UST Golden Notes 2011 - Labor Standards

FUNDAMENTAL PRINCIPLES AND POLICIES
LABORLAW 3. Social legislation It includes laws that

provide particular kinds of protection or
Q:Whatislabor? benefitstosocietyorsegmentsthereofin
furtheranceofsocialjustice.
A:Itistheexertionbyhumanbeingsofphysicalor e.g.GSISLaw,SSSLaw,Philhealthbenefits
mental efforts, or both, towards the production of
goodsandservices. Q: Is there any distinction between labor
legislationandsociallegislation?Explain.
Q:Whatislaborlaw?
A:Laborlegislationissometimesdistinguishedfrom
A: The law governing the rights and duties of the social legislation by the former referring to labor
employerandemployeeswithrespectto: statutes, like Labor Relations Law and Labor
Standards, and the latter to Social Security Laws.
1. Thetermsandconditionsofemployment Laborlegislationfocusesontherightsoftheworker
and intheworkplace.
2. Labor disputes arising from collective
bargaining(CB)respectingsuchtermsand Social legislation is a broad term and may include
conditions. not only laws that give social security protection,
butalsothosethathelptheworkersecurehousing
Q:Whatisthepurposeoflaborlegislation? and basic necessities. The Comprehensive Agrarian
Reform Law could also be considered a social
A: Labor legislation is an exercise of police power. legislation. All labor laws are social legislation, but
The purpose of labor legislation is to regulate the not all social legislation is labor law. (1994 Bar
relations between employers (Ers) and employees Question)
(Ees) respecting the terms and conditions of
employment, either by providing for certain Q:Whatarethesourcesoflaborlaws?
standards or for a legal framework within which
better terms and conditions of work could be A:
negotiatedthroughCB.Itisintendedtocorrectthe 1. Labor Code and other related special
injustices inherent in ErEe relationship. (2006 Bar legislation
Question) 2. Contract
3. CollectiveBargainingAgreement
Q:Whataretheclassificationsoflaborlaw? 4. Pastpractices
5. Companypolicies
A:
1. Labor standards The minimum terms A. FUNDAMENTALPRINCIPLESANDPOLICIES
andconditionsofemploymentprescribed
by existing laws, rules and regulations 1.CONSTITUTIONALPROVISIONS
relatingtowages,hoursofwork,costof
living allowance and other monetary and Q: What are the constitutional mandates with
welfare benefits. (Batong Buhay Gold regardlaborlaws?
Mines,Inc.v.DelaSerna,G.R.No.86963,
August6,1999) A:
th
e.g.13 monthpay 1. Sec.3,Art.XIIITheStateshallaffordfull
2. Labor relations Defines and regulates protection to labor, local and overseas,
the status, rights and duties, and the organizedandunorganized,andpromote
institutionalmechanisms,thatgovernthe full employment and equality of
individual and collective interactions of employmentopportunitiesforall.
Ers, Ees, or their representatives. It is
concerned with the stabilization of Itshallguaranteetherightsofallworkers
relations of Er and Ees and seek to to selforganization, collective bargaining
forestall and adjust the differences andnegotiations,andpeacefulconcerted
between them by the encouragement of activities, including the right to strike in
collective bargaining and the settlement accordance with law. They shall be
of labor disputes through conciliation, entitled to security of tenure, humane
mediationandarbitration. conditions of work, and a living wage.
e.g. Additional allowance pursuant to They shall also participate in policy and
CBA decisionmaking processes affecting their
1
ACADEMICSCHAIR:LESTERJAYALANE.FLORESII UNIVERSITYOFSANTOTOMAS
VICECHAIRSFORACADEMICS:KARENJOYG.SABUGO&JOHNHENRYC.MENDOZA
VICECHAIRFORADMINISTRATIONANDFINANCE:JEANELLEC.LEE Facultad de Derecho Civil
VICECHAIRSFORLAYOUTANDDESIGN:EARLLOUIEM.MASACAYAN&THEENAC.MARTINEZ

UST GOLDEN NOTES 2011
rightsandbenefitsasmaybeprovidedby provides incentives to needed

law. investments.

The State shall promote the principle of 9. Sec. 1, Art. III No person shall be
shared responsibility between workers deprived of life, liberty, or property
andemployersandthepreferentialuseof withoutdueprocessoflaw,norshallany
voluntary modes in settling disputes, personbedeniedtheequalprotectionof
including conciliation, and shall enforce thelaws.
their mutual compliance therewith to
foster industrial peace. The State shall 10. Sec. 4, Art. III No law shall be passed
regulate the relations between workers abridging the freedom of speech, of
and employers, recognizing the right of expression,orofthepress,ortherightof
labor to its just share in the fruits of the people peaceably to assemble and
productionandtherightofenterprisesto petition the government for redress of
reasonablereturnstoinvestments,andto grievances.
expansionandgrowth.
11. Sec. 8, Art. III The right of the people,
2. Sec.9,Art.IITheStateshallpromotea including those employed in the public
just and dynamic social order that will and private sectors, to form unions,
ensure the prosperity and independence associations,orsocietiesforpurposesnot
of the nation and free the people from contrarytolawshallnotbeabridged.
poverty through policies that provide
adequate social services, promote full 12. Sec. 1, Art. XIII The Congress shall give
employment, a rising standard of living, highest priority to the enactment of
andanimprovedqualityoflifeforall. measures that protect and enhance the
right of all the people to human dignity,
3. Sec. 10, Art II The State shall promote reduce social, economic, and political
social justice in all phases of national inequalities, and remove cultural
development. inequities by equitably diffusing wealth
andpoliticalpowerforthecommongood.
4. Sec. 11, Art II The State values the
dignity of every human person and To this end, the State shall regulate the
guaranteesfullrespectforhumanrights. acquisition, ownership, use, and
disposition of property and its
5. Sec. 13, Art. II The State recognizes the increments.
vital role of the youth in nationbuilding
and shall promote and protect their 13. Sec. 2, Art. XIII The promotion of social
physical,moral,spiritual,intellectual,and justice shall include the commitment to
social wellbeing. It shall inculcate in the create economic opportunities based on
youth patriotism and nationalism, and freedomofinitiativeandselfreliance.
encouragetheirinvolvementinpublicand
civicaffairs. 14. Sec.14, Art.XIII The State shall protect
working women by providing safe and
6. Sec. 14, Art. II The State recognizes the healthful working conditions, taking into
role of women in nationbuilding, and account their maternal functions, and
shall ensure the fundamental equality such facilities and opportunities that will
beforethelawofwomenandmen. enhancetheirwelfareandenablethemto
realizetheirfullpotentialintheserviceof
thenation.

7. Sec.18,Art.IITheStateaffirmslaboras Q:WhatistheStatepolicyonlaborasfoundinthe
a primary social economic force. It shall constitution(Sec.3,Art.XIII)?
protect the rights of workers and
promotetheirwelfare. A:
1. Affordfullprotectiontolabor
8. Sec. 20, Art. II The State recognizes the 2. Promotefullemployment
indispensable role of the private sector, 3. Ensure equal work opportunities
encourages private enterprise, and regardlessofsex,race,orcreed
2
LABORLAWTEAM:
ADVISER:ATTY.JOEVEND.DELLOSA;SUBJECTHEAD:ANGELOS.DIOKNO;ASST.SUBJECTHEADS:KARENSABUGO,GENESISR.FULGENCIO
MEMBERS:PALMACLARISSAV.CARILLO,RANDOLPHIANCLET,MICHAELAARONP.GACUTAN,LORRAINETAGUIAM

4. Assure the rights of workers to self safety and decent living for the
organization, security of tenure, just and laborer.
humaneconditionsofwork,participatein d. Art. 1703 No contract which
policy and decisionmaking processes practically amounts to involuntary
affectingtheirrightandbenefits servitude, under any guise
5. Regulate the relations between workers whatsoever,shallbevalid.
andemployers
2. RevisedPenalCode
Q: What are the basic rights of workers Art. 289 Formation, maintenance and
guaranteedbytheConstitution(Sec.3,Art.XIII)? prohibition of combination of capital or
labor through violence or threats. Any
A: person who, for the purpose of
1. Securityoftenure organizing, maintaining or preventing
2. Receivealivingwage coalitions or capital or labor, strike of
3. Humaneworkingconditions laborers or lockout of employees, shall
4. Shareinthefruitsofproduction employ violence or threats in such a
5. Organizethemselves degreeastocompelorforcethelaborers
6. Conduct collective bargaining or or employers in the free and legal
negotiationwithmanagement exercise of their industry or work, if the
7. Engage in peaceful concerted activities act shall not constitute a more serious
includingstrike offenseinaccordancewiththeprovisions
8. Participate in policy and decision making oftheRPC.
processes
3. SpecialLaws
Q:Whatistheprincipleofnonoppression? a. GSISLaw
th
b. 13 MonthPayLaw
A: The principle mandates capital and labor not to c. RetirementPayLaw
act oppressively against each other or impair the d. SSSLaw
interest and convenience of the public. The e. PaternityLeaveAct
protectiontolaborclauseintheConstitutionisnot f. AntiChildLaborAct
designed to oppress or destroy capital. (Capili v. g. AntiSexualHarassmentAct
NLRC,G.R.No.117378,Mar.26,1997) h. Magna Carta for Public Health
Workers
2.NEWCIVILCODEANDOTHERLAWS i. SoloParentsWelfareActof2000
j. National Health Insurance Act as
Q:Whatareotherrelatedlawstolabor? amendedbyR.A.9241
k. Migrant Workers and Overseas
A: Filipinos Act of 1995 as amended by
1. CivilCode RA10022
a. Art. 1700 The relations between l. PERAActof2008
capital and labor are not merely m. Home Development Mutual Fund
contractual. They are so impressed Lawof2009
with public interest that labor n. TheMagnaCartaofWomen
contractsmust yieldtothecommon o. ComprehensiveAgrarianReformLaw
good. Therefore, such contracts are asamendedbyR.A.9700
subject to the special laws on labor
unions, collective bargaining, strikes 3.LABORCODE
and lockouts, closed shop, wages,
working conditions, hours of labor Q:Whatistheaimoflaborlaws?
andsimilarsubjects.
b. Art.1701 Neithercapitalnorlabor A: The justification of labor laws is social justice.
shall act oppressively against the Social justice is neither communism, nor
other, or impair the interest or despotism, nor atomism, nor anarchy, but the
convenienceofthepublic. humanizationoflawsandtheequalizationofsocial
c. Art.1702Incaseofdoubt,alllabor and economic force by the State so that justice in
legislation and all labor contracts its rational and objectively secular conception may
shall be construed in favor of the at least be approximated. Social justice means the
promotion of the welfare of all the people, the
3

adoption by the government of measures A:No,theConstitutionprovidesthattheStateshall

calculated to insure economic stability of all the afford full protection to labor. Furthermore, the
competent elements of society, through the State affirms labor as a primary economic force. It
maintenance of a proper economic and social shall protect the rights of workers and promote
equilibriumintheinterrelationsofthemembersof theirwelfare.(1998BarQuestion)
the community, constitutionally, through the
adoption of measures legally justifiable, or extra a.Art.3.DeclarationofBasicPolicy
constitutionally, through the exercise of powers
underlyingtheexistenceofallgovernmentsonthe Q:WhatisthepolicyoftheStateasregardslabor
timehonoredprincipleofsaluspopuliestsuprema asfoundintheLaborCode(Art.12)?
lex. (Calalang v. Williams, G.R. No. 47800, Dec. 2,
1940) A:
1. Promote and maintain a State of full
Q:Whatiscompassionatejustice? employment through improved
manpower training, allocation and
A:Itisdisregardingrigidrulesandgivingdueweight utilization;
toallequitiesofthecase. 2. Protect every citizen desiring to work
locallyoroverseasbysecuringforhimthe
e.g: Employee validly dismissed may still be given best possible terms and conditions of
severancepay. employment;
3. Facilitate a free choice of available
Q:Howshoulddoubtsintheimplementationand employment by persons seeking work in
interpretation of the Labor Code (LC) and its conformitywiththenationalinterest;
Implementing Rules and Regulations (IRR) be 4. Facilitate and regulate the movement of
resolved? workers in conformity with the national
interest;
A:Theyshouldberesolvedinfavoroflabor. 5. Regulate the employment of aliens,
including the establishment of a
Q: What is the concept of liberal approach in registrationand/orworkpermitsystem;
interpretingtheLCanditsIRR? 6. Strengthen the network of public
employment offices and rationalize the
A: The workers' welfare shouldbe the paramount participation of the private sector in the
consideration in interpreting the LC and its IRR. recruitment and placement of workers,
This is rooted in the constitutional mandate to locally and overseas, to serve national
affordfullprotectiontolabor.(PLDTv.NLRC,G.R. developmentobjectives;
No. 111933, July 23, 1997). It underscores the 7. Ensure careful selection of Filipino
policy of social justice to accommodate the workers for overseas employment in
interests of the working class on the humane order to protect the good name of the
justification that those who have less in life shall Philippinesabroad.
have more in law. (PAL v. Santos, G.R. No. 77875,
Feb.4,1993).(2006BarQuestion) Q: What are the reasons for affording greater
protectiontoemployees?
Q:Art.4oftheLCprovidesthatincaseofdoubtin
the implementation and interpretation of the A:
provisionsoftheLCanditsIRR,thedoubtshallbe 1. Greater supply than demand for labor;
resolved in favor of labor. Art. 1702 of the Civil and
Codealsoprovidesthatincaseofdoubt,alllabor 2. Need for employment by labor comes
legislation and all labor contracts shall be from vital and desperate necessity.
construed in favor of the safety and decent living (Sanchezv.HarryLyonsConstructionInc.,
ofthelaborer. G.R.L2779,Oct.18,1950)

MicaMara Company assails the validity of these Q:Arealllabordisputesresolvedinfavoroflabor?
statutes on the ground that they violate its
constitutional right to equal protection of the A: No. The law also recognizes that management
laws. Is the contention of Mica Mara Company has rights which are also entitled to respect and
tenable?Discussfully. enforcement in the interest of fair play. (St. Lukes
MedicalCenterEesAssnv.NLRC,G.R.No.162053,
Mar.7,2007)
4
LABORLAWTEAM:

1. One employed in an agricultural or farm

b.Art.5.RulesandRegulations enterprise,
2. Performs tasks which are directly related
Q:Whoisgiventherulemakingpower? toagriculturalactivitiesoftheEr,and
3. Any activities performed by a farmer as
A: The Department of Labor and other govt anincidenttofarmingoperations.
agencies charged with the administration and
enforcement of the Labor Code or any of its parts d.Art.211.DeclarationofPolicy
shallpromulgatethenecessaryimplementingrules
and regulations. Such rules and regulations shall Q: What are the policy objectives of our labor
become effective 15 days after announcement of relationslaw?
theiradoptioninnewspapersofgeneralcirculation.
A:Thestateaimstopromote:
Q: What are the limitations to the rulemaking 1. Free collective bargaining (CB) and
power given to the Secretary of Labor and negotiations, including voluntary
Employmentandothergovtagencies? arbitration, mediation and conciliation as
modes of settling labor or industrial
A:Itmust: disputes;
1. Beissuedundertheauthorityofthelaw 2. Freetradeunionism;
2. Not be contrary to law and the 3. Free and voluntary organization of a
Constitution strongandunitedlabormovement;
4. Enlightenment of workers concerning
c.Art.6.Applicability their rights and obligations as union
membersandasEes;
Q:Towhomshallallrightsandbenefitsunderthe 5. Adequate administrative machinery for
LCapply? the expeditious settlement of labor or
industrialdisputes;
A: GR: All rights and benefits granted to workers 6. Stable but dynamic and just industrial
under the LC shall apply alike to all workers, peace;
whetheragriculturalornonagricultural. 7. Participation of workers in the decision
making processes affecting their rights,
XPN: dutiesandwelfare;
1. Governmentemployees(Ees) 8. Truly democratic method of regulating
2. Ees of government corporations created therelationsbetweentheErsandEesby
byspecialororiginalcharter means of agreements freely entered into
3. Foreigngovernments through CB, no court or administrative
4. Internationalagencies agencyorofficialshallhavethepowerto
5. Corporate officers/ intracorporate set or fix wages, rates of pay, hours of
disputes which fall under P.D. 902A and work or other terms and conditions of
now fall under the jurisdiction of the employment, except as otherwise
regular courts pursuant to the Securities providedundertheLC.
RegulationCode(SRC).
6. Local water district except where NLRCs e.Art.212.Definitions
jurisdictionisinvoked.
7. AsmayotherwisebeprovidedbytheLC Q:Whoisanemployer(Er)?

Q:WhatisthetestindeterminingwhetheraGOCC A: Any person acting in the interest of an Er,
issubjecttotheCivilServiceLaw? directly or indirectly. The term does not include a
labor organization (LO) or any of its officers and
A:Itisdeterminedbythemanneroftheircreation. agents,exceptwhenactingasanEr.(Art.212[e])
Govt corporations that are created by special
(original)charterfromCongressaresubjecttoCivil An Er is defined as any person or entity that
Service rules, while those incorporated under the employstheservicesofothers;oneforwhomwork
GeneralCorporationLawarecoveredbytheLC. and who pays their wages of salaries; any person
acting in the interest of an Er; refers to the
Q:Whoisanagricultural/farmworker? enterprise where the LO operates or seeks to
operate.(Sec.1[s],RuleI,BookV,IRR)
A:
Q:WhenisalabororganizationdeemedanEr?
5

A: When it is acting as such in relation to persons or representation of persons in

rendering services under hire, particularly in negotiating, fixing, maintaining or
connectionwithitsactivitiesforprofitorgain. changing terms or conditions of
employment.
Note: The mere fact that respondent is a labor union
doesnotmeanthatitcannotbeconsideredanErfor
persons who work for it. Much less should it be Q:Whatarethekindsoflabordisputes?
exempted from labor laws. (Bautista v. Inciong, G.R.
No.L52824,Mar.16,1988) A:
1. Laborstandarddisputes
Q:Whoisanemployee(Ee)? a. Compensation E.g. Underpayment
of minimum wage; stringent output
A: quota;illegalpaydeductions
1. AnypersonintheemployoftheEr b. Benefits E.g. Nonpayment of
2. Anyindividualwhoseworkhasceasedas holidaypay,OTpayorotherbenefits
a result of or in connection with any c. WorkingConditionsE.g.Unrectified
current labor dispute or because of any workhazards
unfair labor practice if he has not
obtained any other substantially 2. Laborrelationsdisputes
equivalentandregularemployment
3. One who has been dismissed from work a. Organizational right disputes/ULP
but the legality of dismissal is being E.g. Coercion, restraint or
contested in a forum of appropriate interference in unionization efforts;
jurisdiction. (D.O. No. 4003, Mar. 15, reprisal or discrimination due to
2003) union activities; company unionism;
Note: The term shall not be limited to the Ees of a
ULP, strike or lockout; union
particularErunlesstheLCexplicitlystates.
members complaint against union
AnyEe,whetheremployedforadefiniteperiodornot, officers
shall, beginning on the first day of service, be b. Representation disputes E.g.
considered an Ee for purposes of membership in any Uncertainty as to which is the
laborunion.(Art.277[c],LC) majority union; determination of
appropriate CB unit; contests for
Q:Whatisalabordispute? recognition by different sets of
officersinthesameunion
A:Includesanycontroversyormatterconcerning: c. BargainingdisputesE.g.Refusalto
bargain; bargaining in bad faith;
1. Termsandconditionsofemployment,or bargainingdeadlock;economicstrike
2. The association or representation of orlockout
persons in negotiating, fixing, d. Contractadministrationorpersonnel
maintaining, changing or arranging the policy disputes E.g. Non
termsandconditionsofemployment compliance with CBA provision (ULP
3. Regardless of whether the disputants if gross non compliance with
stand in the proximate relation of Er and economic provisions); disregard of
Ee.(Art.212[l]) grievance machinery; non
observance of unwarranted use of
union security clause; illegal or
Q: What are the tests on whether a controversy unreasonable personnel
fallswithinthedefinitionofalabordispute? management policies; violation of
nostrike/nolockoutagreement
A: e. Employment tenure disputes E.g.
Nonregularization of Ees; non
1. AstonatureItdependsonwhetherthe absorption of labor only contracting
dispute arises from ErEe relationship, staff; illegal termination; non
although disputants need not be issuanceofemploymentcontract
proximatelyErorEeofanother.
Q:Whoarethepartiestoadispute?
2. As to subject matter The test depends
on whether it concerns terms or
conditions of employment or association
6
LABORLAWTEAM:

