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E. SPECIFIC ISSUES ON LABOR STANDARDS

1.

WAGES; SOME GOVERNING RULES:

FAIR AND REASONABLE VALUE shall not include any profit to the employer, or
to any person affiliated with the employer.
NO WORK NO PAY PRINCIPLE. -- 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. But where the failure of employees to work was not due to
the employers fault, the burden of economic loss suffered by the employers should
not be shifted to the employer. Each party must bear his own loss.
EQUAL PAY FOR EQUAL WORK. -- Employees who work with substantially equal
qualifications, skill, effort and responsibility, under similar conditions should be paid
similar salaries (International School Alliance of Educators vs. Quisumbing, GR
No.128845, June 1, 2000).
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
work done.

on the goods manufactured or the

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.

1.1 WAGE AND WAGE-RELATED BENEFITS

Minimum wages must always be complied with.
Wage Order No. NCR-20 eff. 02 June 2016
SECTOR/
INDUSTRY

BASIC
WAGE

COLA
INTEGRATI
ON

NEW BASIC
WAGE

NEW COLA

NEW
MINIMUM
WAGE
RATES

Non-agricultural (Incl
hospitals with 100
bed capacity or less)

P466.00

P15.00

P481.00

P10.00

P491.00

429.00

15.00

444.00

10.00

454.00

429.00

15.00

444.00

10.00

454.00

Agriculture
(plantation and nonplantation
Retail/Service
establishmts
employing 15
persons or less

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Manufacturing
establishments
regularly employing
less than 10 workers

429.00

15.00

444.00

10.00

454.00

EXCLUSIONS:
Kasambahay
Persons in the personal service of another, including family drivers
Workers registered in Barangay Micro-Business Enterprises (BMBE)
with Certificates of Authority per R.A. 9178

Hours of work: Hours of worked shall include: (a) all time during which an
employee is required to be on duty or to be at the prescribed workplace,
and (b) all time during which an employee is suffered or permitted to work.
The normal working hours shall be no more than eight (8) hours a day.
Meal and rest period: meal break of less than one (1) hour and short rest
periods shall be considered compensable working time
Holiday pay. -- The employee is entitled to the payment of his regular daily
basic wage (100%) during said holidays, even if the worker did not report
for work on said days; PROVIDED THAT HE WAS PRESENT OR WAS ON
LEAVE OF ABSENCE WITH PAY ON THE WORK DAY IMMEDIATELY
PRECEDING THE HOLIDAY. If the employee was suffered to work during
the said holidays, they will be entitled to payment of holiday premium of
200% of his basic wage (100% of basic wage PLUS 100%).
Premium pay for work within 8 hours on a:
1. Special or rest day: plus 30% of basic daily rate (BDR)
2. Rest day falling on a special day: plus 50% of BDR
3. Rest day falling on a regular holiday: plus 30% of 200% of BDR
Overtime pay for work in excess of 8 hours on:
1. Ordinary days: plus 25% of the basic hourly rate
2. Special days, rest days and holidays: plus 30% of the regular hourly
rate on said days
Nightshift differential pay: plus 10% of the basic/regular rate for work between
10PM 6AM
Service incentive leave: 5 days with pay per year of service
.
Service charges: 85% for distribution to rank-and-file employees; 15% for
losses, breakages, or distribution to managerial employees (applicable only in
establishments collecting service charges)
1.2

GENERAL RULE: WAGE DEDUCTIONS ARE NOT ALLOWED

EXCEPTIONS:
ALLOWABLE DEDUCTIONS WITHOUT EMPLOYEES CONSENT:
a. SSS, Philhealth and PAG-IBIG contributions;
b. Withholding taxes on income
c. Where the employer is authorized by law or regulations issued by the
Secretary of Labor;
d. Agency fees, where the employee who is not a member of the exclusive
bargaining agent but a member of the appropriate bargaining unit, may be
assessed a reasonable fee for benefits received under a CBA.
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ALLOWABLE DEDUCTIONS WITH THE EMPLOYEES CONSENT:
a.
b.
c.
d.

