earned

P400
400
40

NSD
Payment for work done during the night
(10:00pm-6am)
10 % of basic wage

P24

P800
875
24
-----------P1699

OVERTIME PAY
Payment for the excess of the regular 8-hr work
25% or 30% of basic wage

NOTE: The receipt of overtime pay will not preclude payment of night shift differential pay.

ART. 87. OVERTIME WORK

OVERTIME PAY
- additional compensation for work performed
beyond eight (8) hours within the workers 24-hour
workday regardless whether the work covers 2
calendar days.

PREMIUM PAY
- is additional compensation for work rendered
by the employee on days when normally he should
not be working such as special holidays and weekly
rest days.
WORK DAY
- the 24-hour period which commences from
the time the employee regularly starts to work; e.g.,
if the worker starts to work 8 am today, the workday
is from 8am today up to 8 am tomorrow.

- The minimum normal working hours fixed by

law need not be continuous to constitute the legal
working day, so long as it is within the work day.
RATIONALE:
- The employee is given OT pay because he
is made to work longer than what is commensurate
with his agreed compensation for the statutorily
fixed or voluntarily agreed hours of labor he is
supposed to do.
WAIVER OF OVERTIME PAY:
- As a rule, no waiver of overtime pay whether
express or implied. Any contrary stipulation is
null and void, as it is intended to benefit
laborers and employees.
Exceptions:
1. when the waiver is made in consideration of
benefits and privileges which may be more
than what will accrue to them in overtime

pay
(Meralco
Workers
Union
vs
Meralco.G.R.No.L-11876. May 29,1959)
2. compressed workweek proposed by
employees
- allowable only under the following
CONDITIONS:
1. It is voluntary on the part of the worker;
2. There will be no diminution of the
weekly or monthly take-home pay and
fringe benefits of the employees;
3. The value of the benefits that will
accrue to the employees under the
proposed schedule is more than or at
least commensurate with the one-hour
OT pay that is due them during
weekdays based on the employees
quantification;
4. The one-hour OT pay will become due
and payable if they are made or
permitted to work on a day not
scheduled for work on the compressed
workweek;
5. The work does not involve strenuous
physical exertion and employees must
have adequate rest periods; and
6. The arrangement is of temporary
duration.
FACTUAL & LEGAL BASIS FOR CLAIM
- As a Rule: Express instruction from the
employer to the employee to render overtime work

is not required for the employee to be entitled to

overtime pay; it is sufficient that the employee is
permitted or suffered to work.
- HOWEVER, written authority after office
hours during rest days and holidays are required for
entitlement to compensation. (Global Incorporated
vs Atienza. 143 scra 69 [1986] )
N.B. Meal periods during overtime work is not
given to workers performing overtime for the
reason that OT work is usually for a short period
ranging from one to three hours and to deduct from
the same one full hour as meal period would reduce
to nothing the employees OT work.
BASIS OF OT:
- Regular Basic Wage : includes cash wage
only, without any deduction on account of facilities
provided by the employer (Art.90,LC)
RULES:
- Work performed beyond 8 hours a day
must be paid an additional compensation equivalent
to the employees regular wage plus at least 25%
thereof.
- Work performed beyond 8 hours on a
holiday or rest day shall be paid an additional
compensation equivalent to the rate for the first 8
hours on a holiday or rest day plus 30% thereof

SUMMARY OF RATES :

OVERTIME
DURING

RATES

Regular workdays (Normal Premium rate)

Regular basic wage + 25% of regular basic wage

Legal/regular holidays

Holiday wage rate + 30% of holiday rate (200%)

Rest days or special holidays

Rest day or special holiday wage rate + 30% of rest

day or special holiday wage rate (130%)

Scheduled rest day which is also

holiday

a special

Double holidays

Double holiday wage rate + 60% of Double holiday

wage rate (400%)

ILLUSTRATION :

Step 2: compute wage between 8:00pm -5:00 pm

e.g. 8hrs x P100
= P800

1. REGULAR WORKDAYS
Regular basic wage + 25% of regular basic wage

Daily Wage :
Work Schedule:

Rest day & special holiday wage rate + 30% of rest

day & special holiday wage rate (150%)

P 800
8:00am 5:00 pm
(inclusive of
meal break)

hour

Step 3: compute OT Premium Pay between 5:00

pm 10pm
- [(25% x Wage per hour) + Wage per hour] x no.of OT
hours

e.g.
(25% x P100)+100
= P125
x no.of OT hours (5pm-10pm) =
5hrs

------------

5:00pm 10:00 pm

P625

Step 1: get hourly wage rate

- Daily Basic Wage divided by number of hours worked

e.g. P800 / 8 hrs.

= P100

COMPUTATION:

8am-5pm 8hrs x P100.00

5pm-10pm 5hrs x P125.00
Total Take Home Pay

P800
625
-----------P1,425

2. LEGAL OR REGULAR HOLIDAYS

Holiday wage rate + 30% of holiday rate (200%)
Daily Wage :
Work Schedule:
OT :

P 800
8:00am 5:00 pm
(inclusive of 1 hour
meal break)
June
12
(Independence day)
5:00pm 10:00 pm

COMPUTATION:
8am-5pm 8hrs x P130.00
5pm-10pm 5hrs x P169.00
Total Take Home Pay

4. SCHEDULED REST DAY WHICH IS ALSO A

SPECIAL HOLIDAY
Rest day & special holiday wage rate + 30% of rest
day & special holiday wage rate (150%)
Daily Wage :
Work Schedule:

P 800
8:00am 5:00 pm
(inclusive of 1 hour
meal break)

OT

June 6
( Araw ng Caloocan special
holiday
&
employees
scheduled
rest day)
5:00pm 10:00 pm

Step 1: get hourly wage rate

- Daily Basic Wage divided by number of hours worked
multiplied by regular holiday wage rate

e.g. (P800 / 8 hrs.) x 200%

P 1040
845
-----------P1,885

= P200
Step 1: get hourly wage rate

Step 2: compute wage between 8:00pm -5:00 pm

using holiday wage rate
e.g. 8hrs x P200
= P1600
Step 3: compute OT Premium Pay between 5:00
pm 10pm
- [(30% x Wage per hour) + Wage per hour] x no.of OT
hours

e.g. (30 % x P200)+200

= P 260
x no.of OT hours (5pm-10pm) =
5hrs

-----------P1300
COMPUTATION:
8am-5pm 8hrs x P200.00
5pm-10pm 5hrs x P260.00
Total Take Home Pay

P 1600
1300
-----------P2,900

3. REST DAYS OR SPECIAL HOLIDAYS

Rest day or special holiday wage rate + 30% of rest
day or special holiday wage rate (130%)
Daily Wage :
Work Schedule:
OT :

P 800
8:00am 5:00 pm
(inclusive of 1 hour
meal break)
June 24
( Araw ng Makat - special
holiday)
5:00pm 10:00 pm

Step 1: get hourly wage rate

- Daily Basic Wage divided by number of hours worked
multiplied by special holiday wage rate

e.g. (P800 / 8 hrs) x 130%

= P130

Step 2: compute wage between 8:00pm -5:00 pm

using special holiday wage rate
e.g. 8hrs x P130
= P1040
Step 3: compute OT Premium Pay between 5:00
pm 10pm
- [(30% x HWage per hour) + HWage per hour] x no.of OT
hours

e.g. (30 % x P130)+130

= P 169
x no.of OT hours (5pm-10pm) =
5hrs

-----------P 845

- Daily Basic Wage divided by number of hours worked

multiplied by rest day & special holiday wage rate

e.g. (P800 / 8 hrs) x 150%

= P150

Step 2: compute wage between 8:00pm -5:00 pm

using special holiday wage rate
e.g. 8hrs x P150
= P1200
Step 3: compute OT Premium Pay between 5:00
pm 10pm
- [(30% x HWage per hour) + HWage per hour] x no.of OT
hours

e.g. (30 % x P150)+150

= P 195
x no.of OT hours (5pm-10pm) =
5hrs

-----------P 975
COMPUTATION:
8am-5pm 8hrs x P150.00
5pm-10pm 5hrs x P195.00
Total Take Home Pay

P 1200
975
-----------P2,175

5. DOUBLE HOLIDAY
Double holiday wage rate + 30% of Double holiday
wage rate (300%)
Daily Wage :
Work Schedule:
OT :

P 800
8:00am 5:00 pm
(inclusive of 1 hour
meal break)
April 9
(Araw ng Kagitingan &
at the same time Good
Friday)
5:00pm 10:00 pm

Step 1: get hourly wage rate

- Daily Basic Wage divided by number of hours worked
multiplied by rest day & special holiday wage rate

e.g. (P800 / 8 hrs) x 300%

= P300

Step 2: compute wage between 8:00pm -5:00 pm

using special holiday wage rate
e.g. 8hrs x P300
= P2400
Step 3: compute OT Premium Pay between 5:00
pm 10pm
- [(30% x HWage per hour) + HWage per hour] x no.of OT
hours

e.g. (30 % x P300)+300

= P 390

x no.of OT hours (5pm-10pm) =

5hrs

where performance or quality of work is

dependent thereon.

-----------P 1950
COMPUTATION:
8am-5pm 8hrs x P300.00
5pm-10pm 5hrs x P390.00
Total Take Home Pay

P 2400
1950
-----------P4,350

in any of the following cases, the

employer may require the employee to render OT
work provided that the OT work is paid the
additional compensation required.

ART. 88. UNDERTIME NOT OFFSET BY

OVERTIME
RULE :
- Undertime work on any particular day shall not
be offset by overtime work on any other day.
- Permission given to the employee to go on
leave on some other day of the week shall not
exempt the employer from paying the additional
compensation.

- For purposes of computing overtime and

other additional remunerations
- REGULAR WAGE shall include cash wage
only, without deduction on account of
facilities
provided by the employer

CHAPTER II
WEEKLY REST PERIOD

RATIONALE
- An employees regular pay rate is lower than
the overtime rate. Offsetting the undertime hours
against the overtime hours would result in undue
deprivation of the employees extra pay for overtime
work.
ART. 89. EMERGENCY OVERTIME WORK
GENERAL RULE :
- Generally, employers can not compel his workers
to render overtime work against his will.
EXCEPTION:
-

Any employee may be required by the employer

to perform overtime work in any of the following
cases:
1. When the country is at war or when any
national or local emergency has been
declared by the National Assembly or the
Chief Executive;
2.
When it is necessary to prevent loss of
life or property or in case of imminent
danger to public safety due to an actual or
impending emergency in the locality caused
by serious accidents, fire, flood, typhoon,
earthquake, epidemic, or other disaster or
calamity;
3. When there is urgent work to be performed
on machines, installations, or equipment, in
order to avoid serious loss or damage to
the employer or some other cause of
similar nature;
4. When work is necessary to prevent loss or
damage to perishable goods;
5. Where the completion or continuation of the
work started before the eight hour is
necessary to
prevent serious obstruction or prejudice to
the business or operations of the employer;
and
6. When it is necessary to avail of favorable
weather or
environmental
conditions

ART. 90. COMPUTATION OF ADDITIONAL

COMPENSATION

ART. 91. RIGHT TO A WEEKLY REST DAY

CONCEPT OF REST DAY
- Employees should be provided a rest
period of not less than twenty four (24)
consecutive hours after every six (6)
consecutive normal work days.
- Weekly Rest period is within the purview of
employers prerogative
The employer shall schedule the weekly
rest day of his employees subject to
collective bargaining agreement. However,
the employer shall respect the preference
of employees as to their weekly rest day
when such preference is based on
religious grounds.
But when such
preference will prejudice the operations of
the undertaking and the employer cannot
normally result to other remedial measures,
the employer may so schedule the weekly
rest day that meets the employees choice
for at least two (2) days a month.
ART. 92. WHEN EMPLOYER MAY REQUIRE
WORK ON A REST DAY
GENERAL RULE:
-

It shall be the duty of every employer, whether

operating for profit or not to provide a rest
period of not less than twenty four (24)
consecutive hours after every six (6)
consecutive normal work days to his
employees.

EXCEPTION: (UPANAC)
- The employer may require his employees to work
on any day even on a rest day:
1. In cases of urgent work to be performed on
the machinery, equipment, or installation, to
avoid serious loss which the employer
would otherwise suffer;
2. To prevent loss or damage to perishable
goods;

3. In case of actual or impending emergencies

caused by serious accident, fire, flood,
typhoon, earthquake, epidemic, or other
disaster or calamity to prevent loss of life
and property, or imminent danger to public
safety;
4. Where the nature of the work requires
continuous operations and the stoppage of
work may result in irreparable injury or loss
to the employer; and
5. In the event of abnormal pressure of work
due to special circumstances, where the
employer cannot ordinarily be expected to
resort to other measures;
6. Under other circumstances analogous to
the foregoing as determined by the
Secretary of Labor.
ART. 93. COMPENSATION FOR REST DAY,
SUNDAY OR HOLIDAY WORK
REGULAR HOLIDAY
compensable even if unworked subject to certain
conditions
limited to the 10 enumerated by the Labor Code
rate is twice the regular rate if worked

this article does not prohibit a stipulation in the

CBA for higher benefits

SPECIAL HOLIDAYS
- List of Special Holidays
National;
1.All Saints Day -November 1
2.Last Day of the Year-December 31
3.And all other days declared by law
Local:
Those declared by law or ordinance (e.g.
Manila Day for Manila only)
When entitled to premium pay:
If worked = regular wage plus 30%
premium pay
If not worked = no compensation/no
premium
SPECIAL HOLIDAY
Not compensable if unworked
Not exclusive since a law or ordinance may provide
for other special holidays
Rate is 130% of the regular wage if worked

ADDITIONAL COMPENSATION FOR WORK ON A REST DAY, SUNDAY OR HOLIDAY:

DAY
Work on a scheduled rest day

RATE OF ADDITIONAL COMPENSATION

30% of regular wage

No regular workdays and rest days

Work on Special Holidays

30% of regular wage for work on Sundays & Holidays

30% of regular wage

Holiday Work falls on Scheduled Rest Day

50% of regular wage

CHAPTER III
HOLIDAYS, SERVICE INCENTIVE LEAVES
AND SERVICE CHARGES
ART. 94. RIGHT TO HOLIDAY PAY
HOLIDAY PAY
- Also termed as legal holiday
- A days pay given by law to an employee
even if he does not work on a regular holiday. It is
limited to the ten (10) regular holidays listed by
lawthe employee
should
not
have been
absent without pay on the working day preceding
the regular holiday
PREMIUM PAY
-

additional
compensation
for
work
performed on a scheduled rest day or
holiday

REGULAR HOLIDAYS [NM-GALIN-CREB]:

1. New Years Day - January 1
2. Maundy Thursday - Movable date
3. Good Friday - Movable date
4. Araw ng Kagitingan
- April 9

5. Labor Day - May 1

6. Independence Day - June 12
7. National Heroes Day - Last Sunday of
August
8. Bonifacio Day - November 30
9. Christmas Day - December 25
10. Rizal Day - December 30
11. Eidul Fitr movable date (RA 9177.
Nov.13,2002)
N.B.There must be no distinction between Muslims
and non-Muslims as regards payment of benefits
for Muslim Holidays; wages and other emoluments
are laid down by law and not based on faith or
religion. (SMC v. CA)
RULE ON COMPENSABILITY
- compensable whether worked or unworked
subject to certain conditions
- Legal holiday falling on a Sunday does not
create an additional workday nor create a legal
obligation for the employer to pay extra, aside from
the usual holiday pay to its monthly paid
employees.
DOUBLE HOLIDAY PAY
1. 200% of the basic wage
- entitled even if said holiday is unworked
- to give employee only 100% would reduce
the number of holidays under DO No. 3.

2. 300% if he worked on 2 regular holidays falling

on the same day,
- e.g., April 9 and Good Friday
ILLUSTRATION :
A Single holiday rule:
- provided that the employee
1. worked
2. was on leave with pay or
3. was on authorized absence on the
day prior to the regular holiday.

SUCCESSIVE REGULAR HOLIDAY

- If there are two successive regular
holidays, e.g., Maundy Thursday and Good Friday,
the employee must be present the day before the
scheduled regular holiday to be entitled to
compensation to both; otherwise, he must work on
the first holiday to be entitled to holiday pay on the
second regular holiday. (Sec.10, Rule IV, Book III,
Implementing Rules) (see table below)

WEDNESDAY

THURSDAY

FRIDAY

ENTITLED TO BE PAID ?

Present

REST DAY

REGULAR HOLIDAY

YES

Absent with pay

REST DAY

REGULAR HOLIDAY

YES

Absent w/out pay

REST DAY

REGULAR HOLIDAY

NO

Present

SPECIAL DAY

YES

Absent with pay

SPECIAL DAY

YES

Absent w/out pay

SPECIAL DAY

NO

B. Successive holiday rule:

ENTITLED
PAID?

WEDNESDAY

THURSDAY

FRIDAY

Present

REGULAR HOLIDAY

REGULAR
HOLIDAY

YES BOTH

Absent with pay

REGULAR HOLIDAY

REGULAR
HOLIDAY

YES BOTH

Absent w/out pay

REGULAR HOLIDAY

REGULAR
HOLIDAY

NO BOTH

Absent w/out pay

Worked

ART. 95. RIGHT TO SERVICE INCENTIVE

LEAVE
CONCEPT OF SERVICE INCENTIVE LEAVE
(SIL)
- five (5) days leave with pay for every
employee who has rendered at least one (1) year of
service.
SIL DOES NOT APPLY TO THOSE WHO ARE:
(E4)
1. already enjoying the said benefits;
2. already enjoying vacation leave with pay for
at least 5 days;
3. employed in establishments regularly
employing less than 10 employees; and
4. employed in establishments exempted from
granting this benefit by the Secretary of Labor.

BE

YES but only to the

holiday pay on Friday
holidays unless the number of working days in the
establishment, as a matter of practice or policy or
as provided in the employment contract, is less than
12 months
- SIL is commutable, i.e., convertible to cash; the
cash equivalent is aimed primarily at encouraging
workers to work continuously and with dedication to
the company.
- Part-time workers are entitled to the full benefit
of the yearly 5-days SIL. The reason is that the
provisions of Art.95 speak of the number of months
in a year for entitlement to said benefit.
VACATION AND SICK LEAVE
- Not statutorily required; matter of management
discretion or a product of collective bargaining
agreement

ONE (1) YEAR OF SERVICE - service within 12

months, whether continuous or broken, reckoned
from the date the employee started working
including authorized absences and paid regular

TO

Benefits are non-cumulative and noncommutative; must be enjoyed by the employee

within 1 year otherwise they are considered
waived or forfeited. Exception is when the
labor contract or the established practice of the
employer provides otherwise.

VACATION/
SICK LEAVE

SIL
COMPULSORINESS

Mandatory
-legally required under Art.95,LC

Voluntary
- grant results from: employers
discretionary policy or from CBA

PURPOSE

Intended to alleviate the economic

condition of the workers for it acts as
replacement for regular income that would
not be earned during such instance

Intended to afford a laborer a chance to

get a much needed rest to replenish his
worn out energies and acquire new
vitality to enable him to meet him to
efficiently perform his duties and not
merely to give him additional salary

WAIVER

Can not be waived

Must be demanded in its opportune

time, otherwise, silence would equate to
waiver same being a mere concession
or act act of grace of employer

COMMUTABI-LITY

Commutable

Not commutable

MATERNITY AND PATERNITY LEAVE

(see discussion in Art. 133 )
ART. 96. SERVICE CHARGES
CONCEPT.
- All service charges collected by hotels,
restaurants and similar establishment shall be
distributed:
1. 85% for all covered employees to be
equally distributed among them
2. 15% for management
- Share of the employees shall be equally
distributed among them.
The shares referred to herein shall be
distributed and paid to employees not
less than once every 2 weeks or twice
a month at intervals not exceeding 16
days.
-

The 15% management share shall be for

disposition by management to answer for
losses and breakages and distribution to
employees receiving more than P2,000.00 a
month at the discretion of the management in
the latter case.

In case the service charge is abolished, the

share of the covered employees shall be
considered integrated in their wages.
The basis of the amount to be integrated
shall be the average share of each
employee for the past 12 months
immediately preceding the abolition or
withdrawal of such charges.

COVERAGE
- Apply only to hotels, restaurants and similar
establishment collecting service charges
POOLED TIPS
- Monitored, accounted for, and distributed in the
same manner as service charges

TITLE II

WAGES

CHAPTER I
PRELIMINARY MATTERS
ART. 97. DEFINITION
AGRICULTURE includes farming in all its
branches, and, among other things, includes the
cultivation and tillage of soil, dairying, the
production, cultivation, growing and harvesting of
any agricultural and horticultural commodities, the
raising of livestock or poultry, and any practices
performed by a farmer on a farm as an incident to
or in conjunction with such farming operations, but
does not include the manufacturing or processing of
sugar, coconuts, abaca, tobacco, pineapples or
other farm products.
WAGE - the remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time,
task, piece, or commission basis or other method or
calculating the same, which is payable by an
employer to an employee under a written or
unwritten contract of employment for work done or
to be done or for services rendered or to be
rendered and includes the fair and reasonable
value, as determined by the Sec. of Labor, of
board, lodging, or other facilities customarily
furnished by the employer to the employee.
FAIR AND REASONABLE VALUE - shall not
include any profit to the employer or to any person
affiliated with the employer.

 FAIR DAYS WAGE FOR A FAIR DAYS LABOR

- 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,
suspended or dismissed

WAGE
- compensation for manual labor

SALARY
- denotes higher degree of employment

- Not subject to execution except for debts incurred for food

shelter, clothing and medical attendance-

-subject to execution
(Rosario Gaa vs. CA. G.R. No.L-44169. Dec.3,1985)

WHAT DOES WAGE OR SALARY INCLUDE?

1. Commission
2. Facilities
3. Commodities/Supplements
THEY ARE DEEMED INCLUDED IN THE SALARY
IF THE FF CONDITIONS CONCUR:
- The grant thereof is:
Unconditional
Consistent and deliberate over a period of
time
Customarily given such that the employee
expects to receive the same
(Mabeza vs NLRC G.R.No.118506.Apr.18,1997)

FACILITIES
- items of expense necessary for the laborers and his
familys existence and subsistence
- part of the wage
- deductible from the wage

LEGAL REQUIREMENTS BEFORE FACILITIES

CAN BE DEDUCTED FROM THE EMPLOYEES
WAGES:
1.Proof must be shown that such facilities are
customarily furnished by the trade;
2.The provision of deductible facilities must be
voluntarily accepted in writing by the employee;
and
3.The facilities must be charged at fair and
reasonable value.
GRATUITY something given freely or without
recompense to reward employees who have
rendered satisfactory and efficient service to the
company.

Note. Salary does not include allowances nor

gratuities.
COMMISSION direct remunerations received by
an agent, salesman, executor, broker, or trustee
calculated as a percentage on the amount of his
transactions or on the profit to the principal
FACILITIES shall include all articles or services
for the benefit of the employee or his family but
shall not include tools of the trade or articles or
services primarily for the benefit of the employer or
necessary to the conduct of the employers
business
SUPPLEMENTS
- constitute extra remuneration or special privileges or
benefits given to or received by the laborers over and
above their ordinary earnings wages
- independent of the wage
- not wage deductible

ART 99. REGIONAL MINIMUM WAGES

minimum wage rates for agricultural and
nonagricultural employees and workers in each and
every region of the country shall be those
prescribed by the Regional Tripartite Wages and
Productivity Boards.
MINIMUM WAGE - lowest wage rate fixed by law
that an employer can pay his employees.
- The employer cannot exempt himself from
liability to pay minimum wages because of poor
financial condition of the company; the payment of
minimum wages is not dependent on the
employers ability to pay. (De Racho v. Municipality
of Iligan, GR NO. L-23542)

CHAPTER II
MINIMUM WAGE RATES

ART. 98. APPLICATION OF TITLE

Title on Wages apply to ALL EMPLOYEES
except the following:
1. farm tenancy or leasehold
2. household or domestic helpers
3. homeworkers engaged in needle-work
4. workers employed in any establishment duly
registered with the National Cottage Industry
5. workers in duly registered cooperatives

ART.
100.
PROHIBITION
AGAINST
ELIMINATION OR DIMINUTION OF BENEFITS
THE NON-DIMINUTION RULE
- Nothing in the Labor Code shall be construed to
eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time
of promulgation of this Code.
benefits being given to employees cannot
be taken back or reduced unilaterally by
the employer because the benefit has
become part of the employment contract,
written or unwritten.

The rule is applicable if it is shown that the

grant of the benefit is:
1. based on an express policy, or
2. has ripened into practice over a long
period of time, and the practice is
consistent and deliberate, and it is not
due
to
an
error
in
the
construction/application of a doubtful or
difficult question of law.
But even in cases of error, it should be shown
that the correction is being done soon after the
discovery of the error.

BONUS - A supplement or employment benefit

given under certain conditions, such as
success of the business or greater production
or output.
- As a rule, it is an amount granted voluntarily
to an employee for his industry and loyalty which
contributed to the success and realization of profits
of the employers business.
- Therefore, from a legal point of view, it is not
a demandable and enforceable obligation unless it
was promised to be given without any conditions
imposed for its payment in which case it is deemed
part of the wage.
13TH MONTH PAY (OR ITS EQUIVALENT)

Productivity Incentives Act of 1990

(RA 6971, November 22, 1990)
kind of bonus that comes from productivity
gain
aims to institute productivity at company
level and the sharing of productivity gain
between employers and employees
nature of salary bonus is proportionate to
increases in current productivity

ART. 101. PAYMENT BY RESULTS

CATEGORIES OF PIECE RATE WORKERS
(as to presence of control):
1. those who work directly under the supervision
of their employer (usually termed as piece rate
worker)
2. those who work away from the employers work
premises and are not directly supervised by the
employer (usually termed as pakiaw or takay)
CATEGORIES OF PIECE RATE (as to rate of
payment)
1. those who are paid piece rates as prescribed in
Piece Rate Orders by the DOLE
2. those who are paid output rates which are
prescribed by the employer and are not yet
approved by the DOLE

(see annex for specific discussion )

- additional income based on wage required by
P.D. 851 which is equivalent to 1/12 of the total
basic salary earned by an employee within a
calendar year.
- may be given anytime but not later than Dec. 24

WORKERS PAID ON PIECE-RATE BASIS those who are paid a standard amount for every
piece or unit of work produced that is more or less
regularly replicated, without regard to the time
spent in producing the same.

COVERAGE:

BENEFITS PAYABLE TO PIECE-RATE

WORKERS WHOSE WORK IS DIRECTLY
SUPERVISED BY THE EMPLOYER:

- All rank-and-file employees regardless of their

designation or employment status and irrespective
of the method by which their wages are paid, are
entitled to this benefit, provided, that they have
worked for at least one (1) month during the
calendar year.
FORMS:
1. Christmas bonus
2. midyear bonus
3. profit sharing payments; and
4. other cash bonuses amounting to not less than
1/12 of its basic salary.
-

14

It must always be in the form of legal tender

Difference of opinion on how to compute the
13th month pay does not justify a strike.
Free rice, electricity cash and stock dividends,
COLA are NOT proper substitutes for the 13 th
month pay.

1. Applicable statutory minimum daily rate

2. Yearly service incentive leave of five days with
pay
3. Night shift differential pay
4. Holiday pay
5. Meal and rest periods
6. Overtime pay (conditional)
7. Premium pay (conditional)
8. 13th month pay
9. Other benefits granted by law, individual or
collective bargaining agreements or company
policy or practice.

CHAPTER III
PAYMENT OF WAGES
ART. 102. FORMS OF PAYMENT

TH

MONTH PAY
a misnomer because it is basically a bonus
and gratuitous in character
- granting thereof is a management
prerogative which can not be forced upon
the employer
-

PRODUCTIVITY INCENTIVES

EMPLOYER CANNOT PAY HIS WORKERS BY

MEANS OF:
1.
2.
3.
4.
5.
6.
7.

promissory notes;
vouchers;
coupons;
tokens;
tickets;
chits; or
any object other than legal tender

GENERAL RULE:
- payment by legal tender
EXCEPTIONS:
- payment by check or money order may be
allowed if the same is:
1. customary on the date of effectivity of the
LC;
2. necessary
because
of
special
circumstances as determined by the Sec. of
Labor; or
3. stipulated in the CBA
4. or where the ff conditions are met:
a)
b)

c)

d)

there is a bank or other facility for

encashment within a radius of 1 kilometer
from the workplace;
the employer, or any of his agent or
representatives, does not receive any
pecuniary benefit directly or indirectly from
the arrangement;
the employees are given reasonable time
during banking hours to withdraw their
wages from the bank which time shall be
considered as compensable hours worked
if done during working hours; and
the payment by check is with the written
consent of the employees concerned if
there is no CBA authorizing the payment of
wages by bank checks.

ART. 103. TIME OF PAYMENT

WHEN TO PAY:
- at least once every two weeks; or
- twice a month at intervals not exceeding 16
days.
in case of force majeure or other
circumstances beyond the employers
control, payment must be made
immediately after such occurrence has
ceased.
If engaged to perform a task which
cannot be completed in 2 weeks and in the
absence of CBA:
a. payment shall be made at intervals
not exceeding 16 days, in
proportion to the amount of work
completed;
b. that final settlement is made upon
completion of the work.
ART. 104. PLACE OF PAYMENT
WHERE TO PAY:
- at or near the place of undertaking
EXCEPTIONS (Payment in a place other than
workplace):
1. When payment cannot be effected at or
near the place of work by reason of
deterioration of peace and order conditions,
or by reason of actual or impending
emergencies caused by fire flood or other
calamity
rendering
payment
thereat
impossible;

2. When the employer provides for free

transportation to the employees back and
forth; and
3. Under any other analogous circumstances
ABSOLUTE PROHIBITION:
- No employer shall pay his employees in any
bar, night or day club, drinking establishment,
massage clinic, dance hall, or other similar places
or in places where games are played with stakes of
money or things representing money except in the
case of persons employed in said places.
PAYMENT THRU BANKS:
REQUISITES:
1. There must be written permission of the
majority of the employees concerned in an
establishment;
2. The establishment must have 25 or more
employees; and
3. The establishment must be located within
one kilometer radius to the bank

payment through an ATM is allowed

ART.105. DIRECT PAYMENT OF WAGES

GENERAL RULE:
wages shall be paid directly to the workers
to whom they are due
EXCEPTIONS:
1. payment through another person
- in case of force majeure rendering such
payment impossible provided said person is
under written authority given by the worker for
the purpose;
- when authorized under existing law,
including payments for insurance premiums of
the employee and union dues where the right to
check-off has been recognized by the employer
in accordance with a CBA or authorized in
writing by the individual employees concerned
2. payment through heirs of worker
- in case where the worker has died
employer may wages of the deceased worker to
the heirs of the latter without the necessity of
intestate proceedings.
Procedure:
2.1 claimants shall execute an affidavit
attesting their relationship to the
deceased and the fact that they are his
heirs, to the exclusion of all others;
2.2 in case of a minor heir, affidavit shall be
executed on his behalf by his natural
guardian or next of kin;
2.3 affidavit shall be presented to the
employer who shall make payment
through the Secretary of Labor or his
representative;
2.4 the representative shall act as referee
in dividing the amount paid among the
heirs;
2.5 payment of wages under this article
shall absolve the employer of any
further liability with respect to the
amount paid.

- Where the employer is authorized in writing

by the employee to pay his wages to a member
of his family.