A: A: The Labor Organization designated or selected

1. Primary parties are the Er, Ees and the bythemajorityoftheemployeesinanappropriate
union. collective bargaining unit shall be the exclusive
2. Secondary parties are the voluntary representativeoftheemployeesinsuchunitforthe
arbitrator, agencies of DOLE, NLRC, purpose of collective bargaining. However, an
Secretary of Labor and the Office of the individual employee or group of employees shall
President. havetherightatanytimetopresentgrievancesto
their employer. (As amended by Sec. 22, R.A. No.
Q:Whatisaninteruniondispute? 6715,Mar.15,1989)

A:Anyconflictbetweenandamonglegitimatelabor Q: What is the extent of the workers right to
unions involving representation questions for the participate in policy and decisionmaking
purposes of CB or to any other conflict or dispute processesinacompany?
betweenlegitimatelaborunions.
A: Such right refers not only to formulation of
Q:Whatisanintrauniondispute? corporate programs and policies but also to
participationingrievanceproceduresandvoluntary
A: Any conflict between and among union modesofsettlingdisputes.
members, grievances arising from any violation of
the rights and conditions of membership, violation Q: Explain the extent of the workers right to
of or disagreement over any provision of the participate in policy and decisionmaking process
unions constitution and bylaws, or disputes from as provided under Art. XIII, Sec. 13 of the 1987
charteringoraffiliationofunion. Constitution. Does it include membership in the
BoardofDirectorsofacorporation?
Q:Whatarerightsdisputes?
A: No. In Manila Electric Company v. Quisumbing,
A: They are claims for violations of a specific right G.R. No. 127598, January 27, 1999, the SC
arising from a contract, i.e. CBA or company recognized the right of the union to participate in
policies. policy formulation and decision making process on
mattersaffectingtheUnionmembersrights,duties
Q:Whatareinterestdisputes?
and welfare. However, the SC held that such
participation of the union in committees of Er
A: They involve questions on what should be
Meralco is not in the nature of a comanagement
included in the CBA. Strictly speaking, the parties
control of the business of Meralco. Impliedly,
maychooseavoluntaryarbitratortodecideonthe
therefore,workersparticipatoryrightinpolicyand
terms and conditions of employment, but this is
decisionmaking processes does not include the
impracticablebecauseitwillbeavaluejudgmentof
right to put a union member in the Corporations
thearbitratorsandnotoftheparties.
BoardofDirectors.(2008BarQuestion)
Q:Whatarecontractnegotiationdisputes?
Q: May an Er solicit questions, suggestions and
A:ThesearedisputesastothetermsoftheCBA. complaints from Ees even though the Ees are
representedbyaunion?
Q:Whatarecontractinterpretationdisputes?
A:Yes,provided:
A:ThesearedisputesarisingunderanexistingCBA,
involving such matters as the interpretation and 1. The CB representative executes an
application of the contract, or alleged violation of agreementwaivingtherighttobepresent
itsprovisions. on any occasion when Ee grievances are
beingadjustedbytheEr;and
f.Art.255.ExclusiveBargainingRepresentation 2. Er acts strictly within the terms of his
(EBR)andWorkersParticipationinPolicyand waiveragreement.
DecisionMaking
Q:ThehotelunionfiledaNoticeofStrikewiththe
Q:Whoshallbethebargainingrepresentativeof NCMBduetoULPagainsttheDiamondHotelwho
the Employees for purposes of collective refused to bargain with it. The hotel advised the
bargaining? unionthatsinceitwasnotcertifiedbytheDOLEas
the exclusive bargaining agent, it could not be
7

recognized as such. Whether the Union may

bargaincollectively?
A: No. Art. 255 of the LC declares that only the

labor organization designated or selected by the
majority of the Ees in an appropriate collective
bargaining (CB) unit is the exclusive representative
oftheemployees(Ees)insuchunitforthepurpose
of CB. The union is admittedly not the exclusive
representative of the majority of the Ees of the
hotel, hence, it could not demand from the hotel
the right to bargain collectively in their behalf.
(Manila Diamond Hotel v. Manila Diamond Hotel
EesUnion,G.R.No.158075,June30,2006)
Q: Are probationary Ees allowed to vote at the

timeofthecertificationelections?
A: Yes. Under Art. 255 of the LC the labor

organizationdesignatedorselectedbythemajority
oftheEesinanappropriatebargainingunitshallbe
the exclusive representative of the Ees in such unit
for purposes of CB. CB covers all aspects of the
employment relation and the resultant CBA
negotiatedbythecertifiedunionbindsallEesinthe
bargaining unit. Hence, all rank and file Ees,
probationary or permanent, have a substantial
interest in the selection of the bargaining
representative. The LC makes no distinction as to
their employment status as basis for eligibility in
supporting the petition for certification election.
Thelawrefersto"all"theEesinthebargainingunit.
Alltheyneedtobeeligibletosupportthepetitionis
tobelongtothe"bargainingunit."Theprovisionin
theCBAdisqualifyingprobationaryEesfromvoting
cannotoverridetheconstitutionallyprotectedright
of workers to selforganization, as well as the
provisions of the LC and its implementing rules on
certification elections and jurisprudence. A law is
readinto,andformspartof,acontract.Provisions
inacontractarevalidonlyiftheyarenotcontrary
tolaw,morals,goodcustoms,publicorderorpublic
policy. (NUWHRAINMPHCv.SLE,G.R.No.181531,
July31,2009)
8
LABORLAWTEAM:

RECRUITMENT AND PLACEMENT
B. RECRUITMENTANDPLACEMENT 3. Members of the diplomatic corps (but

hiringmustgothroughPOEA)
1. RECRUITMENTOFLOCALANDMIGRANT 4. Publicemploymentoffices
WORKERS 5. Privaterecruitmentoffices
6. Privateemploymentagencies
a.RecruitmentandPlacement 7. POEA
8. Shipping or manning agents or
Q:Whoisaworker? representatives
9. Namehires
A: Any member of the labor force, whether
employedorunemployed.(Art.13[a],LC) Q:Whoarenamehires?

Q:Whatisrecruitmentandplacement? A: They are individual workers who are able to
securecontractsforoverseasemploymentontheir
A: own efforts and representations without the
1. Any act of canvassing, enlisting, assistance or participation of any agency. Their
contracting, transporting, utilizing, hiring hiring,nonetheless,shallpassthroughthePOEAfor
orprocuringworkers;and processing purposes. (Part III, Rule III, POEA Rules
2. Includes referrals, contact services, Governing Overseas Employment as amended in
promisingoradvertisingforemployment, 2002)
locally or abroad, whether for profit or
not.(Art.13[b],LC) Q: What if employment is offered to only one
person?
Q:Whataretheessentialelementsindetermining
whether one is engaged in A:Immaterial.Thenumberofpersonsdealtwithis
recruitment/placement? notanessentialingredientoftheactofrecruitment
andplacementofworkers.Theprovisomerelylays
A:Itmustbeshownthat: down a rule of evidence that where a fee is
collected in consideration of a promise or offer of
1. The accused gave the complainant the employmentto2ormoreprospectiveworkers,the
distinct impression that she had the individual or entity dealing with them shall be
power or ability to send the complainant deemed to be engaged in the act of recruitment
forwork, and placement. The words "shall be deemed"
2. Suchthatthelatterwasconvincedtopart create that presumption. (People v. Panis, G.R. L
with his money in order to be so 5867477,July11,1986)
employed. (People v. Goce, G.R. No.
113161,Aug.29,1995) Q:Whatisaprivateemploymentagency?

Q: Who is deemed engaged in recruitment and A:Anypersonorentityengagedintherecruitment
placement? and placement of workers for a fee which is
charged,directlyorindirectly,fromtheworkersor
A: Any person or entity which, in any manner, employersorboth.
offers or promises for a fee employment to 2 or
morepersons.(Art.13[b],LC) Q:Whatisaprivaterecruitmentagency?

Q:Whatistheruleinrecruitmentandplacement? A: It is any person or association engaged in the
recruitment and placement of workers without
A: GR: No person or entity other than the public charging any fee, directly or indirectly, from the
employment offices, shall engage in the workersoremployers.
recruitmentandplacementofworkers
Q:Whoisaseaman?
XPN:
1. Construction contractors if authorized by A: Any person employed in a vessel engaged in
the DOLE and Construction Industry maritimenavigation.
Authority
2. Other persons or entities as may be Q:Whatisoverseasemployment?
authorizedbytheSLE
9

A: It is employment of a worker outside the andexecutoryorderswithintheperiodof

Philippines. validityofitslicense
2. Violationsoftheconditionsoflicense
Q:WhoisanoverseasFilipinoworker(OFW)? 3. Engaging in acts of misrepresentation for
the purpose of securing a license or
A:Apersonwhoistobeengaged,isengagedorhas renewal
been engaged in a remunerated activity in a State 4. Engagingintherecruitmentorplacement
of which he or she is not a citizen or on board a of workers to jobs harmful to the public
vessel navigating the foreign seas other than a healthormoralityortothedignityofthe
government ship used for military or non country.(Sec.3,RuleI,BookVI,Rulesand
commercial purposes or on an installation located Regulations Governing Overseas
offshore or on the high seas; to be used Employment)
interchangeably with migrant worker. (Sec.2, R.A.
10022amendingR.A.8042) Q: What are the grounds for suspension or
cancellationoflicense?
Q:Whoisanemigrant?
A:
A:Anyperson,workerorotherwise,whoemigrates 1. ProhibitedactsunderArt.34
toaforeigncountrybyvirtueofanimmigrantvisa 2. Publishing job announcements w/o
or resident permit or its equivalent in the country POEAsapproval
ofdestination. 3. Chargingafeewhichmaybeinexcessof
theauthorizedamountbeforeaworkeris
b.IllegalRecruitment,Art.38(Local),Sec.6,Migrant employed
WorkersAct,RA8042 4. Deploying workers w/o processing
throughPOEA
(a)Licensev.Authority 5. Recruitment in places outside its
authorized area. (Sec. 4, Rule II, Book IV,
Q:Whatisalicense? POEARules)

A: It is issued by DOLE authorizing a person or Q:Isthelicenseorauthoritytransferable?
entitytooperateaprivateemploymentagency.
A:No,theyarenontransferable.(Art.29)
Q:WhatisanAuthority?
Q:ARecruitmentandPlacementAgencydeclared
A:ItisadocumentissuedbytheDOLEauthorizing voluntary bankruptcy. Among its assets is its
a person or association to engage in recruitment licensetoengageinbusiness.Isthelicenseofthe
and placement activities as a private recruitment bankrupt agency an asset which can be sold in
entity. publicauctionbytheliquidator?

Q: Who is a nonlicensee / nonholder of A: No, because of the nontransferability of the
authority? license to engage in recruitment and placement.
TheLC(Art.29)providesthatnolicensetoengage
A:Anyperson,corporationorentity: inrecruitmentandplacementshallbeuseddirectly
or indirectly by any person other than the one in
1. Whichhasnotbeenissuedavalidlicense whose favor itwas issued normay such license be
orauthoritytoengageinrecruitmentand transferred, conveyed or assigned to any other
placement by the Secretary of Labor and personorentity.Itmaybenotedthatthegrantof
Employment(SLE)or a license is a governmental act by the DOLE based
2. Whose license or authority has been on personal qualifications, and citizenship and
suspended, revoked or cancelled by the capitalization requirements. (Arts.2728, LC). (1998
POEAortheSLE BarQuestion)

Q:Whatarethegroundsforrevocationoflicense? Note:Changeofownershiporrelationshipofasingle
proprietorship licensed to engage in overseas
A: employment shall cause the automatic revocation of
1. Incurring an accumulated 3 counts of thelicense.
suspension by an agency based on final
Q: Concerned Filipino contract workers in the
Middle East reported to the DFA that XYZ, a
10
LABORLAWTEAM:

private recruitment and placement agency, is (b)IllegalRecruitment

covertly transporting extremists to terrorist
trainingcampsabroad.Intelligenceagenciesofthe Q:WhataretheelementsofIllegalRecruitment?
govt allegedly confirmed the report. Upon being
alerted by the DFA, the DOLE issued orders A:
cancelling the licenses of XYZ, and imposing an 1. Offender is a nonlicensee or nonholder
immediatetravelbanonitsrecruitsfortheMiddle of authority to lawfully engage in the
East. XYZ appealed to the Office of the President recruitment/placementofworkers
to reverse and set aside the DOLE orders, citing 2. Offenderundertakes:
damages from loss of employment of its recruits, a. Any act of canvassing, enlisting,
and violations of due process including lack of contracting, transporting, utilizing,
notice and hearing by DOLE. The DOLE in its hiring or procuring workers, and
answer claimed the existence of an emergency in includes referrals, contact services,
the Middle East which required prompt measures promising or advertising for
to protect the life and limb of OFWs from a clear employment, locally or abroad,
and present danger posed by the ongoing war whetherforprofitornot(Art.13[b]);
against terrorism. Should the DOLE orders be or
upheldorsetaside? b. Any of prohibited practices under
Art.34
A:
1. TheDOLEordercancellingthelicensesof Q:WhenisthereSimpleIllegalRecruitment?
XYZ is void because a report that an A:Itisconsideredsimpleillegalrecruitmentwhen
agencyiscovertlytransportingextremists itinvolveslessthanthree(3)victimsorrecruiters.
isnotavalidgroundforcancellationofa
Certificate of Registration (Art. 239, LC Q: Larry Domingo was accused of the crime of
and there is failure of due process as no illegal recruitment. He argued that he issued no
hearing was conducted prior to the receiptordocumentinwhichheacknowledgedas
cancellation(Art.238,LC). havingreceivedanymoneyforthepromisedjobs.
Hence, he should be free him from liability. Was
2. TheDOLEorderimposingthetravelbanis Larryengagedinrecruitmentactivities?
valid because it is a valid exercise of
police power to protect the national A: Yes. Even if at the time Larry was promising
interest (Sec. 3, Art. XIII, Constitution on employment no cash was given to him, he is still
full protection to labor safety of workers) considered as having been engaged in recruitment
and on the rule making authority of the activities, since Art.13(b) of the LC states that the
SLE. (Art. 5, LC; Phil. Assn. of Service act of recruitment may be for profit or not. It
Exporters v. Drilon, G.R. No. 81958, June sufficesthatLarrypromisedorofferedemployment
30,1988).(2004BarQuestion) for a fee to the complaining witnesses to warrant
his conviction for illegal recruitment. (People v.
Q:Whoarethepersonsprohibitedfromengaging Domingo,G.R.No.181475,April7,2009,J.Carpio
thebusinessofrecruitingmigrantworkers? Morales)

A: Q:WhatisthedifferencebetweentheLCandR.A.
1. UnlawfulforanyofficialorEeofthe: 8042 or the Overseas Filipinos and Overseas
a. DOLE MigrantWorkersAct?
b. POEA
c. Overseas Workers Welfare A:
Administration(OWWA) R.A.8042,asamendedbyRA
LC(Art.38)
d. DFA 10022
e. Other govt agencies involved in the Appliestorecruitmentfor
implementationofthisAct Localrecruitment
overseasemployment
th
2. Their relatives within the 4 civil degree Illegal recruitment IllegalrecruitmentunderSec.6
of consanguinity or affinity, to engage, underArt.38means meansanyrecruitmentactivity
directly or indirectly in the business of any recruitment committed by nonlicensees/
recruiting migrant workers. (Sec. 8, R.A. activity including nonholders of authority or
8042) prohibited acts prohibited acts (same as Art.
under Art. 34 34,LC)
committed by non
11

licensees or non Added to the following in the believed that her application for the renewal of
holdersofauthority. listofprohibitedacts: her license would be approved. She adduced in
1. Failure to actually deploy evidence the Affidavits of Desistance which the
withoutvalidreason; four private complainants had executed after the
2. Failure to reimburse prosecution rested its case. In the said affidavits,
expenses incurred by the they acknowledge receipt of the refund by
workerinconnectionwith MaryroseofthetotalamountofP120,000.00and
his/her documentation
indicated that they were no longer interested to
and processing for
pursuethecaseagainsther.Resolvethecasewith
purposesofdeployment;
reasons.
3. To allow a nonFilipino
citizen to head or
manage a licensed A: Illegal recruitment is defined by law as any
recruitment/ manning recruitment activities undertaken by nonlicenses
agency. or nonholders of authority. (People v. Senoron,
G.R.No.119160,Jan.30,1997)Anditislargescale
Q:Howdoesoneproveillegalrecruitment? illegal recruitment when the offense is committed
against 3 or more persons, individually or as a
A: It must be shown that the accused gave the group. (Art. 38[b], LC) In view of the above,
distinctimpressionthathehadthepowerorability Maryroseisguiltyoflargescaleillegalrecruitment.
tosendcomplainantsabroadforworksuchthatthe HerdefenseofGFandtheAffidavitofDesistanceas
latter were convinced to part with their money in well as the refund given will not save her because
ordertobedeployed. R.A. No. 8042 is a special law, and illegal
recruitmentis malumprohibitum.(Peoplev.Saulo,
Q: May a licensee or holder of authority be held G.R. No. 125903, Nov. 15, 2000). (2005 Bar
liableforillegalrecruitment? Question)

A: Yes, any person (whether nonlicensee, non Q:SometimeinthemonthofMarch1997,inthe
holderofauthority,licenseeorholderofauthority) CityofLasPias,Bugobymeansoffalsepretenses
who commits any of the prohibited acts, shall be and fraudulent representation convinced Dado to
liableforIllegalrecruitment.(R.A.8042) givetheamountofP120,000.00forprocessingof
his papers so that he can be deployed to Japan.
Q: When is illegal recruitment considered as Dado later on found out that Bugo had
economicsabotage? misappropriated, misapplied and converted the
moneytoherownpersonaluseandbenefit.Can
A:Whenitiscommitted: Dado file the cases of illegal recruitment and
estafasimultaneously?
1. Byasyndicatecarriedoutby3ormore
persons conspiring/confederating with A:Yes,illegalrecruitmentandestafacasesmaybe
oneanotheror filed simultaneously or separately. The filing of
2. In large scale committed against 3 or charges for illegal recruitment does not bar the
more persons individually or as a group. filing of estafa, and vice versa. Bugos acquittal in
(Sec.6,10022) theillegalrecruitmentcasedoesnotprovethatshe
isnotguiltyofestafa.Illegalrecruitmentandestafa
Q:Whileherapplicationforrenewalofherlicense are entirely different offenses and neither one
torecruitworkersforoverseasemploymentwas necessarilyincludesorisnecessarilyincludedinthe
still pending Maryrose Ganda recruited Alma and other. A person who is convicted of illegal
her 3 sisters, Ana, Joan, and Mavic, for recruitmentmay,inaddition,beconvictedofestafa
employment as housemates in Saudi Arabia. underArticle315,par.2(a)oftheRPC.Inthesame
Maryroserepresentedtothesistersthatshehada manner, a person acquitted of illegal recruitment
license to recruit workers for overseas maybeheldliableforestafa.Doublejeopardywill
employment and demanded and received not set in because illegal recruitment is malum
P30,000.00 from each of them for her services. prohibitum,inwhichthereisnonecessitytoprove
However, her application for the renewal of her criminal intent, whereas estafa is malum in se, in
license was denied, and consequently failed to theprosecutionofwhich,proofofcriminalintentis
employ the 4 sisters in Saudi Arabia. The sisters necessary.(Syv.People,G.R.No.183879,April14,
charged Maryrose with large scale illegal 2010)
recruitment. Testifying in her defense, she
declaredthatsheactedingoodfaithbecauseshe Q:DistinguishIllegalRecruitmentfromEstafa
12
LABORLAWTEAM:

agentatthetimeofthetransactionoracquiredby
A: him before its completion, is deemed to be the
ILLEGALRECRUITMENT ESTAFA knowledge of the principal, at least so far as the
Maluminse, transaction is concerned, even though in fact the
thus: knowledgeisnotcommunicatedtotheprincipalat
Malumprohibitum,thus:
1. criminal intent is all.(Leonorv.FilipinasCompania,48OG243)
1. Criminal intent is NOT
necessary
necessary
2. crime which Q: Sunace International Management Services
2. itisacrimewhichinvolves
involves moral (Sunace),deployedtoTaiwanMontehermozoasa
moralturpitude
turpitude domestic helper under a 12month contract
effective Feb. 1, 1997. The deployment was with
Accused defrauded the assistance of a Taiwanese broker, Edmund
another by abuse of Wang, President of Jet Crown International Co.,
It is not required that it be
confidence, or by
shown that the recruiter Ltd.Afterher 12monthcontractexpiredonFeb.
meansofdeceit
wrongfully represented 1,1998,Montehermozocontinuedworkingforher

himself as a licensed Taiwanese employer for two more years, after
NOTE: It is essential
recruiter which she returned to the Philippines on Feb. 4,
that the false
statement or 2000. Shortly after her return she file before the
NOTE: It is enough that the fraudulent NLRC against Sunace, one Perez, the Taiwanese
victims were deceived as they representation broker,andtheemployerforeignprincipalalleging
relied on the constitutes the very
misrepresentationandscheme thatshewasjailedforthreemonthsandthatshe
cause or the only was underpaid. Should Sunace be held liable for
that caused them to entrust motive which induces
their money in exchange of the underpayment for the additional two years
thecomplainanttopart
whattheylaterdiscoveredwas withthethingofvalue that she worked for her Taiwanese employer
a vain hope of obtaining underthetheoryofimputedknowledge?

employmentabroad

A: No, the theory of imputed knowledge ascribes
Illegalrecruitmentandestafacasesmaybefiled the knowledge of the agent, Sunace, to the
simultaneouslyorseparately.Thefilingofchargesfor principal Taiwanese employer, not the other way
illegalrecruitmentdoesnotbarthefilingofestafa,and around. The knowledge of the principalforeign
viceversa. employer cannot, therefore, be imputed to its
Doublejeopardywillnotset agentSunace.