Reasonable value of meals and other facilities;

Payment of union dues, which may or may not be under an automatic
charging-off arrangement
Debt payments to the employer or third persons with employees explicit
written consent
Workers insurance acquired by the employer with employees consent;

2015 CASE: Emer Milan, et al. vs. NLRC, et al., G.R. No. 202961, February
04, 2015. -- An employer can withhold terminal pay and benefits pending the
employees return of its properties. An employer is allowed to withhold
terminal pay and benefits pending the employees return of its properties. The
return of the propertys possession became an obligation or liability on the
part of the employees when the employer-employee relationship ceased. The
NLRC has jurisdiction to determine, preliminarily, the parties right over a
property, when it is necessary to determine an issue related to rights or
claims arising from an employer-employee relationship.
1.3

NON-DIMINUTION OF BENEFITS, EXPLAINED:

Art. 100, Labor Code. Prohibition against elimination or diminution
of benefits. Nothing in this Book 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.
General Rule: No diminution of salary or benefits
Exceptions:
(a) When employee consents to the deduction
(b) To correct an error (TSPIC vs. Tspic Employees Union, G.R. No. 163419, Feb2008;
[VELASCO CASE]

Exception to the exception:

If the error is left uncorrected for a reasonable period of time, it ripens into a
company policy and employees can demand for it as a matter of right.
Requisites for voluntary employer practice such that the same cannot be
unilaterally withdrawn anymore: (a) It should have been practiced over a long
period of time; and (b) It must be shown to have been consistent and deliberate.
(Sevilla Trading Company vs. Semana, 428 SCRA 239 [2004], citing Globe Mackay
Cable and Radio Corp. vs. NLRC, 163 SCRA 71 [1988].

As to length of time required to ripen into a corporate policy:

The Supreme Court has not laid down any specific rule requiring a specific
minimum number of years. Rather, the test of long practice has been enunciated
thus: where the company agreed to continue giving a benefit knowing fully well
that said employees are not covered by the law requiring payment of said.
(Oceanic Pharmacal Employees Union (FFW) vs. Inciong, 94 SCRA 270 [1979]).

Hence, the Supreme Court has ruled in specific cases as follows:

a. Davao Fruits Corporation vs. Associated Labor Unions (225 SCRA 562
[1993]): six (6) years.
b. Davao Integrated Port Stevedoring Services vs. Abarquez (220 SCRA 197
[1983]): three (3) years and nine (9) months
c. Sevilla Trading Company vs. Semana, (428 SCRA 239 [2004]: two (2) years.

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Elements for diminution of benefits:
(1) the grant or benefit is founded on a policy or has ripened into a practice over
a long period of time;
(2) the practice is consistent and deliberate;
(3) the practice is not due to error in the construction or application of a doubtful
or difficult question of law; and
(4) the diminution or discontinuance is done unilaterally by the employer. Vergara
vs. Coca Cola Bottlers, G.R. No. 176985, 01 April 2013

Question: When can a policy be considered to have ripened into a regular

company practice?
Answer: The employee must prove by substantial evidence that the giving of the
benefit is done over a long period of time, and that it has been made consistently
and deliberately. Jurisprudence has not laid down any hard-and-fast rule as to
the length of time that company practice should have been exercised in order to
constitute voluntary employer practice. The common denominator in previously
decided cases appears to be the regularity and deliberateness of the grant of
benefits over a significant period of time. It requires an indubitable showing that
the employer agreed to continue giving the benefit knowing well that the
employees are not covered by any provision of the law or agreement requiring
payment thereof. In sum, the benefit must be characterized by regularity,
voluntary and deliberate intent of the employer to grant the benefit over a
considerable period of time.

2.

THIRTEENTH MONTH PAY

2.1 How much: 1/12th of the basic salary of an employee within a calendar
year.
2.2 COVERAGE
All employers are required to pay all their rank-and-file employees a 13th month
pay not later than December 24 of every year.
Such employees are entitled to the benefit regardless of their designation or
employment status and irrespective of the method by which their wages are paid,
provided that they have worked for at least 1 month during a calendar year;
2.3 EXCLUSIONS or EXEMPTIONS FROM COVERAGE
1. Government and any of its political subdivisions, including GOCCs with original
charters. (If GOCC without original charter, then considered part of private
sector)
2. Employers already paying their employees 13th month pay or more in a calendar
year or its equivalent at the time of issuance of PD 851;
Its equivalent includes Christmas bonus, mid-year bonus, cash bonuses
and other payments amounting to not less than 1/12 of the basic salary but
shall not include cash and stock dividends, COLA and all other allowances
regularly enjoyed by the employees as well as non-monetary benefits.