3. payment through member of workers family

SUMMARY OF RULES ON PAYMENT OF WAGES:
WHAT MUST BE PAID
WHEN
WHERE
HOW

Legal tender; promissory notes, vouchers, coupons, tokens, tickets, chits, or any
other object other than legal tender is prohibited.
Once every two weeks or twice a month at intervals not exceeding 16 days.
At or near the place of undertaking
Directly to the employee entitled thereto

ART.
106.
SUBCONTRACTOR

CONTRACTOR

OR

TWO TYPES OF CONTRACTORS UNDER THE

LAW:
a) Labor-only contractor
b) Job contractor
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,
among others, and the workers recruited and
placed by such persons are performing activities
which are directly related to the principal business
of such employer.
Labor-only contracting is prohibited and the
person acting as contractor shall be considered
merely as an agent of the employer who shall be
responsible to the workers in the
same manner and extent as if the latter were
directly employed by him.
JOB CONTRACTING an arrangement whereby
a principal agrees to put out or farm out with a
contractor or series of contractor the performance
or completion of a specific job, work or service
within a definite or predetermined period,
regardless of whether such job, work, or service is
to be performed or completed within or outside the
premises of the principal.
INDEPENDENT CONTRACTOR - one who
carries on a distinct and independent business and
undertakes to perform the job or to do a piece of
work on its own account and under its own
responsibility, according to his own manner and

methods and free from the control and direction of

the principal in all matters connected
with the performance of the work except as to the
results thereof.
- A mere statement in a contract with a
company that laborers who are paid according to
the amount and quality of work are independent
contractors does not change their status as mere
employees in contemplation of labor laws.
ELEMENTS OF JOB CONTRACTING:
1. the contractor or subcontractor carries on a
distinct and independent business and
undertakes to perform the job on his own
account and under his own responsibility,
according to its own manner and method and
free from the control and direction of the
principal in all matters connected with the
performance of the work except as to the
results thereof;
2. the contractor or subcontractor has substantial
capital or investment; and
3. the agreement between the principal and
contractor or subcontractor assures the
contractual employees entitlement to all labor
and occupational safety and health standards,
free exercise of the right to self-organization,
security of tenure and social and welfare
benefits
WHAT IS SUBSTANTIAL CAPITAL
-

refers to the adequacy of resources actually or

directly used by the contractor or subcontractor
in the performance or completion of the job,
work, service contracted out

Substantial capital need not be coupled with

investment in tools or equipment. This is clear
from the use of the conjunction or.

JOB CONTRACTING

LABOR ONLY CONTRACTING

EXISTENCE OF
ER-EE RELATIONSHIP

No E- E relation-ship exists between

the employer and the contractors
employee except
when the
contractor or subcontractor fails to
pay the wages of his employees

Employer is treated as direct employer of the

person recruited in all instances
(contractor is deemed the agent of the
employer)
.

LIABILITY

liability is limited (shall be solidarily

liable w/ er only when latter fails to
comply with requirements as to
unpaid wages and other labor
standards violations)

liability extends to all rights duties and

liabilities under labor standards laws
including the right to self- organization

LEGALITY

Permissible

Prohibited by law

CAPITALIZATION

requires
substantial capital or
investment in the form of tools,
equipment,
machineries,
work
premises, and other materials which
are necessary for the conduct of
business

WORKING CONDITIONS - refers to the terms

and circumstances affecting the employment of
an employee, including policies, programs and
regulations governing his employment status,
work, and work relationships. They are, as a
rule, determined by the employer.

ART. 110. WORKER PREFERENCE IN CASE

OF BANKRUPTCY
PRINCIPLE:
- Workers shall enjoy first preference as regards
their unpaid wages and other monetary claims, any
provision of law to the contrary notwithstanding.
Just establishes a preference and not a
lien;
Applicable only to ordinary preferred credit,
hence, must yield
to special preferred
credits, e.g., secured creditors
This Article did not sweep away the
overriding preference accorded under the
scheme of the Civil Code to tax claims of
the government.
conditions sine qua non to the operation
of the preference accorded to workers
under Art. 110:
a)formal declaration of insolvency
or
bankruptcy
b)general judicial liquidation proceedings
of the employers business
c)filing of claims by workers

The worker preference is not applicable in case

the employer corporation is under
rehabilitation (RUBBERWORLD INC. VS
NLRC).

ART 111. ATTORNEYS FEES

a. In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees
equivalent to 10% of the amount of wages
recovered.
b. It shall be unlawful for any person to demand or
accept, in any judicial or administrative
proceedings for the recovery of the wages,
attorneys fees which exceed 10% of the
amount of wages recovered.
( see discussions in Art.222)
Attorneys fees presuppose atty-client
relationship.

CHAPTER IV
PROHIBITIONS REGARDING WAGES

does not require

ART. 112. NON-INTERFERENCE IN DISPOSAL

OF WAGES
RELATED Civil Code PROVISIONS:
Art. 1705. The laborers wages shall be paid in
legal currency.
Art. 1706. Withholding of the wages, except for a
debt due, shall not be made by the employer
Art. 1707. The laborers wages shall be a lien on
the goods manufactured or the work done.
Art. 1708. The laborers wages shall not be subject
to execution or attachment except for debts
incurred for food, shelter, clothing, and medical
attendance
.Art. 1709. The employer shall neither seize nor
retain any tool or other articles belonging to the
laborer.
PROHIBITIONS REGARDING WAGES:
1. Payment of wages with less frequency than
once (1) a month
2. Limitations/Interference by the employer with
the employees' freedom to dispose of his
wages
3. Forcing, Compelling/Obliging employees to
purchase merchandise, commodities or other
properties from the employer or from any other
person, or to make use of any store or service
of such employer or any other person
4. Withholding of wages
5. Deduction of wages as consideration of a
promise of employment or retention in
employment
6. Refusal to pay/ Reduction of wages and
benefits, discharge/ discrimination against any
employee as retaliatory measures against any
employee who has filed any complaint or
instituted any proceedings against his employer
ART. 113. WAGE DEDUCTIONS
GENERAL RULE.
- Wage deduction is strictly prohibited.
EXCEPTIONS (ALLOWABLE DEDUCTIONS):
A. WITH EMPLOYEES CONSENT:
1. SSS payments
2. MEDICARE payments
3. Contributions to PAG-IBIG Fund
4. value of meals and other facilities
5. payments to third persons with employees
consent
6. deduction of absences
B. WITHOUT EMPLOYEES CONSENT:
1. workers insurance acquired by the employer
2. union dues, where the right to check-off has
been recognized by the employer
3. cases where the employer is authorized
bylaw or regulations issued by the
Secretary of Labor

4. debts of the employee to the employer which

have become due and demandable
ART 114. DEPOSITS FOR LOSS OR DAMAGE
GENERAL RULE.
- No employer shall require his worker to make
deposits for the reimbursement of loss of or
damage to material, equipment, or tools supplied by
the employer.
EXCEPTION.
- When the trade, occupation or businesses of the
employer recognizes, or considers the practice of
making deductions or requiring deposits necessary
or desirable.
REQUISITES OF DEDUCTION FOR LOSS OR
DAMAGE:
1. the employee is clearly shown to be
responsible for the loss or damage;
2. the employee is given ample opportunity to
show cause why deduction should not be
made;
3. the amount of the deduction is fair and
reasonable and shall not exceed the actual
loss or damage; and
4. the deduction from the employees wage
does not exceed 20 percent of the
employees wages in a week.
10 COMMANDMENTS FOR THE EMPLOYER:
1. No employer shall interfere with the
employees freedom to dispose of his
wages; ART 112 NON-INTERFERENCE IN
DISPOSAL OF WAGES
2. no employer shall force, compel, or oblige
employees to purchase merchandise,
commodities or other property from the
employer or from any other person, or
otherwise make use of any store or
services of such employer or any other
person; ART 112 NON-INTERFERENCE
IN DISPOSAL OF WAGES
3. no employer shall make any deductions
from the employees wages except when
authorized to do so; ART 113 WAGE
DEDUCTION
4. no employer shall require the worker to
make deposits from which deductions shall
be made for reimbursement of loss of or
damage to tools, materials, or equipment
supplied by the employer except when the
employer is engaged in such business
requiring such deposits as determined by
the Secretary of Labor; ART 114
DEPOSITS FOR LOSS OR DAMAGE
5. no employer shall make any deduction from
the employees deposits for the actual
amount of the loss or damage unless the
employee has been heard thereon and his
responsibility has been clearly shown; ART
115 LIMITATIONS
6. no employer shall withhold any amount
from the wages unless authorized to do so;
ART 116 WITHHOLDING OF WAGES &
KICKBACKS PROHIBITED

7. no employer shall induce the employee to

give up any part of his wages by force,
stealth, intimidation, threat or dismissal or
by any other means without his (worker)
consent; ART 116 WITHHOLDING OF
WAGES & KICKBACKS PROHIBITED
8. no employer shall make deductions as
consideration of a promise of employment
or retention of employment; ART 117
DEDUCTION TO ENSURE EMPLOYMENT
9. no employer shall refuse to pay or reduce
the wages and benefits or otherwise
discharge the employee who has filed any
complaint under this Title, or has testified or
is about to testify in such proceedings; ART
118 RETALIATORY MEASURES
10. no employer shall make any statement,
report or record knowing such statement,
report or record to be false in any material
respect. ART 119 FALSE REPORTING

CHAPTER V
WAGE STUDIES, WAGE AGREEMENTS
AND WAGE DETERMINATION
ART 122. CREATION OF THE REGIONAL
TRIPARTITE WAGES AND PRODUCTIVITY
BOARDS
WHO MAY SET MINIMUM WAGE:
1. Regional Tripartite Wages and Productivity
Board (RTWPB)
2. Congress
COMPOSITION OF RTWPB:
1.
2.
3.
4.
5.
6.

Regional Director of DOLE

Regional Director of DOLE
Regional Director of DOLE
2 members form the employer sector
2 members form the employee sector
Secretariat

MINIMUM WAGE - The lowest wage rate fixed by

law that an employer can pay his employees.
ART. 123. WAGE ORDER
WAGE ORDER an order issued by the Regional
Board whenever the conditions in the region so
warrant after investigating and studying all pertinent
facts and based on the standards and criteria
prescribed by the LC, the Regional Board proceeds
to determine whether to issue the same or not.
EFFECTIVITY OF A WAGE ORDER
it shall take effect after 15 days from the its
complete publication in at least one newspaper of
general circulation in the region.
FREQUENCY OF A WAGE ORDER
A wage Order issued by the Board may not be
disturbed for a period of 12 months from its

effectivity and no petition for wage increase shall be

entertained during said period.
EXCEPTION: When Congress itself issues a law
increasing wages.
ART. 124. STANDARDS/CRITERIA
MINIMUM WAGE FIXING

1. Demand for living wages;

2. Wage Adjustment vis--vis the consumer price
index;
3. Cost of living and changes or increases therein;
4. Needs of workers and their families;
5. Need to induce industries to invest in the
countryside;
6. Improvements in standards of living;
7. Prevailing wage levels;
8. Fair Return of the capital invested and capacity
to pay of employers;
9. Effects on Employment Generation and Family
Income; and
10. Equitable Distribution of Income & Wealth along
the imperatives of economic and social
development
WAGE DISTORTION a situation where an
increase in prescribed wage rates results in the
elimination or severe contraction of intentional
quantitative differences in wage or salary rates
between and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on skills, length of service or other logical bases of
differentiation.
CORRECTION OF WAGE DISTORTION
A.
Unionized Establishment
1. Negotiate to correct the distortion
2. Any dispute arising therefrom should be
resolved through grievance procedure under
their CBA
3. If the dispute remains unresolved, through
voluntary arbitration
Establishments Without Unions
1. The employers and workers shall endeavor
to correct the distortion.
2. Any dispute arising therefrom shall be
settled through the NCMB and
3. If it remains unresolved after 10 days of
conciliation, it shall be referred to the
NLRC.

NB. Wage distortion is non-strikeable.

IS THE EMPLOYER LEGALLY OBLIGED TO
CORRECT A WAGE DISTORTION?
- It appears so. Article 124 of the Code
provides that the employer and the union shall
negotiate to correct the distortions. If there is no
union, the employer and the workers shall
endeavor to correct such distortions.
MUST THE
RESTORED?

PREVIOUS

PAY

GAPS

CHAPTER VII

FOR

OTHER RELEVANT FACTORS FOR

DETERMINING REGIONAL MINIMUM WAGE
RATES: (DACN2IPFEE)

B.

While that is the aim, it need not

necessarily be restored to the last peso.
An
appreciable differential, a significant pay gap
should suffice as correction of the distortion.

BE

ADMINISTRATION AND
ENFORCEMENT
ART. 128. VISITORIAL AND ENFORCEMENT
POWER
VISITORIAL POWER
- Power of the Sec. of Labor or any of his
duly authorized representative to have access to
employers records and premises at any time of the
day or night whenever work is being undertaken
therein.
includes the right to copy therefrom, to
question any employee & investigate
any fact, condition or matter which may
be necessary to determine violations or
which may aid in the enforcement of
the Code and of any labor law, wage
order, or rules and regulations
duly authorized representative herein
is the Regional Director
ENFORCEMENT POWER (as amended by RA
7730)
- Power of the Sec. of Labor to compel
employer to comply with labor standards upon
finding of violations discovered in the course of the
exercise of the visitorial power
-

Among the powers are the power to:

1. issue Compliance Orders based on the
findings of labor employment and
enforcement officers or industrial safety
engineers made in the course of inspection
2. Issue Writs of Execution for the
enforcement of orders except in cases
where the employer contests the findings of
the said labor officers and raises issues
supported by documentary proofs which
were not considered in the course of
inspection
3. Order Work Stoppage/Suspension of
Operations when non-compliance with the
law or implementing rules and regulations
poses grave & imminent danger to the
health and safety of the workers in the
workplace.
4. Conduct hearings within 24 hours to
determine whether
a. an order for stoppage of work/suspension
of operations shall be lifted or not.
b. employer shall pay the employees
concerned their salaries in case the
violation is attributable to his fault

The Secretary may require employers to keep

and maintain Employment Records as may be
necessary in aid of his visitorial and enforcement
powers (exercised through the regional directors of
DOLE).

PROCEDURE:

COMPLAINT or ROUTINE INSPECTION

ACTUAL INSPECTION
(inspector lists the
violation in his checklist)
INSPECTORS FINDING
OF VIOLATION
ISSUANCE OF COMPLIANCE ORDER
In case of non-compliance
ISSUANCE OF WRIT OF NON-COMPLINACE
In case party disagrees
with RDs finding
HEARING
DECISION
MR

APPEAL
(8-10 days w/ Sec. of labor)
WORK STOPPAGE

INSTANCES WHEN ENFORCEMENT POWER

MAY NOT BE USED
1. case does not arise from the exercise of
visitorial power
2. when er-ee relationship ceased to exist at
the time of the inspection
3. if employer contests the finding of the labor
regulation officer and such contestable
issue is not verifiable in the normal course
of inspection.

ART 128
NATUREOF
POWER

ART. 129. RECOVERY OF WAGES, SIMPLE

MONEY CLAIMS AND OTHER BENEFITS
ADJUDICATORY POWER
- the Regional Director or any of his duly
authorized hearing officer is empowered
through summary proceeding and after due
notice, to hear and decide cases involving
recovery of wages and other monetary claims
and benefits, including legal interests.
REQUISITES:
1. The claim is presented by an employee or
person employed in domestic or household
service or househelper;
2. The claim arises from employer-employee
relations;
3. The claimant does not seek reinstatement; and
4. The aggregate money claim of each employee
or househelper does not exceed P5, 000.00
In the absence of any of the requisites, it is the
labor arbiter who shall have exclusive jurisdiction
over claims arising from employer employee
relations,
except
claims
for
employees
compensation, sss, medicare and maternity
benefits, pursuant to Article 217of the Labor Code.

ART 129

Visitorial & enforcement power of

the Sec. of Labor /his duly
authorized representatives
exercised through routine
inspections of establishment

Adjudicatory Power of the Regional

Director or any duly authorized hearing
officers( to hear and decide matters involving the

EXISTENCE OF
ER-EE
RELS.

Requires the existence of ER-EE

Relationship

ER-EE relationship not necessary since it

should not include a claim for
reinstatement

HOW INITIATED

Enforcement Power is Offshoot of

visitorial power

initiated by sworn complaint filed by the

interested party

LIMITATIONS AS
TO AMT. OF CLAIM

No limit as to amount of claim

Aggregate claim of each complainant does

not exceed P5,000

APPEAL

Appeal is with Sec.of Labor ; period

of appeal is 10 calendar days

Appeal with NLRC; period of appeal is 5

calendar days

WHO EXERCISES
POWER

Person exercising the power is the

Sec. Of Labor or any of his duly
authorized representatives who
may or may not be a regional
director

The power is vested upon a regional

director or any duly authorized hearing
officer of the DOLE.

TITLE III
WORKING CONDITIONS FOR SPECIAL
GROUP OF EMPLOYEES
CHAPTER I

recovery of wages, upon complaint of any interested

party)

EMPLOYMENT OF WOMEN
ART. 130. NIGHTWORK PROHIBITION
No woman, regardless of age, shall be
employed or permitted or suffered to work, with or
without compensation in any :

1. Industrial undertaking between 10PM and

6AM
2. Commercial/Non-Industrial
undertaking
between 12 MN and 6AM
3. Agricultural undertaking at nighttime unless
she is given a period of rest of not less than
9 consecutive hours

- Maternity benefits provided herein shall be

paid only for the first four (4) deliveries or
miscarriages;
- Maternity benefits like other benefits
granted by the SSS, are granted in lieu of wages
and therefore, may not be included in computing
the employees 13th month pay for the calendar
year.

ART. 131. EXCEPTIONS

The prohibitions prescribed by Article 130 shall
not apply in any of the following cases:
1. In cases of actual or impending
emergencies caused by serious accident,
fire, flood, typhoon, earthquake, epidemic,
or other disasters or calamity, to prevent
loss of life or property, or in cases of force
majeure or imminent danger to public
safety;
2. In cases of urgent work to be performed on
the machineries, equipment or installation,
to avoid serious loss which the employer
would otherwise suffer;
3. Where the work is necessary to prevent
serious loss of perishable goods;
4. Where the woman employee holds a
responsible position of managerial or
technical nature, or where the woman
employee has been engaged to provide
health and welfare service;
5. Where the nature of the work requires the
manual skill and dexterity of women
workers and the same cannot be performed
with equal efficiency by male workers;
6. Where the women employees are
immediate members of the family operating
the establishment or undertaking; and
7. Under other analogous cases exempted by
the Secretary of Labor in appropriate
regulations.
ART 132. FACILITIES FOR WOMEN
- The Secretary of Labor may require employers to:
1. Provide seats proper for women and
permit them to use the seats when they are
free from work or during office hours
provided the quality of the work will not be
compromised;
2. Establish separate toilet rooms and
lavatories for men and women and provide
at least a dressing room for women;
3. Establish a nursery in the establishment;
and
4. Determine appropriate minimum age and
other
standards
for
retirement
or
termination in special occupations such as
those of flight attendants and the like

QUALIFICATIONS FOR ENTITLEMENT:

1. The female employee should be
employed at the time of the delivery,
miscarriage, or abortion;
2. The employee shall have notified her
employer of her pregnancy and the
probable date of her childbirth, which
notice shall be transmitted to the SSS
in accordance with the rules and
regulations it may provide;
3. That full payment shall be advanced by
the employer within thirty (30) days
from the filing of the maternity leave
application;
4. That payment of daily maternity
benefits have been received;
Is it necessary that a woman be impregnated by
her legitimate spouse?
No. it is immaterial who the father is.
OTHER IMPORTANT CONDITIONS:
That the SSS shall immediately reimburse
the employer of one hundred percent
(100%) of the amount of maternity benefits
advanced to the employee by the employer
upon receipt of satisfactory proof of such
payment and legality thereof; and
That if an employee member should give
birth or suffer miscarriage without the
required contributions having been remitted
for her by her employer to the SSS, or
without the latter having been previously
notified the employer of the time of the
pregnancy, the employer shall pay to the
SSS damages equivalent to the benefits
which said employee would otherwise have
been entitled to.
EXTENSION OF MATERNITY LEAVE ART 133
(b)
- the maternity leave shall be extended
without pay on account of illness medically
certified to arise out of the pregnancy,
delivery, abortion, or miscarriage, which
renders the woman unfit for work , unless
she has earned unused leave credits from
which such extended leave may be
charged.

ART. 133. MATERNITY LEAVE BENEFITS

PATERNITY LEAVE (RA 8187 , July 5,1996)

MATERNITY LEAVE UNDER THE SSS LAW

- A female member, who need not be legally
married, who has paid for at least three (3)
monthly contributions in the 12-month period
immediately preceding the semester of her
childbirth or miscarriage shall be paid a daily
maternity benefit equivalent to 100% of her average
daily salary credit for 60 days or 78 days, in case of
caesarian delivery.

Grants paternity leave of 7 days with full pay,

consisting of basic salary, to all married male
employees in the public and private sector

Available only for the first 4 deliveries of the

legitimate spouse with whom the husband is
cohabiting; the term delivery includes childbirth,
miscarriage or abortion.
In the event that such leave was not availed of,
said leave shall not be convertible to cash

from enjoying the maternity leave, facilities

and other benefits provided under the
Code;

PURPOSE: to enable the husband to lend support

to his wife during the period of recovery and/ or in
the nursing of the newly born child

2. To discharge such woman employee on

account of her pregnancy, or while on leave
or in confinement due to her pregnancy;

CONDITIONS FOR ENTITLEMENT:

1.
He is an employee at the time of the
delivery of his child;
2.
He is cohabiting with his spouse at the time
she gives birth or suffers a miscarriage;
3.
He has applied for paternity leave with his
employer;
4.
His wife has given birth or suffered a
miscarriage; the term wife refers to the
lawful wife which means the woman who is
legally married to the male employee
concerned.
APPLICATION OF LEAVE:

Must be made:
1. within a reasonable time from the expected
date of delivery by the pregnant spouse
2. within such period as may be provided by
company rules & regulations or CBA

prior application for leave shall NOT be

required in case of miscarriage.

ART. 134. FAMILY PLANNING SERVICES

- Employers who habitually employ more than
two hundred (200) workers in any locality shall
provide free family-planning services to their
employees and their spouses which shall include
but not limited to, the application or use of
contraceptive pills and intrauterine devices.
ART. 135. DISCRIMINATION PROHIBITED
- It shall be unlawful for any employer to
discriminate against any woman employee with
respect to terms and conditions of employment
solely on account of her sex.
ACTS OF DISCRIMINATION:

3. To discharge or refuse the admission of

such woman upon returning to her work for
fear that she may be pregnant;
4. To discharge any woman or child or any
other employee for having filed a complaint
or having testified or being about to testify
under the Code;
ART. 138. CLASSIFICATION OF CERTAIN
WOMEN WORKERS
- Any woman who is permitted to work or
suffered to work, with or without compensation, in
any night club, cocktail lounge, massage clinic, bar
or similar establishment, under the effective control
or supervision of the employer for a substantial
period of time as determined by the Secretary of
Labor, shall be considered as an employee of such
establishment for purposes of labor and social
legislation.

CHAPTER II
EMPLOYMENT OF MINORS
(see RA 7610 annex )

ART. 139. MINIMUM EMPLOYABLE AGE

GENERAL RULE: No child below 15 shall not be
employed.
CONDITIONS ON THE EMPLOYMENT OF A
CHILD BELOW 15:

1. When the child works directly under the sole

responsibility of his/her parents or legal
guardian who employs members of his/her
family only under the following conditions:

a. Payment of a lesser compensation for work of

equal value.
b. Favoring a male employee over a female
employee solely on the account of their sexes.
ART. 136. STIPULATION AGAINST MARRIAGE
-

a. employment does not endanger the childs

life, safety, health and morals;
b. employment does not impair the childs
normal development; and
c. the parent/legal guardian provides the child
with the primary and/or secondary education
prescribed by DECS.

it shall be unlawful for an employer:

1. to require as a condition for employment or
continuation of employment that a woman
employee shall not get married,
2. to stipulate expressly or tacitly that upon
getting married a woman employee shall be
deemed resigned or separated

2. Where the childs employment or participation in

public entertainment or information through cinema,
theater, radio, or television is essential, provided
that:
a.

3. to actually dismiss, discharge, discriminate

or otherwise prejudice a woman employee
merely by reason of her marriage.
ART. 137. PROHIBITED ACTS
-It shall be unlawful for an employer :
1. To discharge any woman employed by him
for the purpose of preventing such woman

b.
c.

employment does not involve advertisements

or
commercials
promoting
alcoholic
beverages, intoxicating drinks, tobacco and its
by-products or exhibiting violence;
There is a written contract approved by the
DOLE; and
The conditions prescribed for the employment
of minors {above stated} are met.

Any person between the ages of 15 and 18 may

be employed in any non-hazardous work.

NONHAZARDOUS WORK OR UNDERTAKING

 one where the employee is not exposed to any

risk which constitutes an imminent danger to his
safety and health.
HAZARDOUS WORKPLACES:
1. where the nature of the work exposes the
workers to dangerous environmental elements,
contaminants or work conditions;
2. where the workers are engaged in construction
work, logging, fire-fighting, 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
5. where the workers use or are exposed to
power-driven tools,

CHAPTER III

1. If the period for household service is fixed,

neither the employer nor the househelper
may terminate the contract before the
expiration of the term, except for a just
cause.
2. If the househelper is unjustly dismissed, he
or she shall be paid the compensation
already earned plus that for fifteen (15)
days by way of indemnity.
3. If the househelper leaves without justifiable
reason, he or she shall forfeit any unpaid
salary due him or her not exceeding fifteen
(15) days.

ART.
151.
EMPLOYMENT
FOR
CERTIFICATION
- Upon the severance of the household service
relationship, the househelper may demand from the
employer a written statement of the nature and
duration of the service and his or her efficiency and
conduct as househelper.

EMPLOYMENT OF HOUSEHELPERS
CHAPTER IV

ARTS. 141-152
RIGHTS OF HOUSEHELPERS:
(Articles 1689 1699, NCC)
1.non-assignment to non- household work
2.Reasonable compensation
(minimum cash wage)
3.Lodging, food, and medical attendance
4.If under 18 years old, an opportunity for
elementary education
- cost of which shall be part of househelpers
compensation
5.Contract for household service shall not
exceed 2 years.
- Renewable however from year to year
6.Just and humane treatment
7.Right not to be required to work for more than
10 hours a day
- If the househelper agrees to work overtime,
and there is additional compensation, the same
is permissible
8.Right to four days vacation each month with
pay
- If the helper does not ask for the vacation,
the number of vacation days cannot be
accumulated, he is entitled only to its monetary
equivalent.
9.Funeral expenses must be paid by the
employer if the househelper has no relatives
with sufficient means in the place where the
head of the family lives
10. Termination only for a just cause.
11. Indemnity for unjust termination of service
12. Employment certification as to nature and
duration of service and efficiency and
conduct of the househelper.
ART. 149. INDEMNITY FOR UNJUST
TERMINATION OF SERVICE
SUMMARY OF RULES :

EMPLOYMENT OF HOMEWORKERS

ARTS. 153-155
ART. 153. REGULATION OF INDUSTRIAL
HOMEWORKERS
- Rule shall apply to any homeworker who
performs in or about his home any processing of
goods or materials, in whole or in part, which have
been furnished directly or indirectly by an employer
and thereafter to be returned to the latter.
ART. 155. DISTRIBUTION OF HOMEWORK
EMPLOYER OF HOMEWORKERS :
- any natural or artificial person who, for his own
account or benefit, or on behalf of any person
residing outside the Philippines, directly or
indirectly, or through any employee, agent,
contractor, sub-contractor; or any other person:
(1) Delivers or causes to be delivered any
goods or articles to be processed in or
about a home and thereafter to be returned
or to be disposed of or distributed in
accordance with his direction; or
(2) Sells any goods or articles for the purpose
of having such goods or articles processed
in or about a home and then repurchases
them himself or through another after such
processing.

BOOK FIVE
LABOR RELATIONS
TITLE I

POLICY AND DEFINITIONS

ART. 211. DECLARATION OF POLICY
LABOR RELATIONS LAW those intended to
stabilize the relations of employees and their
employers, adjust differences between them
through the encouragement of collective
bargaining, and settle labor disputes through
conciliation, mediation and arbitration
it defines the status, rights, and duties and
the institutional mechanisms that govern
the individual and collective interactions of
employers,
employees
or
their
representatives.
Absent an employer-employee relation,
there is no labor relations to speak of.
- Collective bargaining process is possible only
when there is a labor organization, i.e., (1) labor
union or (2) employee association.
PARTIES TO LABOR RELATIONS CASES:
1. employees organization,
2. management, and
3. the public
The public is always to be considered in
disputes between labor and capital, and it
has been held that the rights of the
general public are paramount.
Labor relations policy under the LC is
embodied in Section 3 Article XIII of the 1987
Constitution which guarantees to all workers their
right among others to:
1. Self-organization,
2. Collective bargaining and Negotiations,
3. Peaceful and concerted activities including
the right to strike in accordance with law,
and
4. Participate in policy and decision-making
processes affecting their rights and benefits
as may be provided by law.

ART. 212. DEFINITIONS

EMPLOYER- one who employs the services of
others; one for whom employees work and who
pays their wages or salaries.
any person acting in the interest of an
employer, directly or indirectly. The term
does not include a labor organization or any
of its officers and agents, EXCEPT when
acting as an employer.
EMPLOYEE- one who works for an employer; a
person working for salary or wages.
Shall not be limited to the employees of a
particular employer, and it shall include any
individual whose work
has ceased
as a result of or in connection with any
current labor dispute or because of unfair
labor practice IF he has not obtained any
other:
1. Substantially equivalent and
2. Regular employment (212F)
TYPES OF LABOR DISPUTES:
LABOR STANDARDS DISPUTES

WORKERS ASSOCIATION - any association of

workers organized for the mutual aid and protection
of its members or for any legitimate purpose other
than collective for bargaining.
INDEPENDENT UNION - any labor organization
operating at the enterprise level whose legal
personality is derived through an independent
action for registration prescribed under Art. 234. It
may be affiliated with a federation, national or
industry union, in which case it may also be referred
to as an affiliate.
FEDERATION - any labor organization with at
least 10 locals/chapters or affiliates each of which
must be a duly certified or recognized collective
bargaining agent.
LEGITIMATE WORKERS ASSOCIATION-an
association of workers organized for mutual aid and
protection of its members of for any legitimate
purpose other than collective bargaining registered
with the Department in accordance with Rule III,
Sections 2-C and 2-D of these rules
LABOR MANAGEMENT COUNCIL
- Deals with the employer on matters affecting the
employees rights, benefits and welfare. Purposes
are to:
a.
b.
c.

promote gainful employment

improve working conditions and
achieve increased productivity (RA 6971)

LABOR ORGANIZATION refers to any union or

association of employees in the private sector
which exists in whole or part for the purpose of
collective bargaining, mutual aid, interest,
cooperation, protection, or other lawful purposes.
LEGITIMATE LABOR ORGANIZATION- any labor
organization in the private sector registered or
reported with the Department in accordance with
Rules III and IV of these rules.
LABOR DISPUTE includes any controversy or
matter concerning:
1.
2.

terms or conditions of employment OR

the association or representation of persons in
negotiating, fixing, maintaining, changing or
arranging the terms and conditions of
employment

REGARDLESS of whether the disputants stand in

the proximate relation of employer and employee

The test of whether

a labor controversy comes within the definition of a
labor dispute depends on whether it involves or
concerns terms, conditions of employment, or
representation

LABOR RELATIONS DISPUTES

1. compensation (e.g., underpayment of

minimum wage)

1. organizational right dispute/unfair labor practice

(e.g., coercion, restraint or interference in unionization
efforts)

2. benefits (e.g., nonpayment of holiday pay,

overtime pay)

2. representation disputes (e.g., determination of

the collective bargaining unit, ULP strike)

3. working conditions (e.g., unrectified work

hazards)

3. bargaining disputes (e.g., refusal to bargain)

4. contract administration or personnel policy

disputes (e.g., noncompliance with CBA provisions)
5. employment tenure disputes (e.g., non
regularization of employees)
4. preferably a resident of the region
where he is to hold office.
PARTIES TO A DISPUTE:

1. PRIMARY PARTIES
2.

employer,

employees, union
SECONDARY PARTIES voluntary arbitrator,
agencies of DOLE (BLR, VAC), NLRC, Sec. of
Labor, Office of the President

TITLE II
NATIONAL LABOR RELATIONS
COMMISSION
CHAPTER I

The appointment of the Chairman and the

Commissioners of the NLRC are not
subject to confirmation by the Commission
on Appointments
QUALIFICATIONS OF EXECUTIVE LABOR
ARBITERS/LABOR ARBITERS:
1. must be members of the Philippine Bar;
2. must have been engaged in the practice of law
in the Philippines for at least 7 years; and
3. must have experience or exposure in handling
labor management relations for at least 3 years.
TERM OF OFFICE OF THE CHAIRMAN,
COMMISIONERS, AND LABOR ARBITERS:
they shall hold office during good
behavior until they reach the age of 65
unless removed for causes as provided by
law or become incapacitated to discharge
the function of his office.