(c)Liabilities TherebeingnosubstantialproofthatSunaceknew
of and consented to be bound under the 2year
Q:Whatistheliabilityoftheprivateemployment employment contract extension, it cannot be said
agency and the principal or foreignbased to be privy thereto. As such, it and its owner
employer? cannot be held solidarily liable for and of
Montehermozos claims arising from the 2year
A: They are jointly and severally liable for any employment extension. (Sunace v. NLRC, G.R. No.
violation of the recruitment agreement and the 161757,Jan.25,2006)
contractsofemployment.
(d)Preteminationofcontractofmigrantworker
Note: This joint and solidary liability imposed by law
againstrecruitmentagenciesandforeignErsismeant Q: Serrano, a seafarer, was hired by Gallant
to assure the aggrieved worker of immediate and Maritime and Marlow Navigation Co. for 12
sufficient payment of what is due him. If the months as Chief Officer. On the date of his
recruitment/placementagencyisajuridicalbeing,the departure, he was constrained to accept a
corporate officers and directors and partners as the downgradedemploymentcontractfortheposition
casemaybe,shallthemselvesbejointlyandsolidarily of Second Officer, upon the assurance that he
liable with the corporation or partnership for the wouldbemadeChiefOfficerafteramonth.Itwas
claims and damages. (Becmen Service Exporter and notdone;hence,herefusedtostayonasSecond
Promotion v. Cuaresma, G.R. Nos. 18297879, April 7,
Officer and was repatriated to the Phils. He had
2009)
served only 2 months & 7 days of his contract,

leaving an unexpired portion of 9 months & 23
Q:Whatisthetheoryofimputedknowledge?
days.

A: A rule in insurance law that any information
Serrano filed with the LA a Complaint against
materialtothetransaction,eitherpossessedbythe
Gallant Maritime and Marlow for constructive
13

dismissal and for payment of his money claims. thePOEAorentitiesauthorizedbytheSecretaryof

The LA rendered a favorable decision to Serrano Labor.
awarding him $8,770.00, representing his salary
for 3 months of the unexpired portion of his Q:Whatisthebanondirecthiring?
contract of employment applying R.A. 8042, Sec
10,par5: A: GR: An Er may only hire Filipino worker for
overseas employment through POEA or
MoneyClaims.Incaseofterminationofoverseas entitiesauthorizedbyDOLE.
employment without just, valid or authorized
cause as defined by law or contract, the workers XPN:
shall be entitled to the full reimbursement of his Directhiringby
placement fee with interest of 12% per annum, 1. Internationalorganizations
plus his salaries for the unexpired portion of his 2. Namehires
employment contract or for 3 months for every 3. Membersofthediplomaticorganizations
yearoftheunexpiredterm,whicheverisless. 4. OtherErsasmaybeallowedbyDOLE

Isthesubjectclauseconstitutional? Q:Whyisdirecthiringprohibited?

A: No. The subject clause contains a suspect A:
classification in that, in the computation of the 1. To ensure the best possible terms and
monetary benefits of fixedterm employees who conditionsofemploymentfortheworker.
are illegally discharged, it imposes a 3month cap 2. ToassuretheforeignErthathehiresonly
ontheclaimofOFWswithanunexpiredportionof qualifiedFilipinoworkers.
one year or more in their contracts, but none on 3. To ensure full regulation of employment
the claims of other OFWs or local workers with inordertoavoidexploitation.
fixedtermemployment.Thesubjectclausesingles
outoneclassificationofOFWsandburdensitwitha 2.REGULATIONANDENFORCEMENT
peculiardisadvantage.
a.Remittanceofforeignexchangeearnings
TheclauseisaviolationoftherightofSerranoand
other OFWs to equal protection and right to Q: What is the rule on remittance of foreign
substantive due process, for it deprives him of exchangeearnings?
property, consisting of monetary benefits, without
anyexistingvalidgovernmentalpurpose. A:GR:ItshallbemandatoryforallOFWstoremita
portion of their foreign exchange earnings
Furthermore, prior to R.A. 8042, all OFWs, to their families, dependents, and/or
regardless of contract periods or the unexpired beneficiaries ranging from 50% 80%
portionsthereof,weretreatedalikeintermsofthe depending on the workers kind of job.
computation of their monetary benefits in case of (RuleVIII,BookIII,POEARules)
illegal dismissal. Their claims were subjected to a
uniform rule of computation: their basic salaries XPN:
multiplied by the entire unexpired portion of their 1. Theworkersimmediatefamilymembers,
employment contracts. The same applies local beneficiariesanddependentsareresiding
workerswithfixedtermemployment. withhimabroad
2. ImmigrantsandFilipinoprofessionalsand
Thus, Serrano is entitled to his salaries for the employeesworkingwiththeUNagencies
entireunexpiredperiodofninemonthsand23days orspecializedbodies
of his employment contract, pursuant to law and 3. Filipino servicemen working in U.S.
jurisprudence prior to the enactment of RA 8042. military installations. (Resolution No. 1
(Serrano v. Gallant Maritime Services & Marlow 83, InterAgency Committee for
NavigationCo.,Inc.,G.R.No.167614,Mar.24,2009) ImplementationofE.O.857)

c.DirectHiring Q:Whatistheeffectoffailuretoremit?

Q:WhatisDirecthiring? A:
1. WorkersShallbesuspendedorremoved
A: It is when an employer hires a Filipino worker from the list of eligible workers for
for overseas employment without going through overseasemployment.
14
LABORLAWTEAM:

2. Employers Will be excluded from the processing of pending workers'

overseas employment program. Private applications;and
employment agencies shall face 15. For a recruitment/manning agency or a
cancellation or revocation of their foreign principal/ Er to pass on the OFW
licenses or authority to recruit. (Sec. 9, or deduct from his or her salary the
E.O.857) payment of the cost of insurance fees,
premium or other insurance related
b.ProhibitedActivities charges, as provided under the
compulsoryworker'sinsurancecoverage
Q: What are prohibited practices in 16. Imposing a compulsory and exclusive
recruitment/placement(Art.34.)? arrangementwherebyanOFWisrequired
to:
A: a. Avail a loan only from specifically
1. Furnishing or publishing any false designated institutions, entities or
notice/information/document related to persons
recruitment/employment b. Toundergohealthexaminationsonly
2. FailuretofilereportsrequiredbySLE fromspecificallydesignatedmedical,
3. Inducingorattemptingtoinduceaworker entities or persons, except seafarers
alreadyemployedtoquithisemployment whose medical examination cost is
in order to offer him another unless the shoulderedbytheshipowner
transfer is designed to liberate a worker c. Toundergotrainingofanykindonly
fromoppressivetermsandconditions fromdesignatedinstitutions,entities
4. Recruitment/placement of workers in or persons, except for
jobs harmful to public health or morality recommendatory trainings
ortothedignityofthecountry mandated by principals/shipowners.
5. Engaging directly or indirectly in the (Sec.6,R.A.10022)
managementofatravelagency
6. Substituting or altering employment c.RegulatoryandVisitorialPowersoftheLabor
contractswithoutapprovalofDOLE Secretary
7. Chargingoracceptinganyamountgreater
than that specified by DOLE or make a Q: What are the regulatory powers of the
worker pay any amount greater than SecretaryofLaborandEmployment(SLE)?
actuallyreceivedbyhim
8. Committing any act of misrepresentation A:
tosecurealicenseorauthority 1. Restrictandregulatetherecruitmentand
9. Influencingorattemptingtoinfluenceany placementactivitiesofallagencies
person/entity not to employ any worker 2. Issue orders and promulgate rules and
who has not applied of employment regulations
throughhisagency
10. Obstructing or attempting to obstruct Q:Whatconstitutevisitorialpower?
inspection by SLE or by his
representatives A:
11. Withholdingordenyingtraveldocuments 1. Access to employers records and
from applicant workers before departure premisesatanytimeofthedayornight,
for monetary considerations other than wheneverworkisbeingundertaken
authorizedbylaw 2. Tocopyfromsaidrecords
12. Granting a loan to an OFW which will be 3. Question any employee and investigate
used for payment of legal and allowable any fact, condition or matter which may
placementfees be necessary to determine violations or
13. Refusingtocondoneorrenegotiatealoan whichmayaidintheenforcementofthe
incurredbyanOFWafterhisemployment Labor Code and of any labor law, wage
contract has been prematurely order, or rules and regulation issued
terminatedthroughnofaultofhisorher pursuantthereto.
own
14. For a suspended recruitment/manning Q: Give 4 instances where the visitorial power of
agency to engage in any kind of theSLEmaybeexercisedundertheLaborCode.
recruitment activity including the
A:Powerto:
15

provisions orboth
1. Inspect books of accounts and records of
any person or entity engaged in Nonlicensee/non 48yrsimprisonment;or
holderofauthority Fine:P20KP100K
recruitment and placement, require it to
violatesprovisions orboth
submit reports regularly on prescribed
Corporation, Penaltyimposedupon
forms and act in violations of any
partnership, officer/sresponsiblefor
provisions of the LC on recruitment and association,orentity violation
placement.(Art.37) PenaltiesprescribedunderRA
2. Have access to employers records and 10022,
premises to determine violations of any Alien +
provisions of the LC on recruitment and Deportationwithoutfurther
placement.(Art.128) proceedings
3. Conduct industrial safety inspections of Automaticrevocationof
establishments.(Art.165) licenseorauthorityandall
4. Inquire into the financial activities of permitsandprivilegesofthe
Ineverycase
legitimate labor organizations (LLO) and recruitmentormanning

examinetheirbooksofaccountsuponthe agency,lendinginstitutions,
filing of the complaint under oath and trainingschoolormedical
dulysupportedbythewrittenconsentof clinic
at least 20% of the total membership of
theLOconcerned. Q: What are the remedies under the Migrant
WorkersActandhowmaytheybeenforced?
Q:CanSLEissuesearchwarrantsorwarrantsof
arrest? A:
CRIMINALACTIONS
A: No. Only a judge may issue search and arrest
RTC
warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE the Provinceorcity:
powertoissuesearchorarrestwarrants.Thelabor 1. Wheretheoffensewascommittedor
authoritiesmustgothroughthejudicialprocess. 2. Wheretheoffendedpartyactuallyresidesatthe
sametimeofthecommissionoftheoffense
d.PenaltiesforIllegalRecruitment MONEYCLAIMS
NLRC
Q:Whatistheconsequenceofconvictionofillegal Original and exclusive jurisdiction to hear and decide
recruitment(IR)? claimsarisingoutofanErEerelationshiporbyvirtue
of any law or contract involving Filipino workers for
A: overseas deployment including claims for actual,
PENALTIES(underR.A.10022) moral,exemplaryandotherformsofdamages.
Theliabilityoftheprincipal/Erandtherecruitment/
Offender/Offense Penalty
placement agency for any and all claims shall be
IRaseconomic jointandseveral.
sabotage Lifeimprisonment+ The performance bond to de filed by the
fineofP2MP5M recruitment/placementagencyshallbeanswerable
Provided: for all money claims or damages that may be
1. Ifpersonillegally awardedtotheworkers.
recruitedisbelow If the recruitment/placement agency is a juridical
18yearsofageor being, the corporate officers and directors and
2. Illegal Maximumpenaltyshall partners as the case may be, shall themselves be
recruitmentis beimposed jointly and solidarily liable with the corporation or
committedbya partnershipfortheclaimsanddamages.
nonlicensee/non
holder ADMINISTRATIVEACTIONS
Anypersonfound 12yrsand1day20yrs POEA
guiltyofillegal imprisonment;or
recruitment Fine:P1MP2M
Anypersonfound 6yrsand1day12yrs
guiltyofthe imprisonment;or
prohibitedacts FineofP500KP1M
Licensee/holderof 25yrsimprisonment;or
authorityviolates Fine:P10KP50K;
16
LABORLAWTEAM:

Originalandexclusivejurisdictiontohearanddecide: DoOTandleavepayformpartofthesalarybasis
1. All cases which are administrative in character, inthecomputationofthemonetaryaward?
involving or arising out of violations of rules and
regulations relating to licensing and registration of A: No. The word salaries in Sec. 10(5) does not
recruitment and employment agencies or entities include overtime and leave pay. For seafarers,
and DOLE Department Order No. 33, series 1996,
2. Disciplinaryaction(DA)casesandotherspecialcases provides a Standard Employment Contract of
whichareadministrativeincharacter,involvingErs,
Seafarers,inwhichsalaryisunderstoodasthebasic
principals,contractingpartnersandFilipinomigrant
wage,exclusiveofOT,leavepayandotherbonuses;
workers.
whereas OT pay is compensation for all work
a.ItmaybefiledwiththePOEAAdjudicationOffice
or the DOLE/POEA regional office of the place performed in excess of the regular 8 hours, and
wherethecomplaintappliedorwasrecruitedat holiday pay is compensation for any work
the option of the complainant. The office with performedondesignatedrestdaysandholidays.
which the complaint was first filed shall take (Serrano v. Gallant Maritime Services & Marlow
cognizanceofthecase. Navigation Co., Inc., G.R. No. 167614, Mar. 24,
b.DAcasesandotherspecialcases,asmentioned 2009)
in the preceding Section, shall be filed with
POEAAdjudicationOffice. 3.OTHERRELATEDTOPICS
PERIODS
PhilippineOverseasEmploymentAdministration
MandatoryPeriodforResolutionofIllegal

RecruitmentCases
Q:WhataretheprincipalfunctionsofthePOEA?
Thepreliminaryinvestigations(PI)ofcasesunderR.A.
10022 shall be terminated within a period of 30
calendardaysfromthedateoftheirfiling. A:
IfthePIisconductedbya IfthePIisconductedby 1. ProtectionoftherightofFilipinoworkers
prosecutionofficeranda ajudgeandaprima to fair and equitable employment
primafaciecaseis faciecaseisfoundto practices
established exist 2. Regulation of private sector participation
Prosecutionofficer in the recruitment and overseas
Informationshallbefiled
within48hoursfromthe placement of workers by setting up a
incourtwithin24hours
dateofreceiptofthe licensingandregistrationsystem
fromtheterminationof
recordsofthecase.(Sec. 3. Deployment of Filipino workers through
theinvestigation
11) govttogovthiring
PrescriptivePeriodforIllegalRecruitmentCases 4. Formulation, implementation, and
monitoring of overseas employment of
SimpleIllegalRecruitment EconomicSabotage Filipinoworkerstakinginto consideration
Within20yrsfromthe their welfare and domestic manpower
Within5yrsfromthetime
timeillegalrecruitment requirements
illegalrecruitmenthas
hashappened.(Sec. 5. Shall inform migrant workers not only of
happened
12,R.A.8042) their rights as workers but also of their
rightsashumanbeings,instructandguide
Q: Is compromise agreement on money claims theworkershowtoasserttheirrightsand
allowed? provide the available mechanism to
redress violation of their rights. (Sec. 14,
A: Yes. Consistent with the policy encouraging R.A.10022)
amicable settlement of labor disputes, Sec. 10 of 6. Implementation, in partnership with
R.A.8042allowsresolutionbycompromiseofcases other lawenforcement agencies, of an
filedwiththeNLRC. intensified program against illegal
recruitment activities. (Sec. 14, R.A.
Q:Whenshallcompromiseagreementsonmoney 10022)
claimsbepaid?
Q:MaythePOEA,atanytimeterminateorimpose
A: Any compromise/amicable settlement or abanonemploymentofmigrantworkers?
voluntary agreement on money claims inclusive of
damages shall be paid within 4 months from the A: Yes,in consultationwiththeDFAbasedonthe
approval of the settlement by the appropriate ff.grounds:
authority.
2. InpursuitoftheNationalInterestor
17