3. Employers of household helpers and persons in the personal service of another in

relation to such workers;

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4. Distressed employers:
a. currently incurring substantial losses or
b. 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;
5. Employers of those who are paid on commission, boundary, or task basis, and
those who are paid a fixed amount for performance of a specific work,
irrespective of the time consumed in the performance thereof.
Exception: Where the workers are paid on a piece-rate basis, in which case the
employer shall grant the required 13th month pay to such workers.
Piece Rate employees 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.

3. BONUS
3.1 Nature of a bonus: a prerogative, not an obligation. -- The matter of giving a bonus
over and above the workers lawful salaries and allowances is entirely dependent
on the financial capability of the employer to give it. (Traders Royal Bank vs.
NLRC, 189 SCRA 274 [1990]).
EXCEPTION: When demandable under a contract.
3.2 Are commissions included in computing 13th month pay?
a.

If the commission form part of the employees basic salary, then this will
likewise be included in the computation of 13th month pay. (Philippine
Duplicators, Inc. vs. NLRC, 241 SCRA 380 [1995]).

b)

If the commissions were in the nature of profit-sharing bonuses (productivity

bonuses), then these do not form part of the basic salary and should not
included in the computation of the 13th month pay. (Boie-Takeda Chemicals,
Inc. vs. Dela Serna 228 SCRA 329 [1993]).

4. HOURS OF WORK.
4.1 Hours of worked shall include: (a) all time during which an employee is required to
be on duty or to be at the prescribed workplace, and (b) all time during which an
employee is suffered or permitted to work. (Art. 84, Labor Code; See also Rada
vs. NLRC, 205 SCRA 69 [1992].)
4.2 Rest period of short duration during working hours shall be counted as hours
worked. (Art. 84, Labor Code.) Example: coffee break of 15 minutes; meal period
of less than one hour, e.g., 30 minutes.
4.3 Exemptions. (See Art. 82, Labor Code.) . -- The following employees are not
covered by the Labor Code provisions on hours of work:
a)

b)

Government employees;
Managerial employees (International Pharmaceuticals, Inc. vs. NLRC, 287 SCRA
213 [1998].);

c)

Field Personnel;
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d)
e)
f)

Members of the employer who are dependent upon him for support;
Domestic helpers and persons in the personal service of another;
Workers who are paid by results, e.g., piece workers. (Red V Coconut
Products, Ltd. vs. CIR, 17 SCRA 553 [1966], citing Lara vs. del Rosario, 94 Phil. 780)
(Note: Reason is that workers who are paid by the result are compensated on the
basis of the work completed, and NOT in respect of the time spent working on it).

5.

EMPLOYMENT OF HOUSEHELPERS VS. HOMEWORKERS

(See also KASAMBAHAY LAW)
5.1

Domestic helper or househelpers or domestic servant defined. -- shall refer

to any person, whether male or female, who renders services in and about the
employers home and which services are usually necessary or desirable for the
maintenance and enjoyment thereof, and ministers exclusively to the personal
comfort and enjoyment of the employers family.
Such definition covers family drivers, domestic servants, laundry women,
yayas, gardeners, houseboys and other similar househelps. (Apex Mining
Company, Inc. vs. NLRC, 196 SCRA 251 [1991]). NOTE DISCREPANCY BETWEEN

LAW AND IMPLEMENTING RULES WHICH EXCLUDED THE DRIVERS FROM

COVERAGE.

If the househelp or laundrywomen is suffered to work in staffhouses of a

company to attend to the needs of the companys guest and other persons
availing of said facilities, then they are NOT household helpers as defined by
law but employees of the company. (Apex Mining Company, Inc. vs. NLRC, ibid.)
BENEFITS ACCORDED TO HOUSE-HELPERS (Book III, Title 3, Chapter
III, LC)
1. Not to be assigned to non-household work;
2. Reasonable compensation (minimum cash wage);
3. Lodging, food and medical attendance;
4. If under 18 years, 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 from
year to year);
6. Just and humane treatment;
7. Right not to be required to work for more than 10 hrs. a day (if the
househelper agrees to work overtime and there is additional
compensation, the same is permissible);
8. Right to 4 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 only entitled only to its monetary equivalent);
9. Funeral expenses must be paid by the employer if the house-helper has
no relatives with sufficient means in the place where the head of the
family lives;
10. Termination only for 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 house-helper.