CREATION AND COMPOSITION

ART. 213. NATIONAL LABOR RELATIONS
COMMISSION
TRIPARTISM

The NLRC is composed of five (5)

divisions.
Three (3) sectors are represented in the
composition of the NLRC.
Each division composed of three
commissioners will have representatives
from the following [choice of the Sec. Of
Labor]:
1. from the public sector
2. workers organizations
3. employer and management sector

QUALIFICATIONS OF THE CHAIRMAN AND

THE COMMISSIONERS:
1. must be a member of the Philippine
Bar;
2. must have been engaged in the
practice of law in the Philippines for at
least 5 years;
3. must have experience or exposure in
handling labor management relations
for at least 15 years; and

A. EXCLUSIVE AND ORIGINAL JURISDICTION

OF THE NLRC:
1.Cases certified to it for compulsory arbitration
by the Secretary of Labor under Art. 263CERTIFIED CASES;
2.INJUNCTION CASES under Art. 218 and
264; AND
3.CONTEMPT CASES
B.

EXCLUSIVE APPELLATE JURISDICTION OF

THE NLRC:
1.Cases DECIDED BY LABOR ARBITERS
under Art 217b and Sec 10 RA 8012(Migrant
Workers Act); and
2.Cases DECIDED BY THE REGIONAL
OFFICES OF DOLE IN THE EXERCISE OF
ITS ADJUDICATORY FUNCTION under Art
129 of the Labor Code

THE NLRC ONLY SITS EN BANC FOR

PURPOSES OF:

a. promulgating
rules
and
regulations
governing the hearing and disposition of cases
before any of its divisions and regional branches,
and
b. formulating
policies
affecting
its
administration and operations.
The Commission may only sit en banc
for the determination of policies and
NOT for purposes of adjudication. (RA
6715)

5. CASES
ARISING
FROM
ANY
VIOLATION OF ART 264 of this Code,
including questions involving the legality of
strikes and lockouts; and
6. Except
claims
for
Employees
Compensation, Social Security, Medicare
and maternity benefits, ALL OTHER
CLAIMS ARISING FROM EMPLOYEREMPLOYEE RELATIONS, including those
of persons in domestic or household
service, involving an amount exceeding P5,
000.00 regardless of whether accompanies
with a claim for reinstatement
7. MONETARY CLAIMS OF OVERSEAS
CONTRACT WORKERS under the Migrant
Workers Act of 1995.
8. Claims of employees against GOCCs if
the latter does not have an original
charter and has been incorporated under
the Corporation Code.

Adjudication of cases certified to the

NLRC, or appealed to it from the decision
of its Labor Arbiters are referred to and
decided by its five (5) divisions.
-Petitions for certiorari (Rule 65) against
decisions of the NLRC should henceforth be
initially filed with the Court of Appeals in strict
observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief
desired. The Court of Appeals is procedurally
equipped to resolve unclear or ambiguous factual
finding, aside from the increased number of its
component divisions. (St. Martins Funeral Homes
vs. NLRC G.R. No. 130866)
- Findings of facts of a labor tribunal are
accorded the utmost respect by the courts and are
well-nigh conclusive if supported by substantial
evidence.
- Labor cases are not subject to Barangay
Conciliation since ordinary rules of procedure are
merely suppletory in character vis--vis labor
disputes which are primarily governed by labor
laws.\
- The failure of the petitioner to file a motion
for reconsideration of the decision of NLRC before
filing a petition for certiorari has in certain instances
been held not to be a fatal omission.

CHAPTER II
POWERS AND DUTIES
ART. 217. JURISDICTION OF
ARBITERS AND THE COMMISSION

LABOR

EXCLUSIVE AND ORIGINAL

JURISDICTION
OF LABOR ARBITERS:
- Except as otherwise provided under this
Code
the Labor Arbiters shall have original
and
exclusive jurisdiction to hear and decide, within 30
calendar days after the submission of the case by
the parties for decision without extension, even in
the absence of stenographic notes, the following
cases involving all workers, whether agricultural
or non-agricultural:
1. ULP cases;
2. TERMINATION disputes;
3. If accompanied WITH A CLAIM FOR
REINSTATEMENT, those cases that
workers may file involving wages, rates of
pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and
other forms of DAMAGES arising from
employer-employee relations;

Although
the
provision
speaks
of
EXCLUSIVE
AND
ORIGINAL
JURISDICITION OF labor arbiters, the
cases enumerated may instead be
submitted to a voluntary arbitrator by
agreement of the parties under Art. 262.
The law prefers voluntary over compulsory
arbitration.

Cases which must be disposed of by the labor

arbiter by referring the same to the grievance
machinery and voluntary arbitration:
a.
Disputes on the interpretation or
implementation of CBA and
b. those arising from the interpretation or
enforcement
of
company
personnel
policies.

The labor arbiter and the NLRC have no

jurisdiction over claims filed by employees
against international agencies such as IRRI,
WHO etc. unless they expressly waive their
immunity. (Lasco vs. UNRFNRE)
In the absence of service of summons or a valid
waiver thereof, the hearings and judgment rendered
by the labor arbiter are null and void.
ART. 218. POWERS OF THE COMMISSION
POWERS OF THE NLRC:
a.

Rulemaking power [promulgation of rules &

regulations governing disposition of cases
before any of its divisions/regional offices]
b.
Power to
issue compulsory processes [administer
oaths, summon parties, issue subpoenas]
c. Power to investigate matters and hear
disputes within its jurisdiction [adjudicatory
poweroriginal
& appellate jurisdiction
over cases]
d. Contempt power [218]
e. Power to issue injunctions and restraining
orders

PROCEDURE FOR THE ISSUANCE OF

RESTRAINING ORDER/ INJUNCTION:
a. filing of a verified PETITION

b. HEARING AFTER DUE AND PERSONAL

NOTICE has been served in such manner as
the Commission shall direct, to:
a. all known persons against whom the
relief is sought and
b. also to the Chief Executive or other
public officials of the province or city within
which the unlawful acts have been
threatened or committed charged with the
duty to protect the complainants property
c. RECEPTION AT THE HEARING OF THE
TESTIMONIES
OF
WITNESSES
with
opportunity for cross- examination, in support of
the allegations of the complaint made under
oath as well as testimony in opposition thereto
d. FINDING OF FACT of the Commission to the
effect that :
prohibited or unlawful acts have been
threatened and will be committed, or
have been committed and will be
continued unless restrained, but no
injunction or temporary restraining order
shall be issued on account of any threat,
prohibited or unlawful act, except against
the persons, association or organization
making the threat or committing the
prohibited or unlawful act or actually
authorizing or ratifying the same after
actual knowledge thereof.
That substantial and irreparable injury
to the complainants property will follow
That as to each item of relief to be
granted, greater injury will be inflicted
upon complainant by the denial of the
relief than will be inflicted upon the
defendants by the granting of the relief
That complainants has no adequate
remedy at law
That public officers charged with the
duty to protect complainants property are
unable or unwilling to furnish adequate
protection.
e. Posting of a BOND

REQUISITES BEFORE TRO MAY BE

ISSUED EX PARTE:
1. The complainant shall ALLEGE THAT,
unless a TRO is issued without notice, a
substantial and irreparable injury to
complaints property will be unavoidable;
2. TESTIMONY UNDER OATH is sufficient, if
sustained, to justify the Commission in
issuing a temporary injunction upon hearing
after notice;
3. The complainant shall first FILE AN
UNDERTAKING
WITH
ADEQUATE
SECURITY in an amount to be fixed by the
Commission sufficient to recompense those
enjoined for any loss, expenses or damage
caused by the improvident or erroneous
issuance of such order or injunction,
including all reasonable costs, together with
a reasonable attorneys fee, and expense of
defense against
the granting of any
injunctive relief sought in the same
proceeding and subsequently denied by the
Commission
The TRO shall be effective for no longer
than 20 days and shall become void at the

expiration of said 20 days counted from the date

of the posting of the bond.
The procedural and substantial
requirements of Art 218 (e) must be strictly
complied with before an injunction may issue in a
labor dispute.
THE FOLLOWING CAN ISSUE INJUNCTIONS/
TRO IN LABOR DISPUTES:
1. President (ART. 263, g)
2. Secretary of Labor (ART. 263, g)
3. Labor Arbiters (ART. 217/RULE XI Sec. 1 of
IR&R)
4. NLRC (218)
5. Regional Directors
6. Med- Arbiters
ART. 219. OCULAR INSPECTION
The Chairman, any Commissioner, labor Arbiter or
their duly authorized representatives may, at
anytime during working hours:
a. Conduct an ocular inspection on any
establishment, building, ship, place or
premises, including any work, material,
implement, machinery, appliance or any
object therein; and
b. Ask any employee, laborer, or any person
as the case may be for any information or
date concerning any matter or question
relative to the object of the investigation
ART. 221. TECHNICAL RULES NOT BINDING
AND
PRIOR
RESORT
TO
AMICABLE
SETTLEMENT
The NLRC may disregard technical rules of
procedure in order to give life to the constitutional
mandate affording protection to labor. (Principe vs.
Philippine-Singapore Transport Services Inc.)
RES JUDICATA applies only to judicial or quasijudicial proceedings and NOT to the exercise of
administrative powers.
APPROVAL OF AN AMICABLE SETTLEMENT
BY A LABOR ARBITER
An amicable settlement of a labor dispute
should be approved by the labor arbiter before
whom the case is pending after being satisfied that:
a. it was VOLUNTARILY ENTERED into by the
parties and
b.

after having EXPLAINED TO THEM

THE TERMS AND CONSEQUENCES
thereof.

PURPOSE: for the employees protection

because the labor arbiter before whom the case is
pending would be in a better position than just any
other person to personally determine the
voluntariness of the agreement and certify its
validity (PERIQUET VS. NLRC).
ART. 222. APPEARANCES AND FEES

APPEARANCE OF NON-LAWYERS BEFORE

THE COMMISSION:
GENERAL RULE:
ONLY lawyers can appear
before the NLRC or a Labor Arbiter
EXCEPTIONS: Non-Lawyers can appear ONLY in
the following instances:
1.
if they represent themselves;
2.
if they represent their organization or
members thereof; or
3. if he is a duly accredited member of the
legal aid office duly recognized by the DOJ
in cases referred thereto by the latter or by
the IBP.
ATTORNEYS FEES: The maximum amount to be
given a lawyer is 10% of the monetary benefits
awarded to the employees excluding the award for
moral and exemplary

This article prohibits the payment of

attorneys fees only where the same is
effected through forced contributions from
the workers form their own funds as
distinguished from union funds.

Neither the lawyer nor the union itself may

require the individual workers to assume
the obligation to pay the attorneys fees
from their own pockets. Any agreement to
the contrary shall be null and void.

Attorneys fees for CBA negotiations and

conclusion shall be in the amount agreed
upon by the parties to be taken from the
union funds and not from individual union
members.

CHAPTER III
APPEAL
ART. 223. APPEAL
GROUNDS FOR APPEAL:
1.

If there is prima facie evidence of abuse of

discretion on the part of the Labor Arbiter
2.
If the decision, order or award was secured
through fraud or coercion, including graft and
corruption;
3.
If made purely on questions of law; and
4.
If serious errors in the findings of facts are
raised which would cause grave or irreparable
damage or injury to the appellant.
PERIODS WITHIN WHICH TO APPEAL:
A. decisions of the regional director:
within 5 calendar days from receipt of the
order [129 LCRecovery of wages and
simple money claims].
B. decisions of the labor arbiter:
within 10 calendar days from the receipt
of the decision.

The appeal must be under oath and must

state specifically the grounds relied upon
and the supporting arguments.
Where the 10th day falls on a Saturday,
Sunday or legal holiday, the appeal may be
filed on the next business day. (Rules of
Procedure of NLRC)
PERIOD TO APPEALNOT EXTENDIBLE

It is the policy of the state to settle

expeditiously labor disputes.
The perfection of an appeal within
the statutory/reglementary period is
not only mandatory but also
jurisdictional and failure to do so
renders the questioned decision
final and executory as to deprive
the appellate court of jurisdiction to
alter the final judgment of the RDs
and
LAs.
(Aboitiz
Shipping
Employees Association vs. Trajano)

REQUISITES FOR THE PERFECTION OF AN

APPEAL TO THE NLRC:
1. Filing of A VERIFIED MEMORANDUM OF
APPEAL within the required period of appeal;
2. In case of monetary award, the employer
should file a BOND corresponding to the
monetary award excluding awards for moral
and exemplary damages and attorneys fees.
Where the employer failed to post a
bond to perfect its appeal, the remedy
of the employee is a motion to dismiss
the appeal, NOT a petition for
mandamus.
The intention of the lawmakers is to
make the bond an indispensable
requisite for the perfection of an appeal
by the employer.
3. Appeal fee of P150;
4. Proof of service - furnish the other party
with a copy of the memo of appeal.
Failure to give a copy of the appeal
to the appellee within 10 days is not
fatal IF the latter was not prejudiced by
the delay in the service of said copy of
the appealtechnical rules must yield
to the broader interest of substantial
justice. (Modern Fishing Gear Labor
Union vs. Noriel)
EXECUTION PENDING APPEAL - the decision
of the labor arbiter ordering the reinstatement of a
dismissed or separated employee shall be
immediately executory insofar as the reinstatement
aspect is concerned and the posting of an appeal
bond by the employer shall not stay such
execution.
There is no need for the arbiter to
issue a writ of execution on the
reinstatement order as it is selfexecutory. (Pioneer Texturizing Co. vs.
NLRC)
OPTIONS OF THE EMPLOYER IN COMPLYING
WITH AN ORDER OF REINSTATEMENT WHICH
IS IMMEDIATELY EXECUTORY:

1.

2.

He can ADMIT THE DISMISSED employee

back to work under the same terms and
conditions prevailing prior to his dismissal or
separation or to a substantially equivalent
position if the former position is already filled
up, OR
He can REINSTATE THE EMPLOYEE
MERELY IN THE PAYROLL.
Failure to exercise one of the
foregoing options may be compelled
under pain of contempt and the
employer may be made to pay instead
the salary of the employee.

A petition for relief from the decision of the

labor arbiter must strictly comply with 2
reglementary periods:
1.

The petition must be filed within 60 days

from knowledge of the judgment; and
2.
The petition must be filed within a fixed
period of 6 months from entry of such judgment.
Petitions filed beyond said period
will no longer be entertained.
APPEAL FROM THE DECISION OF THE NLRC:
No law allows an appeal from a decision of
the Secretary of Labor, or the NLRC, or of a
voluntary arbitrator. In these cases, the special
civil action of certiorari, prohibition or
mandamus under Rule 65 of the Rules of Court
may be lodged with the Court of Appeals. (St.
Martins Funeral Home vs. CA)
ART 224. EXECUTION OF DECISIONS,
ORDER, OR AWARDS
The decision of the Secretary of Labor, the
Commission, the Bureau or Regional Director the
Labor Arbiter, the Med-Arbiter or the Voluntary
Arbitrator shall be final and executory after 10
calendar days from receipt thereof by the
parties.
The foregoing may, upon its own initiative
or on motion of any interested party, issue
a writ of execution on a judgment within
5 years from the date it becomes final
and executory.
The immediate execution of judgment
should be undertaken only when the
monetary award had been carefully and
accurately determined by the NLRC and
only after the employer is given the
opportunity to be heard and to raise
objections to the computation.

TITLE III
BUREAU OF LABOR RELATIONS
ART. 226. BUREAU OF LABOR RELATIONS
Pursuant to
CONCILIATION
(NCMB) has

E.O. 126, the NATIONAL

AND
MEDIATION
BOARD
absorbed the conciliation,

mediation and voluntary arbitration functions of

the BLR.

Jurisdiction
over
labor-management
problems or disputes is also exercised by
other offices such as the DOLE regional
offices, and the Office of the Secretary,
NLRC, POEA, OWWA, SSS-ECC, the
regional wage and productivity boards,
NWPC, and even the regular courts over
intra-corporate disputes.

EXCLUSIVE AND ORIGINAL JURISDICTION OF

THE BLR
-to act at its own initiative or upon the request of
either or both parties on all:
1.

INTRA- union conflicts

2.

INTER- union conflicts

3.

all
DISPUTES,
GRIEVANCES
OR
PROBLEMS arising from or affecting labormanagement relations in all workplaces
whether agricultural or non- agricultural.

The parties may however, by

agreement, settle their differences by
submitting their case to a voluntary
arbitrator rather than taking the case to the
BLR.
CASES WHERE THE BLR HAS NO
JURISDICTION:
Those arising from the implementation or
interpretation of collective bargaining agreements
which shall be subject of grievance procedure
and/or voluntary arbitration.
INTRA-UNION DISPUTES refers to any conflict
between and among union members, including
grievances arising from any violation of the rights
and conditions of membership, violation of or
disagreement over any provision of the unions
constitution and by-laws, or disputes arising from
chartering or affiliation.
COVERAGE OF INTER/INTRA-UNION DISPUTES
(Sec. 1 Rule XI DO 40-03)
a. cancellation of registration of a labor
organization filed by its members or by any
other labor organization;
b. conduct of election of union and workers
association officers/nullification of election
of union and workers association officers;
c. audit/accounts examination of union or
workers association funds;
d. deregistration of CBA;
e. validity/invalidity of union affiliation or
disaffiliation;
f. validity/invalidity
of
acceptance/nonacceptance for union membership;
g. validity/invalidity of impeachment/ expulsion
of union and workers association officers;
h. validity/invalidity of voluntary recognition;
i. opposition to application for union and CBA
registration;
j. violations of or disagreements over any
provision in a union or workers association
constitution and by-laws;

k.

disagreements
over
chartering
or
registration of labor organizations and
CBAs;
l. violations of the rights and conditions of
union or workers association membership;
m. violations of the rights of legitimate labor
organizations, except interpretation of
CBAs;
n. such other disputes or conflicts involving
the rights to self-organization, union
membership, and collective bargaining
1. between and among legitimate
labor organizations
2. between and among members of a
union or workers association
EXTENDED COVERAGE (Section 2 Rule XI DO
40-03)
Other related labor relations disputes shall
include any conflict between a labor organization
and the employer or any individual, entity, or group
that is not a labor organization or workers
association. This includes:
1. cancellation of registration of unions
and workers associations; and
2. a petition for interpleader
SPECIAL REQUIREMENTS AS TO THE FILING
OF CASES:
A. INVOLVING ENTIRE MEMBERSHIP
1.The complaint must be signed by at least
30% of the entire membership of the union
and
2.It
must
also
show
exhaustion
of
administrative remedies.
B. INVOLVING A MEMBER ONLY - In such case
only the affected member may file the
complaint.

Redress must first be sought within the

union itself in accordance with its
constitution and by-laws EXCEPT under
any of the following circumstances:

a. futility of intra-union remedies

b. improper expulsion procedure
c. undue delay in appeal as to
constitute
substantial injustice
d. the action is for damages
e. lack of jurisdiction of the investigating body
f.
action of the administrative agency is
patently illegal, arbitrary, and oppressive
g. issue is purely a question of law
h. where the administrative agency had already
prejudged the case
i. where the administrative agency was
practically given the opportunity to act on the
case but it did not.

Imposition of fees by the union affects the

entire membership, therefore it requires
that the complaint should be signed by at
least 30% of the membership of the union.

INTER-UNION DISPUTES -refers to any conflict

between and among legitimate labor unions
involving representation questions for
purposes of collective bargaining or to any
other conflict or dispute between legitimate
labor unions.
EFFECTS
OF
FILING/PENDENCY
OF
INTER/INTRA-UNION DISPUTE AND OTHER
LABOR RELATIONS DISPUTES (Section 3 Rule
XI DO 40-03)
- The rights, relationships and obligations of the
parties litigants against each other and other
parties-in-interest prior to the institution of the
petition shall continue to remain during the
pendency of the petition and until the date of finality
of the decision rendered therein. Thereafter, the
rights, relationships and obligations of the parties
litigants against each other and other parties-ininterest shall be governed by the decision so
ordered.
- The filing or pendency of any inter/intra-union
disputes is not a prejudicial question to any petition
for certification election and shall not be a ground
for the dismissal of a petition for certification
election or suspension of proceedings for
certification election.

SUMMARY OF RULES ON INTRA/INTER-UNION DISPUTES (Rule XI DO 40-03)

WHO

WHERE FILED

FORMAL
REQUIREME
NTS

1. For grounds under Sec. 1:

a. any LLO
b. member(s) thereof specially concerned
2. For grounds under Sec. 2any party-in-interest
1. Regional Office that issued its certificate of registration or certificate of creation of chartered
local- If it involves labor unions with independent registrations, chartered locals, workers
association, its officers or members
2. Directly with the BureauIf it involves a Federation/National Unions/Industry Unions, its
officers or members
1. in writing
2. verified under oath
3. contains the following averments
a. name, address and other personal circumstances of the complainant(s) or petitioner(s);
b. name, address and other personal circumstances of the respondent(s) or person(s)
charged;
c. nature of the complaint or petition;
d. facts and circumstances surrounding the complaint or petition;
e. cause(s) of action or specific violation(s) committed;
f. a statement that the administrative remedies provided for in the constitution and by-laws
-have been exhausted or
-such remedies are not readily available to the complainant(s) or
petitioner(s)
through no fault of his/their own or
-compliance with such administrative remedies does not apply to complainant(s) or
petitioner(s);
g. relief(s) prayed for;
h. certificate of non-forum shopping; and
i. other relevant matters

MODES OF APPEAL IN INTRA/INTER-UNION DISPUTES (Rule XI DO 40-03)

1. Under oath
HOW (formal
2. Consist of a memorandum of appeal
requirements)

PERIOD
TO WHOM
APPEALABLE
WHERE FILED

3. Based on either of the following grounds:

a. Grave abuse of discretion
b. Gross violation of the Rules
4. With supporting arguments and evidence
Within 10 days from receipt of decision
1. Bureau of Labor Relationsif the case originated from the Med Arbiter/Regional Director
2. Sec. Of Laborif the case originated from the Bureau
Regional Office or to the BLR, where the complaint originated (records are transmitted to the BLR
or Sec. Within 24 hours from receipt of the memorandum of appeal)

DETERMINATION OF EMPLOYER-EMPLOYEE
RELATIONSHIP:
- Since the BLR has the original and exclusive
jurisdiction to decide, inter alia, all disputes,
grievances or problems arising from or affecting
labor-management relations in all workplaces,
necessarily, in the exercise of this jurisdiction over
labor-management relations, the Med-Arbiter has
the authority, original and exclusive, to
determine the existence of an employeremployee relationship. (MY San Biscuits, Inc.
vs. Laguesma G.R. No. 9511, 22 April 1991)
In cases where there is overlapping of
jurisdiction, determine the principal issue.
The agency that has jurisdiction thereon
may decide on the incidental issues.
ADMINISTRATIVE FUNCTIONS OF THE BLR:
1.

The REGULATION OF REGISTRATION of

the labor unions;
2.
The KEEPING OF A REGISTRY of labor
unions; and
3.
The maintenance of a FILE OF CBAS.

ART. 227. COMPROMISE AGREEMENTS

REQUIREMENTS:
a. must be freely entered into,
b. must not be contrary to law, morals or
public policy, and

c. must be approved by the authority before

whom the case is pending [see discussion on
article 221approval of labor arbiter of an
amicable settlement in a case before him.
May be effected at any stage of the
proceedings and even when there is
already a final executory judgment (2040
NCC).
Cannot be entered into when the final
judgment is already in the process of
execution. (Jesalva vs. Bautista)
REQUIREMENTS OF A VALID QUITCLAIM:
1. The quitclaim must be VOLUNTARILY
ARRIVED at by the parties;
2. It must be WITH THE ASSISTANCE of the
Bureau of Labor Standards, Bureau of Labor
Relations or any representative of the DOLE;
and
3. The
CONSIDERATION
MUST
BE
REASONABLE (required only when entered
without the assistance of DOLE)

Dire necessity is not an acceptable ground

for annulling the releases, especially in the
absence of proof that the employees were
forced to execute them. (Veloso vs. DOLE)

 WITH vs. WITHOUT ASSISTANCE OF DOLE-COMPROMISE AGREEMENTS

Without assistance of DOLE
With the assistance of DOLE
a. VALIDITY/BINDING EFFECT
- Valid and binding upon the parties

- Valid and binding upon the parties

b. REPUDIATION
- Can be repudiated by the parties by going to
the Commission
NOTE: ULP
compromise.

cases

are

not

subject

to

- Can no longer be repudiatedbecomes final and

binding upon the parties upon execution EXCEPT
a. in case of non compliance with the compromise
agreement; or
b. if there is prima facie evidence that the settlement
was obtained through fraud, misrepresentation, or
coercion

WAIVER OF REINSTATEMENT like waivers of

money claims, a waiver of reinstatement must be
regarded as a personal right which must be
exercised personally by the workers themselves.
(Jag & Haggar Jeans and Sportswear Corp. vs.
NLRC)
ART 231. REGISTRY OF UNIONS AND FILE
OF COLLECTIVE AGREEMENT

The CBA is more than a contract, it is highly

impressed with public interest for it is an
essential instrument to promote industrial
peace.
Must be filed directly with the Bureau or the
Regional Offices of DOLE within thirty (30)
days from execution.
An UNREGISTERED CBA does not bar
certification election [contract bar rule will
not apply in the absence of registration.
[See discussion on Arts. 253 & 253-A]

ART 233. PRIVILEGED COMMUNICATION

- Information and statements made at conciliation
proceedings shall be treated as privileged
communication and shall not be used as evidence
in the Commission.
Conciliators and similar officials may not
testify in any court or body regarding any
matters
taken
up
at
conciliation
proceedings conducted by them.

TITLE IV

CHAPTER I
REGISTRATION AND CANCELLATION
REQUIREMENTS

LEGITIMATE LABOR ORGANIZATION

any labor organization duly registered with the
Department of Labor and Employment, and
includes any branch or local thereof.
Not every legitimate labor organization can
act as bargaining representative and be
certified as such. This is true only of a
union that has won in a consent or
certification election or has been voluntarily
recognized by the employer.
PURPOSE OF FORMATION OF LABOR UNIONS:
for securing a fair and just wages and good
working conditions for the laborers; and for the
protection of labor against the unjust exactions of
capital
MODES OF ACQUIRING
LABOR ORGANIZATIONS

OF

LABOR ORGANIZATION - Any union or

association of employees which exists in whole or
in part for the purpose of:
a. collective bargaining or
b. of dealing with employees concerning terms
and conditions of employment.

LEGITIMACY

FOR

1. Registration with the BLR (Independent

Union
2. Affiliation with a legitimate labor federation
REGISTRATION REQUIREMENTS FOR LABOR
ORGANIZATIONS (as amended by DO 40-03)
3.
4.

LABOR ORGANIZATIONS

ART.
234.
REGISTRATION

It is the agent of the employees

PRINCIPLE OF AGENCY APPLIED
Principal employees
Agent local/chapter
Agent of agent federation

Application for registration

Attachments
a.name of the applicant labor union, its
principal address;
b.the name of its officers and their respective
addresses;
c. approximate number of employees in the
bargaining unit where it seeks to operate,
with a statement that it is not reported as a
chartered local of any federation or national
union;
d.the
minutes
of
the
organizational
meeting(s) and the list of employees who
participated in the said meeting(s);
e.the name of all its members comprising at
least 20% of the employees in the
bargaining unit;

f. the annual financial reports if the applicant

has been in existence for one or more
years, unless it has not collected any
amount from the members, in which case a
statement to this effect shall be included in
the application;
g.the applicants constitution and by-laws,
minutes of its adoption or ratification, and
the list of the members who participated in
it. The list of ratifying members shall be
dispensed with where the constitution and
by-laws was ratified or adopted during the
organizational meeting. In such a case, the
factual circumstances of the ratification
shall be recorded in the minutes of he
organizational meeting(s).

The attachments must now be in one(1) original

copy and two (2) duplicate copies which shall
accompany the application or notice, and submitted
to the Regional Office or the Bureau.

The application for registration of labor unions

xxx, shall be certified under oath by its Secretary or
Treasurer, as the case may be, and attested by its
president.

2. Applications for registration of federations,

national unions or workers associations
operating in more than one region shall be filed
with the bureau or the regional offices, but shall
be processed by the bureau.

A prescribed registration fee must be paid before

the issuance of the certificate of registration
Where to file application for registration:
1. For registration of independent labor unions,
chartered locals, workers associations shall be
filed with the Regional office where the
applicant principally operates. It shall be
processed by the Labor Relations Division at
the Regional office.

APPLICATION FOR REGISTRATION OF LABOR

ORGANIZATION
Notify applicant in

writing to
complete requirements within 30
days from receipt; otherwise,
WHERE TO FILE
application shall be denied
without prejudice to filing a new
application
Regional Office
Bureau
MINISTERIAL
DUTY
OF
THE
BLR
COMPELLABLE
BY
MANDAMUSto
review
the
(Action within 10 days from receipt of application)
application for registration and not the issuance of a
Certificate of Registration.

Approval
- Issuance of certificate of
registration

- After a labor organization had filed the necessary

papers and documents for registration, it becomes
mandatory for the BLR to check if the
requirements under Article 234 have been
sedulously complied with. If its application for
registration is vitiated by falsification and serious
irregularities, especially those appearing on the
face of the application and the supporting
documents, a labor organization should be denied
recognition as a legitimate labor organization.
(Progressive Development Corporation-Pizza Hut
vs. Laguesma et al., GR No. 115077, April 18,
1997)

PURPOSE OF REGISTRATION - Registration

with the BLR is the operative act that gives
rights to a labor organization.

Denial
Ground: Failure to comply with
requirements

It is the fact of being registered with the

DOLE that makes a labor organization
legitimate in the sense that it is clothed
with
legal
personality
to
claim
representational and bargaining rights
enumerated in Article 242 or to strike or
picket under Article 263.
The requirement of registration is NOT a
curtailment of the right to association. It
is merely a condition sine qua non for the
acquisition of legal personality by labor
organizations, associations or unions and
the possession of the rights and privileges
granted by law to labor organizations.

 A valid exercise of police power

since the activities in
which labor organizations, associations,
or unions of workers are engaged affect
public interest, which should be protected.
(PAFLU vs. Sec. Of Labor)

Aside from the application, which must be

accompanied with the requirements for registration
of a labor registration, the application should also
be accompanied by the following:
1. Proof of affiliation of at least 10 locals or
chapters, each of which must be a duly
recognized collective bargaining agent in the
establishment or industry in which it operates,
supporting the registration of such applicant
federation or national union;
2. The names and addresses of the companies
where the locals or chapters operate and the
list of all the members in each company
involved.

FEDERATION- any labor organization with at least

10 locals/chapters or affiliates each of which must
be a duly certified or recognized collective
bargaining agent.
REQUIREMENTS BEFORE A FEDERATION
CAN BE ISSUED A CERTIFICATE OF
REGISTRATION:

Difference between Independent Union and a National Union Federation .

INDEPENDENT UNION
Documentation Requirements:
a.
b.
c.
d.

names, addresses, union offices

address L.O.
minutes organization and list of participants
list of members, at least 20% of the employees
in an appropriate bargaining unit
e. constitution, by-laws, minutes, adoption,
ratification, participants
Financial

NATIONAL FEDERATION
All documents/ financial requirements of an independent
union
PLUS
a.
b.

a. union existing more than 1 year, annual report

b. fees 50.00
Note: The books of account are not anymore a
mandatory requirement.