3. When public welfare so requires. (Sec. 4 3. Ithasconcludedabilateralagreementor

R.A.10022) arrangementwiththegovernmentonthe
protectionoftherightsofOFWs..(Sec.3,
Q: What are the minimum conditions/ provisions R.A.10022amendingR.A.8042)
ofoverseasemploymentcontracts?
Provided, that the receiving country is taking
A: positive,concretemeasurestoprotecttherightsof
1. Guaranteed wages for regular hours and migrant workers in furtherance of any of the
overtime, not lower than the minimum guarantees.
wageprescribedinalloftheff:
a. Thehostcountry Note:Intheabsenceofaclearshowingthatanyofthe
b. Bilateralagreementsorinternational guarantees exists in the country of destination of the
conventions ratified by the host migrant workers, no permit for deployment shall be
countryandthePhilippines issuedbythePOEA.
c. ThePhilippines
2. Free transportation to and from the Q:Whatistheruleonrepatriation?
worksiteoroffsettingbenefit
3. Free food and accommodation or A:GR:Therepatriationofthe:
offsettingbenefit 1. Worker and the transport of his personal
4. Just/authorized causes of termination of belongings shall be the primary
thecontractorservicesoftheworker responsibility of the agency which
recruited or deployed the worker
Note: An agreement that diminishes the Ees pay and overseas.
benefits as contained in a POEAapproved contract is 2. Remains and transport of the personal
void, unless such subsequent agreement is approved belongings of a deceased worker and all
bythePOEA. costsattendanttheretoshallbeborne
bytheprincipaland/orthelocalagency.
Q:WhatistheruleondeploymentofOFWs?
XPNs:
A:TheStateshallallowthedeploymentofOFWs: 1. If the termination of employment is due
solely to the fault of the worker, the
1. Only in countries where the rights of principal/ Er or agency shall not be
Filipinomigrantworkersareprotected. responsible for the repatriation of the
2. To vessels navigating the foreign seas or formerand/orhisbelongings
to installations located offshore or on 2. In cases of war, epidemic, disaster or
high seas whose owners/Ers are calamities, natural or manmade, and
compliant with international laws and other similar event, and where the
standards that protect the rights of principalorrecruitmentagencycannotbe
migrantworkers. identified,theOverseasWorkersWelfare
3. To companies and contractors with Administration, in coordination with
international operations: Provided, That appropriate international agencies, shall
they are compliant with standards, take charge of the repatriation. (Sec.15,
conditions and requirements, as R.A.8042)
embodied in the employment contracts
prescribedbythePOEAandinaccordance Q: What is the rule on mandatory repatriation of
with internationallyaccepted standards. underagemigrantworkers?
(Sec.3,R.A.10022amendingR.A.8042)
A: Upon discovery or being informed of the
Q: What are the guarantees of the receiving presenceofmigrantworkerswhoseagesfallbelow
countryfortheprotectionoftherightsofOFWs? the minimum age requirement for overseas
deployment, the responsible officers in the foreign
A: service shall without delay repatriate said workers
1. It has existing labor and social laws and advise the DFA through the fastest means of
protectingtherightsofworkers,including communication available of such discovery and
migrantworkers; other relevant information. The license of a
2. It is a signatory to and/or a ratifier of recruitment/manning agency which recruited or
multilateral conventions, declarations or deployed an underage migrant worker shall be
resolutions relating to the protection of automatically revoked and shall be imposed a fine
workers,includingmigrantworkers;and
18
LABORLAWTEAM:

of not less than P500,000 but not more than JURISDICTION

P1,000,000.(Sec.9,R.A.10022) LaborArbiter POEA
Original and exclusive
Q: What are the regulatory and adjudicatory Original and exclusive jurisdictionover:
functionsofthePOEA? jurisdiction over all 1. All cases which are
claims arising out of administrative in character
A: ErEe relationship or relating to licensing and
1. Regulatory It regulates the private byvirtueofanylawor registration of recruitment
sector participation in the recruitment contract involving andemploymentagencies
OFWsincludingclaims
and overseas placement of workers
for: 2. Disciplinary Action cases
through its licensing and registration
1.Actual and other special cases,
system.
2.Moral which are administrative in
2. Adjudicatory 3.Exemplary character, involving Ees,
a. Administrative cases involving 4.Other forms of principals, contracting
violations of licensing rules and damages. (Sec. 10, partnersandFilipinomigrant
regulations and registration of R.A.8042) workers. (Rule VII, Book VII,
recruitment and employment POEARules)
agenciesorentities
b. Disciplinary action cases and other Q: A seafarer was prevented from leaving the
special cases which are port of Manila and refused deployment without
administrative in character involving valid reason. His POEAapproved employment
employers, principals, contracting contract provides that the employeremployee
partnersandFilipinomigrants. relationship shall commence only upon the
seafarers actual departure from the port in the
Q:Whatarethegroundsfordisciplinaryactionof point of hire. Is the seafarer entitled to relief
OFWs? undertheMigrantWorkersAct,intheabsenceof
anemployeremployeerelationship?
A:UnderR.A.8042,theseare:
1. Prostitution A: Yes. Despite the absence of an employer
2. Unjustrefusaltodepartfortheworksite employee relationship, the NLRC has jurisdiction
3. Gunrunning or possession of deadly over the seafarers complaint. The jurisdiction of
weapons labor arbiters is not limited to claims arising from
4. Vandalism or destroying company ErEerelationships.Sec.10oftheMigrantWorkers
property Act provides that the labor arbiters shall have
5. Violationofthelawsandsacredpractices jurisdiction over claims arising out of an ErEe
ofthehostcountryandunjustifiedbreach relationship or by virtue of any law or contract
ofemploymentcontract involving Filipino workers for overseas deployment
6. Embezzlement of funds of the company including claims for actual, moral, exemplary and
orfellowworkerentrustedfordeliveryto other forms of damages. Since the present case
relativesinthePhils. involves the employment contract entered into by
7. Creatingtroubleattheworksiteorinthe petitionerforoverseasemployment,hisclaimsare
vessel cognizable by the labor arbiters of the NLRC.
8. Gambling (Santiago v. CF Sharp Crew Management,G.R. No.
9. Initiating or joining a strike or work 162419,July10,2007)
stoppage where the laws of the host
countryprohibitsstrikesorsimilaractions Q:Whatmattersfalloutsidethejurisdictionofthe
10. Commission of felony punishable by POEA?
Philippinelawsorbythehostcountry
11. Theftorrobbery A:
12. Drunkenness 1. Foreign judgments such claim must be
13. Drugaddictionorpossessionortrafficking brought before regular courts. POEA is
ofprohibiteddrugs notacourt;itisanadministrativeagency,
14. Desertionorabandonment exercising adjudicatory or quasijudicial
functions.
Q:Whatisthedistinctionbetweenthejurisdiction 2. Torts falls under the provisions of the
oftheLAandPOEA? CivilCode.

A:
19

EmploymentofNonResidentAliens XPNS:
1. Diplomatic services and foreign govt
Q: What is required in the employment of non officials
residentaliens? 2. Officers and staff of intl organizations
andtheirlegitimatespouses
A: Any alien seeking admission to the Phil. for 3. Members of governing board who has
employmentpurposesandanydomesticorforeign votingrightsonly
employer (Er) who desires to engage an alien for 4. Thoseexemptedbyspeciallaws
employmentinthePhilippines: 5. Owners and representatives of foreign
1. Shall obtain an employment permit from principals who interview Filipino
theDOLE applicantsforemploymentabroad
2. The permit may be issued to a non 6. Alienswhosepurposeistoteach,present
residentalienortotheapplicantErafter and/orconductresearchstudies
adeterminationofthenonavailabilityof 7. Resident aliens. (D.O. 7506, May 31,
a person in the Phil. who is competent, 2006)
ableandwillingatthetimeofapplication
to perform the services for which the Q: May the nonresident alien transfer
alienisdesired employment after issuance of the employment
3. For an enterprise registered in preferred permit?
areasofinvestments,saidpermitmaybe
issueduponrecommendationofthegovt A:Aftertheissuanceofanemploymentpermit,the
agency charged with the supervision of alienshallnottransfertoanotherjoborchangehis
saidregisteredenterprise employerwithoutpriorapprovaloftheSecretaryof
Labor.
Q: The DOLE issued an alien employment permit
for Earl Cone, a U.S. citizen, as sports consultant Q: What is required for immigrants and resident
and assistant coach for GMC. Later, the Board of aliens?
SpecialInquiryoftheCommissiononImmigration
andDeportationapprovedConesapplicationfora A:AnAlienEmploymentRegistrationCertificate.
changeofadmissionstatusfromtemporaryvisitor
to prearranged employee. A month later, GMC Q: What is the duration of the employment
requested that it be allowed to employ Cone as permit?
fullfledged coach. The Dole Regional Director
grantedtherequest.TheBasketballAssociationof A:GR:Minimumof1year
the Phils. appealed theissuance of said permit to
theSLEwhocancelledConesemploymentpermit XPN:Unlessrevokedandsubjecttorenewal
because GMC failed to show that there is no
person in the Philippines who is competent and Q:Mayaliensbeemployedinentitiesengagedin
willing to do the services nor that the hiring of nationalizedactivities?
Cone would redound to the national interest. Is
theactofSLEvalid? A:GR:No.

A:Yes.GMCsclaimthathiringofaforeigncoachis XPNs:
anErsprerogativehasnolegalbasis.UnderArt.40 1. Sec. of Justice specifically authorizes the
of the LC, an Er seeking employment of an alien employmentoftechnicalpersonnel
must first obtain an employment permit from the 2. Aliens are elected members ofthe board
DOLE. GMCs right to choose whom to employ is of directors or governing body of
limited by the statutory requirement of an corporationsorassociationsor
employmentpermit.(GMCv.Torres,G.R.No.9366, 3. EnterprisesregisteredundertheOmnibus
April22,1991) Investment Code in case of technical,
supervisory or advisory positions, but for
Art.41.ProhibitionAgainstTransferofEmployment alimitedperiod.

Q: Who are required to obtain an employment
permit?

A:GR:Onlynonresidentaliens;
20
LABORLAWTEAM:

Art.25.PrivateSectorParticipationinthe Q: Is a corporation, 70% of the authorized and

RecruitmentandPlacementofWorkers votingcapitalofwhichisownedandcontrolledby
Filipino citizens, allowed to engage in the
Q:Whataretheentitiesintheprivatesectorsthat recruitment and placement of workers, locally or
can participate in recruitment and placement of overseas?Explainbriefly.
workers?
A: No. It is because Art. 27 of the Labor Code
A: requiresatleast75%.(2002BarQuestion)
1. Shipping or manning agents or
representatives Q:Whoaredisqualifiedtoengageinthebusiness
2. Privaterecruitmentoffices ofrecruitmentandplacementofworkers?
3. Publicemploymentoffices
4. Construction contractors if authorized by A:
the DOLE and Construction Industry 1. Travel agencies and sales agencies of
Authority. airlinecompanies;(Art.26,LC)
5. Persons that may be authorized by the 2. Officers or members of the board of any
SLE corporation or members in a partnership
6. Private employment agencies. (Sec. 1, engaged in the business of a travel
RuleVII,BookI,IRR) agency;
3. Corporationsandpartnerships,whenany
Q: What are the qualificationsfor participation in of its officers, members of the board or
recruitmentandplacementofworkers? partners,isalsoanofficer,memberofthe
board or partner of a corporation or
A: partnership engaged in the business of a
1. Filipino citizens, partnerships or travelagency;
corporations at least 75% of the 4. Persons, partnerships or corporations
authorized capital stock of which is which have derogatory records, such as
ownedandcontrolledbyFilipinocitizens; butnotlimitedtothose:
(Art.27,LC) a. Certified to have derogatory record
2. Capitalization or information by the NBI or by the
a. Singleproprietorshiporpartnership AntiIllegal Recruitment Branch of
A minimum capitalization of P2 thePOEA;
million b. Against whom probable cause or
b. Corporation primafaciefindingofguiltforillegal
A minimum paidup capital of P2 recruitment or other related cases
million exists;
Provided,thatthosewithexistinglicenses c. Convicted for illegal recruitment or
shall, within 4 yrs from the effectivity other related cases and/or crimes
hereof, increase their capitalization or involvingmoralturpitude;and
paidupcapital,asthecasemaybe,toP2 d. Agencies whose licenses have been
million at the rate of P250,000.00 every previously revoked or cancelled by
year.(Art.28,LC) the POEA for violation of R.A. 8042,
3. Nototherwisedisqualifiedbylaworother P.D. 442 as amended and their
government regulations to engage in the implementing rules and regulations
recruitmentandplacementofworkersfor as well as these rules and
overseas employment. (Rule I, Part II, regulations.
POEARules) 5. Any official or Ee of the DOLE, POEA,
4. Paymentofregistrationfees OWWA, DFA and other government
5. Postingofsurety/cashbonds agencies directly involved in the
implementation of R.A. 8042 and/or any
th
Q: How will POEA regulate private sector of his/her relatives within the 4 civil
participation in the recruitment and overseas degreeofconsanguinityoraffinity;and
placementofworkers? 6. Personsorpartners,officersanddirectors
ofcorporationswhoselicenseshavebeen
A:Bysettingupalicensingandregistrationsystem. previously cancelled or revoked for
(Sec.14,R.A.10022) violationofrecruitmentlaws.(Sec.2,Rule
I, 2002 Rules and Regulations on the
21

Recruitment and Employment of Land

BasedWorkers)

Art.26.TravelAgenciesProhibitedtoRecruit

Q: What is the rule on recruitment of travel
agenciesandsalesagenciesofairlinecompanies?
A: They are prohibited from engaging in the

business of recruitment and placement of workers
foroverseasemploymentwhetherforprofitornot.
Q: WTTA is a wellknown travel agency and an

authorized sales agent of the PAL. Since majority
of its passengers are overseas workers, WTTA
applied for a license for recruitment and
placement activities. It stated in its application
that its purpose is not for profit but to help
Filipinos find employment abroad. Should the
applicationbeapproved?
A: The application should be disapproved, as it is

prohibited by Art. 26 of the LC, to wit: "Art 26.
Travel agencies and sales agencies of airline
companies are prohibited from engaging in the
business of recruitment and placement of workers
for overseas employment whether for profit or
not." Rule I, Part II POEA Rules and Regulations
Governing the Recruitment and Employment of
LandBased Workers (2002) disqualifies any entity
having common director or owner of travel
agencies and sales agencies of airlines, including
any business entity from the recruitment and
placement of Filipino workers overseas, whether
theyderiveprofitornot.(2006BarQuestion)
Art.32.FeestobePaidbyWorkers
Q:Whenmayaworkerbechargedanyfee?
A:Onlywhen:
1. Hehasobtainedworkthroughrecruiters
efforts,and
2. The worker has actually commenced
working

Note: A land based agency may charge and collect
from its hired workers a placement fee in an amount
equivalent to 1 month salary, exclusive of
documentationcosts.
Q: What are the only authorized payments that

maybecollectedfromahiredworker?
A:
1. Placement fee in an amount equivalent
toonemonthssalaryoftheworkerand
2. Documentationcosts.
22
LABORLAWTEAM:

LABOR STANDARDS
C.LABORSTANDARDS Q:WhoaremanagerialEes?

1.HOURSOFWORK A: Those whose primary duty consists of the
management of the establishment in which they
a.Coverage/Exclusions are employed or a department or subdivision
thereof, and other officers or members of the
Q:Whodeterminesworkingconditions? managerialstaff.

A:Generally,theyaredeterminedbytheemployer, Theymustmeetalloftheff.conditions,namely:
as he is usually free to regulate, according to his
discretion,allaspectsofemployment. 1. Primary duty: management of the
establishment in which they are
Q:Whatisthelimitationontheemployerspower employed or of a department or sub
toregulateworkingconditions? divisionthereof;
2. Customarily or regularly direct the work
A: It must be done in good faith and not for the of2ormoreEes
purposeofdefeatingorcircumventingtherightsof 3. HastheauthoritytohireorfireotherEes
the employees. Such are not always absolute and of lower rank; or their suggestions and
must be exercised with due regard to the rights of recommendations as to the hiring and
labor. firing and as to the promotion or any
change of status of other Ees are given
Note: Ones employment, profession, trade or calling particularweight.
is a property right and the wrongful interference 4. Execute under general supervision work
therewithisanactionablewrong. along specialized or technical lines
requiring special training, experience, or
Q:Whendoestheconditiononemploymentunder knowledge
theLaborCodeapply? 5. Executeundergeneralsupervisionspecial
assignmentandtasks;and
A:OnlyifanErEerelationshipexists. 6. Do not devote more than 20% of their
hours worked to activities which are not
Q:Whoaretheemployeesthatarecoveredbythe directly and closely related to
conditionsofemployment? performance of the work described. (Art.
82[2])
A:GR:ItappliestoallEesinallestablishments.
Q:WhyaremanagerialEesnotcovered?
XPN:
1. Govtemployees A: They are employed by reason of their special
2. Managerialemployees training, expertise or knowledge and for positions
3. Fieldpersonnel requiring the exercise of discretion and
4. The employers family members who independent judgment. Value of work cannot be
dependonhimforsupport measuredintermsofhours.
5. Domestic helpers and persons in the
personalserviceofanother,and Q:Whoarefieldpersonnel?
6. Workers who are paid by results as
determinedunderDOLEregulations A:Theyare:

Q:Whoaregovernmentemployees(Ees)? 1. nonagriculturalemployees
2. whoregularlyperformtheirduties
A:TheyareEesofthe: 3. awayfromtheprincipalplaceofbusiness
orbranchofficeoftheemployer;and
1. NationalGovernment 4. whose actual hours of work in the field
2. Anyofitspoliticalsubdivisions cannot be determined with reasonable
3. Including those employed in GOCCs with certainty.
originalcharters.
Q:Whoareworkerspaidbyresults?
Q:WhatlawgovernsgovernmentEes?
A:Theyare:
A:TheCivilServiceLaw,rulesandregulations.

23

1. paidbasedontheworkcompleted;and A:
2. notonthetimespentinworking 1. AlltimeduringwhichanEeisrequiredto
3. including those who are paid on piece be:
work, takay, pakiaw, or task basis if a. Onduty,or
theiroutputratesareinaccordancewith b. AttheErspremises,or
thestandardsprescribed. c. Ataprescribedworkplace

Q: Who are domestic helpers and persons in the 2. AlltimeduringwhichanEeissufferedor
personalserviceofanother? permittedtowork.(Sec.3,RuleI,BookIII,
IRR)
A:Thosewho:
Q: What are the principles in determining hours
1. perform services in the employers (Er) worked?
home which are usually necessary or
desirable for the maintenance or A:
enjoymentthereof;or 1. AllhourswhichtheEeisrequiredtogive
2. minister to the personal comfort, to his Er regardless of whether or not
convenienceorsafetyoftheEraswellas such hours are spent in productive labor
themembersofhisErshousehold. orinvolvephysicalormentalexertion.
2. Rest period is excluded from hours
Q: A house personnel was hired by a ranking worked, even if Ee does not leave his
company official to maintain a staff house workplace,itbeingenoughthat:
provided for the official. The personnel is being a. Hestopsworking
paidbythecompanyitself.Isthehousepersonnel b. Mayrestcompletely
adomesticservantofthecompanyofficial? c. May leave his workplace, to go
elsewhere, whether within or
A:No,thepersonnelisnotadomestichelperbuta outside the premises of the
regularemployeeofthecompany. workplace
3. All time spent for work is considered
Q: What are the 3 groups of employees (Ees) hoursworkedif:
undertheLC? a. The work performed was
necessary
A: b. IfitbenefitedtheEr
1. Managerial Ee One who is vested with c. OrtheEecouldnotabandonhis
the powers or prerogatives to lay down work at the end of his normal
andexecutemanagementpoliciesand/or working hours because he had
to hire, transfer, suspend, layoff, recall, noreplacement
discharge,assignordisciplineEes. d. Provided,theworkwaswiththe
2. SupervisoryEethosewhointheinterest knowledge of his Er or
of the Er, effectively recommend such immediatesupervisor
managerialactionsiftheexerciseofsuch 4. ThetimeduringwhichanEeisinactiveby
authority is not merely routinary or reasons of interruptions in his work
clerical in nature but requires the use of beyond his control shall be considered
independentjudgment. workingtime:
3. RankandFileEeallEesnotfallingwithin a. If the imminence of the
anyoftheabovedefinitions.(Art.212[m]) resumption of the work
requires the Ees presence at
b.Normalhoursofwork theplaceofworkor
b. If the interval is too brief to be
Q:WhatarethenormalhoursofworkofanEe? utilized effectively and gainfully
intheEesowninterest.(Sec.4,
A:Itshouldnotexceed8hoursinageneralworking RuleI,BookIII,IRR)
day.

Note: Normal hours of work may be shortened or
compressed.

Q:Whatareconsideredhoursworked?
24
LABORLAWTEAM:

LABOR STANDARDS
consultations with the workers and supervisors, a

(a)Exceptions:HealthPersonnel&Compressed consensus is reached on how to deal with
WorkWeek deteriorating economic conditions and it is
sufficientlyproventhatthecompanywassuffering
HealthPersonnel from losses. Under the Bureau of Working
Conditions bulletin, a reduction of the number of
Q: What are the hours of work of health regular working days is valid where the
personnel? arrangement is resorted to by the employer to
prevent serious losses due to causes beyond his
A: GR: 8 hours/5 days (40hour work week), control,suchaswhenthereisasubstantialslumpin
exclusiveoftimeformeals. thedemandforhisgoodsorservicesorwhenthere
is lack of raw materials. There is one main
XPN: Where the exigencies of the service consideration in determining the validity of
require that such personnel work for 6 days or reductionofworkinghoursthatthecompanywas
48hours,theyshallbeentitledtoanadditional suffering from losses. A year of financial losses
compensation of at least 30% of their regular would not justify a reduced workweek. (Linton
wageforworkonthe6thday. Commercialv.Hellera,G.R.No.163147,October10,
2007)
Note: 40hourworkweek doesnot applyifthereisa
training agreement between the resident physician Q: Under what conditions may a "compressed
and the hospital and the training program is duly
work week" schedule be legally authorized as an
accredited or approved by appropriate government
exception to the "8hour a day" requirement
agency.
undertheLC?
Q:Whoarecoveredbythe40hourworkweek?
A:

1. TheEevoluntarilyagreestoit
A:
2. There is no diminution in their weekly or
1. Health personnel in cities and
monthlytakehomepayorfringebenefits
municipalities with a population of at
3. The benefits are more than or at least
least1million;or
commensurate or equal to what is due
2. Hospitals and clinics with a bed capacity
the Ees without the compressed work
ofatleast100
week

4. OTpaywillbedueanddemandablewhen
Note:Art.83(2)donotrequirehospitalstopaythe
they are required to work on those days
Ees a full weekly salary with paid 2 days off. (San
which should have ceased to be working
Juan de Dios Ees Assoc.AFW et al. vs. NLRC, G.R.
days because of the compressed work
No.126383,Nov.28,1997)
weekschedule.