5.2 Homeworker, defined.-- one 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. (Book III, Rule XIV, Section 1 of the Omnibus Rules
Implementing the Labor Code.)
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HOUSEHELPERS
Minister to the personal needs and
comfort of his employer in the latters
home

HOME WORKERS
Performs in or about his own home any
processing or fabrication of goods or
materials, in whole or in part, which have
been furnished directly or indirectly, by an
employer and sold thereafter to the latter.

RIGHTS and BENEFITS ACCORDED TO HOMEWORKERS (Department Order No. 5,

replacing Rule XIV of the Rules Implementing Book III of the Labor Code):

1) Formation and registration of labor organization of industrial homeworkers.

2) It also makes explicit the employers duty to pay and remit SSS, Philhealth and ECC
premiums.

3) Prohibitions for Homework

explosives, fireworks and articles of like character;
drugs and poisons;
other articles, the processing of which requires exposure to toxic substance.

6.

EMPLOYMENT OF MINORS: (Sec. 12, R.A. 7610, as amended by R.A.

9231).
Article 139. Minimum employable age. -(a)
No child below fifteen (15) years of age shall be employed, except when
he works directly under the sole responsibility of his parents or guardian, and his
employment does not in any way interfere with his schooling.
(b)
Any person between fifteen (15) and eighteen (18) years of age may be
employed for such number of hours and such periods of the day as determined by the
Secretary of Labor in appropriate regulations.
(c)
The foregoing provisions shall in no case allow the employment of a
person below eighteen (18) years of age in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor.
Article 140. Prohibition against child discrimination..-- No employer shall
discriminate against any person in respect to terms and conditions of employment on
account of his age.
6.1 GENERAL RULE: Employment of any child below fifteen (15) years of age is
prohibited
Note1:
Any person between 15 and 18 may be employed in any nonhazardous work.
Note2: Any person above 18 NO PROHIBITION.
EXCEPT:
1. When he works directly under the sole responsibility of his parents or guardian,

and his employment does not in any way interfere with his schooling.
following conditions must be met:

The

The employment does not endanger the childs life, safety, health and morals;
The employment does not impair the childs normal development;
The employer parent or legal guardian provides the child with the primary
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and/or secondary education prescribed by the Department of Education
2. Where the childs employment or participation in public entertainment or

information through cinema, theater, radio or TV is essential provided that:

The employment does not involve ads 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 following requirements are strictly complied with:
employer shall ensure protection, health, morals, and normal
development of the child;
employer shall institute measures to prevent childs exploitation /
discrimination taking into account the system and level of
remuneration, duration, and arrangement of working time;
employer shall formulate and implement a continuing program for
training and skills acquisition of the child, subject to approval and
supervision of competent authorities. (as amended by Rep. Act No.
9231)
6.2 NOTE: 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 Labor and Employment which shall ensure observance of the above
requirements. (Rep. Act. No. 9231).
ON HAZARDOUS WORK. -- Any person between fifteen (15) and eighteen (18) years
of age may be employed for NON-HAZARDOUS WORK for such number of hours and
such periods of the day as determined by the Secretary of Labor in appropriate
regulations. No such prohibition if eighteen (18) years old and above.
PROHIBITION AGAINST CHILD DISCRIMINATION. -- No employer shall discriminate
against any person in respect to terms and conditions of employment on account of his
age.

6.3 Comparisons: (Rep. Act No. 9231)

A child below 15

A child above 15
years of age but
below 18

7.

Allowed to work for not more than 20 hours a week.

Provided, the work shall not be more than 4 hours in a
day.
Shall not be allowed to work between 8pm and 6am of
the following day.
Shall not be allowed to work for more than 8 hours a
day, and in no case beyond 40 hours a week.
Shall not be allowed to work between 10 pm and 6am
the following day

APPRENTICESHIP AND LEARNER

7.1 Apprenticeship is the practical on-the-job training as supplemented by related
theoretical instruction (Art. 58 (a), LC).
7.2 Learners are persons hired as trainees in semi-skilled and other industrial
occupations which are non-apprenticeable and may be learned through practical
training on the job in a relatively short period of time which shall not exceed three
months.
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APPRENTICESHIP

LEARNERSHIP

NATURE

highly-technical

semi-skill; non-apprenticeable

PERIOD

SIX (6) months

THREE (3) months

COMITMT TO
HIRE

At option of employer

May be paid or not; if

paid, 75% of minimum

WAGES
DOLE
Approval
DEDUCTION for
Expenses

Yes, DOLE approval is

essential

Yes, expenses for

training deductible
from income tax

At option of learner

Must always be paid; 75% of

minimum

No, DOLE approval not required;

inspection only.