A LOCAL UNION MAY AFFILIATE WITH A

FEDERATION - The procedure of affiliation would
depend on whether the union is independently
registered or not.

proof of affiliation of at least 10 local chapters, each

duly recognized and support the registration
names,
addresses
of
the
company where
local/chapters operate, list of members in each
company

ONCE AFFILIATED, A LOCAL UNION MAY

DISAFFILIATE FROM THE FEDERATION
WHEN TO DISAFFILIATE

REQUIREMENTS OF AFFILIATION (as amended

by DO 40-03)
1. Report of affiliation of independently
registered labor union
2. Attachments:
a. resolution of the labor unions
board of directors approving the
affiliation;
b. minutes of the general membership
meeting approving the affiliation;
c. the total number of members
comprising the labor union and the
names of members who approved
the affiliation;
d. the certificate of affiliation issued by
the federation in favor of the
independently registered labor
union; and
e. written notice to the employer
concerned if the affiliating union is
the incumbent bargaining agent.
A union of supervisory employees may affiliate
with a national federation of labor organizations of
rank and file employees PROVIDED that:
a. the federation is not actively involved in union
affairs in the company; and
b. the rank and file employees are not directly
under the control of the supervisors

GENERAL RULE: A labor union may disaffiliate

from the mother union to form a local or
independent union only during the 60-day
freedom period immediately preceding the
expiration of the CBA.
EXCEPTION: DISAFFILIATION BY MAJORITY

This happens when there is a substantial

shift in allegiance on the part of the majority
of the members of the union. In such a
case, however, the CBA continues to bind
the members of the new or disaffiliated and
independent union up to the CBAs
expiration date.

LIMITATION: disaffiliation should be in accordance

with the rules and procedures stated in the
Constitution and by-laws of the Federation.

A prohibition to disaffiliate in the

Federations constitution or by-laws is valid
intended for its own protection.

REVOCATION OF CHARTER BY THE

FEDERATION - by serving the local/chapter a
verified notice of revocation, copy furnished the
Bureau on the ground of disloyalty or such other

grounds as may be specified in its constitution or

by-laws.

The revocation shall divest the local

chapter of its legal personality upon receipt
of the notice by the Bureau, unless in the
meantime the local chapter has acquired
independent registration (Rule VIII Section
5 of the IRR)

ART. 236.
APPEAL

- Decisions of the BLR denying the registration of a

labor organization is appealable to the Secretary of
Labor within 10 calendar days from receipt of the
decision, on grounds of:
a. grave abuse of discretion; or
b. gross incompetenceEven before the
onset of the freedom period,
disaffiliation may still be carried out, but
such disaffiliation must be effected by a
majority of the union members in the
bargaining unit.

DENIAL OF REGISTRATION;

RULES ON AFFILIATION/DISAFFILIATION
INDEPENDENTLY
REGISTERED
a. HOW TO AFFILIATE
-by signing a contract of affiliation

b. EFFECT OF DISAFFILIATION TO THE

UNION [local]
- would not affect its being a legitimate
labor organization and therefore it would
continue to have legal personality and to
possess all the rights and privileges of a
legitimate labor organization.

c. EFFECT OF DISAFFILIATION TO THE CBA

- an existing CBA would continue to be valid
as the labor organization can continue
administering the CBA
d. ENTITLEMENT TO UNION DUES AFTER
DISAFFILIATION
- labor organization is entitled to the union
dues and not the federation from which the
labor organization disaffiliated.

UNREGISTERED

-by application of the union with the federation

for the issuance of a charter certificate to be
submitted to the Bureau accompanied by the
following:
a. Copies of its constitution and by-laws
b. Statement of the set of officers and
Books of accounts, all of which must be
certified by the Secretary/Treasurer and
attested to by the President. In such case,
the union becomes a local chapter of the
Federation.
upon severance, it would cease to be a
legitimate labor organization and would no
longer have legal personality and the rights and
privileges granted by law to legitimate
organization, unless the local chapter is
covered by a duly registered collective
bargaining agreement. In the latter case, the
local or chapter will not lose its legal
personality until the expiration of the CBA.
After the CBA expires it will lose its legal
personality
unless
it
registers
as
an
independent union.
The CBA would continue to be valid. The local
chapter will not lose its personality until the
expiration of the CBA. After the CBA expires
the local union looses its personality, unless it
registers anew.
- union dues may no longer be collected as
there would no longer any labor union that is
allowed to collect such union dues from the
employees.
Note: Follow the principle of agency between
federation and local.
Principal employees
Agent local/chapter
Agent of agent federation

MODES OF APPEAL

DENIAL BY:

Regional Office
(transmit records
within 24 hours from
receipt of Memo of
Appeal)

APPEAL BY MEMO OF APPEAL

WITHIN
10 DAYS FROM RECEIPT OF NOTICE

GROUNDS:
1. Grave abuse of discretion;
2. Violation of rules as amended

Bureau
(decision within 20
days from receipt of
records)

Bureau
(transmit
records
within 24 hours from
receipt of Memo of
Appeal)

Secretary of DOLE
(decision within 20
days from receipt of
records)

Supreme Court
Rule 65

Supreme Court
Rule 65

ART.
238.
CANCELLATION
REGISTRATION; APPEAL

OF
2. Violation of any of the provisions of Art. 239
(grounds for cancellation of union registration) of
the Code

The certificate of registration of any

legitimate labor organization shall be cancelled by
the BLR if it has reason to believe, after due
hearing, that the said labor organization no longer
meets one or more of the requirements prescribed
by law.

3. Commission of any of the acts enumerated

under Art. 241 (rights and conditions of
membership) of the code- No petition for
cancellation based on this ground may be granted
unless supported by at least 30% of all the
members of the respondent labor organization or
workers association.

GROUNDS FOR CANCELLATION:

1.
Failure to comply with any of the
requirements prescribed under Arts. 234
(requirements for registration of a labor union)
& 237 (addl reqts federation registration) of the
Code.

A pronouncement as to the illegality of the

strike is not within the meaning of Art. 239
of the Code which provides for the grounds
for cancellation of union registration.

CANCELLATION OF REGISTRATION
WHERE TO FILE

FOR:
1. Legitimate Individual labor Union
2. Chartered Local
3. Workers Association

Regional
Director
who
has
jurisdiction over the place where
respondent principally operates
(30 days to decide)

FOR:
1. Federations
2. National or Industry Unions
3. Trade Union Centers

Bureau Director
(30 days to decide)

WHO MAY FILE

Only the members of the Labor

organization concerned if grounds
are actions involving violations of
Art. 241, subject to the 30% rule

Any party in interest,

if ground is:
1. Failure to comply with any of the
requirements under Articles 234,
237, and 238, LC
2. Violation of any provision under
Art. 239, LC
- Take note of cancellation proceedings
if violation is D and J of art. 239, LC

MODES OF APPEAL
CANCELLATION BY:

Regional Director

Bureau

Appeal within 10 days from receipt of

decision
GROUNDS:
1. Grave abuse of discretion;
2. Violation of rules

Supreme Court

EFFECT
OF
CANCELLATION
OF
Rule 65
REGISTRATION
IN
THE
COURSE
OF
PROCEEDINGS
- Where a labor union is a party in a
proceeding and later it loses its registration permit
in the course or during the pendency of the case,
such union may continue as a party without need of
substitution of parties, subject however to the
understanding that whatever decision may be
rendered therein will be binding only upon those
members of the union who have not signified their
desire to withdraw from the case before its trial and
decision on the merits. [Principle of Agency applied
the employees are the principals, and the labor
organization is merely an agent of the former,
consequently, the cancellation of the unions
registration, would not deprive the consenting
member-employees of their right to continue the
case as they are the considered as the principals]
ART 239. GROUNDS FOR CANCELLATION
OF UNION REGISTRATION
GROUNDS FOR CANCELLATION OF UNION
REGISTRATION:
A. FRAUDULENT ACTS
1. Misrepresentation, False statement or Fraud in
connection
with
[RATIFICATION
OF
CONSTI/BY-LAWS]:
a. the ADOPTION OR RATIFICATION of the
constitution and by-laws or amendments
thereto,
b. the MINUTES of ratification, and

c.

Bureau

Secretary of DOLE

Supreme Court

the LIST OF MEMBERS

who took part in
Rule 65
the ratification.

2. Misrepresentation, false statement or fraud in

connection with the [ELECTION PAPERS]:
a. ELECTION of officers,
b. MINUTES of the election of officer and the
list of voters, or
c. failure to submit these documents together
with the list of the newly elected/appointed
officers and their postal addresses within 30
days from election
B. INACTION OR OMISSION
1. Failure to submit the following documents
[RATIFICATION OF CONSTI/BY-LAWS]:
a. the adoption or ratification of the
constitution and by-laws or amendments
thereto,
b. the minutes of ratification, and
the list of members who took part in the
ratification
Within 30 days from adoption or ratification
of the constitution and by-laws or amendments
thereto.
2. Failure to submit THE ANNUAL FINANCIAL
REPORT to the Bureau within 30 days after
the closing of every fiscal year and
misrepresentation, false entries and fraud in the
preparation of the financial report itself;
3. Failure to submit a LIST OF INDIVIDUAL
MEMBERS of the Bureau once a year or
whenever required by the Bureau; and
4. Failure to comply with the REQUIREMENTS
UNDER ARTICLES 237.

C. UNLAWFUL ACTS
1. Acting as a labor contractor or engaging in the
CABO SYSTEM, or otherwise engaging in
any activity prohibited by law;
2. Entering into collective bargaining agreements
which provide terms and conditions of
employment
below
minimum
standard
established by law [CBA-BELOW MINIMUM
STANDARDS];
3. Asking for or ACCEPTING ATTORNEYS FEES
OR NEGOTIATION FEES from the employers;
4. Other than for mandatory activities under this
Code, checking off special assessment or any
other fees without duly signed individual written
authorization of the members [UNLAWFUL
ASSESSMENTS];
REPORTING REQUIREMENTS OF LABOR
UNIONS AND WORKERS ASSOCIATIONS (Rule
V DO 40-03)
- It shall be the duty of every legitimate labor union
and workers association to submit to the Regional
Office or Bureau which issued its certificate of
registration or certificate of creation of chartered
local, as the case may be, two (2) copies of each of
the following documents:

a. any amendment to its constitution and bylaws and the minutes of adoption or
ratification of such amendments, within 30
days from its adoption or ratification;
b. annual financial reports within 30 days after
the close of each fiscal or calendar year;
c. updated list of newly-elected officers,
together with the appointive offices or
agents who are entrusted with the handling
of funds, within 30 days after each regular
or special election of officers, or from the
occurrence of any change in the officers of
agents of the labor organization or workers
association
d. updated list of individual members of
chartered locals, independent unions and
workers associations within 30 days after
the close of each fiscal year; and
e. updated list of its chartered locals and
affiliates or member organizations, CBAs
executed and their effectivity period, in the
case of federations or national unions,
within 30 days after the close of each fiscal
year, as well as the updated list of their
authorized representatives, agents or
signatories in the different regions of the
country.

RULES ON ADMINISTRATIVE CANCELLATION OF CERTIFICATE OF REGISTRATION OF LLOs DUE TO

NON-COMPLIANCE WITH THE REPORTORIAL REQUIREMENTS:
WHEN PROPER

Failure to comply with its legal duty to submit the documents

required to be submitted under Rule V of DO 40-03 for 5
consecutive years

WHO MAY FILE THE PETITION FOR

CANCELLATION

1. Motu-propio by the Bureau

2. Any party-in-interest

THREE-NOTICE REQUIREMENT

1st Notice
Bureau shall send by registered mail with return card notice for
compliance indicating the documents it failed to submit and the
corresponding period in which they were required, with notice to
comply with the said reportorial requirements and to submit proof
thereof to the Bureau within 10 days from receipt thereof
2nd Notice
Where no response is received by the Bureau within 30 days from
the release of the 1st notice, another notice for compliance shall be
made by the Bureau, with warning that failure on its part to comply
with the reportorial requirements within the time specified shall
cause the continuation of the proceedings for the administrative
cancellation of its registration
3rd Notice
Where no response is again received by the Bureau within 30 days
from release of the 2nd notice, the Bureau shall cause the
publication of the notice of cancellation of registration of the labor
organization in 2 newspapers of general circulation.
When no response is received by the Bureau within 30 days from
the date of publication or when the Bureau has verified the
dissolution of the labor organization, it shall order the cancellation
of registration of the labor organization AND cause its de-listing
from the roster of legitimate labor organizations

CHAPTER II
RIGHTS AND CONDITIONS OF
MEMBERSHIP IN A LABOR ORGANIZATION

ART. 241. RIGHTS AND CONDITIONS OF

MEMBERSHIP
IN
A LABOR
ORGANIZATION
GENERAL GROUPINGS OF THE RIGHTS OF
THE UNION MEMBERS:

1. Political right - the right to vote and be voted

for, subject to lawful provisions on qualifications
and disqualifications.
2. Deliberative and Decision-Making Right - the
right to participate in deliberations on major
policy questions and decide them by secret
ballot.
3. Rights Over Money Matters - the right of the
members:
a. against imposition of excessive fees;
b. right against unauthorized collection of
contributions
or
unauthorized
disbursements;
c. to require adequate records of income
and expenses;
d. to access financial records;
e. to vote on officers compensation;
f. to vote on special assessment;
g. to be deducted a special assessment
only with the members written
authorization.
4. Right to Information - the right to be informed
about:
5.
a. the organizations constitution and bylaws,
b. the collective bargaining agreement,
and labor laws.

Any violation of the above rights and

conditions of membership shall be a ground
for cancellation of union registration or
expulsion of an officer from office,
whichever is appropriate. At least 30% of
all the members of the union or any
member or members specifically concerned
may report such violation to the Bureau.
PERSONS WHO ARE PROHIBITED FROM
BECOMING MEMBERS/OFFICERS OF A LABOR
ORGANIZATION UNDER THE LABOR CODE (see
also notes under Art. 243 on persons who are not
granted the right to self-organization):
1. Subversives or those engaged in subversive
activities [Art.241 (e)]
2. Persons who have been convicted of a crime
involving moral turpitude shall not be eligible
for election as union officer or for appointment
to any position in the union. [Art. 241 (f)]

In general, a union is free to select its own

members, and no person has an absolute right
to membership in a union.

LIMITATIONS [see discussion on union security

arrangements under Art. 248]:
CHECK-OFF VS. AGENCY FEE
CHECK-OFF
a. DEDUCTED FROM
- members of a union for the payment of union dues.
b. CONSENT
- May not be deducted from the salaries of the union
members without the written consent of the workers affected

Union agency fee cannot be imposed on

employees already in the service and are members
of another union. If a closed shop agreement

a.

The labor org. cannot compel employees

already member of rival union.
b.
persons
mentioned
in
Art.
241(e)
[subversives] of the labor code are
prohibited from becoming a member a labor
organization.
c. members of religious organization whose
religion forbade membership in labor
organization could not be compelled into
union membership.
REQUIREMENTS IN MAKING SPECIAL
ASSESSMENTS or OTHER EXTRAORDINARY
FEES (Art. 241 [n]):
1.
there must be a WRITTEN RESOLUTION
2.
the
resolution
must
have
BEEN
APPROVED BY A MAJORITY of all the
members
3.
the approval must be AT A GENERAL
MEMBERSHIP MEETING DULY called for that
purpose
The secretary of the organization shall
record the minutes of the meeting including:
a. the list of all members present,
b. the votes cast, and
c. the purpose of the assessment or
fees
The record shall be attested by the
President.
Substantial
compliance
to
the
aforementioned procedure is not enough
the requirements must be strictly complied
with in view of the fact that the special
assessment will diminish the compensation
of union members. (Palacol et. al vs.
Ferrer-Calleja et. al)
CHECK-OFF - a method of deducting from an
employees pay at prescribed period, the amounts
due to the union for fees, fines or assessments.
NATURE AND PURPOSE OF CHECK-OFF:
to facilitate the collection of dues necessary
for the unions life and sustenance.
Union dues are the lifeblood of the union.
REQUIREMENTS WITH REGARD TO CHECKOFFS (Art. 241 [o]):
NO special assessment, attorneys fees,
registration fees or any other extraordinary fees
may be checked off from any amount due an
employee WITHOUT an individual written
authorization duly signed by the employee.
The authorization should specifically state the:
a. amount
b. purpose and
c. beneficiary of the deduction.

AGENCY FEE
- non-members of the bargaining agent (union) for the
enjoyment of the benefits under the CBA.
- May be deducted from the salary of employees without their
consent.

cannot be applied to them, neither may an agency

fee, as a lesser form of union security, be imposed
to them. (NABAILU vs. San Miguel Brewery Inc)


EXCEPTION TO THE REQUIREMENT OF
INDIVIDUAL WRITTEN AUTHORIZATION:
1.For mandatory activities provided under the
Code; and
2.When non-members of the union avail of the
benefits of the CBA.
- said non-members may be assessed union
dues equivalent to that paid by members

- only by a Board Resolution approved by

majority of the members in a general meeting called
for the purpose
Will the employees-members of another union
not be considered as free riders?
No since when the union bids to be the bargaining
agent it voluntarily assumes the responsibility of
representing all the employees in the appropriate
bargaining unit.

SPECIAL ASSESSMENT vs. CHECK-OFF

SPECIAL ASSESSMENTS

CHECK-OFF

a. HOW APPROVED
-by written resolution approved by majority of all the members at a
meeting duly called for that purpose

-by obtaining the individual written authorization duly signed by the

employee which must specify:
a. amount
b. purpose and
c. beneficiary of the deduction.

b. EXCEPTION TO SUCH REQUIREMENT

-no exceptionwritten resolution is mandatory at all instances.

-not necessary if:

1. For mandatory activities provided under the Code; and
2. When non-members of the union avail of the benefits of the CBA.
Said non-members may be assessed union dues equivalent to that
paid by members only by a Board Resolution approved by majority
of the members in a general meeting called for the purpose.

CHAPTER III

PERSONS/EMPLOYEES ELIGIBLE TO JOIN A

LABOR
ORGANIZATION
FOR
MUTUAL AID AND PROTECTION
(AIRSIW):

RIGHTS OF LEGITIMATE LABOR

ORGANIZATIONS

ART. 242. RIGHTS OF LEGITIMATE LABOR

ORGANIZATIONS
RIGHTS
OF
A
LEGITIMATE
ORGANIZATION [USERFOE]:

LABOR

1.Undertake activities for benefit of members

2.Sue and be sued
3.Exclusive representative of all employees
4.Represent union members
5.Furnished by employers of audited financial
statements
6.Own properties
7.Exempted from taxes

TITLE V
COVERAGE
ART. 243. COVERAGE AND EMPLOYEES
RIGHT TO SELFORGANIZATION
PERSONS/EMPLOYEES ELIGIBLE TO JOIN A
LABOR
ORGANIZATION
FOR
PURPOSES
OF
COLLECTIVE
BARGAINING:
1. All persons employed in commercial, industrial
and agricultural (CIA) enterprises, and
2. In religious, charitable, medical or educational
(RCME) institutions whether operating for
profit or not

1. Ambulant,
2. Intermittent,
3. Rural,
4. Self-employed people
5. Itinerant workers and
6. Workers without any definite employers,
PERSONS/EMPLOYEES WHO ARE NOT
GRANTED
THE
RIGHT
TO
SELFORGANIZATION: (HEMACEN)
1. High-level government employees (E.O. 180
Sec. 3)
2. Employees of international organizations with
immunities (ICMC vs. Calleja)
3. Managerial employees
whose functions are normally considered
as policy-making or managerial
whose duties are of a highly confidential or
highly technical in nature (212 LC)
4. Members of the Armed Forces of the
Philippines, including police officers, policemen,
firemen and jail guards (E.O. 180 Sec. 4);
5. Confidential employees (Metrolab vs. Confesor)
6. Employees of cooperatives who are members
(Benguet Elec. Coop. vs Calleja)
7. Non-Employees (Rosario Bros. vs Ople)
Foreigners validly working in the Philippines
[with permit from DOLE] can form labor
organizations, provided the same right to form, join
or assist in the formation of labor unions is also
given to Filipinos in their country of origin. This
embodies the principle of reciprocity.
MAY SECURITY GUARDS FORM A LABOR
ORGANIZATION?
YES. Under RA 6715, they may now freely join a
labor organization of the rank-and-file or that of the
supervisory union, depending on their rank.
(Meralco vs. Secretary of Labor)

EXTENT OF THE
ORGANIZATION

RIGHT

TO

SELF-

a. To form, join and assist labor organizations

for the purpose of collective bargaining

through representatives
choosing and

of

their

own

b. To engage in lawful concerted activities for

the same purpose- for their mutual aid and
protection.

ART. 244. RIGHTS OF EMPLOYEES IN THE PUBLIC SERVICE

GOVERNMENT OWNED OR
GOVERNMENT OWNED OR CONTROLLED
CONTROLLED CORPORATIONS WITH A
CORPORATIONS WITHOUT CHARTER
CHARTER
a. LAW
- Employees cannot stage strikes since they are
governed by the Civil Service Law. They are
enjoined by Civil Service Memorandum Circular
No. 6, under pain of administrative sanctions from
staging strikes, demonstrations, mass leaves,
walkouts and other concerted activities.
b. BARGAINING RIGHTS
- Corporations with original charters cannot
bargain with the government concerning the
terms and conditions of their employment.
However, they can negotiate with the
government on those terms and conditions of
employment which are not fixed by law. Thus,
they have limited bargaining rights.
c. PURPOSE OF ORGANIZATION
- Can only form, join or assist labor organization for
purposes not contrary to law.

- The GOCC is
created under Corporation Code, then
employees are covered by the Labor Code.
Therefore the
employees have the same rights as those as employees of
private corporations, one of which is the right to strike.

- The GOCC is created under Corporation Code, being

governed by the Labor Code, they can bargain with the
government concerning the terms and conditions of their
employment.
Thus, they have unlimited bargaining
rights.

- Can form, join or assist labor organization for purposes of

CBA, etc.

THE FOLLOWING ARE CONSIDERED

NEGOTIABLE IN GOCC WITH ORIGINAL
CHARTER:
schedule of vacation and other leaves
work assignment of pregnant women
personnel growth and development
communication system lateral and vertical
provision for protection and safely
provision for facilities for handicapped
personnel
7.
provision for first-aid medical services for
married women
8.
annual medical/physical examination
9.
recreational, social, athletic and cultural
activities and facilities (Rules implementing WO
180)

b. promotion
c. assignments/details
d. reclassification/upgrading of position
e. revision of compensation structure
f. penalties imposed as a result of
disciplinary actions
g. selection of personnel to attend seminar,
trainings, study grants
h. distribution of work load
i. external communication linkages

1.
2.
3.
4.
5.
6.

THE FOLLOWING ARE CONSIDERED NOT

NEGOTIABLE:
1. Those which require appropriation of funds,
such as:
a. increase in salary emoluments and
other allowance not presently provided
for by law
b. facilities requiring capital outlays
c. car plan
d. provident fund
e. special hospitalization, medical and
dental services
f. rice/sugar/other subsidies
g. travel expenses
h. increase in retirement benefits
2. Those that involve the exercise of management
prerogatives, such as:
a. appointments

Government employees and employees of

government-owned
and
controlled
corporations with original charters may
bargain, however, such bargaining power
is limited.

NOTE: The Public Sector Labor Management

Council (PSLMC), created by E.O. 180 has
jurisdiction to hear charges of ULP filed by
government employees against their employer.
REASONS WHY EMPLOYEES IN GOCCs
INCORPORATED UNDER THE CORPORATION
CODE ARE ALLOWED TO ORGANIZE:
1. they are not involved in public service
2. terms of employment are not fixed by law
3. they are governed by the provisions of the
Labor Code not by the Civil Service Law
ART. 245. INELIGIBILITY OF MANAGERIAL
EMPLOYEES
TO
JOIN
ANY
LABOR
ORGANIZATION; RIGHT OF SUPERVISORY
EMPLOYEES.
MANAGERIAL EMPLOYEE - one who is vested
with powers or prerogatives to lay down and

execute management policies and /or to hire,

transfer, suspend, lay-off, recall, discharge, assign
or discipline employees.
MANAGERIAL EE UNDER LS AND LR
Managerial Employees under Labor Standards
a. POWERS/DUTIES
- primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof
b. EXTENT
- includes the officers and members of the managerial
staff
c. PURPOSE OF DEFINITION
- to determine w/n certain employees are covered by
Book III of the LC on Conditions of Employment.

Reason for ineligibility in the collective

bargaining process, managerial employees are
supposed to be on the side of the employer to act
as its representatives, and to see to it that its
interests are well protected. The employer is not
assured of such protection if these employees are
union members.

In the same manner, the labor union might

not be assured of their loyalty to the union
in view of the evident conflict of interest.
The union can also become companydominated with the presence of managerial
employees in Union Membership (Bulletin
Publishing Co. Inc. vs. Hon. Augusto
Sanchez).

SUPERVISORY EMPLOYEES - those who, in the

interest of the employer, effectively recommend
such managerial actions if the exercise of such
authority is not merely

routinary or clerical in nature but requires the

use of independent judgment.
MAY SUPERVISORY EMPLOYEES FORM,
ASSIST, JOIN A LABOR ORGANIZATION?
YES, on their own and NOT with the rank-and-file
employees (RA 6715).

The TEST IS:

Do they exercise
independent judgment which is not subject
to evaluation of other department
heads/other superiors? If in the affirmative,
then they may-must form a labor
organization of their own [separate from the
rank and file employees]
If their responsibilities do not inherently
require the exercise of discretion and
independent
judgment
[or
merely
routinary/clerical in nature] then they may
join the union composed of the rank and file
employees.

Managerial Employees under Labor Relations

- See definition above

- does not include the managerial staff since they are

classified as supervisory employees [who may/may not
be eligible to join a labor union with the rank and file
employees]
- to determine an employees eligibility in
joining/forming a labor union.
NOTE: It is the nature of the employees functions
and not the nomenclature or title given to his job
which determines whether he has a rank and file or
managerial status. (Engineering Equipment, Inc. vs.
NLRC)
MAY THEY AFFILIATE WITH A FEDERATION OF
LABOR ORGANZATIONS OF RANK AND FILE
EMPLOYEES?
YES. Provided that:
a. s the federation is not actively involved in
union affairs in the company; and
b. the rank and file employees are not directly
under the control of the supervisors
(Adamson vs. Adamson)
CONFIDENTIAL EMPLOYEES - by the very
nature of their functions, they assist and act in a
confidential capacity to, or, have access to
confidential matters of persons who exercise
managerial functions in the field of labor
relations. Therefore, the rationale behind the
ineligibility of managerial employees to form, assist
or join a labor union equally applies to them.
(Philips Industrial Devt Inc. Vs. NLRC)
- they are entrusted with confidence on delicate
matters, or with the custody, handling, or care and
protection of the employers property. Under the
doctrine of necessary implication, confidential
employees are similarly disqualified under Article
245. (Republic Planters Bank vs. Torres)
NOTE: The phrase in the field of labor relations is
important.
It
stresses
labor
nexus,
i.e.,
confidentiality of the position is related or linked to
labor relations matters.
Access to information which is regarded by
the employer to be confidential from the
business standpoint, such as financial
information or technical trade secrets, will
not render an employee a confidential
employee. (SMC Supervisors & Exempt
Union vs. Hon. Laguesma, et al.)
Confidentiality is not a matter of official
rank, it is a matter of job content and
authority. It is not measured by closeness
to or distance from top management, but by
the significance of the jobholders role in

the pursuit of corporate objectives and

strategies.
Every managerial position is confidential
because one does not become a manager
without having gained the confidence of the
appointing authority.
But not every
confidential employee is managerial; he
may be a supervisory or even a rank-andfile employee.

ART. 246. NON-ABRIDGEMENT OF THE

RIGHT TO SELF-ORGANIZATION
THE RIGHT TO SELF-ORGANIZATION SHALL
NOT BE ABRIDGED MEANS:
It shall be unlawful for any person to:
a. restrain,
b. coerce,
c. discriminate against, or
d. unduly interfere
- with employees and workers in their exercise of
the right to self-organization.

Any act intended to weaken or defeat the

right is regarded by law as an offense,
which is technically called unfair labor
practice.

TITLE VI
UNFAIR LABOR PRACTICES
CHAPTER I
CONCEPT

ART. 247. UNFAIR LABOR PRACTICES

NATURE OF UNFAIR LABOR PRACTICES:
1. VIOLATE THE CONSTITUTIONAL RIGHT of
workers and employees to self-organization;
2. are
INIMICAL
TO THE
LEGITIMATE
INTERESTS of both
labor and management, including their right to
bargain collectively and otherwise deal with
each
other in an atmosphere of freedom and
mutual respect
3. DISRUPT INDUSTRIAL PEACE; and
4. hinder the promotion of healthy and stable
labor-management relations and mutual respect
[LABOR-MNGT RELATIONS-UNSTABLE];
2 ELEMENTS OF UNFAIR LABOR PRACTICE:
1. employer-employee relationship between
the offender and the offended
2. act done is expressly defined in the Code as
an act of unfair labor practice

NOTE: Prohibited acts are all related to the

workers' self-organizational right and the the
observance of a CBA, except Art. 248 (f) dismissing
or prejudicing an employee for giving testimony
under the Code.
ULP has a technical meaning.
It refers to acts opposed to workers' right to
organize. Without this, the act, no matter how
unfair, is not ULP. It commonly connotes antiunionism.

2 ASPECTS OF UNFAIR LABOR PRACTICE:

CIVIL CASE
A. PERSONS LIABLE
1.
2.

Officers and agents of employer or

Labor organization, officers and agents

B. JURISDICTION

CRIMINAL CASE
1. Agents and officers who participated or authorized or
ratified the act.
2. Agents, representatives, members of the government
board, including ordinary members
-MTC/RTC as the case may be.

-Labor Arbiters of the NLRC

C. QUANTUM OF PROOF NEEDED
- substantial evidence

D. PRESCRIPTIVE PD.
- one year from the accrual of the ULP act.

-beyond reasonable doubt [subject to prosecution and

punishment]
- one year from the accrual of the ULP act, however it will be
suspended once the administrative case has been filed and
would only continue running once the administrative case
has attained finality.
Final judgment in the administrative proceeding finding that
ULP has been committed is a prerequisite in filing a criminal
case for ULP
NOTE: Final judgment in the administrative proceedings
shall not be binding in the criminal case nor shall be
considered as an evidence of guilt but merely as a proof of
compliance of the requirements prescribed by the Code.

CHAPTER II
UNFAIR LABOR PRACTICES
OF EMPLOYERS

ART 248. ULP THAT MAY BE COMMITTED BY

AN EMPLOYER (1-10)
1. To INTERFERE WITH, RESTRAIN OR COERCE
EMPLOYEES
- in the exercise of their right to selforganization;

4.
INTERFERENCE
Examples:
- outright and unconcealed intimidation
- interrogation
1. employer must communicate to the
employee the purpose of questioning
2. assure him that no reprisal would take place
3. obtain employee participation voluntarily
4. must be free from employer hostility to union
organization
5. must not be coercive in nature
-intimidating expressions of opinion by employer
TEST OF INTERFERENCE OR COERCION whether the employer has engaged in conduct
which it may reasonably be said tends to interfere
with the free exercise of the employees' right and it
is not necessary that there be direct evidence that
any employee was in fact intimidated or coerced by
the statements of threats or the employer if there is
a reasonable interference that the anti-union
conduct of the employer does have an adverse
effect of self-organization and collective bargaining.
2.

To require as a condition for employment

that a person or an employee
- shall not join a labor organization or
- shall withdraw from one to which he
belongs;

YELLOW DOG CONTRACT - A promise exacted

from workers as a condition of employment that
they are not to belong to, or attempt to foster, a
union during their period of employment. It is null
and void because:
- It is contrary to public policy for it is
tantamount to involuntary servitude.
- It is entered into without consideration for
employees in waiving their right to selforganization
- Employees are coerced to sign contracts
disadvantageous to their family.
Does Art. 248 (3) mean that an employer cannot
contract out work?
NO. Contracting out services is not ULP per se. It is
ULP only when the following conditions exist:
1. the service contracted- out are being
performed by union members; and
2. such contracting-out interferes with,
restrains, or coerce employees in the
exercise of their right to selforganization.
HOWEVER, when the contracting-out is being done
to minimize expenses, then it is a valid exercise of
management prerogative.
3.