5. No strenuous physical exertion or that
CompressedWorkweek
theyaregivenadequaterestperiods.

6. It must be for a temporary duration as
Q:Whatisacompressedworkweek?
determined by the DOLE. (2005 Bar

Question)
A: The normal workweek is reduced to less than 6

days but the total number of workhours of 48
Q: What are the requisites for adoption of
hoursperweekshallremain.Thenormalworkdayis
compressedworkweek?
increased to more than 8 hours but not to exceed

12 hours, without corresponding overtime
A:
premium.Theconceptcanbeadjustedaccordingly
1. The Er shall notify the DOLE through the
depending on the normal workweek of the
Regional Office which has jurisdiction
company.(DepartmentAdvisoryOrderNo.2,Series
over the workplace, of the adoption of
of2009)
compressedworkweek.

2. The notice shall be in Report Form
Q: When is the implementation of a compressed
attachedtotheadvisory.
workweekvalid?
3. The Regional Office shall conduct an

ocular visit to validate whether the
A: The validity of the reduction of working hours
adoption of the flexible work
canbeupheldwhenthearrangementistemporary,
arrangements is in accordance with this
it is a more humane solution instead of a
issuance.(DepartmentAdvisoryOrderNo.
retrenchment of personnel, there is notice and
2,Seriesof2009)
25

Note: Where during meal period, the laborers are

c.WorkinterruptionduetobrownoutS requiredtostandbyforemergencywork,orwherethe
meal hour is not one of complete rest, such is
Q: What are the guidelines on power considered OT. (Pan Am vs. Pan Am Ees Association,
interruptions? G.R.No.L16275,Feb.23,1961)
A: Rest periods or coffee breaks running from 5 to 20

1. Brownouts of short duration but not minutes shall be considered as compensable working
exceeding 20 minutes shall be treated as time.(Sec.7,RuleI,BookIII,IRR)
worked or compensable hours whether
usedproductivelybytheemployees(Ees) Q: Are meal periods provided during OT work
ornot. compensable?

2. Brownouts running for more than 20 A: Yes, since the 1 hour meal period (non
minutes may not be treated as hours compensable)isnotgivenduringOTworkbecause
worked provided any of the following thelatterisusuallyforashortperiodandtodeduct
conditionsarepresent: fromthesamewouldreducetonothingtheEesOT
a. TheEescanleavetheirworkplaceor work. Thus, the 1 hour break for meals during OT
go elsewhere within or without the shouldbetreatedascompensable.
workpremises;or
Q: What are the instances where meal periods
b. The Ees can use the time effectively
shortened to not less than 20 minutes is
fortheirowninterest.
compensableornotcompensable?

3. In each case, the Er may extend the
A:
working hours of his Ees outside the
1. Compensable At the instance of
regular schedules to compensate for the
Employer,when:
loss of productive manhours without
a. Work is nonmanual in nature or
beingliableforOTpay.
does not involve strenuous physical

exertion;
4. Industrial enterprises with one or two
b. Establishmentregularlyoperatesless
work shifts may adopt any of the work
than16hoursaday;
shift prescribed for enterprises with 3
c. Workisnecessarytopreventserious
work shifts to prevent serious loss or
lossofperishablegoods.
damage to materials, machineries, or
d. Actual or impending emergency or
equipmentthatmayresultcaseofpower
thereisurgentworktobeperformed
interruptions.(PolicyInstructionNo.36)
on machineries and equipment to

avoidseriouslosswhichtheErwould
d.MealBreak
otherwisesuffer.(Sec.7,RuleI,Book

III,IRR)
Q:Whatisthedurationofthemealperiod?

2. Not Compensable Ee requested for the
A: Every Er shall give his Ees not less than 60
shorter meal time so that he can leave
minutesor1hourtimeoffforregularmeals.
work earlier than the previously
Q:Isthemealperiodcompensable? establishedschedule.Requisites:
a. Ees voluntarily agree in writing and
A: Beingtimeoff,itisnotcompensable.Employee are willing to waive OT pay for the
mustbecompletelyrelievedfromduty. shortenedmealperiod;
b. No diminution in the salary and
Q: When is the meal period considered other fringe benefits of the Ees
compensable? which are existing before the
effectivity of the shortened meal
A: It is compensable where the lunch period or period;
mealtime: c. Work of the Ees does not involve
strenuousphysicalexertionandthey
1. Ispredominantlyspentfortheemployers are provided with adequate coffee
benefit;or breaks in the morning and
2. Whereitislessthan20minutes afternoon;

26
LABORLAWTEAM:

LABOR STANDARDS
d. Value of the benefits derived by the to travel to his regular place of

Ees from the proposed work businessorsomeotherworksite.
arrangements is equal to or b. Done through a conveyance
commensurate with the providedbytheemployer(Er).
compensation due them for the c. Done under the supervision and
shortenedmealperiodaswellasthe controloftheEr.
OTpayfor30minutesasdetermined d. Done under vexing and dangerous
bytheEesconcerned; circumstance.
e. OT pay will become due and
demandable after the new time 2. Travel that is all in a days work time
schedule spent in travel as part of the employees
f. Arrangement is of temporary (Ees)principalactivity
duration. e.g.travelfromjobsitetojobsiteduring
the work day, must be counted as
e.Idletime,waitingtime,commutingtime/travel workinghours.
time,whetherpartofhoursofworkornot
3. Travelawayfromhome
Q: When is an Ee considered working while on GR:
call? a. Travel that requires an overnight
stay on the part of the Ee when it
A:WhenEeisrequiredtoremainoncallintheErs cutsacrosstheEesworkdayisclearly
premisesorsoclosetheretothathecannotusethe workingtime.
timeeffectivelyandgainfullyforhisownpurpose. b. Thetimeisnotonlyhoursworkedon
regular workdays but also during
Q:Whenidletimeisconsideredworkingtime? corresponding working hours on
nonworking days. Outside of these
A:Whentheemployeeisidleorinactivebyreason regular working hours, travel away
of interruptions beyond his control shall be from home is not considered
consideredworkingtime. workingtime.

Q:Wheniswaitingtimeconsideredworkingtime? XPN: During meal period or when Ee is
permitted to sleep in adequate facilities
A: furnishedbytheEr.
1. Ifwaitingisanintegralpartofhiswork,or
2. TheEeisrequiredorengagedbytheErto Q: What are the conditions in order for lectures,
wait(engagedtowait) meetings and training programs to be not
consideredasworkingtime?
Note: The controlling factor is whether waiting time
spentinidlenessissospentpredominantlyfortheErs A:Alloftheff.conditionsmustbepresent:
benefitorfortheEe. 1. Attendance is outside of the employers
regularworkinghours
Q: When is waiting time not considered working 2. Attendanceisinfactvoluntaryand
time? 3. The employee does not perform any
productiveworkduringsuchattendance.
A:WhentheEeiswaitingtobeengaged:idletime
isnotworkingtime;itisnotcompensable. f.Overtimework:Undertimeoffsetbyovertime,
Waiverofovertime
Q:Whenistraveltimeconsideredworkingtime?

Q:Whatisovertimework(OT)?
A:
1. Travelfromhometowork
A: Work performed beyond 8 hours within the

workers24hourworkday.
GR: Normal travel from home to work is
notworkingtime. Note: Express instruction from the employer (Er) to
the employee (Ee) to render OT work is not required
XPNS: fortheEetobeentitledtoOTpay;itissufficientthat
a. Emergency call outside his regular the Ee is permitted or suffered to work. However,
working hours where he is required written authority after office hours during rest days
27

and holidays are required for entitlement to Rateofthefirst8hoursworkedon

compensation. plusatleast30%oftheregularwage(RW):

Q:Whatisaworkday? ifdoneonaspecialholidayORrestday:
30%of130%ofRW
A: The 24hourperiod which commences fromthe
timetheemployeeregularlystartstowork IfdoneonaspecialholidayANDrestday:
e.g. If the worker starts to work 8 am today, the 30%of150%ofRW
workdayisfrom8amtodayupto8amtomorrow.
ifdoneonaregularholiday:
Note: Minimum normal working hours fixed by law 30%of200%ofRW
neednotbecontinuoustoconstitutethelegalworking
day. Q:WhatisthebasisofcomputingtheOTpayand
additionalremuneration?
Q:WhatistherationalebehindOTpay?
A:Regularwagewhichincludesthecashwageonly,
A: Employee is made to work longer than what is withoutdeductiononaccountoffacilitiesprovided
commensurate with his agreed compensation for bytheemployer.(Art.90)
the statutory fixed or voluntarily agreed hours of
laborheissupposedtodo.(PNBvs.PEMAandCIR, Q: In lieu of OT pay, the employee was given
G.R.No.L30279,July30,1982) permission to go on leave on some other day, is
thatvalid?
Discourages the employer (Er) from requiring such
work thus protecting the health and wellbeing of A:No.Permissiongiventotheemployee(Ee)togo
the worker, and also tend to remedy onleaveonsomeotherdayoftheweekshallNOT
unemployment by encouraging Ers to employ exempt the employer from paying the additional
othersworkerstodowhatcannotbeaccomplished compensation required because it would prejudice
duringthenormalhoursofwork. theEe,forhewillbedeprivedoftheadditionalpay
for the OT work he has rendered and which is
Q:DistinguishOvertimepayfrompremiumpay. utilized to offset the undertime he may have
incured. Undertime could be charged against the
A: Eesaccruedleave.
OVERTIMEPAY PREMIUMPAY
Additionalcompensationforwork Q: Socorro is a clerktypist in the Hospicio de San
Additional performedwithin8hoursondays Jose, a charitable institution dependent for its
compensationfor when normally he should not be existence on contributions and donations from
work performed working (on nonworking days, wellwishers.Sherenderswork11hoursadaybut
beyond 8 hours such as rest days and special hasnotbeengivenOTpaysinceherplaceofwork
on ordinary days days.) isacharitableinstitution.IsSocorroentitledtoOT
(within the But additional compensation for
pay?Explainbriefly.
workers 24hour work rendered in excess of 8
workday) hours during these days is also
A:Yes.SocorroisentitledtoOTcompensation.She
consideredOTpay.
does not fall under any of the exceptions to the
coverage of Art. 82, under the provisions of hours

Q:WhataretheOTpayrates?
of work. The Labor Code is equally applicable to
nonprofit institutions. A covered Ee who works

A:
beyond 8 hours is entitled to OT compensation.
PAYRATES
(2002BarQuestion)
OTduringaregularworkingday
Q: Flores applied for the position of driver in the
Additionalcompensationof25%oftheregularwage
motorpool of Gold Company, a multinational
corporation. Danilo was informed that he would
OTduringaholidayorrestday
frequently be working OT as he would have to
drive for the company's executives even beyond
the ordinary 8hour work day. He was provided
withacontractofemploymentwhereinhewould
bepaidamonthlyrateequivalentto35timeshis
dailywage,regularsickandvacationleaves,5day
leavewithpayeverymonthandtimeoffwithpay
28
LABORLAWTEAM:

LABOR STANDARDS
when the company's executives using the cars do specificwagesperday,withoutproviding

not need Danilo's service for more than eight for a fixed hourly rate or that the daily
hoursaday,inlieuofOT.Aretheaboveprovisions wagesincludeOTpay,saidwagescannot
ofthecontractofemploymentinconformitywith, be considered as including OT
orviolativeof,thelaw? compensation. (Manila Terminal Co. vs.
CIR,etal.,91Phil.,625)
A: Except for the provision that Danilo shall have 2. However, the employment contract may
time off with pay when the company's executives provideforabuiltinOTpay.Becauseof
usingthecarsdonotneedDanilo'sserviceformore this, nonpayment of OT pay by the
than8hoursaday,inlieuofOT,theprovisionsof employer is valid. (Engg Equipment vs.
the contract of employment of Danilo are not Minister of Labor, G.R. No. L64967, Sep.
violative of any labor law because they instead 23,1985)
improve upon the present provisions of pertinent
laborlaws. (a)UndertimenotoffsetbyOvertime

Q: May an employee be compelled to render OT Q:Canundertime(UT)offsetOT?
work?
A: Whereaworkerincursundertimehoursduring
A:GR:No.OTworkisvoluntary. hisregulardailywork,saidundertimehoursshould
not be offset against the overtime hours on the
XPN: Compulsory OT work in any of the samedayoronanyotherday.Itisbothprohibited
followingsituations: bythestatuteandbyjurisprudence.

1. Urgent work to be performed on (b)WaiverofOvertimepay
machines and installations in order to
avoidseriouslossordamagetotheEror Q:CantherighttoOTpaybewaived?
someothercauseofsimilarnature
2. Work is necessary to prevent loss or A:GR:TherighttoOTpaycannotbewaivedasit
damagetoperishablegoods is governed by law and not merely by the
3. In case of imminent danger to the public agreementoftheparties.
safety due to an actual or impending
emergency in the locality caused by XPN:
serious accidents, fire, flood, typhoon, 1. If the waiver is done in exchange for
earthquake,epidemicorotherdisasteror certain valuable benefits and privileges,
calamity which may even exceed the OT Pay,
4. Countryisatwar waivermaybepermitted.
5. Completion or continuation of the work 2. Compressedworkweek
started before the 8th hour is necessary
to prevent serious obstruction or g.Nightwork
prejudice to the business operations of
theEr Q:Whatisnightwork?
6. Anyothernationalorlocalemergencyhas
beendeclared A: Any and all work rendered between 6:00 pm
7. Necessary to prevent loss of life or and6:00am.(NationalRice&CornCorp.v.NARIC,
property. 105Phil891)

Note: There should be payment of additional Q: What isnight work prohibitionwith regard to
compensation.EesrefusaltoobeytheorderoftheEr
womenworkers?
constitutes insubordination for which he may be
subjectedtodisciplinaryaction.
A: GR: No woman regardless of age shall be
employed or permitted to work, with or
Q: The employment contract requires work for
withoutcompensationinany:
more than 8 hours a day with a fixed wage
inclusiveofOTpay.Isthatvalid?
1. Industrial undertaking or branch thereof
between 10pm and 6am of the following
A:Itdepends.
day.
1. When the contract of employment 2. Commercialornonindustrialundertaking
requires work for more than 8 hours at orbranchthereof,otherthanagricultural,
29

between midnight and 6am of the

followingday. XPN:
3. Agricultural undertaking at nighttime 1. Ees of the Govt and any of its political
unlesssheisgivenperiodofrestnotless subdivisions,includingGOCCs.
than9consecutivehours. 2. Retail and service establishments
regularly employing not more than 5
XPNS: workers.
1. Actualorimpendingemergencies 3. Includestaskandcontractbasis
a. Caused by serious accident, fire, 4. Domestic helpers and persons in the
flood, typhoon, earthquake, personalserviceofanother.
epidemic, other disasters, or 5. Field personnel and Ees whose time and
calamity performance is unsupervised by the
b. Topreventlossoflifeorpropertyor employer
c. Incaseofforcemajeureor 6. ManagerialEes
d. Imminentdangertopublicsafety
2. Urgentwork Q:MayanemployeewaivetherighttoNSD?
a. To be performed on machineries,
equipmentorinstallations, A: GR: No, such waiver is against public policy.
b. To avoid serious loss which the Er (Mercury Drug Co., Inc. vs. Dayao, et al., G.R.
wouldotherwisesuffer No.L30452,Sep.30,1982)
3. Workisnecessarytopreventseriousloss
toperishablegoods XPN:Higher/betterbenefits
4. WomanEes
a. Holds a responsible position of h.CBAprovisionvisvisovertimework
managerialortechnicalnature,or
b. Has been engaged to provide health Q:Maytheovertimeratebesubjecttostipulation
andwelfareservices oftheEeandEr?
5. Natureofthework
a. Requires the manual skill and A:Generally,thepremiumforworkperformedon
dexterityofwomenworkersand the employees rest days or on special days or
b. Thesamecannotbeperformedwith regularholidaysareincludedaspartoftheregular
equalefficiencybymaleworkers rate of the employee in the computation of
6. Women Ees are immediate members of overtime pay for any overtime work rendered on
theestablishmentorundertaking said days especially if the employer pays only the
7. In analogous cases exempted by the SLE minimum overtime rates prescribed by law. The
inappropriateregulations.(Art.131) employees and employer, however, may stipulate
in their collective agreement the payment of
Note: The operation of Call Contract Centers which overtime rates higher than those provided by law
provides offshore case solutions to US based clients andexcludethepremiumratesinthecomputation
who phone in to conduct product inquiries and of overtime pay. Such agreement may be
technical support, operating for 24/7, has been consideredvalidonlyifthestipulatedovertimepay
exempted from the prohibition considering the rates will yield to the employees not less than the
inevitable time difference between the US and the minimumprescribedbylaw.
Phils. and the peak time for its operation is between
8:00 pm to 10:00 am Manila time, thereby making it 2.WAGES
necessaryfor80%ofitsEes,includingwomen,towork
duringgraveyardshift.(BWCWHSDOpinionNo.491,s. Q:Whatisawage?
2003)
A: It is the remuneration or earnings, however
Q:Whatisnightshiftdifferential(NSD)? designated,capableofbeingexpressedintermsof
money, whether fixed or ascertained on a time,
A: It is additional compensation of not less than task, piece, or commission basis, or other method
10%ofanEesregularwageforeveryhourworked of calculating the same, payable by an employer
between10:00pmto6:00am,whetherornotsuch (Er) to an employee (Ee) under a written or
periodispartoftheworkersregularshift. unwrittencontractofemployment:
Q:WhoareentitledtoNSD? 1. For work done or to be done, or for

servicesrenderedortoberendered;and
A:GR:NSDappliestoallemployees(Ees). includes
30
LABORLAWTEAM:

LABOR STANDARDS
2. Fair and reasonable value of board, c.FacilitiesandSupplements

lodging, or other facilities customarily
furnished by the Er to the Ee as Q:Distinguishbetweenfacilitiesandsupplement
determinedbySLE.
A:
Q:Whatdoyoumeanbycustomary? FACILITIES SUPPLEMENT
Extra remuneration or
Items of expenses special privileges or
A: It is founded on longestablished and constant
necessaryforthelaborers benefits given to or
practiceconnotingregularity.
and his familys existence receivedbythelaborers
andsubsistence over and above their
Q: What do you mean by fair and reasonable
ordinary earnings or
value? Note:Doesnotincludetools
wages (Atok Big Wedge
oftradeorarticles/services
A:Itshallnotincludeanyprofittotheemployer(Er) Mining Co. v. Atok Big
primarily for the benefit of
ortoanypersonaffiliatedwiththeEr. Wedge Mutual Benefit
the Er or necessary to the
conductoftheErsbusiness. Assoc, G.R. No. L7349,
a.Nowork,Nopayprinciple July19,1955).
Formspartofthewage Independentofwage
Q: What does a fair days wage for a fair days Deductiblefromwage Notwagedeductible
labormean(noworknopay)? For the benefit of the Granted for the
workerandhisfamily. convenienceoftheEr.
A: GR: If there is no work performed by the Ee,
withoutthefaultoftheEr,therecanbeno Q:Whatisthecriterionindeterminingwhetheran
wageorpay. itemisasupplementorfacility?