None.

8. DISABLED WORKERS
8.1

Equal opportunity for employment.

No disabled person shall be denied access to opportunities for suitable
employment. [R.A. 7277, Sec. 5: Magna Carta for Disabled Persons]
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.
A worker is not necessarily considered as a handicapped worker if he is
capable, as an able-bodied worker, to function suitably in relation to the work
to which he was hired. (i.e. one-legged transcriptionist)

8.2

Incentives for employment of disabled workers (Sec. 2, RA 7277).

1. Private entities that employ disabled persons who meet the required skills or
qualifications either as regular employee, apprentice or learner, shall be
entitled to an additional deduction from their gross income, equivalent to 25%
of the total amount paid as salaries and wages to disabled persons; Provided,
that the following are complied with:
a. Presentation of proof certified by DOLE that disabled persons are under
their employ; and
b. Disabled employee is accredited with DOLE and DOH as to his
disability, skills and qualifications.
2. Private entities that improve or modify their physical facilities to provide
reasonable accommodation for disabled persons shall also be entitled to an
additional deduction from their taxable income, equivalent to 50% of the direct
costs of the improvements or modifications. This does not apply to
improvements required under B.P. Blg. 344.

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9. EMPLOYEE BENEFITS; RETIREMENT.
9.1 RETIREMENT AGE
GENERAL RULE: R.A. 7641
a. OPTIONAL at 60 years with minimum 5 years of service
b. MANDATORY at 65 years, no service requirement
EXCEPTION:
Where the company provides for a Retirement Plan with earlier retirement age,
then the companys Retirement Plan will apply
9.2 RETIREMENT BENEFITS
GENERAL RULE: R.A. 7641
month for every year of service (expanded concept per Sec 1, RA 7641)
Expanded concept: 22.5 days (basis: Capitol Wireless vs. Confesor)
15 days + 5 days service incentive leave + 2.5 days prorated 13th month pay
EXCEPTION:
Where the company provides for a Retirement Plan with better benefits, then the
companys Retirement Plan will apply
9.3 CASES:

a) Question: Is an employee who was terminated for authorized causes

(redundancy), also entitled to avail of early retirement benefits? Otherwise
stated, may an employee be paid both retirement and separation pay
benefits?
Answer: YES, as a general rule. Exception: When there is an explicit
provision in the company rules prohibiting the availment of both .
Goodyear vs. Marina Angus, G.R. No. 185499, 14 November 2014. -Employees are legally entitled to recover both separation pay and retirement
benefits in the absence of a specific prohibition in the Retirement Plan or
CBA. In such an instance where both the company rules or CBA and the
retirement plan are silent, an employee is not barred from claiming his early
retirement benefits, even if he/she had already received his retrenchment
pay, and has executed a Quitclaim to that effect. This must be so because
he is legally entitled thereto as a general rule.
See also: Difference between separation pay arising from termination of
employment and retirement.
General Milling Corporation vs. Viajar, G.R. No. 181738, 30 January 2013,
Citing Quevedo vs. Benguet Electric Cooperative, Inc., 599 SCRA 438
[2009]. -- While termination of employment and retirement from service are
common modes of ending employment, they are mutually exclusive, with
varying judicial bases and resulting benefits. Retirement from the service is
contractual (i.e. based on the bilateral agreement of the employer and
employee), while termination of employment is statutory (i.e. governed by
the Labor Code and other related laws as to its grounds, benefits and
procedure. The benefits resulting from termination vary, depending on the
cause. For retirement, Article 287 of the Labor Code gives leeway to the
parties to stipulate above a floor of benefits.
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b. DIFFERENCE BETWEEN VOLUNTARY AND INVOLUNTARY RETIREMENT.
Voluntary retirement cuts employment ties leaving no residual employer
liability; involuntary retirement amounts to a discharge, rendering the
employer liable for termination without cause. The employees intent is the
focal point of analysis. In determining such intent, the fairness of the
process governing the retirement decision, the payment of stipulated
benefits, and the absence of badges of intimidation or coercion are relevant
parameters. (ibid.)
2015 CASE: Zenaida Paz vs. Northern Tobacco Redrying Co., Inc., et al., G.R.
No. 199554, 18 February 2015. -- If optional retirement is involuntary, the
employee shall be deemed to be illegally dismissed.
c. RESIGNATIONS vs. TERMINATION vs STRAINED RELATIONS vs RETIREMENT
2013 CASE: IN TERMINATION OF EMPLOYMENT BY THE EMPLOYEE
VIA RESIGNATION. -- The intent to relinquish must concur with the overt
act of relinquishment. (Mendoza vs. HMS Credit Corp., et. al., G.R. No. 187232,
17 April 2013; citing San Miguel Properties vs. Gucaban, 654 SCRA 18 [2011])