To CONTRACT OUT SERVICES OR

FUNCTIONS BEING PERFORMED BY
UNION MEMBERS
- when such will interfere with, restrain or
coerce employees in the
- exercise of their right to self-organization;

To INITIATE, DOMINATE, ASSIST

OR
OTHERWISE INTERFERE
- with the formation or administration of any
labor organization,
- including the giving of financial or other
support to it or its organizers or officers;

5. To DISCRIMINATE IN REGARD TO WAGES,

hours of work, and other
terms
and
conditions of employment in order to encourage
or discourage
membership in any labor
organization.
TEST OF DISCRIMINATION- whenever benefits or
privileges given to one is not given to the other
under similar or identical conditions when directed
to encourage or discourage union membership (see
more discussions below)
6. To DISMISS, DISCHARGE OR OTHERWISE
PREJUDICE OR DISCRIMINATE against an
employee
- for having given or being about to give
testimony under this Code;
DISCRIMINATION BECAUSE OF TESTIMONY
TEST: the subject matter of the testimony
can be anything under the Code
what is ULP is the employer's retaliatory act
regardless of the subject of employee's
complaint or testimony
7. To violate the duty to bargain
prescribed by this Code;

collectively as

8. To pay negotiation or attorneys fees to the union

or its officers or agents
- as part of the settlement of any issue in

collective bargaining
disputes; or

or

any

other

9.

To VIOLATE A COLLECTIVE BARGAINING

AGREEMENT.
- the violation must be gross and with respect
to the economic provision of the CBA
All the aforementioned acts (Nos. 1-9) must
have a relation to the employees exercise of
their to self-organization. Anti-union or antiorganization motive must be proved because it
is a definitional element of ULP.
RUNAWAY SHOP - an industrial plant moved by
its owners from one location to another to escape
union labor regulations or state laws or to
discriminate against employees at the old plant
because of their union activities.

COMPANY UNIONISM
1. Initiation of the company union idea by:
a. outright formation by employer or his
representatives
b. employee formation on outright
demand or influence by employer
c. managerially motivated formation by
employees
2. financial support to the union by:
a. employer defrays union expenses
b. pays attorney's fees to the attorney
who drafted the Constitution or by
laws of the union

3.

employer encouragement and assistance

by
immediate
granting
of
exclusive
recognition as bargaining agent without
determining whether the union represents
majority of the employees
4.supervisory
assistance
by
soliciting
membership, permitting union activities during
work time or coercing employees to join the
union by threats of dismissal or demotion.
DISCRIMINATION FOR OR AGAINST UNION
MEMBERSHIP
TEST OF DISCRIMINATION: That the discharge of
an employee was motivated by his union activity.
Such inference must be based on evidence, direct
or circumstantial, not upon mere suspicion.
CONSTRUCTIVE DISCHARGE - ULP where
employer prohibits employees from exercising their
rights under the Code, on pain of discharge, and
the employee quits as a result of the prohibition
THREE COMPONENTS
(DISCRIMINATION):

OF

ART.

248(5)

1.It prohibits discrimination in terms and

conditions of employment in order to
encourage or discourage membership in the
union;
2.It gives validity to union security
agreements;
3.It allows an agency shop arrangement
whereby agency fees may be collected from
non-union members.
SECURITY ARRANGEMENTS - stipulations in
the CBA requiring membership in the contracting
union as a condition for employment or retention of
employment in the company.

PRINCIPLES
OF
UNION
SECURITY
ARRANGEMENTS:
1. Protection - To shield union members from
whimsical and abusive exercise of management
prerogatives.
2. Benefits - An additional membership will insure
additional source of income to the union in the
form of union dues and special assessment.
3. Self-preservation- It strengthens the union
through selective acceptance of new members on
the basis of commitment and loyalty.
DIFFERENT KINDS OF UNION SECURITY
ARRANGEMENTS:
1. CLOSED-SHOP AGREEMENT - the employer
undertakes not to employ any individual who is not
a member of the contracting union and the said
individual once employed must, for the duration of
the agreement, remain a member of the union in
good standing as a condition for continued
employment.
EXCEPTIONS:
a. employees belonging to any religious sect
which prohibit affiliation of their members with
any labor organization are not covered by such
agreementThe free exercise of religious

belief is superior to contract rights (Victoriano

vs. Elizalde Rope Workers).
b. members of the rival union are not covered by
such arrangement.
2. UNION
SHOP AGREEMENT -stipulation
whereby any person can be employed by the
employer but once employed such employee must,
within a specific period, become a member of the
contracting union and remain as such in good
standing for continued employment for the duration
of the CBA [take note of the exceptions in the
preceding number.]
3. MAINTENANCE OF MEMBERSHIP CLAUSE the agreement DOES NOT require non-members to
join the contracting union BUT provides that those
who are members thereof at the time of the
execution of the CBA and those who may thereafter
on their own volition become members must for the
duration of the agreement maintain their
membership in good standing as a condition for
continued employment in the company for the
duration of the CBA.
4. PREFERENTIAL SHOP AGREEMENT an
agreement whereby the employer merely agrees to
give preference to the members of the bargaining
union in hiring or filing vacancies and retention in
case of lay-off. The employer has the right to hire
from the open market if union members are not
available.
5.
AGENCY SHOP AGREEMENT - an
agreement whereby employees must either join the
union or pay to the union as exclusive bargaining
agent a sum equal to that paid by the members.
This is directed against FREE
RIDER employees who benefit from
union activities without contributing support
to the union, to prevent a situation of nonunion members enriching themselves at the
expense of union members.
Employee members of another/rival
union are not considered free riders since
when the union [agent] bids to be the
bargaining agent, it voluntarily assumed the
responsibility of representing all the
employees in the appropriate bargaining
unit.
REQUIREMENTS FOR A VALID TERMINATION
BY THE EMPLOYER OF THE SERVICES OF AN
EMPLOYEE PURSUANT TO A UNION OR
CLOSED-SHOP AGREEMENT:
1. The agreement must be expressed in a CLEAR
AND UNEQUIVOCAL way so as not to leave
room for interpretation because it is a limitation
to the exercise of the right to self-organization.
Any doubt must be resolved against the
existence of a closed-shop agreement.
2. The agreement can only have PROSPECTIVE
APPLICATION and cannot be applied
retroactively.
3. It can only be exercised by giving the employee
his right to DUE PROCESS.
- The employer has the right to satisfy
himself that there are sufficient bases for
the request of the union.

The termination of the services of the

employee is not automatic upon the request
of the union.
4. It cannot be applied to employees who are
already MEMBERS OF THE RIVAL UNION or
to the employees based on their religious
beliefs.

COLLECTIVE BARGAINING AND

ADMINISTRATION OF AGREEMENTS

ART. 250. PROCEDURE IN COLLECTIVE

BARGAINING

UNFAIR LABOR PRACTICES OF LABOR

ORGANIZATIONS

COLLECTIVE BARGAINING negotiation by an

organization or group of workmen, in behalf of
its members, with the employer, concerning
wages, hours of work and other terms and
conditions of employment and the settlement
of disputes by negotiation between an
employer and the representative of his
employees.
Negotiation towards a collective agreement.

ART. 249. UNFAIR LABOR PRACTICES OF

LABOR ORGANIZATIONS

The mechanics of collective bargaining is set in

motion only when the following JURISDICTIONAL
PRECONDITIONS are present:

CHAPTER III

a. To RESTRAIN OR COERCE employees in the

exercise of their right to self-organization.
However, a labor organization shall have the
right to prescribe its own rules with respect to
the acquisition or retention of membership;
b. To CAUSE OR ATTEMPT TO CAUSE AN
EMPLOYER TO DISCRIMINATE AGAINST AN
EMPLOYEE, including discrimination
c. To VIOLATE THE DULY OR REFUSE TO
BARGAIN COLLECTIVELY with the employer
provided that it is the representative of the
employees;
d. TO CAUSE OR ATTEMPT TO CAUSE AN
EMPLOYER TO PAY OR DELIVER OR
AGREE TO PAY OR DELIVER ANY MONEY or
other things of value, in the nature of an
exaction, for services which are not performed
or not to be performed, including the demand
for a fee for union negotiations;
e. To ASK FOR OR ACCEPT NEGOTIATION OR
ATTORNEYS FEES FROM EMPLOYERS as
part of the settlement of any issue in collective
bargaining or any other dispute; or
f. To VIOLATE A COLLECTIVE BARGAINING
AGREEMENT.
- The violation must be gross and must be
with respect to economic provisions of the
CBA.
PERSONS CIVILLY LIABLE FOR ULP:
1. Officers and agents of employer
2. Labor organization, officers and agents
3.
Agents and officers who participated or
authorized or ratified the act.
FEATHERBEDDING - refers to the practice of the
union or its agents in causing or attempting to
cause an employer to pay or deliver or agree to pay
or deliver money or other things of value, in the
nature of exaction, for services which are not
performed or not to be performed, as when a union
demands that the employer maintain personnel in
excess of the latters requirements.

It is not featherbedding if the work is

performed no matter how unnecessary or
useless it may be.

TITLE VII

1. POSSESSION OF THE STATUS OF

MAJORITY representation by the employees
representative in accordance with any of the
means of selection or designation provided for
by the Labor Code;
2. proof of MAJORITY REPRESENTATION;
and
3. a DEMAND TO BARGAIN under Article 250
(a) of the Labor Code. (Kiok Loy vs. NLRC)
COLLECTIVE
BARGAINING
AGREEMENT
(CBA) - a negotiated contract between a legitimate
labor organization and the employer concerning:
a. wages,
b. hours of work, and
c. all other terms and conditions of
employment in a bargaining unit,
including mandatory provisions for
grievances and arbitration machineries.
PROCEDURE IN COLLECTIVE BARGAINING
1.

Written NOTICE with statement of

proposals
2.
REPLY by the other party within 10
calendar days
3.
In case of differences, either party may
REQUEST FOR A CONFERENCE which must
be held within 10 days from receipt of request.
4.
If not settled NCMB MAY INTERVENE
AND ENCOURAGE the parties to submit the
dispute to a voluntary arbitrator
5.
If not resolved, the parties may go to where
they want AND RESORT TO ANY OTHER
LAWFUL MEANS [either to settle the dispute or
submit it to a voluntary arbitrator].
During the conciliation proceeding in
the Board, the parties are prohibited from
doing any act which may disrupt or impede
the early settlement of the disputes (250[d]
LC).
8 STAGES IN THE NEGOTIATION FOR A
COLLECTIVE BARGAINING AGREEMENT:
1. PRELIMINARY process - written notice for
negotiation which must be clear and
unequivocal
2. NEGOTIATION Process
3. EXECUTION Process signing of the
agreement

PUBLICATION for at least 5 days before

ratification
RATIFICATION by the majority of all the
workers in the bargaining unit represented in
the negotiation (not necessary in case of
arbitral award)
REGISTRATION Process
Requisites for registration:
a. mandatory provisions
b. payment of P1, 000
c. 5 copies of CBA
d. proof of ratification
ADMINISTRATION Process the CBA shall
be jointly administered by the management
and the bargaining agent for a period of 5
years
INTERPRETATION AND APPLICATION
Process

4.
5.

6.

7.

8.

MANDATORY PROVISIONS OF THE CBA:

1. wages
2. hours of work
3. grievance machinery
4. voluntary arbitration
5. family planning
6. rates of pay
7. mutual observance clause

In addition, the Bureau requires that the

CBA should include a clear statement of the
terms of the CBA.

ART. 252. MEANING OF DUTY TO BARGAIN

COLLECTIVELY

DUTY TO BARGAIN COLLECTIVELY - the

performance of a mutual obligation:
a.

to MEET AND CONVENE promptly and

expeditiously in good faith for the purpose of
negotiating an agreement with respect to
wages, hours of work and all other terms and
conditions of employment including proposals
for adjusting any grievances or questions
arising under such agreement and
b. EXECUTING A CONTRACT incorporating
such agreements if requested by either party.
LIMITATIONS:
1. the duty to bargain collectively does not
compel any party to:
a. agree to a proposal; or
b. make a concession.
2. the parties cannot stipulate terms and
conditions of employment which are below the
minimum requirements prescribed by law
(Meaning of duty to bargain when there exists a
CBA, see discussion under Art. 253)
Collective bargaining does not end with the
execution of the agreement.
It is a
continuous process. The duty to bargain
imposes on the parties during the term of
their agreement the mutual obligation to
meet and confer promptly and expeditiously
and in good faith for the purpose of
adjusting any grievances or question
arising under such agreement. (Republic
Savings Bank vs. CA)

FOUR (4) FORMS OF ULP IN BARGAINING:

a. failure or refusal to meet and convene
b.evading the mandatory subjects of bargaining
c. bad faith in bargaining, including failure or
refusal to executive the CBA, if requested
d. gross violation of the CBA
Do economic exigencies justify refusal to
bargain?
An employer has been held not guilty of refusal to
bargain by adamantly rejecting the union's
economic demands where he is operating at a loss,
on a low profit margin, or in a depressed industry,
as long as he continues to negotiate. But financial
hardship constitutes no excuse for refusing to
bargain collectively.
ACTS NOT DEEMED REFUSAL TO BARGAIN:
1. adoption of an adamant bargaining position in
good faith
2. refusal to bargain over demands for commission
of ULP
3. refusal to bargain during period of illegal strike
4. there is no request for bargaining
5. union seeks recognition for an inappropriately
large unit
6. union seeks to represent some persons who are
excluded from the Code
7. the rank-and-file unit includes supervisors or
inappropriate otherwise
8. the demand for recognition and bargaining is
made within the year following a certification
election in which the clear choice was no union and
no ad interim significant change has taken place in
the unit
9. the union makes unlawful bargaining demands
BARGAINING TO THE POINT OF DEADLOCK
OR IMPASSE:
1. over a mandatory subject - party may insist on
bargaining and will not be construed as bargaining
in bad faith
REASON: duty to bargain requires meeting and
convening on the terms and conditions of
employment
but does not require
assent to the other party's proposals.
2. over a non-mandatory subject - party may not
insist on bargaining to the point of impasse,
otherwise, he will be construed as bargaining in bad
faith.
EXAMPLE: The employer's insistence that the
union should change its negotiator before
bargaining can proceed to the employees' wage
and benefits is an instance of bad-faith bargaining
because the composition of the negotiating panel is
not a mandatory subject of bargaining.
Hence, if Party A insists on first settling a nonmandatory subject before tackling a mandatory
subject, Party B may complain that Party A's
posture is just an excuse to avoid bargaining on the
mandatory, essential subjects of bargaining; thus,
Party B can charge that Party A is bargaining in bad
faith or is evading bargaining on terms and
conditions of employment - in short, Party A is
committing ULP.

NOTE: What the rule forbids is the posture of

making settlement of a non-mandatory subject a
pre-condition to the discussion or settlement of a
mandatory subject.

ART.
253.
DUTY
TO
BARGAIN
COLLECTIVELY WHEN THERE EXISTS A
COLLECTIVE BARGAINING AGREEMENT

GENERAL RULE: When there is an existing CBA,

the duty to bargain collectively shall also
mean that neither party shall TERMINATE
nor MODIFY such agreement during its
lifetime. It is the duty of both parties to:
a. keep the status quo and
b. to continue in the full force and effect the
terms and conditions of the existing CBA
EXCEPTION: during the 60-day period prior to its
expiration, upon service of a written notice to
terminate or modify the same, a party may choose
to terminate or modify the non-representational
aspect of the CBA.

DUTY TO BARGAIN COLLECTIVELY UNDER 253 AND 253-A/256

253

253-A/256

A.FREEDOM PERIOD
-the notice or proposal period comes towards the end
of the two/three year term of non-representation
provisions of the CBA

- comes on the fifth (5th) year of the CBA

B. WHAT MAY BE CHANGED DURING THE 60-DAY

FREEDOM PERIOD
-re-negotiable provisions of the CBA particularly the
non-representation aspect

representation aspectit may be resolved by

holding a consent or certification election

AUTOMATIC RENEWAL CLAUSE Art. 253

provides that the CBA shall remain effective and
enforceable even after the expiration of the period
fixed by the parties as long as no new agreement
is reached by them.

WHAT MAY BE DONE DURING THE 60-DAY

FREEDOM PERIOD:
a. A labor union may DISAFFILIATE from the
mother union to form a local or independent
union only during the 60-day freedom period
immediately preceding the expiration of the
CBA. [take note of the limitation-see
discussions on registration of labor unions]
b. either party can serve a written notice to
TERMINATE OR MODIFY the agreement at
least 60 days prior to its expiration period [on
re-negotiable/non-representation aspect of the
CBAsee discussion on 253]
c. a petition for CERTIFICATION ELECTION
may be filed

ART. 253A. TERMS OF A COLLECTIVE

BARGAINING AGREEMENT
DURATION OF THE CBA:

- Any agreement on such other provisions of the

CBA made within 6 months after the date of expiry
of the CBA is subject to AUTOMATIC
RETROACTION to the day immediately following
such date of expiry.
b. Those not made within 6 months the parties
may agree to the DATE OF RETROACTION.
This rule applies only if there is an
EXISTING AGREEMENT.
If THERE IS NO
EXISTING AGREEMENT, there is no retroactive
effect because the date agreed upon shall be the
start of the period of agreement.
NOTE: Article 253-A on retroaction does not apply if
the provisions were imposed by the Secretary of
Labor by virtue of arbitration. It applies only if the
agreement was voluntarily made by the parties.
ART. 254. NO INJUNCTION RULE
No temporary or permanent injunction or
restraining order in any case involving or growing
out of labor disputes shall be issued by any court
or other entity, except as otherwise provided in
Articles 218 (Powers of the Commission/NLRC) and
264 (Prohibited Activities) of this Code.

1. With respect to the representation aspect,

the same lasts for 5 years

REASON: injunction contradicts the constitutional

preference for voluntary modes of dispute
settlement

2. With respect to other provisions [economic

provisions], the same may last for a maximum
period of 3 years after the execution of the CBA

RULE ON RETROACTIVE
AGREEMENT PROVISIONS:

EFFECTS

OF

a. Those made within 6 months after the date of

expiry of the CBA

In cases of strikes/picketing, third parties

or innocent bystanders may secure a court
(regular court) injunction to protect their
rights. (PAFLU vs. CLORIBEL)

ART. 255. EXCLUSIVE

REPRESENTATION
AND

BARGAINING
WORKERS

PARTICIPATION IN POLICY AND DECISIONMAKING

WHAT IS THE MEANING OR EXTENT OF THE
WORKERS RIGHT TO PARTICIPATE IN POLICY
AND DECISION-MAKING PROCESSES?
Such right refers ONLY to participation in
grievance procedures and voluntary modes of
settling disputes and NOT to formulation of
corporate programs and policies.
NOTE:
An employer may solicit questions,
suggestions and complaints from employees
eventhough the employees are represented by a
union, provided:
1. the collective bargaining representative
executes an agreement waiving the right to
be present on any occasion when employee
grievances are being adjusted by the
employer and
2. employer acts strictly within the terms of
this waiver agreement.

BARGAINING UNIT- a group of employees of a

given employer, comprised of all or less that all
the entire body of the employees, which,
consistent with equity to the employer, indicate
to be best suited to serve the reciprocal rights
and duties of the parties under the collective
bargaining provision of the law.
CERTIFICATION YEAR - refers to the period
wherein collective bargaining should begin, which is
within 12 months following the determination and
certification of employees' exclusive bargaining
representative.
FOUR FACTORS IN DETERMINING
APPROPRIATE BARGAINING UNIT:

THE

1. the EXPRESS WILL OR DESIRE of the

employees (Globe Doctrine);

the desires of all the employees are

relevant to the determination of the
appropriate bargaining unit. The relevance
of the wishes of the employees concerning
their inclusion or exclusion from a proposed
bargaining unit is inherent in the basic right
to self organization

ONE-UNION, ONE-COMPANY POLICY - the

proliferation of unions in an employer unit is
discouraged as a matter of policy unless there are
compelling reasons which would deny a certain
class of employees the right to self-organization for
purposes of collective bargaining.

2. the
SUBSTANTIAL
INTEREST factor;

EXCEPTION:

3. prior collective bargaining HISTORY; and

- supervisory employees who are allowed to form

their own unions apart from the rank-and-file
employees

4. EMPLOYMENT STATUS, such as

a. temporary
b. seasonal, and
c. probationary employee

- the policy should yield to the right of employees to

form unions for purposes not contrary to law, selforganization and to enter into collective bargaining
negotiations.

THINGS TO CONSIDER IN DETERMINING THE

COMMUNITY OF INTEREST DOCTRINE:

two companies cannot be treated into a

single bargaining unit even if their businesses
are related.

subsidiaries or corporations formed out of

former divisions of a mother company following
a reorganization may constitute a separate
bargaining unit.
LABOR MANAGEMENT COUNCILS - deal with
the employer on matters affecting employees
rights, benefits and welfare.
They may be formed even if there is already a
union in the company.

AND

1. similarity in the scale

determining earnings

and

MUTUALITY

manner

of

2. similarity in employment benefits, hours of work

and other terms and conditions of employment
3. similarity in the kinds of work performed
4. similarity in the qualifications, skills and training
of the employees
5. frequency of contract or interchange among the
employees
6. common supervision and determination of
labor-relations policy
7. history of previous collective bargaining
8. desires of the affected employees

ARTS.
256-259
CERTIFICATION ELECTION

PETITION

FOR

9. extent of union organization

MODES OF CHOOSING THE EXCLUSIVE
BARGAINING UNIT:
1. SELECTION - certification election
2. DESIGNATION - voluntary recognition

A. CERTIFICATION ELECTION the process of

determining by secret ballot the sole and exclusive
bargaining agent of the employees in an

appropriate bargaining
collective bargaining

unit,

for

purposes

of

CERTIFICATION vs. CONSENT ELECTION

CERTIFICATION ELECTION

CONSENT ELECTION

A. NATURE
- separate and distinct from a consent election

- a separate and distinct process and has nothing to

do with the import and effect of a certification election

B. PURPOSE
- to determine the sole and exclusive bargaining agent
of all the employees in an appropriate bargaining unit
for the purpose of collective bargaining;

- to determine the issue of majority representation of

all the workers in the appropriate collective bargaining
unit

DIRECT CERTIFICATION - the process whereby

the Med-Arbiter directly certifies a labor
organization of an appropriate bargaining unit of a
company after a showing that such petition is
supported by at least a majority of the employees in
the bargaining unit.
IT IS NO LONGER
ALLOWED. (EO 111)

VOLUNTARY RECOGNITION the process

whereby the employer recognizes a labor
organization as the exclusive bargaining
representative of the employees in the
appropriate bargaining unit after a showing
that the labor organization is supported by at
least a majority of the employees in the
bargaining unit.

EFFECT OF VOLUNTARY RECOGNITION BY

THE EMPLOYER - through voluntary recognition by
the employer, the labor organization is recognized
by the employer as the exclusive bargaining agent
which may collectively bargain with such employer.
C.E. IN AN ORGANIZED AND AN UNORGANIZED ESTABLISHMENT
ORGANIZED

UNORGANIZED

A. WHEN MANDATORY ON THE PART OF BLR

- upon the filing of a verified petition by a legitimate labor
organization questioning the majority status of the
incumbent bargaining agent within the 60-day freedom
period before the expiration of a CBA.
- The petition must be supported by the written
consent of at least 25% of ALL THE EMPLOYEES IN
THE APPROPRIATE BARGAINING UNIT.
- the employer cannot file a petition for certification
election; only a legitimate labor organization can file
such petition.

Upon:
a. the filing of a verified petition by a legitimate labor
organization; or
b. upon the filing of a petition by the employer when
such employer is requested by the employees to bargain
collectively.

B. PERIOD FOR FILING THE PETITION

a. when there is a CBA, the labor organization can file a
petition for certification election within the 60-day freedom
period (CONTRACT-BAR RULE)
b. when there is no CBA, then the labor organization can
file a petition for certification election at any time, subject
to the Deadlock Bar Rule.

- any time, subject however to the ONE-ELECTIONPER-YEAR RULE.

REQUISITES BEFORE A LABOR UNION CAN

BE DECLARED A WINNER (DOUBLE MAJORITY
RULE):
1. Majority of the eligible voters cast their votes
AND
2. Majority of the valid votes cast is for such union.
HOW TO DETERMINE
MAJORITY RULE:

THE

DOUBLE

1. In determining the eligible votes cast [FIRST

MAJORITY], include spoiled ballots

2. In
determining
valid
votes
[SECOND
MAJORITY], eliminate spoiled ballots but
include challenged votes
RUN-OFF ELECTION:
A run-off election is proper if the following
conditions exist namely:
(a) a VALID ELECTION took place because
majority of the CBU members voted [FIRST
MAJORITY];
(b) the said election presented at least THREE
CHOICES, e.g., Union One, Union Two,
and No Union (Take Note: No Union shall
not be a choice in the run off election);

(c) NOT ONE OF THE CHOICES OBTAINED

THE
MAJORITY
(50%+1-SECOND
MAJORITY) of the valid votes cast;
(d) the TOTAL VOTES FOR THE UNIONS IS
AT LEAST 50% of the votes cast;
(e) there is NO UNRESOLVED CHALLENGED
VOTES or election protest which if
sustained can materially alter the results

Who will participate in the run off?

The unions receiving the highest and
second highest number of votes cast.

Re Run Election vs. Run off Election

RE RUN ELECTION
Held in two instances:
1. if one choice receives a plurality of vote and the
remaining choices results in a tie;
2. if all choices received the same number of votes;
In both instances, the NO UNION is also a choice

RULES WHICH PREVENT THE HOLDING OF A

CERTIFICATION ELECTION [DONC]:
1. Deadlock bar rule
2. One year bar rule
3. Negotiation bar rule
4. Contract bar rule
1. CONTRACT-BAR RULE - while a valid and
registered CBA is subsisting, the BLR is not allowed
to hold an election contesting the majority status of
the incumbent union.
REQUIREMENTS IN ORDER
CONTRACT-BAR RULE:

TO

INVOKE

1. Agreement is in WRITING AND SIGNED by all

contracting parties.
2. It
must
contain
THE
TERMS
AND
CONDITIONS of employment.
3. Covered employees in an appropriate
bargaining unit [ABU EES COVERED].
4. It is for a REASONABLE PERIOD or duration.
5. It must be RATIFIED.
6. It must be REGISTERED with the Bureau.
7. The violation of the contract bar rule or the
existence of a duly registered CBA must be
specifically IMPLEADED AS A DEFENSE.
EFFECT OF AN INVALID AND UNREGISTERED
CBA- there is no bar and therefore a certification
election may be held.
NOTE: Registration of CBA only puts into effect the
contract bar rule but the CBA itself is valid and
binding even if unregistered.
EXCEPTIONS TO THE CONTRACT-BAR RULE:
1. CBA is not registered
2. CBA deregistered
3. CBA was hastily concluded way ahead of the
freedom period
4. CBA is incomplete in itself
5. CBA does not foster industrial peace because
of schism
6. CBA was concluded in violation of an order
enjoining the parties from entering into a CBA
until the issue of representation is resolved
7. Petition is filed during the 60-day freedom
period

RUN OFF ELECTION

Conducted when none of the choices, including the
choice of No Union, receives a majority of the valid
vote cast. This presupposes no less than three
competing choices. In this situation, an election is
conducted between the union choices receiving the
largest and the second largest number of the valid
votes cast.
SUCCESSOR-IN-INTEREST DOCTRINE When
an employer with an existing CBA is succeeded by
another employer, the successor-in-interest who is
a buyer in good faith has no liability to the
employees in continuing employment and the
collective bargaining agreement because these
contracts are in personam
EXCEPT:
a.
when the successor-in-interest expressly
assumes the obligation or
b.
the sale is a device to circumvent the
obligation or
c. the sale or transfer is made in bad faith
SUBSTITUTIONARY DOCTRINE where there
occurs a shift in the employees union allegiance
after the execution of a collective bargaining
contract with the employer, the employees can
change their agent (the labor union) but the
collective bargaining contract which is still
subsisting continues to bind the employees up to its
expiration date. They may, however, bargain for the
shortening of said expiration date.

The employees cannot revoke the validly

executed collective bargaining contract with
their employer by the simple expedient of
changing their bargaining agent. The new
agent must respect the contract. (Benguet
Consolidated, Inc. vs. Employees and
Workers Union-PAFLU)
LIMITATION AS TO ITS APPLICATION it
cannot be invoked to support the contention
that a newly certified collective bargaining
agent automatically assumes all the personal
undertakings of the former agentlike the no
strike clause in the CBA executed by the latter
(Benguet Consolidated Inc. vs. BCI Employees
and Workers Union-PAFLU).

2.
DEADLOCK BAR RULE - a petition for
certification election cannot be entertained if, before
the filing of the petition for certification election, a
bargaining deadlock to which an incumbent or
certified bargaining agent is a party, had been
submitted to conciliation or arbitration or had
become the subject of a valid notice of strike or
lockout.
DEADLOCK arises when there is an impasse,
which presupposes reasonable effort at good faith

bargaining which, despite noble intentions, did not

conclude in an agreement between the parties.
INDICATIONS OF A GENUINE DEADLOCK:
1. the submission of the deadlock to a third
party conciliator or arbitrator
2. the deadlock is the subject of
a valid notice of strike or lockout
3. NEGOTIATION BAR RULE - a petition for
certification election cannot be entertained if, before
the filing of the petition for certification election, the
duly recognized or certified union has commenced
negotiations with the employer in accordance with
Art. 250 of the Labor Code.
4. CERTIFICATION
certification election
from the date of a
run-off election or
recognition

agreement can be registered in the absence of

such procedure.
It is a part of the continuous process of
collective bargaining intended to promote a friendly
dialogue between labor and management as a
means of maintaining industrial peace.
VOLUNTARY ARBITRATION - contractual
proceedings where parties to a dispute select a
judge of their own choice and by consent submit
their controversy to him for determination.
All grievances not settled within 7 days
from the date of its submission to the grievance
machinery shall automatically be referred voluntary
arbitration prescribed in the CBA.

YEAR RULE no petition for

may be filed within one year
valid certification, consent, or
from the date of voluntary

EXAMPLES OF BAD FAITH BARGAINING:

1. Surface Bargaining occurs when employer
constantly changes its positions over the
agreement.
2. Boulwarism occurs:
a. when the employer directly bargains with
the employee disregarding the union.

ARBITRATION MAY BE INITIATED BY:

1.

The aim was to deal with the Union through

the employees, rather than with the
employees through the union.
b. Employer submits its proposals and adopts a
take it or leave it stand. This is not negotiation
because the take it or leave it stand implies
threat.
3.

Side Bar Technique

TITLE VII- A
(as incorporated by RA 6715)
GRIEVANCE MACHINERY AND VOLUNTARY
ARBITRATION

2.

JURISDICTION
ARBITRATORS:

OF

1. EXCLUSIVE
ORIGINAL
CONFERRED BY LAW

VOLUNTARY
JURISDICTION

a)All
grievances
arising
from
the
interpretation or implementation of the CBA
b)Those arising from the interpretation or
enforcement of company personnel polices
c)Hear and decide wage distortion issues
arising from the application of any wage
orders in organized establishments.
d)Unresolved grievances arising from the
interpretation and implementation of the
productivity incentive programs under RA
6071

GRIEVANCE MACHINERY - a mechanism for the

adjustment
of
controversies
or
disputes arising from the interpretation
or implementation of the CBA and the
interpretation or enforcement of
company personnel policies

NATURE OF GRIEVANCE PROCEDURE - It is a

must provision in any CBA and no collective

SUBMISSION AGREEMENT where the

parties define the disputes to be resolved;
or
DEMAND OR NOTICE invoking a
collective agreement arbitration clause.

ART 261. JURISDICTION OF VOLUNTARY

ARBITRATORS OR PANEL OF VOLUNTARY
ARBITRATORS

ART. 260. GRIEVANCE MACHINERY AND

VOLUNTARY ARBITRATION

GRIEVANCE - arises when a dispute or

controversy arises over the implementation or
interpretation of a CBA or from the implementation
or enforcement of company personnel policies, and
either the union or the employer invokes the
grievance machinery provision for the adjustment or
resolution of such dispute or controversy.