XPN:Thelaborerwasable,willingandreadyto A:Thecriterionisnotsomuchwiththekindofthe
workbutwas: benefitoritem(food,lodging, bonusorsickleave)
1. Preventedbymanagement; given, but its purpose. (State Marine v. Cebu
2. Illegallylockedout; SeamensAssn.,G.R.No.L12444,Feb.28,1963)
3. Illegallysuspended;
4. Illegallydismissed Q:Whencanthecostoffacilitiesfurnishedbythe
5. Otherwise illegally prevented from ErbechargedagainstanEe?
working. (Aklan Electric Coop. v. NLRC,
G.R.No.129246,Jan.25,2000) A:InorderthatthecostbechargedagainsttheEe,
the latters acceptance of such facilities must be
b.CoverageandExclusions voluntary.

Q:Towhomdoesthetitleonwagesapply? Q:Whataretherequirementsfordeductingvalues
forfacilities?
A:GR:Itappliestoallemployees
A:
XPN: 1. Proof must be shown that such facilities
1. Farmtenancyorleasehold; arecustomarilyfurnishedbythetrade
2. Householdordomestichelpers,including 2. Theprovisionofdeductiblefacilitiesmust
familydriversandpersonsworkinginthe bevoluntarilyacceptedinwriting
personalserviceofanother; 3. The facilities must be chargedat fair and
3. Homeworkersengagedinneedleworkor reasonable value (Mabeza v. NLRC, G.R.
in any cottage industry duly registered in No.118506,April18,1997)
accordancewithlaw;
4. Workers in duly registered cooperatives Q: Are food and lodging, or the electricity and
when so recommended by theBureau of water consumed by a hotel worker, considered
Cooperative Development and upon facilities?
approval of the Secretary of Labor and
Employment. A: No. These are supplements. Considering,
5. Workers of a barangay micro business therefore, thathotel workers are required towork
enterprise(R.A.9178) differentshiftsandareexpectedtobeavailableat
various odd hours, their ready availability is a
necessarymatterintheoperationsofasmallhotel.
Furthermore,grantingthatmealsandlodgingwere
31

provided and indeed constituted facilities, such A: The Er and the union shall negotiate to correct
facilities could not be deducted without the Er thedistortions.Ifthereisnounion,theErandthe
complying first with certain legal requirements. workersshallendeavortocorrectsuchdistinctions.
(Mabezav.NLRC,G.R.No.118506,April18,1997)
Q:WhatarethebasicprinciplesinWD?
d.Wagesv.Salaries
A:
Q:Distinguishbetweenwageandsalary? 1. The concept of WD assumes an existing
group or classification of Ees which
A: establishes distinctions among such Ees
WAGE SALARY onsomerelevantorlegitimatebasis.This
(Gaavs.CA,G.R.No.44169,Dec.3,1985) classification is reflected in a differing
Compensationformanual Paidtowhitecollared wagerateforeachoftheclassesofEes
labor(skilledorunskilled) workersanddenotes 2. Often results from govt decreed
alsoknownasblue higherdegreeof
increasesinminimumwages.
collaredworkers,paidat employmentora
3. Should a WD exist, there is no legal
statedtimesand superiorgradeofservices
requirement that, in the rectification of
measuredbytheday, andimpliesapositionin
week,monthorseason. office. that distortion by readjustment of the
Considerablepayfora wageratesofthedifferingclassesofEes,
Outgestureofalarger the gap which had previously or
lowerandless
andmoreimportant historically existed be restored in
responsiblecharacterof
service precisely the same amount. In other
employment.
GR:Notsubjectto words, correction of a WD may be done
execution by reestablishing a substantial or
significant gap (as distinguished from the
Subjecttoexecution.
XPN:Debtsincurredfor historicalgap)betweenthewageratesof
food,shelter,clothingand thedifferingclassesofEes.
medicalattendance. 4. The reestablishment of a significant
differenceinwageratesmaybetheresult
e.WageDistortion of resort to grievance procedures or
collectivebargainingnegotiations.(Metro
Q:Whatiswagedistortion(WD)? Transit Org., Inc. v. NLRC, G.R. No.
116008,July11,1995)
A: Asituationwhereanincreaseinwageresultsin
theeliminationorseverecontractionofintentional Q:DistinguishtheprocessforcorrectionofWDof
quantitative differences in wage or salary rates organized establishments and unorganized
between and among the Eegroups in an establishments?
establishment as to effectively obliterate the
distinctionsembodiedinsuchwagestructurebased A:
onskills,length ofserviceorotherlogicalbasesof Organized Unorganized
differentiation. Establishment Establishments
(withunion) (withoutunion)
Q:WhataretheelementsofWD? TheErandtheunion TheErandtheworkers
shallnegotiateto shallendeavortocorrect
A: correctdistortion. thedistortion.
1. An existing hierarchy of positions with Anydisputeshallbe
correspondingsalaryrates. resolvedthrougha Anydisputeshallbe
2. A significant change or increase in the grievanceprocedure settledthroughtheNCMB.
salaryrateofalowerpayclasswithouta undertheCBA.
corresponding increase in the salary rate Ifitremainsunresolved,
Ifitremainsunresolved
ofahigherone; itshallbedealtwith
within10daysitshallbe
throughvoluntary
3. The elimination of the distinction referredtotheNLRC.
arbitration.
betweenthe2groupsorclasses;and
Thedisputewillbe TheNLRCshallconduct
4. The WD exists in the same region of the
resolvedwithin10days continuoushearingsand
country. (Alliance Trade Unions v. NLRC,
fromthetimethe decidethedisputewithin
G.R.No.140689,Feb.17,2004) disputewasreferredto 20daysfromthetimethe
voluntaryarbitration. samewasreferred.
Q:IstheErlegallyobligedtocorrectWD?
32
LABORLAWTEAM:

LABOR STANDARDS
Q: Can the issue of WD be raised in a notice of Moreover, compliance with a collective bargaining
strike? agreement is mandatedby theexpressed policy to
giveprotectiontolabor.Unlessotherwiseprovided
A: No. WD is nonstrikeable. (Ilaw at Buklod ng by law, said policy should be given paramount
Manggagawa v. NLRC, G.R. No. 91980, June 27, consideration.(MeycauayanCollegev.DRILON,G.R.
1991.) WD is neither a deadlock in collective No.81144,My7,1990).
bargainingnorULP.
g.Nondiminutionofbenefits
f.CBAprovisionvisvisWageOrderCBACredibility
Q:Whatistheconceptofnondiminution(ND)of
Q:DistinguishCBAandWageOrder. benefits?

A: A: GR: Benefits being given to employees (Ees)
CBA WAGEORDER cannot be taken back or reduced unilaterally by
Not an ordinary Administrative issuance the employer (Er) because the benefit has
contract. It can be which results from a become part of the employment contract,
entered into only by an statute(RA6727) whetherwrittenorunwritten.
exclusive bargaining
agentorunit. XPN:Tocorrectanerror,otherwise,iftheerroris
If the CBA provides Onlysetstheminimum notcorrectedforareasonabletime,itripensinto
betterbenefitsthenthe a company policy and Ees can demand it as a
employees shall be matterofright.
entitledtothesame.
Q:WhenisNDofbenefitsapplicable?
Q: Can a CBA provision regarding wages prevail
overaWageOrder? A: It is applicable if it is shown that the grant of
benefit:
A:Yes,wheretheCBAprovidesawageorsalaryto
be received by the employees which is more than 1. Is based on an express policy of the law;
theamountsetbytheWageOrder,whetherissued or
prior to or after the conclusion of the CBA, it is 2. Has ripened into practice over a long
incumbent upon the employer to compensate the period of time and the practice is
employees according to the provisions of the CBA consistent and deliberate and is not due
withrespecttowages. to an error in the construction/
application of a doubtful or difficult
questionoflaw.
Q: Meycauayan College Faculty and Personnel

Association as the employees union in
h.Workerspreferenceincaseofbankruptcy
Meycauayan College, admits that its members

were paid all the increases in pay as mandated
Q:Whatisbankruptcy?
law.Itappearshoweverthatin1987,shortlyafter

union President Joy Bugo turned over the
A:BankruptcyisreferredtointhePhilippinesas
presidency,shediscoveredthatArt.IVoftheCBA,
Insolvency. It denotes the state of an entity or
which providesfor higher salary increasewasnot
personthathasliabilitiesgreaterthanitsassets.
implemented.Maytheunionclaimthedifference

between their old salaries and those provided by
Q: What happens if the Er business experiences
saidCBAprovision?
bankruptcyorliquidation?
A: Yes, the terms and conditions of a collective A: His workers shall enjoy first preference as
bargainingcontractconstitutethelawbetweenthe regards their wages and monetary claims, any
parties. Beneficiaries thereof are therefore, by provision of the law to the contrary
right, entitled to the fulfillment of the obligation notwithstanding.
prescribed therein.Consequently, to deny binding
force to the CBA would place a premium on a Q: What are the principles underlying the
refusalbyapartytheretotocomplywiththeterms preference?
oftheagreement.Suchrefusalwouldconstitutean
unfairlaborpractice. A:

33

1. Declaration of bankruptcy or judicial mortgagee of property. Was the Labor Arbiter

liquidation before enforcement of the correctinhisdecision?
workerspreferentialright;
2. Filingofclaimsbyworkers; A:No.ThepreferenceofcreditsestablishedinArt.
3. Therightdoesnotconstitutealientothe 110oftheLCcannotbeinvokedintheabsenceof
property of the insolvent debtor in favor any insolvency proceedings, declaration of
ofworkers.(DBPvs.NLRC,G.R.No.82763 bankruptcy, or judicial liquidation. (DBP v.
Mar. 19, 1990 and G.R. No. 97176, Mar. Santos,G.R.No.75801,March20,1991).(2003Bar
18,1993); Question)
4. ThepreferenceinfavoroftheEesapplies
to discharge of funds. The preference Q: Distinguish the mortgage created under the
doesnotonlycoverunpaidwages,italso CivilCodefromtherightof1stpreferencecreated
extends to termination pay and other bytheLCasregardstheunpaidwagesofworkers.
monetaryclaims; Explain.
Note: Termination pay, after all, is
considered as additional remuneration for A: A mortgage directly subjects the property upon
services rendered to the employer for a whichitisimposed,whoeverthepossessormaybe,
certainperiodoftime;itiscomputedonthe tothefulfillmentoftheobligationforwhichitwas
basisoflengthofservice.(PNBvs.Cruz,G.R. constituted. It creates a real right which is
No.80593,Dec.18,1989) enforceableagainstthewholeworld.Itistherefore
5. Applicable only to ordinary preferred alienonanidentifiedrealproperty.
credit, hence, must yield to special
preferredcredits. Mortgage credit is a special preferred credit under
the Civil Code in the classification of credits. The
Q: Are workers preferred than the tax claims of preference given by the LC when not attached to
theGovt? anyspecificpropertyisanordinarypreferredcredit.
(1995BarQuestion)
A: No. Art. 110did not sweep away the overriding
preferenceaccordedundertheschemeoftheCivil i.LaborCodeprovisionsforwageprotection
Codetotaxclaimsofthegovernment.
Q: What are the Labor Code provisions for wage
Q: Is worker preference applicable if the Er protection
corporationisunderrehabilitation?
A:
A: No. Suspension of payments order by the SEC Art.112.NonInterferenceinDisposalofWagesNo
mandatestheholdinginabeyancethefilingorthe employershalllimitorotherwiseinterferewiththe
proceedings on labor cases against an Er who is freedom of any employee to dispose of his wages.
under rehabilitation to give the Er the chance to Heshallnotinanymannerforce,compeloroblige
concentrate onhow to revive his business andnot his employees to purchase merchandise,
bedistractedintryingtodefenditselfinlaborcases commoditiesorotherpropertiesfromtheemployer
filedagainstit.(Rubberworld,Inc.v.NLRC,G.R.No. orfromanyotherperson,orotherwisemakeuseof
126773,April14,1999) anystoreorserviceofsuchemployeroranyother
person.
Q:PremiereBank,beingthecreditormortgageeof
XYZ & Co., a garment firm, foreclosed the Art. 113 Wage DeductionNo employer in his own
hypothecated assets of the latter. Despite the behalf or in behalf of any person, shall make any
foreclosure, XYZ & Co. continued its business deduction from the wages of his employees,
operations.Ayearlater,thebanktookpossession except:
of the foreclosed property. The garment firm's
business operations ceased without a declaration (a) Incaseswheretheworkerisinsuredwith
ofbankruptcy.Caspar,anemployeeofXYZ&Co., his consent by the employer, and the
was dismissed from employment due to the deductionistorecompensetheemployer
cessation of business of the firm. He filed a for the amount paid by him as premium
complaint against XYZ & Co. and the bank. The ontheinsurance;
LaborArbiter,afterhearing,sofoundthecompany (b) For union dues, in cases where the right
liable, as claimed by Caspar, for separation pay. of the worker or his union to check off
PremiereBankwasadditionallyfoundsubsidiarily has been recognized by the employer or
liableuponthethesisthatthesatisfactionoflabor authorized in writing by the individual
benefitsduetotheEeissuperiortotherightofa workerconcerned;and
34
LABORLAWTEAM:

LABOR STANDARDS
(c) Incaseswheretheemployerisauthorized worker concerned (Art. 113). Art. 241(o)

by law or regulations issued by the providesthatspecialassessmentsmaybe
SecretaryofLabor. validly checkedoff provided that there is
an individual written authorization duly
Art. 114 No employer shall require his worker to signedbyeveryemployee(Ee).
make deposits from which deductions shall be 3. DeductionsforSSS,MedicareandPagibig
made for the reimbursement of loss of or damage premiums
to tools, materials or equipments supplied by the 4. TaxeswithheldpursuanttotheTaxCode
employer;exceptwhentheemployerisengagedin 5. Deductions under Art. 114 for loss or
such trades, occupations or business where the damagetotools,materialsorequipments
practiceofmakingdeductionsorrequiringdeposits 6. Deductions made with the written
isarecognizedone,orisnecessary,ordesirableas authorization of the Ee for payment to a
determined by the Secretary of Labor in thirdperson.(Sec13,RuleVIII,BookIIIof
appropriaterulesandregulations. theIRR)
7. Deductions as disciplinary measures for
Art. 115 LimitationsNo deduction from the habitual tardiness (Opinion dated March
deposits of an employee for the actual amount of 10,1975oftheSLE)
the loss or damage shall be made unless the 8. AgencyfeesunderArt.248(e)
employee has been heard thereon, and his 9. Deductions for value of meals and
responsibilityhasbeenclearlyshown. facilitiesfreelyagreedupon
10. IncasewheretheEeisindebtedtotheEr
Art 116 Withholding of Wages and Kickbacks where such indebtedness has become
ProhibitedIt shall be unlawful for any person, due and demandable. (Art. 1706, Civil
directlyorindirectly,towithholdanyamountfrom Code)
thewagesofaworkerorinducehimtogiveupany 11. Incourtawards,wagesmaybesubjectof
part of his wages by force, stealth, intimidation, execution or attachment, but only for
threat or by any other means whatsoever without debtsincurredforfood,shelter,clothing,
theworkersconsent. and medical attendance. (Art. 1703, Civil
Code)
Art117DeductiontoEnsureEmploymentItshallbe 12. Salarydeductionofamemberofalegally
unlawfultomakeanydeductionfromthewagesof established cooperative. (R.A. 6938, Art.
anyemployeeforthebenefitoftheemployerorhis 59)
representative or intermediary as consideration of
a promise of employment or retention in k.Attorneysfees
employmentorretentioninemployment.
Q: What are the limitations to the assessment of
Art. 118 Retaliatory MeasuresIt shall be unlawful attorneyslienagainsttheculpableparty?
for an employer to refuse to pay or reduce the
wages and benefits, discharge or in any manner A:
discriminate against any employee who has filed 1. In case of unlawful withholding of wages
anycomplaintinstitutedanyproceedingunderthis 10% of the amount of wages to be
Title or has testified or is about to testify in such recovered.
proceedings. 2. It shall be unlawful for any person to
demand or accept, in any judicial or
j.Allowabledeductionswithoutemployees administrative proceedings for the
consent recoveryofwages,attysfeesthatexceed
10%oftheamountofwagesrecovered.
Q:Whatistheruleinwagedeductions?
Note: The prohibition on attys lien refers to
A: proceedingsforrecoveryofwagesandnottoservices
GR:Itisstrictlyprohibited rendered in connection with CBA negotiations. In the
latter case, the amount of attys fees may be agreed
XPN: upon by the parties and the same is to be charged
1. Deductions under Art. 113 for insurance againstunionfundsasprovidedforinArt.222ofthe
premiums Labor Code. (Pacific Banking Corp.v. Clave, G.R. No.
56965,Mar.7,1984)
2. Unionduesincaseswheretherightofthe

workerorhisuniontocheckoffhasbeen
Q:Whatisordinaryattorneysfee?
recognized by the employer (Er) or

authorized in writing by the individual
35

A: It is the reasonable compensation paid to a Q: When can attorneys fees and damages be
lawyer by his client for the legal services he has awardedinanillegaldismissalcase?
rendered.
A: For attorneys fees, moral and exemplary
Q:Whatisextraordinaryattorneysfee? damages to be granted, the plaintiff must prove
thatthefactsofhiscasefallwithintheenumerated
A: It is the indemnity for damages ordered by the instances in the Civil Code. Thus, moral damages
courttobepaidbythelosingpartyinlitigationand may only be recovered where the dismissal or
is not to be paid to the lawyer but to the client, suspension of the employee was attended by bad
unless they have agreed that the award shall faith or fraud, or constituted an act oppressive to
pertain to the lawyer as an additional labor,orwasdoneinamannercontrarytomorals,
compensation or as a part thereof. (Traders Royal goodcustomsorpublicpolicy.Inotherwords,the
Bank Ees UnionIndependent v. NLRC, G.R. No. act must be a conscious and intentional design to
120592,Mar.14,1997) doawrongfulactforadishonestpurposeorsome
moralobliquity.Exemplarydamages,ontheother
Note: Art.111 of the LC deals with the extraordinary hand, may only be awarded where the act of
concept of attorneys fees. It may not be used as the dismissal was effected in a wanton, oppressive or
standardinfixingtheamountpayabletothelawyerby malevolent manner. (Chaves v. NLRC,G.R. No.
hisclientforthelegalservicesherendered.(Masmud 166382,June27,2006)
v.NLRC,G.R.No.183385,Feb.13,2009)
Q:Whatisunionservicefee?
Q:Santiago,aprojectworker,wasbeingassigned

by his Er, Bagsak Builders, to Laoag, Ilocos Norte.
A: The appearance of labor federations and local
Santiago refused to comply with the transfer
unions as counsel in labor proceedings has been
claiming that it, in effect, constituted a
givenlegalsanctionunderArt.222oftheLC,which
constructive dismissal because it would take him
allows nonlawyers to represent their organization
away from his family and his usual work
thereof.Thesaidlaborfederationsandlocalunions
assignments in Metro Manila. The Labor Arbiter
haveavalidclaimtoattysfeeswhichiscalledthe
(LA) found that there was no constructive
UnionServiceFee.
dismissal but ordered the payment of separation
pay due to strained relations between Santiago l.Criteria/FactorsforWageSetting
and Bagsak Builders plus attysfees equivalentto
10%ofthevalueofSantiago'sseparationpay. Q:Whatarethestandardsorcriteriaforminimum
wagesetting?
Istheawardofatty'sfeesvalid?Statethereasons
foryouranswer. A: In the determination of such regional minimum
wages, the Regional Board shall, among other
A: No, the award of attys fees is not valid. relevantfactorsconsiderthefollowing:
AccordingtotheLC(Art.111[a]),attysfeesmaybe
assessedincasesofunlawfulwithholdingofwages a)Thedemandforlivingwages
which does not exist in the case. The worker b)Wage adjustment visavis the consumer
refusedtocomplywithalawfultransferorder,and priceindex
hence,arefusaltowork.Giventhisfact,therecan c) The cost of living and changes or
benobasisforthepaymentofatty'sfees. increasestherein
d) Theneedsofworkersandtheirfamilies
Could the LA have validly awarded moral and e) Theneedtoinduceindustriestoinvestin
exemplary damages to Santiago instead of atty's thecountryside
fees?Why? f) Improvementsinstandardsofliving
g) Theprevailingwagelevels
A: No, moral and exemplary damages can be
h) Fair return of the capital invested and
awardedonlyiftheworkerwasillegallyterminated
capacitytopayofemployers
in an arbitrary or capricious manner. (Nueva Ecija
i) Effects on employment generation and
Electric Cooperative Inc., Ees Assn., vs. NLRC, G.R.
familyincome
No. 116066, Jan. 24, 2000; Cruz vs. NLRC, G.R. No.
j) The equitable distribution of income and
116384, Feb. 7, 2000; Phil. Aeolus etc., vs. NLRC,
wealthalongtheimperativesofeconomic
G.R. No. 124617, April 28, 2000). (2001 Bar
andsocialdevelopment
Question)

Q:Whatissalaryceilingmethod?
36
LABORLAWTEAM:

LABOR STANDARDS
A: A method of minimum wage adjustment (MBTCvNWPCCommission,G.R.NO.144322,Feb.

whereby the wage adjustment is applied to Ees 6,2007)
receiving a certain denominated ceiling. In other
words, workers already being paid more than the 3.RESTDAY
existingminimumwagearealsotobegivenawage
increase. (ECOP v. NWCP, G.R. No. 96169, Sep. 24, a.Righttoweeklyrestday,Preferemceofthe
1991) employee,whenworkonrestdayauthorized

Q:Whatisafloorwagemethod? Q:Whatistherighttoweeklyrestday(WRD)?