2013 CASE: DIFFERENCE BETWEEN TERMINATION OF EMPLOYMENT

AND RETIREMENT. -- While termination of employment and retirement from
service are common modes of ending employment, they are mutually
exclusive, with varying judicial bases and resulting benefits from the service
is contractual (i.e. based on the bilateral agreement of the employer and
employee), while termination of employment is statutory (i.e. governed by
the Labor Code and other related laws as to its grounds, benefits and
procedure). The benefits resulting from termination vary, depending on the
cause. For retirement, Article 287 of the Labor Code gives leeway to the
parties to stipulate above or floor benefits. (General Milling Corporation vs.
Viajar, G.R. No. 181783, 30 January 2013; Citing Quevedo vs. Benguet Electric
Cooperative, Inc., 599 SCRA 438 [2009])

RESIGNATION It is the voluntary act of employees who are compelled by

reasons to disassociate themselves from their employment. It must be done
with intention of relinquishing the office, accompanied by the act of
abandonment. Where evidence reveals otherwise, then illegal dismissal.
STRAINED RELATIONS Where reinstatement is no longer desirable or
viable in view of strained relations between the parties, then separation pay
is an acceptable alterative to reinstatement. Computation: one month for
every year of service, computed from date of hiring until finality of the
Decision finding for illegal termination.
d. Early retirement is the option of the EMPLOYEE. Eastern Shipping Lines, Inc.
vs. Ferrer D. Antonio, G.R. No. 171587, 13 October 2009.
The age of retirement is primarily determined by the existing agreement or
employment contract. In the absence of such agreement, the retirement age
shall be fixed by law. Under the aforecited law, the mandated compulsory
retirement age is set at 65 years, while the minimum age for optional
retirement is set at 60 years. Under Paragraph B of the retirement plan, a
shipboard employee, upon his written request, may retire from service if he
has reached the eligibility age of 60 years. In this case, the option to retire
lies with the employee. Records show that respondent was only 41 years old
when he applied for optional retirement, which was 19 years short of the
required eligibility age. Thus, he cannot claim optional retirement benefits as
a matter of right.
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FOR PHILIPPINE ASSOCIATION OF LAW SCHOOLS (PALS)

THE ABAD NOTES

e. IMPORTANT CASE: MAY THE EMPLOYER DEDUCT COST OF TRAINING

FROM THE RETIREMENT BENEFITS OF THE EMPLOYEE? Bibiano C.
Elegir vs. Philippine Airlines, Inc. G.R. No. 181995, 16 July 2012.

ANSWER: YES! By carrying over the same stipulation in the present CBA,
both PAL and ALPAP recognized that the companys effort in sending pilots
for training abroad is an investment which necessarily expects a reasonable
return in the form of service for a period of at least three (3) years. This
stipulation had been repeatedly adopted by the parties in the succeeding
renewals of their CBA, thus validating the impression that it is a reasonable
and acceptable term to both PAL and ALPAP. Consequently, the petitioner
cannot conveniently disregard this stipulation by simply raising the absence
of a contract expressly requiring the pilot to remain within PALs employ
within a period of 3 years after he has been sent on training. The supposed
absence of contract being raised by the petitioner cannot stand as the CBA
clearly covered the petitioners obligation to render service to PAL within 3
years to enable it to recoup the costs of its investment. Further, to allow the
petitioner to leave the company before it has fulfilled the reasonable
expectation of service on his part will amount to unjust enrichment.

FOR THE 2016 BAR EXAMINEES:

GOOD LUCK AND GOD BLESS YOU ALL!!
ADA D. ABAD, 2016
Dean, Adamson University College of Law
In behalf of Philippine Association of Law Schools (PALS)

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