Although the provision mentions

parties to a collective bargaining
agreement, it does not mean that a
grievance machinery cannot be set up
in a CBA-less enterprise. In any work
place where grievance can arise, a
grievance machinery (regardless of
name) can be established.
In a unionized company, Art. 255 allows
an employee, union member or not, to
raise a grievance directly to the
employer.

It is the labor arbiter and not the grievance

machinery which has jurisdiction over
dismissals pursuant to the union security
clause.
violations of CBA, except those which are
gross in character, shall no longer be treated as
ULP and shall be resolved as grievances

GROSS VIOLATION flagrant and/or malicious

refusal to comply with the economic provisions of
the CBA.

2. JURISDICTION BY AGREEMENT OF THE

PARTIES (Art. 262)
-all other disputes including ULP and
bargaining deadlocks
The disputes the parties may submit to a
Voluntary Arbitrator can include any or all
the disputes mentioned in Art. 217 which
otherwise fall under the exclusive
jurisdiction of a labor arbiter.
Voluntary arbitration may be viewed as a
master procedure to prevent or resolve
labor disputes

1.
2.
3.
4.
5.

GROUNDS FOR JUDICIAL REVIEW OF

DECISIONS
OF
VOLUNTARY
ARBITRATORS:
Lack of jurisdiction
Grave abuse of discretion
Violation of due process
Denial of substantial justice
Erroneous interpretation of the law
A voluntary arbitrator is a quasi-judicial
instrumentality (Sec 9 BP129 as amended by
RA 7902); hence, a petition for certiorari under
Rule 65 of the Rules of Court will lie where a
grave abuse of discretion or an act without or in
excess of jurisdiction of the voluntary arbitrator
is shown, which may be filed with the Court of
Appeals.

SOME EXAMPLES OF STRIKES AND THEIR

VALIDITY

STRIKES AND LOCKOUTS AND FOREIGN

INVOLVEMENT IN TRADE UNION
ACTIVITIES
CHAPTER I
STRIKES AND LOCKOUTS

B. WILDCAT STRIKE- is a work stoppage that

violates the labor contract and is not authorized
by the union. ILLEGAL- It is not valid because
it fails to comply with certain requirements of
the law, to wit: notice of strike, vote, and report
on strike vote.

ART. 263.

STRIKES, PICKETING AND

LOCKOUTS

industrial or labor dispute.

IMPORTANCE: it is the most effective weapon of
labor in protecting the rights of employees to
improve the terms and conditions of their
employment.

STRIKE AREA the establishment, warehouse,

depots, plants or offices, including the sites or
premises used as runaway shops of the employer
struck against, as well as the immediate vicinity
actually used by picketing strikers in moving to an
fro before all points of entrance to and exit from
said establishment

TITLE VIII

STRIKE - Any temporary stoppage of work by the

concerted action of employees as a result of an

STRIKE-BREAKER - any person who obstructs,

impedes or interferes by force, violence, coercion,
threats or intimidation with any peaceful picketing
by employees during any labor controversy
affecting wages, hour or conditions of work or in the
exercise of the right to self organization or collective
bargaining

SIT-DOWN STRIKE - is
characterized by a temporary work stoppage of
workers who thereupon seize or occupy
property of the employer or refuse to vacate the
premises of the employer. ILLEGAL- amounts
to a criminal act because the employees
trespass on the premises of the employer.

PICKETING - the act marching to and fro the

employers premises, usually accompanied by the
display of placards and other signs making known
the facts involved in a labor dispute. This is an
exercise of ones freedom of speech.

Only legitimate labor organizations are

given the right to strike.
Ununionized workers may hold a protest
action but not a strike
Not all concerted activities are strikes; they
may only be protest actions. And they do not
necessarily cause work stoppage by the
protesters. A strike, in contrast, is always a
group action accompanied by work stoppage.

LOCKOUT - means the temporary refusal of an

employer to furnish work as a result of an industrial
or labor dispute.

A.

C. SYMPHATETIC STRIKES- are work

stoppages of workers of one company to make
common cause with other strikers of other
companies, without demands or grievances of
their own against the employer. ILLEGAL because there is no labor dispute between the
workers who are joining the strikers and the
latters employer.
D. SECONDARY STRIKES- are work
stoppages of workers of one company to exert
pressure on their employer so that the latter will
in turn bring pressure upon the employer of
another company with whom another union has
a labor dispute. ILLEGAL- because there is no
labor dispute involved.
IS A WELGA NG BAYAN LEGAL?
NO. A welga ng bayan is illegal because it is a
political strike and therefore there is neither a
bargaining deadlock nor any ULP. It is a political
rally.
GROUNDS FOR THE DECLARATION OF
STRIKE:
1.deadlock in collective bargaining (ECONOMIC);
and/or
2.unfair labor practices (POLITICAL)

ECONOMIC STRIKE

ULP STRIKE
[POLITICAL]

A. NATURE
- A voluntary strike because the employee
will declare a strike to compel management
to grant its demands.

- An involuntary strike; the labor organization is forced to

go on strike because of the ULP committed against them
by the employer. It is an act of self-defense since the
employees are being pushed to the wall and their only
remedy is to stage a strike.

B. INITIATED BY:
- The collective bargaining agent of the
appropriate bargaining unit can declare an
economic strike.

-either
a. Collective bargaining agent or
b. the legitimate labor organization in behalf of its
members

C. COOLING OFF PERIOD

-30 days from the filing of the notice of strike.

-15 days from the filing of the notice of strike.

D. EXCEPTION TO THE COOLING-OFF

PERIOD
- No exceptionmandatory

E. STRIKE DURATION PAY IN CASE OF A

LEGAL STRIKE
- not entitled to said pay based on the principle
that a fair days wage accrues only for a fair days
labor

- the cooling off period may be dispensed with, and the

union may take immediate action in case of dismissal from
employment of their officers duly elected in accordance
with the unions Constitution and By-laws, which may
constitute union busting where the existence of the
union is threatened
BUT it must still observe the mandatory 7-day period
before it can stage a valid strike.
- may be awarded the said paid in the discretion of the
authority deciding the case.

TESTS IN DETERMINING THE LEGALITY OF A

STRIKE:

PURPOSE OF A STRIKE VOTE: - to ensure that

the intended strike is a majority decision

1. Purpose Test
2. Compliance with Procedural and substantive
requirements of law
3. Means employed test
1. PURPOSE TEST - The strike must be due to
either
- bargaining deadlock and/or
- unfair labor practice.

The report on the strike vote must be

submitted to the DOLE at least 7 days
before the intended strike subject to the
cooling-off period.

2. COMPLIANCE WITH PROCEDURAL &

SUBSTANTIVE REQUIREMENTS OF LAW to
wit (a-d):
a. notice of strike
b. 30/15-day cooling-off period
COOLING OFF PERIOD - that period of time
given the NCMB to mediate and conciliate the
parties.
It is that span of time allotted by law for
the parties to settle theirdisputes in a
peaceful manner, before staging a
strike or lockout.
c. strike vote
STRIKE VOTE - a requirement wherein the
decision to declare a strike must be:
1. approved by a MAJORITY of the total
union membership in the bargaining unit
concerned [not of the whole bargaining
unit],
2. obtained by SECRET BALLOT
in MEETINGS OR REFERENDA called for
the purpose.

d. 7-day strike ban

7-DAY STRIKE BAN it is the 7 day waiting period
before the date of the purported strike [within which
the union intending to conduct a strike must at least
submit a report to the Department as to the result of
the strike vote] intended to give the Department an
opportunity TO VERIFY whether the projected strike
really carries the imprimatur of the majority of the
union members.
3.

MEANS EMPLOYED TEST-A strike may be

legal at its inception but eventually be declared
illegal if the strike is accompanied by violence
which violence is widespread, pervasive and
adopted as a matter of policy and not merely
violence which is sporadic which normally occur
in a strike area [see prohibited activities under
art. 264].

NOTE: The 3 tests must concur. Non-compliance

with any of the aforementioned requisites renders
the strike illegal.
EFFECT OF GOOD FAITH OF STRIKERS ON
LEGALITY OF STRIKE - A strike may be
considered legal where the union believed that the
company committed ULP and the circumstances
warranted such belief in good faith, although
subsequently such allegations of ULP are found out
as not true.

 TOTALITY DOCTRINE - the culpability of an

employers remarks are to be evaluated not only on
the basis of their implicit implications but are to be
appraised against the background of and in
conjunction with collateral circumstances.
Under this doctrine expressions of opinion by
an employer which, though innocent in themselves,
frequently were held to be culpable because:
a. of the circumstances under which they
were uttered
b. the history of the particular employers
labor relations of anti-union bias or
c.
because of their connection
with an established collateral plan of
coercion or interference.

IN CASE THE STRIKE IS DECLARED LEGAL,

ARE THE STRIKERS ENTITLED TO STRIKE
DURATION PAY?
GENERAL RULE: Strikers are not entitled to their
wages during the period of a strike, even if the
strike is legal.
EXCEPTIONS:
1.

In case of a ULP STRIKE, in the discretion of

the authority deciding the case [see table for
more distinction bet. Economic and ULP strike]
Where the strikers VOLUNTARILY AND
UNCONDITIONALLY OFFERED TO RETURN
TO WORK, but the employer refused to accept
the offer [e.g. of an unconditional offer: we
will return tomorrow and NOT willing to return
provided]

2.

WHEN CAN THE SEC. OF LABOR ASSUME

JURISDICTION OVER A STRIKE?
1.there exists a labor dispute causing or likely to
cause a strike or lockout in a INDUSTRY
INDISPENSABLE
TO
THE
NATIONAL
INTEREST,
2.the Secretary of Labor and Employment may
assume jurisdiction and EITHER:
- decide it, or
- certify the same to the Commission for
COMPULSORY ARBITRATION.
NOTE: What constitutes indispensable industry is
based solely upon the discretion of the Secretary of
Labor.
EFFECTS OF THE ASSUMPTION
JURISDICTION OF THE SECRETARY

OF

1. AUTOMATICALLY ENJOINS the intended or

impending strike or lockout as specified in the
assumption or certification order;
2. if one has already taken place at the time of
assumption or certification, all striking or
locked-out employees shall IMMEDIATELY
RETURN TO WORK; and
3. the employer shall immediately resume
operations and READMIT ALL WORKERS
under the same terms and conditions prevailing
before the strike or lockout.

A motion for reconsideration does not

suspend the effects as the assumption order is
immediately executory.

ISSUES THAT THE SECRETARY OF LABOR

CAN
RESOLVE
WHEN
HE
ASSUMES
JURISDICTION OVER A LABOR DISPUTE:
-

Only issues submitted to the Secretary may be

resolved by him. (PAL vs. Sec. of Labor, 23
January 1991).
Issues submitted to the Secretary for resolution
and such issues involved in the labor dispute
itself. (St. Scholasticas College vs. Torres,
29 June 1992)
Secretary of Labor may subsume pending labor
cases before Labor Arbiters which are involved
in the dispute. (Intl Pharmaceuticals vs. Sec
of Labor, 09 January 1992).
Power of Sec. of Labor is plenary and
discretionary. (St. Lukes Medical Center vs.
Torres, 29 June 1993; reiterated in PAL vs.
Confesor, 10 March 1994).

They are entitled to backwages from the date

the offer was made

3.

Where there is RETURN-TO-WORK ORDER

and the
employees are discriminated
against.
-

They are entitled to backwages from the

date of discrimination.

RULE ON REINSTATEMENT OF STRIKING

WORKERS:
GENERAL RULE : Striking employees are entitled
to reinstatement, regardless of whether or not the
strike was the consequence of the employers ULP
REASON: because while out on strike, the strikers
are not considered to have abandoned their
employment, but rather have only ceased from their
labor.
The declaration of a strike is NOT a
renunciation of employment relation.
EXCEPTIONS - The following strikers are NOT
entitled to reinstatement:
1. Union officers who knowingly participate in an
illegal strike; and
2. any striker/union member who knowingly
participates in the commission of illegal acts
during the strike.
RULE IN STRIKES IN HOSPITALS
1. It shall be the duty of striking employees or
locking-out employer to provide and maintain an
effective SKELETAL WORKFORCE of medical
and other health personnel for the duration of the
strike or lockout.
2. SECRETARY OF LABOR MAY IMMEDIATELY
ASSUME JURISDICTION WITHIN 24 HOURS
FROM KNOWLEDGE of the occurrence of such
strike or lock-out or certify it to the Commission
for compulsory arbitration

 ART. 264. PROHIBITED ACTIVITIES

EMPLOYERS

LABOR ORGANIZATIONS
1. No labor organization or employer shall declare
a strike or lockout
without first having bargained
collectively in accordance with Title VII of
this Book or

3.

without first having filed the notice

required in Art. 263 or
without the necessary strike or
lockout vote first having been obtained
and reported to the Department.
NO strike or lockout shall be declared:
a. AFTER assumption of jurisdiction by
the President or the Secretary or
b. AFTER certification or submission of
the dispute to compulsory or voluntary
arbitration or
c.

DURING the pendency of cases

involving the same grounds for the
strike or lockout.

THIRD PERSONS
2. NO person [3rd persons] all obstruct, impede or
interfere with by force, violence, coercion,
threats or intimidation
any peaceful picketing by employees

during any labor controversy or in the

exercise of the right of selforganization or collective bargaining or
shall aid or abet such obstruction or
interference.

NO employer shall use or employ any

STRIKE-BREAKER nor shall any person be
employed as a strikebreaker.

PUBLIC OFFICIAL OR EMPLOYEE

4.

NO public official or employee, including

officers and personnel of the New Armed
Forces of the Philippines of the Integrated
National Police, or armed persons,
shall bring in, introduce or
escort in
any manner, any individual who seeks
to replace strikes in entering or leaving
the premises of a strike area, or work
in place of the strikers.

The police force shall keep out of the

picket lines unless actual violence or
other criminal acts occur therein:

Provided, That nothing herein shall be

interpreted to prevent any public officers from
taking any measure necessary to:
a. maintain peace and order,
b. protect life and property, and/or
c. enforce the law and legal order.
PERSONS ENGAGED IN PICKETING
NO person engaged in PICKETING shall:
a. commit any act of violence, coercion or
intimidation or
b. obstruct the free ingress to or egress from the
employers premises for lawful purposes,or
c. obstruct public thoroughfares

ART. 265. IMPROVED OFFER vs. REDUCED OFFER BALLOTING

IMPROVED OFFER BALLOTING

1. a referendum conducted by the NCMB on or before

the 30th day of the strike, for the purpose of
determining whether or not the improved offer of the
employer is acceptable to the union members.

REDUCED OFFER BALLOTING

1. a referendum conducted by the NCMB for the

purpose of determining whether or not the reduced
offer of the union is acceptable to the board of
directors, trustees or partners.

PURPOSE
2. to determining whether or not the improved
offer of the EMPLOYER is acceptable to the
union members.
to ascertain the real sentiment of the silent
majority of the union members on strike.

2. to determining whether or not the improved

offer of the UNION is acceptable to the union
members.
to ascertain the real sentiment of the silent majority
of the union members on strike.

PERIOD OF FILING
3. on or before the 30th day of the strike

3. on or before the 30th day of the lockout

LIMITATION
4. applies only to economic strikes (deadlock)

ART. 266. ARREST AND DETENTION

General rule is that a police officer cannot arrest
or detain a union member for union activities
without previous consultations with the Secretary of
Labor EXCEPT on grounds of:
a.
national security
b.
public peace
c.
commission of a crime

BOOK SIX
POST EMPLOYMENT
TITLE I
TERMINATION OF
EMPLOYMENT
ART. 279. SECURITY OF TENURE
SECURITY OF TENURE - the constitutional right
granted the employee, that the employer shall not
terminate the services of an employee except for
just cause or when authorized by law.

RELIEFS AVAILABLE TO
DISMISSED EMPLOYEE:

AN

ILLEGALLY

A.
REINSTATEMENT - Restoration of the
employee to the state from which he has been
unjustly removed or separated without loss of
seniority rights and other privileges.
FORMS OF REINSTATEMENT:
1.

ACTUAL OR PHYSICAL REINSTATEMENT

- the employee shall be admitted back to
work
2. PAYROLL REINSTATEMENT
- the employee is merely reinstated in the
payroll
May a court order the reinstatement of a
dismissed employee even if the prayer of the
complaint did not include such relief?
YES. So long as there is a finding that the
employee was illegally dismissed, the court can
order the reinstatement of an employee even if the
complaint does not include a prayer for
reinstatement, unless, of course, the employee has
waived his right to reinstatement. By law, an
employee who is unjustly dismissed is entitled to
reinstatement, among others. The mere fact that
the complaint did not pray for reinstatement will not
prejudice the employee, because technicalities of
law and procedure are frowned upon in labor
proceedings (General Baptist Bible College v.
NLRC, 219 SCRA 549).

4. applies only to economic strikes-deadlock in

bargaining (lockout)

\What happens if there is an order of

reinstatement but the position is no longer
available?
The employee should be given
SUBSTANTIALLY EQUIVALENT POSITION.

If NO SUBSTANTIALLY EQUIVALENT
POSITION IS AVAILABLE, reinstatement should not
be ordered because that would in effect compel the
employer to do the impossible. In such a situation,
the
employee
should
merely
be
given
SEPARATION PAY CONSISTING OF ONE MONTH
SALARY FOR EVERY YEAR OF SERVICE (1:1).
CIRCUMSTANCES WHEN COMPANY MAY NOT
REINSTATE
DESPITE
ORDER
OF
REINSTATEMENT
1. TRANSFER OF BUSINESS OWNERSHIP
-There is no law requiring a purchasing
corporation to absorb the employees of the
selling corporation. A fortiori, reinstatement of
unjustly dismissed employees CANNOT be
enforced against the new owner UNLESS there
is an express agreement on the assumption of
liabilities by the purchasing corporation;
2. When reinstatement is rendered IMPOSSIBLE
due to the abolition of the position;
3. When the business has CLOSED DOWN;
4. PHYSICAL INCAPACITY of the employee; and
5. DOCTRINE OF STRAINED RELATIONS When the employer can no longer trust the
employee and vice-versa, reinstatement could
not effectively serve as a remedy. This doctrine
only applies only to positions which require
trust and confidence
- Under the circumstances where the
employment relationship has become so
strained to preclude a harmonious
working relationship, and that all hopes at
reconciliation are nil after reinstatement, it
would be more beneficial to accord the
employee backwages and separation
pay.
B. BACKWAGES the relief given to an employee
to compensate him for lost earnings during the
period of his dismissal.
PERIOD COVERED BY THE PAYMENT
OF
BACKWAGES - Backwages shall cover the period
from the date of dismissal of the employee up to the
date of actual reinstatement
HOW COMPUTED - Under existing law,
backwages is computed from the time of the illegal
dismissal up to time of actual reinstatement.
INCLUDED IN THE COMPUTATION OF
BACKWAGES
1. transportation and emergency allowances
2. vacation or service incentive leave and sick
leave
3. 13th month pay.

NOTE: facilities such as uniforms, shoes, helmets

and ponchos should NOT be included in the
computation of backwages.
REASON: said items are given free, to be used
only during official tour of duty not for private or
personal use.
CIRCUMSTANCES THAT PREVENT AWARD OF
BACKWAGES:
1.
2.
3.
4.
5.

death of the employee

physical and mental incapacity
business reverses
closure of business
reinstatement of dismissed employee
confinement in jail

Which takes precedence in conflicts arising

between
employers
MANAGEMENT
PREROGATIVE and the employ
ees right
to security of tenure?

The employees right to security of tenure.

Thus, an employers management prerogative
includes the right to terminate the services of the
employee but this management prerogative is
limited by the labor code which provides that the
employer can terminate an employee only for a just
cause or when authorized by law. This limitation is
because no less than the constitution recognizes
and guarantees employees right to security of
tenure. (Art. 279, Labor Code; Art. XIII, Sec. 3,
Constitution)
ART. 280.
EMPLOYMENT

REGULAR

AND

CASUAL

REGULAR EMPLOYMENT - one wherein an

employee is engaged to perform activities which are
usually necessary or desirable in the usual
business or trade of the employer.
Test of regularity: nature of employment

PROJECT vs. REGULAR EMPLOYEE

PROJECT EMPLOYEE

REGULAR EMPLOYEE

A regular employee is one engaged to perform

activities which are usually necessary or desirable
in the usual business or trade of the employer

a project employee is one whose employment is

fixed for a specific project or undertaking the
completion of which has been determined at the
time of the engagement of the employee. (See Art.
280 LC)

TEMPORARY EMPLOYMENT - one wherein an

employee is engaged to work on a specific project
or undertaking which is usually necessary or
desirable in the usual business or trade of the
employer, the completion of which has been
determined at the time of the engagement of the
employee.
SEASONAL EMPLOYMENT - one wherein an
employee is engaged to work during a particular
season on an activity that is usually necessary or
desirable in the usual business or trade of the
employer.
Pakiao
employees
are
considered
employees as long as the employer
exercises control over the means by
which such workers are to perform their
work.
PROBATIONARY PERIOD OF EMPLOYMENT the period needed to determine the fitness for the
job, i .e., the time needed to learn the job.
It is the period during which the employer
may determine if the employee is qualified for
possible inclusion in the regular force.
PURPOSE: To afford the employer an opportunity
to observe the fitness of a probationary employee at
work.
NOTE: The standard which the probationary
employee is to meet must be made known by the
employer to the employee at the time of
engagement. The services of probationary
employees may be terminated for the same

causes as in the case of regular employee, except

that there is an additional ground failure to meet
the standard.
LIMITATIONS ON THE EMPLOYERS POWER
TO
TERMINATE
A
PROBATIONARY
EMPLOYMENT CONTRACT:
1. the power must be exercised in accordance
with the specific requirements of the contract
[COMPLIANCE
WITH
SPECIFIC
REQUIREMENTS];
2.if a particular time is prescribed, the
termination must be within such time and if
formal notice is required, then that form must
be
used
[WITHIN
PARTICULAR
PRESCRIBED TIME];
3.the employers dissatisfaction must be real
and in good faith, not feigned so as to
circumvent the contract or the law
[DISSATISFACTIONREAL AND IN GOOD
FAITH]; and
4.there
must
BE
NO
UNLAWFUL
DISCRIMINATION in the dismissal.
GENERAL RULE: Probationary employment shall
not exceed six months from the date the employee
started working.
EXCEPTIONS:
1. when it is covered by an apprenticeship
agreement stipulating a longer period; or
2. when the parties to an employment contract
agree otherwise, such as when the same is
established by company policy or when the same is
required by the nature of the work to be performed
by the employee

 EFFECT IF PROBATIONARY EMPLOYEE IS

ALLOWED TO WORK BEYOND 6 MONTHS
If the probationary employee is allowed to work
beyond the period of 6 months or the agreed
probationary period, said employee becomes a
regular employee by operation of law.
Under the Labor Code, an employee who is
allowed to work after a probationary period shall be
considered a regular employee. (Art. 281.)

ART. 282. TERMINATION BY EMPLOYER

SECURITY OF TENURE - An employer CANNOT
terminate the services of an employee EXCEPT for
a just cause or when authorized by law.
GUIDELINES TO DETERMINE THE VALIDITY
OF TERMINATION:
1.
2.
3.
4.
5.

Gravity of the offense

Position occupied by the employee
Degree of damage to the employer
Previous infractions of the same offense
Length of service

A. JUST CAUSES [MaNaBaCA]:

1. Serious
MISCONDUCT
OR
WILLFUL
DISOBEDIENCE by the employee of the lawful
orders of his employer or representative in
connection with his work;
Misconducttransgression
of
some
established and definite rule of action, a
forbidden act, a dereliction of duty, willful
in character, and implies wrongful intent
and not mere error in judgment. (Dept. of
Labor Manual, Sec. 4353.01)
2. Gross and habitual NEGLECT by the employee
of his duties;
3. FRAUD OR WILLFUL BREACH by the
employee of the trust reposed in him by his
employer or duly organized representative
Fraud must be committed against the
employer or his representative and in
connection with the employees work.
((Dept. of Labor Manual, Sec. 4353.01
[3])
4. Commission of a CRIME OR OFFENSE BY
THE EMPLOYEE AGAINST THE PERSON OF
HIS EMPLOYER or any immediate member of
his family or his duly authorized representative;
and
Conviction or prosecution is not required.
5. Other causes ANALOGOUS to the foregoing.
A cause must be due to the voluntary or
willful act or omission of the employee.
(Nadura v. Benguet Consolidated, G.R.
No. L-17780)
DUE PROCESS TO BE OBSERVED BY THE
EMPLOYER - For termination of the employment
based on the any of the just causes for termination,
the requirements of due process that an employer
must comply with are:

1. Written NOTICE should be served to the

employee specifying the ground or grounds
for termination and giving the said employee
reasonable opportunity within which to
explain;
2. A HEARING OR CONFERENCE should be
held during which the employee concerned,
with the assistance of counsel, if the
employee so desires, is given the opportunity
to respond to the charge, present his
evidence and present the evidence presented
against him;
3. A WRITTEN NOTICE OF TERMINATION, if
termination is the decision of the employer,
should be served on the employee indicating
that upon due consideration of all the
circumstances,
grounds
have
been
established to justify his termination.
For termination of employment based
on authorized causes, the requirements
of due process shall be deemed complied
with upon service of a written notice to
the employee and the appropriate
Regional office of the Department of
Labor and employment at least thirty
days before the effectivity of the
termination specifying the grounds for
termination.
NOTE: Under the so-called WENPHIL
DOCTRINE if the services of the employee was
terminated due to a just or authorized cause but
the affected employees right to due process
has been violated, the dismissal is legal but the
employee is entitled to damages by way of
indemnification for the violation of the right.
SERRANO
vs.
ISETANN
et.
al.
abandoned the WENPHIL DOCTRINE
and ruled that if the employee is
dismissed under just or authorized cause
but the affected employees right to due
process has been violated, his dismissal
becomes ineffectual. Therefore, the
employee is entitled to backwages from
the time he was dismissed until the
determination of the justness of the cause
of the dismissal.
ARTS. 283-284.
B. AUTHORIZED CAUSES OF TERMINATION BY
THE EMPLOYER:
1. installation
of
(AUTOMATION)

labor-saving

devices

2. REDUNDANCY (superfluity in the performance

of a particular work)
redundancy, for purposes of the Labor
Code, exists where the services of an
employee are in excess of what is
reasonably demanded by the actual
requirements of the enterprise. (Wishire
File Co. Inc. vs. NLRC)
Reorganization as a cost-saving device is
acknowledged by jurisprudence. An
employer is not precluded from adopting
a new policy conducive to a more
economical and effective management,

and the law does not require that the

employer should be suffering financial
losses before he can terminate the
services of the employee on the ground
of redundancy (DOLE PHILIPPINES, INC
et
al.,
vs.
NATIONAL
LABOR
RELATIONS COMMISSION et al.)

4. closing or CESSATION OF OPERATION of the

establishment or undertaking UNLESS the
closing is for the purpose of circumventing the
provisions of the Labor Code.
5. DISEASE

3. RETRENCHMENT to prevent losses (there is

excess of employees and employer wants to
prevent financial losses)

a. the disease is incurable within 6

months and the continued employment
of the employee is prohibited by law or
prejudicial to his health as well as to
the health of his co-employees

CONDITIONS UNDER WHICH AN EMPLOYER

MAY RETRENCH:
(a) substantial losses which are not merely de
minimis in extent;

(b) imminence of such substantial losses;

(c) retrenchment would effectively prevent the
expected and additional losses;
(d) the alleged losses and expected losses must be
proven by sufficient and convincing evidence.
(NDC-GUTHRIE PLANTATIONS, INC., vs.
NATIONAL
LABOR
RELATIONS
COMMISSION, ET. AL)
CAUSE OF TERMINATION

b. with a certification from public heath

officer that the disease is incurable
within 6 months.
Before an employer could dismiss an
employee based on a disease, Section 8 of
Rule 1, Book VI of the Omnibus Rules
Implementing the Labor Code requires a
certification by a competent public health
authority that the disease is of such a
nature or at such stage that it cannot be
cured within a period of 6 months even with
proper medical treatment. (CATHAY
PACIFIC AIRWAYS VS. NLRC AND
MARTHA SINGSON)
SEPARATION PAY

Automation

Equivalent to at least one month pay or at least one

month pay for every year of service, whichever is
higher

Redundancy

Equivalent to at least one month pay or at least one

month pay for every year of service, whichever is
higher

Retrenchment

Equivalent to one month pay or at least one-half

month pay for every year of service

Closures or cessation of operations not

due to serious business losses or
financial reverses

Equivalent to one month pay or at least one-half

month pay for every year of service

Disease

Equivalent to at least one-month salary or to

month salary for every year of service, whichever is
greater, a fraction of at least 6 months shall be
considered one (1) whole year.

NOTE: ARTICLE 283 governs the grant of

separation benefits in case of closures or cessation
of operation of business establishments NOT due
to serious business losses or cessation of operation
[North Davao Mining Corp. vs.NLRC, et al].
Therefore, the employee is not entitled to such
benefit if the closure was due to SERIOUS
BUSINESS LOSSES.
When termination of employment is brought by
the failure of an employee to meet the standards of
the employer in case of probationary employment, it
shall be sufficient that a written notice is served the
employee within a reasonable time from the
effective date of termination.
When termination is brought about by the
completion of the contract or phase thereof, no prior
notice is required

ART. 285. TERMINATION BY EMPLOYEE

TERMINATION BY THE EMPLOYEE:
a.

WITHOUT JUST CAUSE- by serving a

WRITTEN NOTICE on the employer at least
one month in advance. .
The employer upon
whom no such notice was served may hold the
employee liable for damages.

b. WITH JUST CAUSE - An employee may put an

end to establish WITHOUT SERVING ANY
NOTICE on the employer for any of the
following just causes [SUCA]:
1. SERIOUS INSULT by the employer or his
representative on the hour and person of
the employee;

2. Inhuman
and
UNBEARABLE
TREATMENT accorded the employee by
the employer or his representative;
3. Commission of a CRIME OR OFFENSE by
the employer or his representative against
the person of the employee or any of the
immediate members of his family; and
4. Other causes ANALOGOUS to any of the
foregoing.
ART. 287. RETIREMENT RETIREMENT AGE The age of retirement is that specified in the CBA or
iin the employment contract. If it is not specified,
The rule is different with respect to
underground mining employees whose
optional retirement age is 50-60 provided
they have at least served for a period of 5
years (Art. 287 as amended by RA 8558).
BENEFITSA retiree is entitled to a retirement
pay equivalent to at least month salary for every
year of service, a fraction of at least six (6) months
being considered as one whole year.

Unless the parties provide for broader

inclusions, the term one half (1/2) month salary
shall mean:
15 days plus 1/12 of the 13th month pay and
the cash equivalent of NOT more than 5 days
of service incentive leaves.
(22.5 days per year of service)
Under Section 26, R.A. No. 4670, otherwise
known as the Magna Carta for Public School
Teachers, public school teachers having fulfilled the
age and service requirements of the applicable
retirement laws shall be given ONE
RANGE SALARY RAISE upon retirement, which
shall be the basis of the computation of the lump
sum of the retirement pay and the monthly benefit
thereafter.
NOTE: Exempted from the payment of retirement
pay
are
retail,
service
and
agricultural
establishments or operations employing NOT more
than ten (10) employees or workers.