A:Itinvolvesthefixingofadeterminateamountto A: Every employer shall give his employees a rest
beaddedtotheprevailingstatutoryminimumwage period of not less than 24 consecutive hours after
rates. every6consecutivenormalworkdays.(Sec.3,Rule
III,BookIII,IRR)
Q:TheRegionalWageBoardofRegionIIissueda
Wage Order granting all Ees in the private sector Q:WhatisthescopeofWRD?
throughout the region an acrosstheboard
increaseofP15.00daily.IsthisWageOrdervalid? A:Itshallapplytoallemployerswhetheroperating
forprofitornot,includingpublicutilitiesoperated
A:TheWageOrderisvalidinsofarasthemandated byprivatepersons.(Sec.1,RuleIII,BookIII,IRR)
increase applies to Ees earning the prevailing
minimum wage rate at the time of the passage of Q:WhodeterminestheWRD?
the Wage Order and void with respect to its
application to Ees receiving more than the A:GR:ErshalldetermineandscheduletheWRDof
prevailing minimum wage rate at the time of the hisEe.
passage of the Wage Order. Pursuant to its
authority, the Regional Wage Boards may issue XPNs:
wage orders which set the daily minimum wage 1. CBA
rates. In the present case, the Regional Wage 2. RulesandregulationsastheSLEprovides
Board did not determine orfixthe minimum wage 3. Preference of employee (Ee) based on
rate.Itdidnotsetawagelevelnorarangetowhich religious grounds Ee shall make known
a wage adjustment or increase shall be added. his preference in writing at least 7 DAYS
Instead, it granted an acrosstheboard wage beforethedesiredeffectivityoftheinitial
increaseofP15.00toallEesintheregion.Indoing rest day so preferred. (Sec. 4(1), Rule III,
so,theRegionalWageBoardexceededitsauthority BookIII,IRR)
by extending the coverage of the Wage Order to
wage earners receiving more than the prevailing XPN to XPN no. 3: Employer (Er) may
minimumwagerate,withoutadenominatedsalary schedule the WRD of his choice for at
ceiling.TheWageOrdergrantedadditionalbenefits least 2 days in a month if preference of
notcontemplatedbyR.A.No.6727.(MBTCvNWPC theemployeewillinevitablyresultin:
Commission,G.R.No.144322,Feb.6,2007) a. serious prejudice to the operations
oftheundertakingand
Q: Since the Wage Order was declared void with b. the Er cannot normally be expected
respect to its application to employees receiving to resort to other remedial
more than the prevailing minimum wage rate at measures.(Sec.4(2),RuleIII,BookIII,
thetimeofthepassageoftheWageOrder,should IRR)
these Ees refund the wage increase received by
them? Q: When should employees (Ees) be informed of
theirscheduleofWRD?
A:No.TheEesshouldnotrefundthewageincrease
that they received under the invalidated Wage A:Ershallmakeknownrestperiodbymeansof:
Order.Beingingoodfaith,theemployeesneednot 1. Writtennotice
refund the benefits they received. Since they 2. Postedconspicuouslyintheworkplace
received the wage increase in good faith, in the 3. At least 1 week before it becomes
honest belief that they are entitled to such wage effective.(Sec.5,RuleIII,BookIII.IRR)
increaseandwithoutanyknowledgethattherewas
no legal basis for the same, they need not refund Q: Can an Ee be compelled to work on his rest
the wage increase that they already received. day?

37

A:GR:No. Workonascheduled +30%PremiumPay(PP)

restday of100%regularwage
XPN: (RW).(Sec.7,RuleIII,Book
1. Urgent work to be performed on the III,IRR)
machinery, equipment or installation, to Workhasnoregular
+30%PPof100%RW.
avoid serious loss which the Er would workdaysandrestdays
(Sec.7,RuleIII,BookIII,
otherwisesuffer; (Ifperformedon
IRR
2. Nature of work requires continuous SundaysandHolidays)
operations for 7 days in a week or more WorkonaSunday +30%PPof100%RW.
(IfEesscheduledrest (Sec.7,RuleIII,BookIII,
and stoppage of the work may result in
day) IRR)
irreparableinjuryorlosstotheEr;
3. Abnormalpressureofworkduetospecial 1st8hrs:+30%PPof
circumstances, where the Er cannot be 100%RW

ordinarily expected to resort to other Workperformedonany
Excessof8hrs:+30%of
measures; SpecialHoliday
hourlyrateonsaiddate.
4. Actualorimpendingemergencies(serious (M.C.No.10,Seriesof
accident,fire,flood,typhoon,earthquake, 2004)
etc.)
1st8hrs:+50%PPof
5. Prevent loss or damage to perishable
100%regularwage
goods; Workperformedona

6. Analogous or similar circumstances as SpecialHolidayand
Excessof8hrs:+30%of
determinedbytheSLE; samedayisthe
hourlyrateonsaiddate.
7. Work is necessary to avail of favorable scheduledrestday
(M.C.No.10,Seriesof
weather or environmental conditions 2004)
where performance or quality of work is Eeisonlyentitledtohis
dependentthereon. basicrate.NoPPis
required.
Q.WhatistherulewhenanEevolunteerstowork
Workperformedona
onhisrestdayunderothercircumstances? Reason:Workperformed
SpecialWorkingHoliday
isconsideredworkon
A:Heshallexpressitinwritingsubjecttoadditional ordinaryworkingdays.
compensation.(Sec.6[2],RuleIII,BookIII,IRR) (Sec.7,RuleIII,BookIII,
IRR)
Q:Whatispremiumpay?
Note:HolidayworkprovidedunderArt.93pertainsto
A: It is the additional compensation for work specialholidaysorspecialdays.
rendered by the employee on days when normally
he should not be working such as special holidays Q: Jose applied with Mercure Drug Company for
andweeklyrestdays. thepositionofSalesClerk.MercureDrugCompany
maintains a chain of drug stores that are open
Q:CantheErandEeagreeontherateofpremium everydaytilllateatnight.Josewasinformedthat
payotherthanthatprovidedbylaw? he had to work on Sundays and holidays at night
as part of the regular course of employment. He
A: Yes. Nothing shall prevent the Er and his Ee or was presented with a contract of employment
their representatives from entering into any settingforthhiscompensationonanannualbasis
agreement with terms more favorable to the Ees withanexpresswaiverofextracompensationfor
Provided: It shall not be used to diminish any workonSundaysandholidays,whichJosesigned.
benefit granted to the Ees under existing laws, IssuchawaiverbindingonJose?Explain.
agreementsandvoluntaryErpractices.(Sec.9,Rule
III,BookIII,IRR) A: As long as the annual compensation is an
amount that is not less than what Jose should
Q: What are the rates of compensation for rest receiveforallthedaysthatheworks,plustheextra
day,Sundayorholidaywork? compensation that he should receive for work on
his weekly rest WRD and for night differential pay
A: forlatenightwork,consideringthelawsandwage
RATESOFADDITIONAL orders providing for minimum wages, and the
INSTANCES pertinentprovisionsoftheLC,thenthewaiverthat
COMPENSATION
Jose signed is binding on him for he is not really
waivinganyrightunderLaborLaw.Itisnotcontrary
38
LABORLAWTEAM:

LABOR STANDARDS
tolaw,morals,goodcustoms,publicorderorpublic considered regular holidays. (Presidential

policy for an Er and Ee to enter into a contract ProclamationNo.18)
where the Ees compensation that is agreed upon
alreadyincludesalltheamountsheistoreceivefor REGULARHOLIDAYS DATE
OT work and for work on weekly rest days and NewYearsDay January1
holidaysandfornightdifferentialpayforlatenight MaundyThursday April21
work.(1996BarQuestion) GoodFriday April22
EidlFitr MovableDate
4.HOLIDAYS ArawngKagitingan April9
LaborDay May1
a.RighttoHolidayPay IndependenceDay June12
Aug.29(lastMondayof
NationalHeroesDay
Q:Whatisholidaypay(HP)? August)
BonifacioDay Nov.30
A: It is a premium given to employees (Ees) ChristmasDay December25
pursuanttolawevenifhehasnotbeensufferedto RizalDay Dec.30
work on a regular holiday. It is limited to the 11
regularholidays,alsocalledlegalholidayslistedby
law. The employee (Ee) should not have been Note: RA 9492 has already been superseded by
absentwithoutpayontheworkingdaypreceeding Presidential Proclamation No. 18 issued by President
theregularholiday. BenignoC.AquinoIIIplacingtheobservanceofregular
holidays and national special days according to their
Q:Whataretheclassesofspecialdays(SD)? respectivedatesinthecalendar.

A: Q:WhatareMuslimHolidays(MH)?
1. NationalSpecialPublicHoliday
A: The MHs, except Eidl Fitr, are observed in
GR:Nonworkingdays
specified Muslim areas. All private corporations,

offices, agencies and entities or establishments
XPN:Otherwisedeclaredbythe
President operating within the designated Muslim provinces
andcitiesarerequiredtoobserveMH.

2. Local Special Public Holiday Regular
Q: When shall Eidl Fitr and/or Eidl Adha be
workingday.(LOI814asamendedbyLOI
declaredanationalholiday?
1087)
A:Theproclamationdeclaringanationalholidayfor
NATIONALSPECIALDAYS DATE
the observance of Eidl Fitr and/or Eidl Adha shall
AllSaintsDay November1
beissued:
LastDayoftheYear December31
NinoyAquinoDay August21 1. AftertheapproximatedateoftheIslamic
Otherdaysdeclaredbylaw holiday has been determined in

1. SpecialNonworking
accordancewiththe:
days
December24 a. IslamicCalendar(Hijra)or
2. SpecialPublicHolidays
b. LunarCalendaror
3. SpecialNational
c. Uponastronomicalcalculations
Holiday
d. Whicheverispossibleorconvenient
4. SpecialHoliday(forall
2. The Office of Muslim Affairs shall inform
schools)
the Office of the President on which day
a. EdsaRevolution
February25 the holiday shall fall. (Sec.2, Proc. No.
Anniversary
LOCALSPECIALDAYS 1841)
Thosedeclaredby:
e.g.Maniladay(in Q: Can a Christian employee (Ee) working within
1. Lawor
Manilaonly) theMuslimareabecompelledtoworkduringMH?
2. Ordinance

A: No. Christians working within the Muslim areas
Q:Whatareregularholidays(RH)? may not report for work during MH. Not only
Muslim but also Christian Ee in the designated
A: They are compensable whether worked or provinces and cities are entitled to HP on the MH.
unworked subject to certain conditions. They are (SMCv.CA,G.R.146775,Jan.30,2002)
also called legal holidays. The following are
39

Q: Can a Muslim Ee working outside the Muslim 8.Eepaidfixedamountforperformingwork

areabecompelledtoworkduringtheobservance irrespective of the time consumed in the
oftheMH? performance thereof. (Sec. 1, Rule IV,
BookIII,IRR)
A:GR: No.MuslimEesshallbeexcusedfromwork
during MH without diminution of salary or Q:Whatareretailestablishments?
wages.
A: They are engaged in the sale of goods to end
XPN: Those who are permitted or suffered to usersforpersonalorhouseholduse.(e.g.Grocery)
workonMHareentitledtoatleast100%basic
pay+100%aspremiumoftheirbasicpay.(SMC Q:Whatareserviceestablishments?
v.CA,G.R.No.146775,Jan.30,2002)
A: They are engaged in the sale of services to
Note: RH falling within temporary or periodic individualsfortheirownorhouseholduse.(e.g.TV
shutdown and temporary cessation of work are repairshop)
compensable. However, if the temporary or periodic
shutdown and cessation of work is due to business Q:Isanexerciseofprofessionretailorservice?
reverses, the employer may not pay the RHs during
suchperiod. A:Itisneitherretailnorservice.
Q:DistinguishRHfromSD. Q:MayanErrequireanEetoworkonRH?

A: A: Yes. But Ee shall be compensated twice his
REGULARHOLIDAY SPECIALHOLIDAY regularrate.
IfUnworked
Regularpay Q:WhataretheratesofcompensationforRHon
(subject to certain EesregularworkdayandRHonEesrestday?
NoPay
conditions for daily paid
Ees) A:
Ifworked FORMULASTOCOMPUTEWAGESON
+ 30% premium pay of REGULARHOLIDAYS(RH)
2xregularpay(200%)
100%regularwage (M.C.No.10,Seriesof2004)
Othermatters RHonEesregular
RHonEesrestday
Setbylaw Setbyproclamation workday
Limited to those provided Ifunworked
Notexclusive
underArt.94,LC 100%
100%

Q:WhoareentitledtoHP? e.g. 300 Php regular wage
e.g.300Php(RW)
(RW)
A:GR:Allemployees(Ees)areentitled.(Sec.1,Rule Ifworked(1st8hrs)
IV,BookIII,IRR) +30%of200%
200%
XPNS: e.g600(200%ofRW)
1. Govt Ees and any of its political e.g.300(RW) X0.3
subdivisions, including GOCCs (with +300 180
originalcharter) 600=TotalWage(TW)
2. Retail and service establishments 180+600=780(TW)
regularlyemployinglessthan10workers Ifworked(OT)(excessof8hrs)
3. Domestic helpers and persons in the 230%
personalserviceofanother 230% + 30% of hourly
4. Ee engaged on task or contract basis or 200%+30%ofhourlyrate rateonsaiddate
purelycommissionbasis onsaiddate
5. MembersoftheFamilyoftheErwhoare
dependentonhimforsupport Q:What is animportant condition that shouldbe
6. Managerial Ee and other member of the metinordertoavail/receivethesingleHP?
managerialstaff
A:TheEeshouldnothavebeenabsentwithoutpay
7. FieldpersonnelandotherEewhosetime
ontheworkingdayprecedingtheRH.
andperformanceareunsupervisedbythe
Er
40
LABORLAWTEAM:

LABOR STANDARDS
Q: Distinguish between monthly paid and daily cleaning of machineries compensated.

paidEes. isundertaken
Due to business reverses
RH may not be paid
A: (cessation as authorized by
bytheEr
MonthlyPaidEes DailyPaidEes theSec.ofLabor)
One who is paid his wage or One who is paid his
salary for everyday of the wage or salary only
month, including rest days, on those days he (3)HolidayPayofTeachers,Pieceworkers,
Sundays, regular or special actually worked, seafarers,seasonalworkers
days, although he does not except in cases of
regularlyworkonthesedays. regular or special Q:WhataretheHPsofcertainemployees?
days, although he
Not excluded from benefit of does not regularly A:
HP. workonthesedays. EMPLOYEES RULE
1. RH during semestral
Private school
Q: What is the effect if a legal holiday falls on a vacations
teachers (Faculty
Sunday? - NotentitledtoHP
members of
2. RH during Christmas
colleges and
A: A legal holiday falling on a Sunday creates no vacation
universities)
legal obligation for the Er to pay extra to the Ee - ShallbepaidHP
who does not work on that day, aside from the HP shall not be less than his
usual HP to its monthly paid Ee. (Wellington v. Eepaidby: average daily earnings for the
Trajano,G.R.114698,July3,1995) 1. resultsor last 7 actual work days
2. output precedingtheRH.
(1)InCaseofAbsences (Piece work Provided: HP shall not be less
payment) than the statutory minimum
Q:Discusstheconceptofabsences. wagerate.
MaynotbepaidtherequiredHP
A: SeasonalWorkers duringoffseasonwheretheyare
ABSENCES notatwork.
LOAwithpayontheday LOAwithoutpay onthe Workershavingno
ShallbeentitledtoHP
immediatleypreceding dayimmediately regularworkdays
RH. precedingaRH. Seafarers ShallbeentitledtoHP
GR: An Ee may not be
paid the required HP Q: Are the school faculty who according to their
if he has not worked contracts are paid per lecture hour entitled to
onsuchRH. unworkedHP?
XPN: Where the day
immediately A:
GR: All covered Ees are
preceding the 1. If during regular holiday No. Art. 94 of
entitledtoHP.
holidayisa: LC is silent with respect to faculty members
1. Nonworking day paidbythehourwhobecauseoftheirteaching
(NWD) in the contracts are obliged to work and consent to
establishmentor be paid only for work actually done (except
2. The scheduled rest
whenanemergencyorafortuitouseventora
day(RD)oftheEe.
national need calls for the declaration of

special holidays). RH specified as such by law
areknowntobothschoolandfacultymembers
(2)InCaseofTemporaryCessationofWork
as "no class days" certainly the latter do not
Q:Whatistheeffectincasethereisatemporary expect payment for said unworked days, and
or periodic shutdown and temporary cessation of this was clearly in their minds when they
work? enteredintotheteachingcontracts.(JoseRizal
Collegev.NLRC,G.R.No.65482,Dec.1,1987)
A:
TEMPORARYORPERIODICSHUTDOWNand 2. IfduringspecialpublicholidaysYes.The
TEMPORARYCESSATIONOFWORK law and the IRR governing HP are silent as to
(Sec.7,RuleIV,BookIII,IRR) payment on Special Public Holidays. It is
Instances Rule: readily apparent that the declared purpose of
1. Yearlyinventoryor RH falling within the the HP which is the prevention of diminution
2. When the repair or period shall be of the monthly income of the Ees on account
41

of work interruptions is defeated when a Authorized 300%

worked
regular class day is cancelled on account of a absence (atleast)
specialpublicholidayandclasshoursareheld 390%
on another working day to make up for time Workedanddayis (+30%of
Same
lost in the school calendar. Otherwise stated, RestDay each3
thefacultymember,althoughforcedtotakea 100%)
rest, does not earn what he should earn on
thatday.Beitnotedthatwhenaspecialpublic Q:IsdoubleHPapplicableatpresent?
holiday is declared, the faculty member paid
by the hour is deprived of expected income, A: No, because Araw ng Kagitingan is moved to
anditdoesnotmatterthattheschoolcalendar MondaynearestApril9.(R.A.9242)
is extended in view of the days or hours lost,
for their income that could be earned from Q:WhatistheconceptofsuccessiveRH?
othersourcesislostduringtheextendeddays.
Similarly, when classes are called off or A:
shortened on account of typhoons, floods, MAUNDY GOOD ENTITLED
WED
rallies, and the like, these faculty members THURS FRIDAY TOHP
must likewise be paid, whether or not Worked RH RH Yes.Both
extensions are ordered. (Jose Rizal College v. LOA
RH RH Yes.Both
NLRC,G.R.No.65482,Dec.1,1987) w/pay
LOAw/o
RH RH No.Both
pay
Q: Lita, a full time professor in San Ildefonso
Yes.Onlyto
University,ispaidonaregularmonthlybasis.She LOAw/o
Worked RH HPon
teachesforaperiodof10monthsinaschoolyear, pay
Friday
excluding the 2 month summerbreak. During the

semestral break, the University did not pay her
Q: What are the conditions so that an Ee may be
emergency Cost of Living allowance (ECOLA)
entitledto2successiveHP?
althoughshereceivedherregularsalarysincethe

semestralbreakwasallegedlynotanintegralpart
A:Onthedayimmediatelyprecedingthe1stRH,he
of the school year and no teaching service were
mustbe:
actually rendered by her. In short, the University

invoked the principle of "no work, no pay". She
1. Present(worked),or
seeksyouradviceonwhetherornotsheisentitled
2. On LOA with pay. (Sec. 10, Rule IV, Book
to receive her ECOLA during semestral breaks.
III,IRR)
Howwouldyourespondtothequery?