BOOK SEVEN
TRANSITORY AND FINAL PROVISIONS
TITLE II
PRESCRIPTION OF OFFENSES AND CLAIMS
ART. 291. MONEY CLAIMS
PERIODS OF PRESCRIPTION
Cause

Period of Prescription

MONEY CLAIMS

3 years from the accrual of the causes of action

ULP

1 year from the accrual of the cause of action

ILLEGAL DISMISSAL

4 years from the accrual of the cause of action

REINSTATEMENT

4 years

NOTE: The period of prescription mentioned under Article 292 of the Labor Code refers to and is limited to
money claims, all other cases of injury to rights of a workingman being governed by the Civil Code. Hence,
REINSTATEMENT prescribes in 4 years.
Age
Retirement
60-65
Optional but the employee
must have served at least
5 years
65
Compulsory (no need for
five years of service

Appendices
SPECIAL LAWS
SOCIAL SECURITY SYSTEM
COVERAGE:
- Compulsory upon all employees not over 60 years
of age and their employers

In case of domestic helpers, their monthly

income should not be less than one thousand
pesos
Any benefit already earned by the
employees under private benefit plans existing at
the time of the approval of the Act shall not be
discontinued, reduced or otherwise impaired and
shall continue to remain under the employers
management unless there is an existing agreement
to the contrary
Filipinos recruited by foreign based
employers for employment abroad may be covered
by the SSS on a voluntary basis
Compulsory upon such self- employed
persons as may be determined by the Commission
including but not limited to the following:
1. all self employed professionals
2. partners and single proprietors
3. actors and actresses directors
4. professional athletes, coaches, trainers
5. individual farmers and fishermen
EFFECTIVE DATE OF COVERAGE:
- Shall take effect on the first day of the operation
with respect to the employer and that of the
employee on the day of his employment
DEPENDENTS:
1. the legal spouse entitled by law to receive
support from the member
2. the legitimate, legitimated or legally adopted
and illegitimate child who is unmarried, not
gainfully employed and has not reached 21
years of age or if 21 years of age, he is
congenitally incapacitated or while still a minor
has been permanently incapacitated and
incapable of self- support, physically and
mentally and
3. the parent who is receiving regular support from
the member
EMPLOYER
Any person natural or juridical, domestic or
foreign, who carries on in the Philippines, any trade
business, industry undertaking or activity of any
kind and uses the services of another person who is
under his orders as regards the employment except
the Government and any of its political subdivisions,
branches
or
instrumentalities,
including
corporations owned or controlled by the
Government
- Self- employed person shall be both the employer
and employee at the same time.
EMPLOYEE

entitled to 50% of the share of the legitimate,

legitimated or legally adopted children.
In the absence of the legitimated, legally
adopted or legitimate children, illegitimate children
shall be entitled to 100% of the benefits.
In their absence, the dependent parents
who shall be the secondary beneficiaries.
In the absence of all of the foregoing, any
person designated by the covered employee as
secondary beneficiary.

MEDICARE
COVERAGE:
All SSS members are covered under the
Medicare program. Total permanent disability,
unemployed partial permanent disability, retirement
pensioners and survivors of deceased members of
the SSS and their dependents are also entitled to
medical care benefits without need of additional
contributions
PERIOD OF ENTITLEMENT
- The member or pensioner is entitled to a
maximum of 45 days confinement in a hospital in a
given calendar year. His dependents are given
another set of 45 days to be shared among
themselves. Unused benefits cannot be carried
over to the succeeding year.

GOVERNMENT SERVICE INSURANCE

SYSTEM
COMPULSORY MEMBERSHIP
Compulsory for all employees receiving
compensation who have not reached the
compulsory retirement age, irrespective of
employment status, except members of the Armed
Forces and the PNP, subject to the condition that
they must settle first their financial obligations with
the GSIS and contractuals who have no employer
and employee relationship with the agencies they
serve.
Except for the members of the Judiciary
and constitutional commissions who shall have life
insurance only, all members of the GSIS shall have
life insurance, retirement and all other social
security protection such as disability, survivorship,
separation and unemployment benefits.
COMPUTATION OF SERVICE

- Any person who performs services for an

employer in which either or both mental and
physical efforts are used and who receives
compensation for such services, where there is an
employer- employee relationship.

- The computation of service for the purpose of

determining the amount of benefits payable shall be
from the date of the original appointment/ election
including periods of service at different times under
the authority of the Republic of the Philippines and
those that may be prescribed by the GSIS in
coordination with the Civil Service Commission.

BENEFICIARIES
- The dependent spouse until he or she remarries,
the dependent legitimate, legitimated or legally
adopted and illegitimate children who shall be the
primary beneficiaries of the member, PROVIDED
that the dependent illegitimate children shall be

All service credited for retirement,

resignation or separation for which corresponding
benefits have been awarded shall be excluded in
the computation of service in case of reinstatement
in the service of an employer and subsequent
retirement or separation which is compensable.

UNEMPLOYMENT
OR
INVOLUNTARY
SEPARATION BENEFITS
- Monthly cash payments equivalent to 50% of the
average monthly compensation shall be paid to a
permanent employee who is involuntarily separated
from the service due to the abolition of his office or
position usually resulting from reorganization.
RETIREMENT BENEFITS: CONDITIONS FOR
ENTITLEMENT:
1.Member has rendered at least 15 years of
service
2.He is at least 60 years of age at the time of
retirement
3.He is not receiving a monthly pension benefit
from permanent total disability
PERMANENT DISABILITY BENEFITS
- Monthly income benefit for life equal to the basic
monthly pension effective from the date of the
disability. Provided:
1.

He is in the service at the time of the

disability
2.
If separated from service, he has paid at
least 36 monthly contributions within the 5 year
period immediately preceding the disability or
has paid a total of at least 180 monthly
contributions prior to the disability
Unless the member has reached the
minimum retirement age, disability benefits shall be
SUSPENDED when:
1.he is reemployed
2.he recovers from his disability as determined by
the GSIS, whose decision shall be final and
binding
3.he fails to present himself for medical
examination when required by the GSIS
TEMPORARY DISABILITY BENEFITS
- 75% of the current daily compensation for each
day or fraction thereof of temporary disability benefit
not exceeding 120 days in one calendar year after
exhausting all sick leave credits and collective
bargaining agreement sick leave benefits.
PROVIDED:
1. he is in service at the time of his disability
2. if separated, he has rendered at least 3 years
of service and has paid at least 6 monthly
contributions in the 12- month period
immediately preceding the disability
HOWEVER, a member cannot enjoy
temporary total disability benefit and sick leave pay
simultaneously and in no case shall it be less than
70 pesos a day.
SURVIVORSHIP BENEFITS:
- Upon the death of a member, the primary
beneficiaries shall be entitled to:
survivorship pension, PROVIDED:
a. member was in service at the time of his
death
b. if separated from service, has rendered at
least 3 years of service and paid 36
monthly contributions with the 5- year
period immediately preceding his death or

has paid a total of at least 180 monthly

contributions.
LIFE INSURANCE BENEFITS
- All employees except members of the AFP and
the PNP shall be compulsorily covered with life
insurance.
PRESCRIPTION OF CLAIMS
- Claims for benefits under the Act except for life
and retirement shall prescribe after 4 years from the
date of the contingency.
JURISDICTION
- GSIS shall have the exclusive and original
jurisdiction to settle any dispute arising under the
Act and any other laws administered by the GSIS.

Social Legislation
A. Social Security Act; Government Service Insurance Act;
Policy Objectives:
SSS
- To establish, develop, promote and perfect a sound and viable tax-exempt social security system suitable to the needs of the people throughout the Philippines which shall promote
social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, and death, and other contingencies
resulting in loss of income or financial burden. (sec. 2 RA 8282)

Covered Employer:
SSS
1. Any person
a. natural, juridical, domestic, foreign
b. carries on in the Philippines trade, business, industry, undertaking
c. Uses services of another, under his order as regards employment [8 (c)]

GSIS
1.National government, political subdivisions, branches, agencies, instrumentalities
2. Government owned and/or controlled financial institutions with original charters
3. Constitutional Commissions and the judiciary [2 (c)]

2. Self-employed both employer and employee [8 (c) ]

Covered Employee:
SSS
1. Any person who performs services for an employer in which either or both mental and
physical efforts are used and who received compensation for such services, where there is
an employer-employee relationship;

GSIS
1. Any person, receiving compensation while in the service of an employer as defined
herein, whether by election or appointment, irrespective of status of appointment
2.

Barangay officials

2. A self-employed person shall be both employee and employer at the same time [8 (d)]
3. Sanggunian Officials [sec. 2(d)]

Dependents:
SSS
1. Spouse
Legal spouse entitled by law to receive support [8 (e) (1)]

1. Spouse
Legitimate and dependent for support

GSIS

2. Child
a. Legitimate
b. legitimated
c. Legally adopted

2. Child
a. Legitimate
b. legitimated
c. Legally adopted

d. Illegitimate child who is unmarried, and not gainfully employed and has not reached 21 years
of age or he is congenitally incapacitated or while still a minor has been permanently incapacitated
and incapable of self-support, physically or mentally; [8(e)(2)]

d. illegitimate who is unmarried, not gainfully employed, not over the age of majority, or is over
the age of majority but incapacitated and incapable of self-support due to a mental or physical defect
acquired prior to age of majority;

3. Parent
Who os receiving regular support from the member. [8(e)(3)]

3. Parents
legitimate parents dependent upon the member for support

Beneficiaries:
SSS
1. Primary
a. Dependent spouse until he or she remarries
b. Dependent legitimate, legitimated, or legally adopted, and illegitimate children,
provided, that the dependent illegitimate children shall be entitled to 50% of the share of
the legitimate, legitimated, or legally adopted children:
2. Secondary
Dependent parents

GSIS
1. Primary
a. Legal dependent spouse until he/ she remarries and
b. The dependent children
2. Secondary
a. The dependent parents and
b. Subject to the restrictions on dependent children, the legitimate descendants

3. Others
In the absence of all the foregoing, any other person designated by the covered
employee as secondary beneficiary. [8(k) and 15

Coverage
SSS
Compulsory
a. Employees not over 60 years of age and their employers; [9 (a)]
b. Domestic helpers whose monthly income shall not be less than Php 1000 a month. [9 (a)].
c. Self-employed persons including but not limited to:
Self-employed professionals
Partners and single proprietors of businesses
Actors, actresses, directors, scriptwriters and news correspondents
Professional athletes, coaches, trainers and jockeys
Individual farmer and fishermen [9-A]
Voluntary
1. Filipinos recruited by foreign-based employers for employment abroad [9 (c) ]
2. Spouses who devote full time to managing the household and family affairs, unless they are also
engaged in other vocation or employment which is subject to mandatory coverage [9(b)]

GSIS
Compulsory
All employees receiving compensation who have not reached the compulsory retirement age,
irrespective of employment status,
Except:
a. members of the armed forces of the Philippines and the Philippine National Police, subject to
the condition that they must settle first their financial obligation with the GSIS, and
b. Contractuals who have no employer and employee relationship with the agencies they serve.
c. Members of the judiciary and constitutional commissions who shall have life insurance only.

3. Employees separated from employment may continue to pay contributions to maintain his right to
full benefits.
4. Self-employed with no income (11-A)
By Agreement
Any foreign government, international organization, or their wholly-owned instrumentality
employing workers in the Philippines, may enter into an agreement with the Philippine government for
the inclusion of such employees in the SSS except those already covered by their respective civil
service retirement systems.
Excluded employment:
1. Employment purely casual and not for the purpose of occupation or business of the employer
2. Service performed on or in connection with an alien vessel by an employee if he is employed
when such vessel is outside the Philippines.
3. Service performed in the employ of the Philippine government or instrumentality or agency
thereof.
4. Service performed in the employ of a foreign government, international organization, or their
wholly owned instrumentality;
5. Services performed by temporary employees which may be excluded by regulation of the
commission.

Effect of separation from employment

SSS

GSIS

1. Compulsory Covered Employee

a.
His employers contribution on his account and his obligation to pay contribution
arising from that employment shall cease at the end of the month of separation

- A member separated from the service shall continue to be a member, and shall be entitled
to whatever benefits he has qualified to in the event of any contingency compensable under
this act.

b.
c.
d.

Employee shall be credited with all contributions paid on his behalf and entitled to
benefits according to the provisions of this Act.
He may, however, continue to pay the total contributions to maintain his right to full
benefit.

2. Effect of Interruption of Business or professional Income

a. If the self-employed realizes no income in any given month, he shall not be required
to pay contributions for that month.
b.
c. He may, however, be allowed to continue paying contributions under the same rules
and regulations applicable to separated employee member;

Provided that no retroactive payment of contributions shall be allowed other than as

prescribed under section 22-A hereof.

Reporting Requirements
SSS

Each Employer shall immediately report to the SSS names, ages, civil status,
occupations, salaries and dependents of all his employees who are subject to
compulsory coverage; [24 (a)]
Self-employed Member
Each covered self-employed person, shall within 30 days from the first day he
started the practice of his profession or business operations, register and report to the
SSS his name, age, civil status, and occupation, average monthly net income and his
dependents.

GSIS

The employer shall report to the GSIS the names of all its employees, their
corresponding employment status, positions, salaries and such other pertinent
information, including subsequent changes therein, if any, as may be required by the
GSIS.

Funding
SSS

Employees contribution
Employers contribution

Amount based on salary bracket

GSIS
Employer contribution
Member contribution
Government guarantees the fulfillment of the obligations of the GSIS to its members as
and when they fall due.

Compensation- all actual remuneration for employment, including the mandated cost of
living allowance, as well as the cash value of any remuneration paid in any medium other
than cash except that part of the remuneration received during the month in excess of the
maximum salary credit as provided under sec. 18 [8(f)]

Effect of non-remittance
SSS

GSIS

Where an employer refuses or neglects to pay the same shall be collected by the SSS in
the same manner as taxes are made collectible under the National Internal Revenue Code,
as amended. Failure or refusal of the employer to pay or remit the contributions herein
prescribed shall not prejudice the right of the covered employee to the benefits of the
coverage. [22(b)]

Government guarantees the fulfillment of the obligations of the GSIS to its members as
and when they fall due.

Benefits
SSS
1.
2.
3.
4.
5.
6.
7.
8.

GSIS

Monthly pension
Dependents pension
Retirement benefits
Death
Permanent disability
Funeral
Sickness
Maternity

All Members
1.
Life Insurance
2. Retirement
3. Permanent disability
4. Temporary disability
5. Survivorship
6. Separation
7. Funeral
Judiciary & Constitutional Commissions Life insurance only

Basis of Claim
SSS
1.
2.
3.
4.

Non-work connected disability, sickness

Maternity
Old Age
Death

GSIS
1. Non-work connected disability, sickness, death
Permanent disability no benefit if due to:
a. Grave misconduct
b. Notorious negligence
c. Habitual intoxication
d. Willful intention to kill himself or another
2. Survivorship
3. Separation
4. Unemployment

Prescriptive Period

SSS

GSIS

Ten years from the time the right of action accrues obligation created by law (Art.
1144 (2) Civil Code)

Claims for benefits under the GSIS Act, except for life and retirement, shall prescribe after
four years from the date of contingency

Benefit protection
1.
2.
3.

SSS
Benefits non-transferable paid only to such persons entitled
Personal claim/ collection power of attorney in favor of another to collect not recognized except if the
beneficiary is physically unable to collect personally
Beneficiary who is a national of a foreign country which does not extend benefits to a Filipino residing in the
Philippines, or which is not recognized by the Philippines shall not be entitled to receive any benefits;

GSIS

But SS Commission may direct payments without regard to nationality or country of residence if best interest of the
SSS will be served
TAX =Benefits exempt taxes, fees or charges, not liable to attachments, garnishments, levy, seizures by or under
legal or equitable process whether before or after receipt except pay debts.
1.
2.

Benefits exempt taxes, assessments, fees or duties of all kinds.

Exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial
agencies or administrative bodies
COA disallowances and from all financial obligations of the members, including his pecuniary accountability arising
from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to
or in connection with his position or work except when his monetary liability, contractyual or otherwise, is in favor of the
GSIS.

FEES
No fees to agent, attorney or other person-in-charge of preparation, filing or pursuing claim. Any stipulation to the
contrary shall be void.
Any member of the Philippine Bar who appears as counsel in any case heard by the SS Commission shall be
entitled to 10% of the benefits awarded. Any stipulation to the contrary shall be void.

Exclusivity of Benefits
SSS

GSIS
Whenever other laws provide similar benefits for the same contingencies covered by this act,
The member who qualifies to the benefits shall have the option to choose which benefits
will be paid to him.
However, if the benefits provided by the law chosen are less than the benefits provided
under this act, the GSIS shall pay only the difference.

Dispute settlement
SSS

GSIS

Disputes involving:
a. Coverage
b. Benefits
c. Contributions
d. Penalties
e. Any other matter related thereto.

Any dispute arising under this act and any other laws administered by the GSIS

Agency: Social Security Commission

Agency: GSIS

Decided within the mandatory period of 20 days after the submission of evidence

Decide the case within 30 days from the receipt of the hearing officers findings and
recommendations or 30 days after submission for decision

Decision final and executory 15 days after date of notification [5 (b)]

Appeals
1. Court of Appeals laws and fact [5 (c)]
2. Supreme Court questions of law.
[5 (c)]

Appeals
1. Court of Appeals Rule 43 (31)
2. Supreme Court Rule 45 (31)
Appeals shall not stay the execution of the order or award unless ordered by the board, CA or
SC

Execution of Decision
Commission may, motu propio or on motion of any interested party, issue a writ of
execution to enforce any of its decisions or awards, after it has become final and
executory.

Execution of Decision
When no appeal is perfected and there is no order to stay by the Board, CA, or by the SC,
any decision or award of the board shall be enforced and executed in the same manner as
the decisions of the RTC|.

RA 8042: "MIGRANT WORKERS AND

OVERSEAS FILIPINOS ACT 0F 1995"
Approved on 07 June 1995 and took effect on 15
July 1995. As indicated in its title, the law institutes
the policies of overseas employment and
establishes a higher standard of protection and
promotion of the welfare of migrant workers, their
families, and of overseas Filipinos in distress.
GUARANTEE OF
OVERSEAS WORKERS

PROTECTION

jointly and solidarily liable with the corporation or

partnership for the aforesaid claims and damages.
Such liabilities shall continue during the
entire period or duration of the employment contract
and shall not be affected by any substitution,
amendment or modification made locally or in a
foreign country of the said contract.
Three Month's Pay Under RA 8042
The date the employment
termination occurred is material. On or after
15 July 1995, the law to apply is RA 8042.

FOR

The State shall deploy overseas Filipino

workers only in countries where the rights of Filipino
migrant workers are protected. The government
recognizes any of the following as a guarantee for
the protection of the receiving country of the rights
of overseas Filipino workers:
1. It has existing labor and social laws protecting
the rights of migrant workers;
2. It is a signatory to multilateral conventions,
declarations or resolutions relating to the
protection of migrant workers;
3. It has concluded a bilateral agreement or
arrangement with the government protecting
the rights of overseas Filipino workers; and,
4. It is taking positive, concrete measures to
protect the rights of migrant workers.
JURISDICTION
1. NLRC
Money Claims - the Labor Arbiters of the
National Labor Relations Commission
(NLRC) shall have the original and exclusive
jurisdiction to hear and decide, the claims arising
out of an employer-employee relationship or by
virtue of any law or contract involving Filipino
workers for overseas deployment including
claims for actual, moral, exemplary and other
forms of damages.
2. POEA
The POEA retains original and exclusive
jurisdiction to hear and decide:
1. all cases which are administrative in
character, involving or arising out of
violations of rules and regulations relating
to licensing and registration of recruitment
and employment agencies or entities; and
2. disciplinary action cases and other special
cases which are administrative in character,
involving employers, principals, contracting
partners and Filipino migrant workers.
LIABILITIES
The liability of the principal/employer and
the recruitment/placement agency for any and all
claims under this section shall be joint and several.
The performance bond to be filed by the
recruitment/placement agency, as provided by law,
shall be answerable for all money claims, or
damages that may be awarded to the workers. If
the recruitment/placement agency is a juridical
being, the corporate officers and directors and
partners as the case may be, shall themselves be

Under Section 10 of RA 8042, a worker

dismissed from overseas employment without just,
valid or authorized cause as defined by law or
contract, is entitled to the full reimbursement of his
placement fee with interest at twelve percent (12%)
per annum, plus his salary for the unexpired portion
of his employment contract or for three (3) months
for every year of the unexpired term, whichever is
LESS.
VENUE
A criminal action arising from illegal
recruitment shall be filed with the RTC of the
province or city where the offense was committed or
where the offended party actually resides at the
time of the commission of the offense. The court
where the criminal action is first filed shall acquire
jurisdiction to the exclusion of other courts.
PRESCRIPTIVE PERIODS
Illegal recruitment cases under this Act
shall prescribe in five (5) years; provided,
however, That illegal recruitment cases
involving economic sabotage as defined herein
shall prescribe in twenty (20) years. (Sec. 12,
R.A. 8042)
PROHIBITED ACTS IN THE RECRUITMENT
AND PLACEMENT OF WORKERS UNDER THE
LABOR CODE ARE RETAINED UNDER THE
MIGRANT WORKERS ACT WITH THE ADDITION
OF THE FOLLOWING:
1. Failure to deploy employee without valid reason
2. Failure to reimburse expenses incurred in
connection with his documentation and
processing in cases that deployment did not
take place
DIFFERENT FUNDS CREATED UNDER THE
LAW:
1.
2.
3.
4.

Repatriation fund
Loan Guaranty fund
Legal Assistance fund
Congressional Migrant Workers Scholarship
fund

GOVERNMENT AGENCIES MOBILIZED:

1. DFA
2. DOLE
3. POEA
4. OWWA

3. The above acts would result

in an
intimidating,
hostile
or
offensive
environment for the employee.

REPUBLIC ACT NO. 7877

AN ACT DECLARING SEXUAL
HARASSMENT UNLAWFUL IN THE
EMPLOYMENT, EDUCATION OR TRAINING
ENVIRONMENT,A ND FOR OTHER
PURPOSES

B. in an education or training environment,

sexual harassment is committed:
1. against one who is under the care, custody
or supervision of the offender;
2. against one whose education, training,
apprenticeship or tutorship is entrusted to
the offender;
3. when the sexual favor is made a condition
to the giving of a passing grade, or the
granting honors and scholarships, or the
payment of a stipend, allowance or other
benefits, privileges or considerations;
4. when the sexual advances result in an
intimidating,
hostile
or
offensive
environment for the result, trainee or
apprentice.

DECLARATION OF POLICY.
- The State shall:
1. value the dignity of every individual,
enhance the development of its human
resources,
2. guarantee full respect for human rights,
uphold the dignity of workers, employees,
applicants for employment, students or
those undergoing training, instruction or
education.
- Towards this end, all forms of sexual harassment
in the employment, education or training
environment are hereby declared unlawful.
- The law punishes sexual harassment if the same
is:
1. work-related;
2. education-related;
3. training-related
WORK, EDUCATION OR TRAINING-RELATED
SEXUAL HARASSMENT DEFINED.
- When work, education or training related sexual
harassment is committed:
a. By an employer, employee, manager,
supervisor, agent of the employer,
teacher, instructor, professor, coach,
trainor, or any other person who, having
authority,
influence
or
moral
ascendancy over another
b. In a work or training or education
environment
c. Demands, Requests or otherwise
Requires any sexual favor from the
other regardless of whether the
demand, request or requirement for
submission is
accepted by the object of said act.

- Any person who directs or induces another to

commit any act of sexual harassment as herein
defined, or who cooperates in the commission
thereof by another without which it would not
have been committed shall also be held liable
under this Act.
DUTY OF THE EMPLOYER OR HEAD OF
OFFICE IN A WORK-RELATED, EDUCATION OR
TRAINING ENVIRONMENT.
- It is the duty of the Employer or Head of Office in
a
Work-related,
Education
or
Trainings
Environment.
1. to prevent or deter the commission of acts
of sexual harassment and,
2. to provide the procedures for the resolution,
settlement or prosecution of acts of sexual
harassment.
- Towards this end, the employer or head of office
shall:
(a)

Promulgate appropriate rules and regulations

in consultation with and jointly approved by
the employees or students or trainees,
through their duly designated representatives,
prescribing the procedure for the investigation
of sexual harassment cases and the
administrative sanctions therefor.

or
employment
harassment
is

Administrative sanctions shall not be a bar

to prosecution in the proper courts for unlawful
acts of sexual harassment.

1. the sexual favor is made as a condition in

the hiring or in the employment, reemployment or continued employment of
said individual, or in granting said individual
favorable compensation, terms, conditions,
promotions or privileges, or the refusal to
grant the sexual favor results in limiting,
segregating or classifying the employee
which in any way would discriminate,
deprive
or
diminish
employment
opportunities or otherwise adversely affect
said employee;
2. The above acts would impair the
employees rights and privileges under
existing labor laws;

The said rules and regulations issued

pursuant to this subsection shall include,
among others,

A. in
a
work-related
environment,
sexual
committed when:

(a) guidelines on proper decorum in the

workplace and educational or training
institutions.

(b)

The creation of a committee on

decorum and investigation of cases on
sexual harassment.

The committee shall conduct meetings, as

the case may be, with officers and employees,
teachers, instructors, professors, coaches,

trainors and students or trainees to increase

understanding and prevent incidents of sexual
harassment. It shall also conduct the
investigation of alleged cases constituting
sexual harassment.
In the case of a work-related environment,
the committee shall be composed of at least
one(1)
representative
each
from
the
management, the union, if any, the employees
from the supervisory rank, and from the rank
and file employees.
In the case of the educational or training
institution, the committee shall be composed of
at least one (1) representative from the
administration,
the
trainors,
teachers,
instructors, professors or coaches and students
or trainees, as the case may be.
The employer or head of office, educational
or training institution shall disseminate or post a
copy of this Act for the information of all
concerned.
LIABILITY OF THE EMPLOYER, HEAD OF
OFFICE,
EDUCATIONAL
OR
TRAINING
INSTITUTION.
- The employer or head of office, educational or
training institution shall be solidarily liable for
damages arising from the acts of sexual
harassment committed in the employment,
education or training environment if the employer or
head of office, educational or training institution is
informed of such acts by the offended party and no
immediate action is taken thereon.
INDEPENDENT ACTION FOR DAMAGES
- Nothing in this Act shall preclude the victim of
work, education or training-related sexual
harassment from instituting a separate and
independent action for damages and other
affirmative relief.
PENALTIES
- Any person who violates the provisions of this Act
shall, upon conviction, be penalized by
imprisonment of not less than one (1) month nor
more than six (6) months, or a fine of not less than
Ten thousand pesos (P10,000) nor more than
Twenty thousand pesos (P20,000), or both such
fine and imprisonment at the discretion of the court.
PRESCRIPTION
- Any action arising from the violation of the
provisions of this Act shall prescribe in three (3)
years.

REPUBLIC ACT 7610

AN ACT PROVIDING FOR STRONGER
DETERRENCE AND SPECIAL PROTECTION
AGAINST CHILD ABUSE, EXPLOITATION
AND DISCRIMINATION, PROVIDING
PENALTIES FOR ITS VIOLATION AND FOR
OTHER PURPOSES
POLICY.
-It is hereby declared to be the policy of the
State to :

1. provide special protection to children from

all forms of abuse, neglect, cruelty,
exploitation and discrimination, and other
conditions prejudicial to their development;
2. provide sanctions for their commission and
3. carry out a program for prevention and
deterrence of and crisis intervention in
situations of child abuse, exploitation and
discrimination.
- The State shall intervene on behalf of the child
when:
1. the parent, guardian, teacher or person
having care or custody of the child fails or is
unable to protect the child against abuse,
exploitation and discrimination or
2. when such acts against the child are
committed by the said parent, guardian,
teacher or person having care and custody
of the same.
- The best interests of children shall be the
paramount consideration in all actions concerning
them
- Every effort shall be exerted to promote the
welfare of children and enhance their opportunities
for a useful and happy life.
CHILDREN persons below 18 years of age or
those over but are unable to fully take care of
themselves or protect themselves from abuse,
neglect, cruelty, exploitation or discrimination
because of a physical or mental disability or
condition
CHILD ABUSE - maltreatment, whether habitual
or not, of the child which includes any of the
following:
1. Psychological and physical abuse, neglect,
cruelty, sexual abuse and emotional
maltreatment;
2. Any act by deeds or words, which debases,
degrades or demeans the intrinsic worth
and dignity of a child as a human being;
3. Unreasonable deprivation of his basic
needs for survival, such as food or shelter;
or
4. Failure to immediately give medical
treatment to an injured child resulting in
serious impairment of his growth and
development, or in his permanent
incapacity or death.
"COMPREHENSIVE PROGRAM AGAINST
CHILD
ABUSE,
EXPLOITATION
AND
DISCRIMINATION" - refers to the coordinated
program of services and facilities to protect children
against:
1.
2.
3.
4.
5.

Child prostitution and other sexual abuse;

Child trafficking;
Obscene publications and indecent shows;
Other acts of abuse; and
Circumstances which threaten or endanger
the survival and normal development of
children.

RULE ON CHILD LABOR

Children below fifteen (15) years of

age shall not be employed

Except:
1.When a child works directly under the sole
responsibility of his parents or legal guardian and
where only members of the employer's family are
employed
- However, the ff. conditions must be met:

that his employment neither endangers

his life, safety, health and morals, nor
impairs his normal development;
that the parent or legal guardian shall
provide the said minor child with the
prescribed primary and/or secondary
education;

- Every employer shall comply with the duties

provided for in Articles 108 and 109 of PD 603
(Child and Youth Welfare Code):
Article 108, PD 603 Duty of Employer to
Submit Report
Article 109, PD 603 Register of Children

PROHIBITION
DISCRIMINATION.

AGAINST

CHILD

-No employer shall discriminate against any

person in respect to terms and conditions of
employment on account of his age. (Art. 140 Labor
Code)

2.
Where a child's employment or participation
in public entertainment or information through
cinema, theater, radio or television is essential
- However the ff. conditions must be met:

The employment contract is concluded

by the child's parents or legal guardian,
with the express agreement of the child
concerned, if possible, and approval of
the Department of Labour and
Employment
That the following requirements in all
instances are strictly complied with:
(a) The employer shall ensure the
protection, health, safety, morals
and normal development of the
child;
(b) The
employer
shall institute
measures to prevent the child's
exploitation or discrimination taking
into account the system and level
of remuneration and the duration
and arrangement of working time;
and
(c) The employer shall formulate and
implement, subject to the approval
and supervision of competent
authorities,
a
continuing
programme for training and skills
acquisition of the child.

- In the above exceptional cases where any such

child may be employed, the employer shall first
secure, before engaging such child, a work permit
from the Department of Labour and Employment
which shall ensure observance of the above
requirements. (RA 7610, as amended by RA 7658)
PROHIBITION ON THE EMPLOYMENT OF
CHILDREN IN CERTAIN ADVERTISEMENTS.

No person shall employ child models in all

commercials or advertisements promoting alcoholic
beverages, intoxicating drinks, tobacco and its byproducts, and violence. (Sec. 14 RA 7610)
COMPLIANCE WITH PD 603

13TH MONTH PAY LAW (P.D. 851)

SEC. 2.

DEFINITION OF CERTAIN TERMS

"THIRTEENTH-MOTH PAY" - shall mean one

twelfth (1/12) of the basic salary of an employee
within a calendar year;
"BASIC SALARY" - include all remunerations or
earnings paid by an employer to an employee for
services rendered but may not include:
1. cost-of-living allowances
2. profit-sharing payments, and
3. all allowances and monetary benefits which
are not considered or integrated as part of
the regular or basic salary of the employee
at the time of the promulgation of the
Decree on December 16, 1975.
WHAT CAN BE CONSIDERED AS 13TH MONTH
PAY:
1. Christmas bonus
2. Midyear bonuses
3. Cash bonuses
SEC. 3.

EMPLOYERS COVERED

- The Decree shall apply to all employers except

to:
a)
Distressed employers,
- such as
1. those which are currently incurring
substantial losses; or
2. in the case of non-profit institutions and
organizations, where their income, whether
from donations, contributions, grants and
other earnings from any source, has
consistently declined by more than forty
(40%) percent of their normal income for
the last two (2) years, subject to the
provision of Section 7 of this issuance;
b)The Government and any of its political
subdivisions, including GOCCs except those
corporations operating essentially as private
subsidiaries of the Government;

c)Employers already paying their employees 13month pay or more in a calendar year of its
equivalent at the time of this issuance;
d)Employers of household helpers and persons in
the personal service of another in relation to such
workers; and
e)Employers of those who are paid on purely
commission, boundary, or task basis, and those
who are paid a fixed amount for performing a
specific work, irrespective of the time consumed
in the performance thereof, except where the
workers are paid on piece-rate basis in which
case the employer shall be covered by this
issuance insofar as such workers are concerned.
WORKERS PAID ON PIECE-RATE BASIS - refer
to those who are paid a standard amount for every
piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent
in producing the same.
"ITS EQUIVALENT" (as used in paragraph c)
hereof) shall include:
1. Christmas bonus
2. mid-year bonus
3. profit-sharing payments and
4. other cash bonuses amounting to not less
than 1/12th of the basic salary but shall not
include cash and stock dividends, cost of
living allowances and all other allowances
regularly enjoyed by the employee, as well
as non-monetary benefits.
- Where an employer pays less than 1/12th of
the employees basic salary, the employer shall
pay the difference.
SEC. 4.
EMPLOYEES COVERED
- Except as provided in Section 3 of this issuance,
all employees of covered employers shall be
entitled to benefit provided under the Decree who
are receiving not more than P1,000 a month,
regardless of their position, designation or
employment status, and irrespective of the method
by which their wages are paid, provided that they
have worked for at least one month during the
calendar year.
WHO ARE EXCLUDED FROM COVERAGE:
1. government employees
2. household helpers
3. employees paid purely on commission
basis
4. employees already receiving 13th month
pay
SEC. 5.
OPTION
OF
COVERED
EMPLOYERS
A covered employer may pay one-half of the
13th-month pay required by the Decree before the
opening of the regular school year and the other
half on or before the 24th day of December of every
year.
-In any establishment where a union has been
recognized or certified as the collective bargaining
agent of the employees therein, the periodicity or
frequency of payment of the 13th month pay may
be the subject of agreement.
SEC. 6.

SPECIAL FEATURE OF BENEFIT

- The benefits granted under this issuance shall not

be credited as part of the regular wage of the
employees for purposes of determining overtime
and premium pay, fringe benefits, as well as
premium contributions to the State Insurance Fund,
social security, medicare and private welfare and
retirement plans.
SEC. 7.
EXEMPTION OF DISTRESSED
EMPLOYERS
- Distressed employers shall qualify for exemption
from the requirement of the Decree upon prior
authorization by the Secretary of Labor.
SEC. 8.
REPORT OF COMPLIANCE
- Every covered employer shall make a report of
his compliance with the Decree to the nearest
regional labor office not later than January 15 of
each year.
SEC. 9.
ADJUDICATION OF CLAIMS
Non-payment of the thirteenth-month pay
provided by the Decree and these rules shall be
treated as money claims cases and shall be
processed in accordance with the Rules
Implementing the Labor Code of the Philippines and
the Rules of the National Labor Relations
Commission.
SEC. 10.
PROHIBITION
AGAINST
REDUCTION OR ELIMINATION OF
BENEFITS
- Nothing herein shall be construed to authorize
any employer to eliminate, or diminish in any way,
supplements, or other employee benefits or
favorable practice being enjoyed by the employee
at the time of promulgation of this issuance.
PRIVATE SCHOOL TEACHERS
- Private school teachers, including faculty
members of colleges and universities, are entitled
to 1/12 of their annual basic pay regardless of the
number of months they teach or are paid within a
year.
OT PAY
- Overtime pay, earnings and other remunerations
which are not part of the basic salary shall not be
included in the computation of the 13-month pay.

RA 8042: "MIGRANT WORKERS AND

OVERSEAS FILIPINOS ACT 0F 1995"
Approved on 07 June 1995 and took effect on 15
July 1995. As indicated in its title, the law institutes
the policies of overseas employment and
establishes a higher standard of protection and
promotion of the welfare of migrant workers, their
families, and of overseas Filipinos in distress.
GUARANTEE OF PROTECTION FOR
OVERSEAS WORKERS
The State shall deploy overseas Filipino
workers only in countries where the rights
of
Filipino migrant workers are protected. The
government recognizes any of the following as
a guarantee for the protection of the receiving
country of the rights of overseas Filipino
workers:

1. It has existing labor and social laws protecting

the rights of migrant workers;
2. It is a signatory to multilateral conventions,
declarations or resolutions relating to the protection
of migrant workers;
3. It has concluded a bilateral agreement or
arrangement with the government protecting the
rights of overseas Filipino workers; and,It is taking
positive, concrete measures to protect the rights of
migrant workers.
JURISDICTION
1. NLRC
Money Claims - the Labor Arbiters of the
National Labor Relations Commission
(NLRC) shall have the original and exclusive
jurisdiction to hear and decide, the claims arising
out of an employer-employee relationship or by
virtue of any law or contract involving Filipino
workers for overseas deployment including
claims for actual, moral, exemplary and other
forms of damages.
2. POEA
The POEA retains original and exclusive
jurisdiction to hear and decide:
3. all cases which are administrative in
character, involving or arising out of
violations of rules and regulations relating
to licensing and registration of recruitment
and employment agencies or entities; and
4. disciplinary action cases and other special
cases which are administrative in character,
involving employers, principals, contracting
partners and Filipino migrant workers.
LIABILITIES
The liability of the principal/employer and
the recruitment/placement agency for any and all
claims under this section shall be joint and several.
The performance bond to be filed by the
recruitment/placement agency, as provided by law,
shall be answerable for all money claims, or
damages that may be awarded to the workers. If
the recruitment/placement agency is a juridical
being, the corporate officers and directors and
partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or
partnership for the aforesaid claims and damages.
Such liabilities shall continue during the
entire period or duration of the employment contract
and shall not be affected by any substitution,
amendment or modification made locally or in a
foreign country of the said contract.

The date the employment termination

occurred is material. On or after 15 July 1995, the
law to apply is RA 8042.
Under Section 10 of RA 8042, a worker
dismissed from overseas employment without just,
valid or authorized cause as defined by law or
contract, is entitled to the full reimbursement of his
placement fee with interest at twelve percent (12%)
per annum, plus his salary for the unexpired portion
of his employment contract or for three (3) months
for every year of the unexpired term, whichever is
LESS.
VENUE
A criminal action arising from illegal
recruitment shall be filed with the RTC of the
province or city where the offense was committed or
where the offended party actually resides at the
time of the commission of the offense. The court
where the criminal action is first filed shall acquire
jurisdiction to the exclusion of other courts.
PRESCRIPTIVE PERIODS
Illegal recruitment cases under this Act
shall prescribe in five (5) years; provided,
however, That illegal recruitment cases
involving economic sabotage as defined herein
shall prescribe in twenty (20) years. (Sec. 12,
R.A. 8042)
PROHIBITED ACTS IN THE RECRUITMENT
AND PLACEMENT OF WORKERS UNDER THE
LABOR CODE ARE RETAINED UNDER THE
MIGRANT WORKERS ACT WITH THE ADDITION
OF THE FOLLOWING:
1. Failure to deploy employee without valid
reason
2. Failure to reimburse expenses incurred in
connection with his documentation and
processing in cases that deployment did
not take place
DIFFERENT FUNDS CREATED UNDER THE
LAW:
1.
2.
3.
4.

Repatriation fund
Loan Guaranty fund
Legal Assistance fund
Congressional
Migrant
Scholarship fund

Workers

GOVERNMENT AGENCIES MOBILIZED:

1. DFA
2. DOLE
Three Month's Pay Under RA 8042
3. POEA
4. OWWA
POEA RULES & REGULATIONS GOVERNING THE RECRUITMENT & EMPLOYMENT OF LANDBASED
OVERSEAS WORKERS (2002)
PART II: LICENSING AND REGULATION
Qualifications for those who may be permitted to engage in the business of recruitment and placement of
Filipino workers:
Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock
of which is owned and controlled by Filipino citizens;

A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership
and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided that
those with existing licenses shall, within four years from effectivity hereof, increase their capitalization or paid up
capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand
Pesos (P250,000.00) every year.
Those not otherwise disqualified by law or other government regulations to engage in the recruitment and
placement of workers for overseas employment.
Disqualifications to engage in the business of recruitment and placement of Filipino workers overseas:
Travel agencies and sales agencies of airline companies;
Officers or members of the Board of any corporation or members in a partnership engaged in the business of a
travel agency;
Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer,
member of the board or partner of a corporation or partnership engaged in the business of a travel agency;
Persons, partnerships or corporations which have derogatory records, such as but not limited to the following:
1) Those certified to have derogatory record or information by the National Bureau of Investigation or by the
Anti-Illegal Recruitment Branch of the POEA; 2) Those against whom probable cause or prima facie finding of
guilt for illegal recruitment or other related cases exists; 3) Those convicted for illegal recruitment or other
related cases and/or crimes involving moral turpitude; and 4) Those agencies whose licenses have been
previously revoked or cancelled by the Administration for violation of RA 8042, PD 442 as amended and their
implementing rules and regulations as well as these rules and regulations. All applicants for issuance/renewal of
license shall be required to submit clearances from the National Bureau of Investigation and Anti-illegal
Recruitment Branch, POEA, including clearances for their respective officers and employees.
Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in
the implementation of R.A. 8042, otherwise known as Migrant Workers and Overseas Filipino Act of 1995 and/or
any of his/her relatives within the fourth civil degree of consanguinity or affinity; and
Persons or partners, officers and Directors of corporations whose licenses have been previously cancelled or
revoked for violation of recruitment laws.
REQUIREMENTS FOR LICENSING Every applicant for license to operate a private employment agency shall
submit a written application together with the following requirements:
A certified copy of the Articles of Incorporation or of Partnership duly registered with the Securities and
Exchange Commission (SEC), or Certificate of Registration of the firm or business name with the Department of
Trade and Industry (DTI);
Proof of financial capacity: verified income tax returns for the past two (2) years and/or a savings account
certificate showing a maintaining balance of not less than P500,000.00.
Proof of marketing capability: 1) A duly executed Special Power of Attorney and/or a duly concluded.
Recruitment/ Service Agreement; 2) Manpower request(s) or visa certification from new employer(s)/ principal(s)
for not less than one hundred (100) workers; and 3) Certification from Pre-Employment Services Office of
POEA on the existence of new market.
Clearances of all members of the applicant agency from the National Bureau of Investigation (NBI) and other
government agencies as may be required; appropriate clearance in case of persons with criminal cases;
provided that where the member or partner concerned is a foreigner, clearance from his country of origin shall
be required.
A verified undertaking stating that the applicant: 1) Shall select only medically and technically qualified recruits;
2) Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with
the use of the license; 3) Shall assume joint and solidary liability with the employer for all claims and liabilities
which may arise in connection with the implementation of the contract, including but not limited to payment of
wages, death and disability compensation and repatriations; 4) Shall guarantee compliance with the existing
labor and social legislations of the Philippines and of the country of employment of the recruited workers; 5)
Shall assume full and complete responsibility for all acts of its officials, employees and representatives done in
connection with recruitment and placement; 6) Shall negotiate for the best terms and conditions of employment;
7) Shall disclose the full terms and conditions of employment to the applicant workers; 8) Shall deploy at least
100 workers to its new markets within one (1) year from the issuance of its license; 9) Shall provide orientation
on recruitment procedures, terms and conditions and other relevant information to its workers and provide
facilities therefor; and 10) Shall repatriate the deployed workers and his personal belongings when the need
arises. [For the purpose of compliance with item (1), the agency may require the worker to undergo trade testing
and medical examination only after the worker has been pre-qualified for employment.]
In case of corporation or partnership, verified undertaking by its officers, directors, partners that they will be
jointly and severally liable with the company over claims arising from employer-employee relationship.
Proof of possession by the sole proprietor, partner or chief executive officer, as the case may be, of a bachelors
degree and three years business experience.
List of all officials and personnel involved in the recruitment and placement, together with their appointment, biodata and two (2) copies of their passport-size pictures as well as their clearances from the National Bureau of
Investigation and the Anti-illegal Recruitment Branch of the Administration.
Copy of contract of lease or proof of building ownership, indicating the office address.
Proof of publication of notice of the application with the names of the proprietor, partners, incorporators and
officers.
Certificate of attendance of owner and/or chief executive officer in a pre-application seminar conducted by the
Administration.
ACTION UPON THE APPLICATION FOR LICENSE -- Within fifteen (15) calendar days from receipt of an
application with complete requirements including proof of payment of the filing fee of P10,000.00, the

Administration shall evaluate the pertinent documents, inspect the offices and equipment and determine whether
or not to grant or deny the application. Denial of an application will result in the forfeiture of the filing fee.
Payment of Fees and Posting of Bonds:
License fee of P50,000.00.
Escrow Agreement in the amount of P1,000,000.00, confirmation of escrow deposit with an accredited reputable
bank and a surety bond of P100,000.00 from a bonding company acceptable to the Administration and
accredited with the Insurance Commission.
Agencies with existing licenses shall, within four years from effectivity hereof, increase their Escrow Deposit to
One Million Pesos.
Purposes for the posting of bonds and escrow agreement:
shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the
license, and/or accreditation and contracts of employment;
shall likewise guarantee compliance with the provisions of the Code and its implementing rules and regulations
relating to recruitment and placement, the Rules of the Administration and relevant issuances of the Department
and all liabilities which the Administration may impose; and
the surety bonds shall include the condition that notice to the principal is notice to the surety and that any
judgment against the principal in connection with matters falling under POEAs/NLRCs jurisdiction shall be
binding and conclusive on the surety. The surety bonds shall cover the validity period of the license.
VALIDITY OF THE LICENSE Four (4) years from the date of issuance unless sooner cancelled, revoked or
suspended for violation of applicable law, rules and other pertinent issuances. Such license shall be valid only at
the place/s stated therein and when used by the licensed person, partnership or corporation.
EFFECT UPGRADING OF SINGLE PROPRIETORSHIP OR PARTNERSHIPS INTO CORPORATION -- The
approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the single
proprietorships, partnerships or corporations so merged, consolidated or upgraded.
PURPOSE FOR THE UPGRADING To respond adequately to developments/changes in the international
labor market and to enable them to better comply with their responsibilities arising from the recruitment and
deployment of workers overseas.
NON-EXPIRATION OF LICENSE -- Where the license holder has made timely and sufficient application for
renewal, the existing license shall not expire until the application shall have been finally determined by the
POEA. For this purpose, an application shall be considered sufficient if the applicant has substantially complied
with the requirements for renewal.
REPLENISHMENT OF SURETY BONDS/DEPOSIT IN ESCROW Within fifteen (15) calendar days from date
of receipt of notice from the POEA that the bonds/deposit in escrow, or any part thereof had been garnished, the
agency shall replenish the same. Failure to replenish such bonds/deposit in escrow within the said period shall
cause the suspension of the license.
RELEASE OF DEPOSIT IN ESCROW A licensed agency which voluntarily surrenders its license shall be
entitled to the release of the deposit in escrow, only after posting a surety bond of similar amount valid for four
(4) years from expiration of license and submission of the necessary clearances from the National Labor
Relations Commission (NLRC) and the Administration.
ADVERTISEMENT FOR MANPOWER POOLING Licensed agencies may advertise for manpower pooling
without prior POEA approval provided that the ad indicates the following:
name, address and POEA license number of the agency
no fees will be collected from the applicants;
name and worksite of prospective principal; and
skill categories and qualification standards
PART III: PLACEMENT BY THE PRIVATE SECTOR
VERIFICATION OF DOCUMENTS Made at the worksite prior to the registration with the POEA which includes
the review of the master employment contract, its capability to hire workers at the applicable rates and at a
desirable working conditions that are in conformity with the minimum standards prescribed by POEA and with
the labor laws of the host country.
DOCUMENTARY REQUIREMENTS FOR VERIFICATION Also submitted for registration special power of attorney issued to the licensed Philippine agency, or recruitment agreement or service
agreement;
master employment contract which incorporates the minimum provisions of employment contracts of land-based
workers (wages, benefits, just/authorized causes for termination, etc.)
manpower request indicating the position and salary of the workers to be hired;
valid business license, registration certificate, or equivalent document.
REGISTRATION OF FOREIGN PLACEMENT AGENCIES May be registered as principals if they are
authorized to operate as such in their respective countries and subject to prescribed guidelines by the POEA.
VALIDITY OF REGISTRATION Valid for a maximum of 4 years, unless sooner revoked or cancelled by POEA
on the following grounds:
expiration of the principals business license;

upon written mutual agreement by the parties to pre-terminate the agreement;

false documentation or misrepresentation in connection with the application for registration;
final judgment in a disciplinary action against the foreign principal.
RENEWAL OF REGISTRATION Upon request by the agency provided that the documents required for initial
registration are still valid.
OPEN REGISTRATION A foreign principal that acts as a direct employer may be registered to more than one
Philippine agency provided that:
there is a uniform compensation package with the agency;
principal has a verified job order of at least 50 workers;
the principal must have hired at least 50 workers within a period of 1 year immediately preceding the election.
DUAL REGISTRATION A principal that is licensed to operate as foreign placement agency by its
government may be registered to a maximum of two Philippine agencies provided that the above
conditions for open registration are met.
TRANSFER OF REGISTRATION Allowed provided that:
the compensation package previously approved by the POEA shall be maintained
the transferee shall assume full and complete responsibility of all contractual obligations of the principal to its
workers originally recruited and processed by the former agency.
ACTION ON APPLICATION FOR REGISTRATION OF PRINCIPALS WITH OUTSTANDING OBLIGATIONS
Shall not prevent the POEA from acting on the request for registration, even if there is a pending
conciliation.
PART IV: PLACEMENT BY THE ADMINISTRATION
HIRING THROUGH THE ADMINISTRATION Primarily on government-to-government arrangements and shall
service the hiring of foreign government instrumentalities; shall also recruit for foreign employers in such sectors
as the policy may dictate.
Recruitment and placement: Activities shall include but not limited to interview and selection, referral to medical
examination, processing of contracts, assistance in securing of passport and appropriate visas, pre-employment
orientation, pre-departure orientation and travel arrangements.
GUARANTEE TRUST FUND Established for all workers hired on a government-to-government arrangement
for the purpose of covering monetary claims of the workers arising from breach of contractual obligations.
PART V: EMPLOYMENT STANDARDS
FORMULATION OF EMPLOYMENT STANDARDS The POEA shall determine, formulate and review
employment standards in accordance with prevailing market realities/conditions.
OFFSETTING BENEFITS Considered in lieu of free transportation to and from the worksite and free food and
accommodation.
FREEDOM TO STIPULATE ON THE TERMS AND CONDITIONS OF THE EMPLOYMENT Parties shall have
the freedom to stipulate other terms and conditions provided that these are not contrary to law, morals and
public policy.
DISCLOSURE OF TERMS AND CONDITIONS OF EMPLOYMENT The agency and the worker shall fully
disclose all relevant information in relation to the recruitment and employment. The whole employment package
should be beneficial to the workers and not contrary to law, morals and public policy.
PART VI: RECRUITMENT VIOLATION & RELATED CASES
JURISDICTION ON VIOLATIONS OF RECRUITMENT RULES AND REGULATIONS The POEA shall have
original and exclusive jurisdiction over administrative cases, involving and arising out of the
CLASSIFICATION OF OFFENSES AND THEIR PENALTIES:
violations of recruitment rules and regulations including refund of fees collected from workers and violations of
the conditions for issuance of license to recruit workers.
GROUNDS FOR IMPOSITION OF ADMINISTRATIVE SANCTIONS:
Section 6, R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995)
Section 2, Rule I, Part VI of the POEA Rules and Regulations 2002

VENUE TO FILE COMPLAINTS Recruitment violation cases may be filed with the POEA Adjudication
Office or with the POEA Regional Centers / Regional Extension Units which exercise territorial
jurisdiction over the place where the complainant was recruited.
WHO MAY FILE COMPLAINT Any person prejudiced by the commission of any violation of the Labor Code,
POEA Rules and other issuances relating to recruitment However, the POEA, on its own initiative, may conduct
proceedings based on reports of the violation of POEA Rules and Regulations and other issuances on overseas
employment subject to preliminary evaluation.
PRELIMINARY HEARING It is set to allow parties to voluntarily settle their differences.
EFFECTS OF WITHDRAWAL OF COMPLAINT / DESISTANCE shall not bar the POEA from proceeding with
the investigation of the recruitment violations, and may resolve the case on the merits and impose penalties.
RESOLUTION OF CASES Within 90 days from the filing of the case, the adjudicator must submit his findings
and recommendations in the form of a draft order.
ORDER OF PREVENTIVE SUSPENSION PENDING INVESTIGATION When issued by the POEA, the
adjudicator shall, within 60 days, submit his findings and recommendations in the form of a draft order.
Light offenses - Penalties: 1st offense reprimand; 2nd offense suspension of license for 2-6 months; 3 rd
offense cancellation of license. Alternative penalty: fine of P10,000 per month of suspension. In determining
the period of suspension, mitigating and aggravating circumstances shall be considered.
for the owner, partner or officers of any licensed agency to become a member of the Board of any corporation or
partnership engaged in the management of a travel agency;
inducing or attempting to induce an already employed worker to transfer from or leave his employment for
another unless the transfer is designed to liberate a worker from oppressive terms and conditions of
employment;influencing or attempting to influence any person or entity not to employ any worker who has not
applied for employment through his agency;
failure to deploy a worker within the prescribed period without valid reasons;
coercing workers to accept prejudicial arrangements in exchange for certain benefits that rightfully belong to the
workers;
disregard of orders, notices and other legal processes issued by the POEA;
failure to submit reports related to overseas recruitment and employment within the specified time, as may be
required by POEA; and
violation of other pertinent provisions of the Labor Code and other relevant laws, rules and guidelines for
overseas employment.
Less serious offenses - Penalties: 1 st offense suspension of license for 2-6 months; 2nd offense cancellation
of license. Alternative penalty: fine of P10,000 per month of suspension. In determining the period of
suspension, mitigating and aggravating circumstances shall be considered.
charging before employment is obtained for applicant worker;
collecting any fee from a worker without issuing the appropriate receipt;
misrepresentations in connection with recruitment and placement of workers;
obstructing or attempting to obstruct inspection by the Secretary, the POEA, or their duly authorized
representatives
altering to the prejudice of the worker, employment contracts approved and verified by DOLE;
withholding or denying travel and documents for considerations other than those authorized by laws
engaging in recruitment activities in places other than that specified in the license without POEA authorization;
appointing agents or employees without POEA approval;
falsifying travel documents of applicant worker in relation to overseas recruitment activities;
deploying workers whose documents were not processed by the POEA;
deploying workers to principals not registered by the POEA;
withholding of workers salaries or remittances without justifiable reasons;
allowing persons who are otherwise disqualified to participate in the overseas employment program under
existing laws, rules and regulations to participate in the management and operations of the agency;
failure to reimburse expenses incurred by the worker in connection with his documentation and processing for
purposes of deployment, where deployment does not take place without the workers fault;
failure to comply with the undertaking to provide Pre-Departure Orientation Seminars to Workers;
non-compliance with any other undertaking in connection with the issuance or renewal of the license.
Serious offenses - Penalty: cancellation of license.
deployment of underage workers;
misrepresentation in securing license or renewal;
recruitment in jobs harmful to public health or morality;
transfer of ownership of a single proprietorship;
charging or collection of placement fees for deployment to countries where charging or collection is prohibited;
and
charging or collection of excessive placement fees.

JURISDICTION ON APPEAL OR PETITIONS FOR REVIEW The Secretary of Labor and Employment shall
have exclusive jurisdiction to act on appeal or petition for review of cases decided by the POEA, which should
be filed within 15 calendar days from receipt of the decision. Failure to appeal within the reglementary period
shall render the decision of the POEA final and executory. The appeal will stay the execution upon posting of a
supersedeas bond, except only where the penalty imposed is suspension for 12 months or more or cancellation
of license which shall be immediately executory. The appeal shall be resolved within 60 days from the receipt of
transmittal of the entire records of the case.
EXECUTION OF DECISIONS After the Order has become final and executory, the POEA shall issue a writ of
execution upon motion or on its own initiative.
PART VII: DISCIPLINARY ACTION CASES
JURISDICTION ON DISCIPLINARY ACTION CASES The POEA shall exercise original and exclusive
jurisdiction to hear and decide disciplinary action cases against migrant workers, foreign employers and
principals that are administrative in character, which shall be filed with the Adjudication Office of the POEA.
GROUNDS FOR DISCIPLINARY ACTION AGAINST PRINCIPALS OR EMPLOYERS:
default on its contractual obligations to the migrant worker and/or to its Philippine agent;
gross violation of laws, rules and regulations on overseas employment;
gross negligence leading to serious injury or illness or death of the worker;
grave misconduct;
conviction of an offense involving moral turpitude;
any other cases analogous to the foregoing.
RESOLUTION OF THE DISCIPLINARY ACTION CASES Within 60 days, the adjudicator shall submit his
findings and recommendations in the form of draft order.
DISQUALIFICATION OF FOREIGN EMPLOYERS/PRINCIPALS Foreign employers and principals against
whom the penalty of suspension or disqualification had been imposed through an order, decision or resolution
shall be disqualified from participating in the overseas employment program unless cleared by the POEA or the
penalty imposed is lifted.

GROUNDS FOR DISCIPLINARY ACTION COMMISSION BY A MIGRANT WORKER:

Pre-employment offenses
Using or submitting false information or documents for purposes of job application or employment.
Unjustified refusal to depart for the worksite after all employment and travel documents have been duly
approved by the appropriate government agencies.
Offenses during employment
Commission of a felony or a crime punishable by the Philippine laws and by the laws of the host country.
Unjustified breach of employment contract.
Embezzlement of company funds or monies and/or properties of a fellow worker entrusted for delivery to kin or
relatives in the Philippines, and
Violations of the sacred practices of the host country.
JURISDICTION OF APPEALS/PETITION FOR REVIEW The Secretary shall have the exclusive jurisdiction to
act on appeals/petition for review of disciplinary action cases decided by the POEA, which must filed within the
reglementary period of 15 calendar days.

Title:Labor Advisory on Retirement Pay Law

SUbject: Guidelines for the Effective Implementation of RA 7641, The Retirement Pay Law
A. Coverage
RA 7641 or the Retirement Pay Law shall apply to all employees in the private sector, regardless of their
position, designation or status and irrespective of the method by which their wages are paid. They shall include
part-time employees, employees of service and other job contractors and domestic helpers or persons in the
personal service of another.
The law does not cover employees of retail, service and agricultural establishments or operations
employing not more than ten (10) employees or workers and employees of the National Government and its
political subdivisions, including government owned and controlled corporations, if they are covered by the Civil
Service Law and its regulations.
B. Computation of Retirement Pay
A Covered employee who retires pursuant to RA 7641 shall be entitled to retirement pay equivalent to at
least one half (1/2) month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.
The law is explicit that one half month salary shall mean fifteen (15) days plus one twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days service incentive leaves unless the parties
provide for broader inclusions. Evidently, the law expanded the concept of one half month salary from the
usual one month salary divided by two.
In reckoning the length of service, the period of employment with the same employer before the
effectivity date of the law on January 7, 1993 shall be included.
C. Substitute Retirement Plan
Qualified workers shall be entitled to the retirement benefit under RA 7641 in the absence of any individual
or collective agreement, company policy or practice. In case there is such an agreement, policy or practice
providing retirement benefit, which is equal or superior to that which is provided in the Act, said agreement,
policy or practice will prevail.
As provided in RA 7742, a private employer shall have the option to treat the coverage of the PAG
IBIG Fund as a substitute retirement benefit for the employee concerned within the purview of the Labor Code
as amended; provided, such option does not in any way contravene an existing collective bargaining agreement
or other employment agreement. Thus, the PAG IBIG Fund can be considered as a substitute retirement plan
of the company for its employees provided that such scheme offers benefits which are more than or at least
equal under RA 7641. If said scheme provides less than what the employee is entitled to under RA 7641, the
employer is liable to pay the difference.
If both the employee and the employer contribute to a retirement plan, only the employers contribution
and its increments shall be considered for full or partial compliance with the benefit under RA 7641. On the
other hand, where the employee is the lone contributor to the PAG IBIG Fund, the employer being exempted
from its coverage, he employer is under obligation to give his employee retirement benefits under the ACT.
(Sgd) LEONARDO A. QUISUMBING

Guidelines on the Right to Organize of Government Employees Executive Order 180

I. Coverage
Section 1. This Executive Order applies to all employees of all branches, subdivisions, instrumentalities
and agencies of the Government, including government owned or controlled corporations with original
charters. For this purpose, employees covered by this Executive Order shall be referred to as government
employees.
Section 2. All government employees can form, join or assist employees organization for their own
choosing for the furtherance and protection of their interests. They can also form, in conjunction with

appropriate government authorities, labor management committees, works councils and other forms of
workers participation schemes to achieve the same objectives.
Section 3. High level employees whose functions are normally considered as policy making or
managerial or whose duties are of a highly confidential nature shall not be eligible to join the organization of rank
and file employees.
Section 4. The Executive Order shall not apply to the members of the Armed Forces of the Philippines,
including police officers, policemen, firemen and jail guards.
II. Protection of the Right to Organize
Section 5. Government employees shall not be discriminated against in respect of their employment by
reason of their membership in employees organizations or participation in the normal activities of their
organization. Their employment shall not be subject to the condition that they shall not join or shall relinquish
their membership in the employees organizations.
Section 6. Government authorities shall not interfere in the establishment, functioning or administration
of government employees organizations through acts designed to place such organizations under the control of
government authority.
III. Registration of Employees Organization
Section 7. Government employees organizations shall register with the Civil Service Commission and
the Department of Labor and Employment. The application shall be filed with the Bureau of Labor Relations of
the Department which shall process the same in accordance with the provisions of the Labor Code of the
Philippines, as amended. Applications may also be filed with the Regional Offices of the Department of labor
and Employment which shall immediately transmit the said applications to the Bureau of Labor Relations within
three (3) days from receipt thereof.
Section 8. Upon the approval of he application, a registration shall be issued to the organization
recognizing it as a legitimate employees organization with the right to represent its members and undertake
activities to further and defend its interests. The corresponding certificates of registration shall be jointly
approved by the Chairman of the Civil Service Commission and Secretary of Labor and Employment.
IV. Sole and Exclusive Employees Representatives
Section 9. The appropriate organization unit shall be the employers unit consisting of rank and file
employees unless circumstances otherwise require.
Section 10. A duly registered employees organization having the support of the majority of the
employees in the appropriate organizational unit shall be designated as the sole and exclusive representative of
the employees.
Section 11. A duly registered employees organization shall be accorded voluntary recognition upon
showing that no other employees organization is registered or is seeking registration, based on records of the
Bureau of Labor Relations, and that the said organization has the majority support of the rank and file
employees in the organizational unit.
Section 12. Where there are two or more duly registered employees organization in the appropriate
organizational unit, the Bureau of Labor Relations shall, upon petition, order the conduct of a certification
election and shall certify the winner as the exclusive representative of the rank and file employees in said
organization unit.
V. Terms and Conditions of Employment in government Services
Section 13. Terms and conditions of employment or improvements thereof, except those that are fixed
by law, may be the subject of negotiations between duly recognized employees organizations and appropriate
government authorities.
VI. Peaceful concerted Activities and Strikes
Section 14. The Civil Service Law and rules governing concerted activities and strikes in the
government service shall be observed, subject to any legislation that may be enacted by Congress.
VII. Public Sector Labor Management Council
Section 15. A Public Sector Labor Management Council, hereinafter referred to as the Council, is hereby
constituted to be composed of the following:
1. Chairman, Civil Service Commission Chairman
Secretary, Department of Labor and Employment Vice Chairman
2. Secretary, Department of Finance Member

3. Secretary, Department of Justice Member

4. Secretary, Department of Budget and Management Member
VIII. Settlement of Disputes
Section 16. The Civil Service and labor laws and procedures, wherever applicable, shall be followed n
the resolution of complaints, grievances and cases involving government employee. In case any dispute
remains unresolved after exhausting all the available remedies under existing laws and procedures, t he parties
may jointly refer the dispute to the Council, for appropriate action.
IX. Effectivity
Section 17. This Executive Order shall take effect immediately.
Done in the City of Manila, this 1 st day June, in the year of Our Lord, nineteen hundred and eighty
seven.
(Sgd.) CORAZON C. AQUINO