Q:Whatiftheconditionsarenotmet?
A: There is no longer any law making it the legal
obligation of an employer to grant an Emergency
A:Hemustworkonthe1stRHtobeentitledtoHP
Cost of Living Allowance (ECOLA). Effective 1981,
onthe2ndRH.(Sec.10,RuleIV,BookIII,IRR)
the mandatory living allowances provided for in
earlier Presidential Decrees were integrated into 5.LEAVES
the basic pay of all covered employees. Thus,
whether the ECOLA will be paid or not during the a.ServiceIncentiveLeavePay
semestral break now depends on the provisions of
theapplicablewageorderorcontractwhichmaybe Q:Whatisserviceincentiveleave(SIL)?
a CBA, that many grant said ECOLA. (1997 Bar
Question) A: It is 5 days leave with pay for every employee
who has rendered at least 1 yr of service. It is
Q:WhatistheconceptofdoubleHP? commutabletoitsmoneyequivalentifnotusedor
exhaustedattheendofyear.
A:2RHonsameday.
Q:Whatdoyoumeanbyatleast1yearofservice?
MAUNDY
WED THURSDAY&ARAW RATE
A: Service for not less than 12 months, whether
NGKAGITINGAN
continuous or broken reckoned from the date the
Present unworked 200%
employee started working, including authorized
LOAw/pay unworked 200%
absences and paid regular holidays unless the
300%
LOAw/pay worked working days in the establishment as a matter of
(atleast)
42
LABORLAWTEAM:

LABOR STANDARDS
practice or policy, or that provided in the theSILmaybeonaproratabasis.(No.VI(c),DOLE

employment contract is less than 12 months, in HandbookonWorkersStatutoryMonetaryBenefit)
which case said period shall be considered as one
year.(Sec.3,RuleV,BookIII,IRR) Q: Are parttime workers entitled to the full
benefitoftheyearly5daySIL?
Q:WhoareentitledtoSIL?
A:Yes.Art.95ofLaborCodespeaksofthenumber
A: GR: Applies to every Ee who has rendered at ofmonthsinayearforentitlementtosaidbenefit.
least1yearofservice.(Art.95[a]) (Bureau of Working Conditions Advisory Opinion to
Phil.IntegratedExporters,Inc.)
XPNS:
1. Government Ees and any of its political Q: Are piecerate workers entitled to the full
subdivisionsincludingGOCCs benefitoftheyearly5daySIL?
2. Thosealreadyenjoyingthebenefit
3. Domestic helpers and persons in the A:Itdepends.
personalservicesofanother
4. Thosealreadyenjoyingvacationleavewith 1. Yes.Provided:
payofatleast5days a. Theyareworkinginsidethepremises
5. ManagerialEes oftheemployer(Er)and
6. Field personnel and other Ees whose b. Under the direct supervision of the
performanceisunsupervisedbytheEr Er.
7. Employed in establishments regularly 2. No.Provided:
employinglessthan10workers a. They are working outside the
8. Exemptestablishments premisesoftheEr
9. Engaged on task or contract basis, purely b. Hours spent in the performance of
commissionbasis,orthosewhoarepaidin work cannot be ascertained with
a fixed amount of performing work reasonablecertainty
irrespective of the time consumed in the c. The are not under the direct
performancethereof.(Art.95[b]) supervisionoftheEr

Q: Are teachers of private schools on contract Q: Does it apply to Ees with salaries above
basisentitledtoSIL? minimumwage?

A:Yes.Thephrase"thosewhoareengagedontask A:No.Thedifferencebetweentheminimumwage
orcontractbasis"should,however,berelatedwith andtheactualsalaryreceivedbytheEescannotbe
"field personnel" applying the rule on ejusdem deemedastheir13thmonthpayandSILpayassuch
generis that general and unlimited terms are difference is not equivalent to or of the same
restrained and limited by the particular terms that import as the said benefits contemplated by law.
they follow. Clearly, Cebu Institute of Technology (JPL Marketing Promotions v. CA, G.R. No. 151966,
teaching personnel cannot be deemed as field July8,2005.)
personnelwhichrefers"tononagriculturalEeswho
regularly perform their duties away from the Q: Explain the entitlement of terminated Ees to
principalplaceofbusinessorbranchofficeoftheEr SIL.
andwhoseactualhoursofworkinthefieldcannot
be determined with reasonable certainty. (Par. 3, A:
Art. 82, LC). (CIT vs. Ople, G.R. No. 70203, Dec. 18, 1. Illegally dismissed Ees entitled to SIL
1987) until actual reinstatement. (Integrated
Contractor and Plumbing Works, Inc. v.
Q:IsSILcommutabletoitsmonetaryequivalentif NLRC,G.R.No.Aug.9,2005)
notusedorexhaustedattheendoftheyear? 2. Legally dismissed Ees the Ee who had
not been paid of SIL from outset of
A:Yes.Itisaimedprimarilyatencouragingworkers employment is entitled only of such pay
to work continuously and with dedication to the after a year from commencement of
company. service until termination of employment
orcontract.(JPLMarketingPromotionsv.
Q:Whatisthebasisforcashconversion? CA,G.R.No.151966,July8,2005)

A: The basis shall be the salary rate at the date of
commutation. The availment and commutation of
43

b.MaternityLeave said Ee would otherwise have been

entitledto,andtheSSSshallinturnpay
Q:Whatismaternityleavebenefit? suchamounttotheEeconcerned.

A:Acoveredfemaleemployee(Ee)isentitledtoa c.PaternityLeave
daily maternity benefit equivalent to 100% of her
presentbasicsalary,allowancesandotherbenefits Q:Whatistheconceptofpaternityleavebenefits?
orthecashequivalentofsuchbenefitsfor60days
or78daysincaseofcaesariandelivery. A: Notwithstanding any law, rules and regulations
to the contrary, every married male employee in
Q: What are the requirements in order that theprivateandpublicsectorsshallbeentitledtoa
maternitybenefitsmaybeclaimed? paternityleaveof7dayswithfullpayforthefirst4
deliveriesofthelegitimatespousewithwhomheis
A: cohabiting.
1. There is childbirth, abortion or
miscarriage Q:Whatispaternityleave?
2. She has paid at least 3 monthly
contributions A: It refers to the benefits granted to a
marriedmaleemployeeallowinghimnottoreport
Q:Whataretheconditions? for work for 7 days but continues to earn the
compensation therefore, on thecondition that his
A: spouse has delivered a child or suffered
1. The Ee shall have notified her employer amiscarriage for purposes of enabling him to
(Er) of her pregnancy and the probable effectivelylendsupporttohiswifeinherperiodof
date of her childbirth which notice shall recovery and/or in the nursing of the newlyborn
betransmittedtotheSSS child.

2. ThepaymentshallbeadvancedbytheEr Q: What are the requirements in order to avail
in 2 equal installments within 30 days paternityleave?
from the filing of the maternity leave
application A: The maleemployee (Ee) applying for paternity
leaveshall:
3. Incaseofcaesariandelivery,theEeshall
bepaidthedailymaternitybenefitfor78 1. Notifyhisemployer(Er)ofthepregnancy
days ofhislegitimatespouseand
2. Theexpecteddateofsuchdelivery.
4. Payment of daily maternity benefits shall
be a bar to the recovery of sickness Q: What are the conditions for entitlement to
benefits for the same compensable paternityleave?
periodof60daysforthesamechildbirth,
abortion,ormiscarriage A:ThemaleEeis;
5. The maternity benefits provided under 1. Legallymarriedto,andiscohabitingwith
Section 14A shall be paid only for the thewomanwhodeliversthebaby
firstfourdeliveries 2. Eeofprivateorpublicsector;
3. Onlyforthefirst4deliveriesoflegitimate
6. The SSS shall immediately reimburse the spousewithwhomheiscohabiting;and
Er of 100% of the amount of maternity 4. Notify his Er of the pregnancy of his
benefits advanced to the Ee by the Er legitimate spouse and the expected date
uponreceiptofsatisfactoryproofofsuch ofsuchdelivery
paymentandlegalitythereof;and
Note: For purposes of this Act, delivery shall include
7. If an Ee should give birth or suffer childbirthoranymiscarriage.
abortion or miscarriage without the
required contributions having been Q: Jemuel is a bank employee of BPI. He is
remitted for her by her Er to the SSS, or cohabiting with Paula for straight five years with
withoutthelatterhavingbeenpreviously whom he has four children. On the fifth year of
notified by the Er of the time of the their cohabitation, Paula had her miscarriage.
pregnancy, the Er shall pay to the SSS Jemuelisavailinghimselfofhispaternityleave.Is
damagesequivalenttothebenefitswhich heentitledtopaternityleave?
44
LABORLAWTEAM:

LABOR STANDARDS
A: No. Jemuel is not entitled to paternity he/she is entrusted with the custody
leavebecausethefactsofthecaseonlyshowthat ofthechildren;
heisonlycohabitingwith Paula.Thelawexpressly e. Nullity or annulment of marriage as
provides that the male must be legally married to decreed by a court or by a church as
the woman with whom he is cohabiting as a long as he/she is entrusted with the
condition for entitlement of paternity leave. Even custodyofthechildren;
assumingthatJemuelislegallymarriedtoPaula,he f. Abandonment of spouse for at least 1
cannotavailalsoofthepaternityleavebecausethe yr;
law limits the deliveries only to four which include 3. Unmarried mother/father who has
childbirth or miscarriage. Based on the facts, it is preferred to keep and rear his or her
alreadythefifthdeliveryofthewoman. child/childreninsteadof:
a.havingotherscareforthemor
d.ParentalLeave b.givethemuptoawelfareinstitution;
4.Anyotherpersonwhosolelyprovides:
Q:Whatisparentalleave? a.parentalcareand
b.supporttoachildorchildren;
A:Leavebenefitsgrantedtoasoloparenttoenable 5. Any family member who assumes the
him/her to perform parental duties and responsibilityofheadoffamilyasaresult
responsibilities where physical presence is ofthe:
required. a.death,
b.abandonment,
In addition to leave privileges under existing laws, c.disappearanceor
parental leave of not more than 7 working days d. prolonged absence of the parents or
every year shall be granted to any solo parent Ee soloparent.
whohasrenderedserviceofatleast1year.(Sec.8)
Note: A change in the status or circumstance of the
Q: What are the conditions for entitlement of parent claiming benefits under this Act, such that
parentalleave? he/sheisnolongerleftalonewiththeresponsibilityof
parenthood,shallterminatehis/hereligibilityforthese
A: benefits.(Sec.3)
1.Heorshemustfallamongthosereferredtoas
soloparent e.Leavesforvictimsofviolenceagainstwomen
2. Must have the actual and physical custody of
thechildorchildren Q:Whatistheleaveforvictimsofviolenceagainst
3. Must have at least rendered service of one women or otherwise known as battered woman
yeartohisorheremployer leave?
4.Heorshemustremainasoloparent
A: A female employee who is a victim of violence
Q: Who are those referred to as solo parent (physical, sexual, or psychological) is entitled to a
entitledtoparentalleave? paid leave of 10 days in addition to other paid
leaves.(R.A.9262,AntiVAWCAct)
A: Any individual who falls under any of the ff.
categories: 6.SERVICECHARGES

1.Awomanwhogivesbirthasaresultofrape a.CoverageandExclusion
and other crimes against chastity even
withoutafinalconvictionoftheoffender, Q:Whatareservicecharges(SC)?
provided, That the mother keeps and
raisesthechild; A: These are charges collected by hotels,
2. Parent left solo or alone with the restaurantsandsimilarestablishmentsandshallbe
responsibilityofparenthooddueto: distributedattherateof:
a.Deathofspouse;
b. Detention or service of sentence of COVEREDEes MANAGEMENT
spouseforacriminalconvictionforat
least1yr; 85% 15%
c. Physical and/or mental incapacity of
spouse 1. To answer for losses and
Equally
d.Legalseparationordefactoseparation breakagesand
distributed
2. Distributed to Ees receiving
fromspouseforatleast1yraslongas
45

amongthem more than P2000 a month at Provided, that they have worked for at least 1
the discretion of the month, during a calendar year. (Revised
th
management. Guidelines on the Implementation of the 13
MonthPayLaw)
Q:WhoarecoveredEes?
XPN:
A: GR: All Ees are covered, regardless of their 1. GovernmentEes
position, designation, employment status, 2. Householdhelpers
irrespectiveofthemethodbywhichtheirwagesare 3. Eespaidpurelyoncommissionbasis
paid. 4. Eesalreadyreceiving13thmonthpay

Note: Applies only to hotels, restaurants and similar Q: What would be your advice to your client, a
establishmentcollectingservicecharges. manufacturing company, who asks for your legal
opinion on whether or not the 13th Month Pay
XPN:ManagerialEes.(Sec.2,RuleVI,BookIII,IRR) LawcoversacasualEewhoispaidadailywage?

b.Distribution A: I will advise the manufacturing company to pay
thecasualEe13thMonthPayifsuchcasualEehas
Q:Whenistheshareofemployeedistributedand workedforatleast1monthduringacalendaryear.
paidtothem? The law on the 13th Month Pay provides that Ees
areentitledtothebenefitofsaidlawregardlessof
A: Not less than once every 2 weeks or twice a theirdesignationoremploymentstatus.
monthatintervalsnotexceeding16days.
The SC ruled in Jackson BuildingCondominium
c.Integration Corp. v. NLRC, G.R. No. 112546, March 13, 1996,
interpretingP.D.851,asfollows:Eesareentitledto
Q: What happens if the Service Charge is the 13th month pay benefits regardless of their
abolished? designation and irrespective of the method by
whichtheirwagesarepaid.(1998BarQuestion)
A:TheshareofthecoveredEesshallbeconsidered
integrated in their wages on the basis of the Note:AnEr,maygivetohisEesoftherequired13th
average monthly share of eachEes for thepast 12 Monthpaybeforetheopeningoftheregularschoolyr.
monthsimmediatelyprecedingtheabolition. andtheotherhalfonorbeforetheDec.24.
Note:Servicechargesformpartoftheawardinillegal Q:Is13thMonthPaylegallydemandable?
dismissalcases.
A: Yes. It is a statutory obligation, granted to
7.13thMONTHPAYANDOTHERBONUSES covered Ees, hence, demandable as a matter of
right.(Sec1,P.D.851)
a.Coverage,Exclusion/exemptionsfromcoverage
b.Natureof13thMonthPay
Q:Whatis13thmonthpayoritsequivalent?
Q: In what form is the 13th month pay paid or
A: Additional income based on wage required by given?
P.D. 851 Requiring all Employers to pay their
Employeesa13thmonthpaywhichisequivalentto A:Itisgivenintheformof:
1/12 of the total basic salary earned by an
employee(Ee)withinacalendaryear. 1. ChristmasBonus
2. MidyearBonus
Q:WhoarecoveredbyP.D.851? 3. ProfitSharingScheme
4. Other Cash bonuses amounting to not
A:GR: All rankandfile Ees regardless of the lessthan1/12ofitsbasicsalary
amount of basic salary that they receive in a
month,iftheiremployers(Er)arenototherwise Note:Itmustalwaysbeintheformofalegaltender.
exemptedfrompayingthe13thmonthpay.Such
th
Ees are entitled to the 13 month pay Q:Whatarenotpropersubstitutesfor13thMonth
regardless of said designation of employment pay?
status,andirrespectiveofthemethodbywhich
theirwagesarepaid. A:
1. Freerice
46
LABORLAWTEAM:

LABOR STANDARDS
2. Electricity last2years,subjecttotheprovision
3. Cashandstockdividends ofSec.7ofP.D.851;
4. COLA(Sec.3)
2. The Government and any of its political
Q: Concepcion Textile Co. included the OT pay, subdivisions, including GOCCs, except
nightshift differential pay, and the like in the those corporations operating essentially
computation of its Ees 13thmonth pay. as private subsidiaries of the
Subsequently, with the promulgation of the Government;
decision of the SC in the case of SMC vs. Inciong 3. ErsalreadypayingtheirEes13monthpay
(103SCRA139)holdingthattheseothermonetary or more in a calendar year of its
claimsshouldnotbeincludedinthecomputation equivalentatthetimeofthisissuance:
of the 13th month pay, Concepcion Textile Co.
sought to recover under the principle of solutio 4. Itsequivalentshallinclude:
indebiti the overpayment of the Ees 13thmonth a. Christmasbonus
pay, by debiting against future 13thmonth b. Midyearbonus
payments whatever excess amounts it had c. Profitsharing payments
previouslymade. and
d. Other cash bonuses
(1)IstheCompany'sactiontenable? amountingtonotlessthan
1/12th of the basic salary
(2) With respect to the payment of the 13th but
month pay after the SMC ruling, what
arrangement, if any, must the Company make in 5. Itshallnotinclude:
order to exclude from the 13thmonth pay all a. cashandstockdividends,
earnings and remunerations other than the basic b. COLA
pay? c. all other allowances
regularly enjoyed by the
A: The Company's action is not tenable. The Ee, as well as non
principle of solutio indebiti which is a civil law monetarybenefits.
conceptisnotapplicableinlaborlaw.(DavaoFruits
Corp. vs. NLRC, et al., G.R. No. 85073 August 24, 6. Ers of household helpers and persons in
1993). After the 1981 SMC ruling, the High Court thepersonalserviceofanotherinrelation
decided the case of Philippine Duplicators Inc. vs. tosuchworkers;and
NLRC, GR 110068, Nov. 11, 1993. Accordingly,
management may undertake to exclude sick leave, 7. Ers of those who are paid on purely
vacation leave, maternity leave, premium pay for commission, boundary, or taskbasis, and
regular holiday, night differential pay and cost of those who are paid a fixed amount for
living allowance. Sales commissions, however, performingaspecificwork,irrespectiveof
should be included based on the settled rule as the time consumed in the performance
earlier enunciated in Songco vs. NLRC, G.R. No. L thereof, except where the workers are
50999,March23,1990.(1994BarQuestion) paidonpieceratebasisinwhichcasethe
employer shall be covered by this
Q: Are all Ers required to pay 13th Month Pay issuance insofar as such workers are
underP.D.851? concerned.(Sec3,P.D.851)

A:
Q:WhataretheoptionsofcoveredErs?
GR:Yes.ItappliestoallErs,
A:
XPN: 1. Pay onehalf of the 13thmonth pay
1. DistressedErs: required before the opening of the
a. Currentlyincurringsubstantiallosses regularschoolyearandtheotherhalfon
or or before the 24th day of December of
b. In the case of nonprofit institutions everyyear.
and organizations, where their 2. In any establishment where a union has
income, whether from donations, been recognized or certified as the
contributions, grants and other collective bargaining agent of the Ee, the
earnings from any source, has periodicity or frequency of payment of
consistently declined by more than the13thmonthpaymaybethesubjectof
40% of their normal income for the agreement.
47

Manggagawa sa Honda, G.R. No. 145561, June

Q:Howareclaimsadjudicated? 15,2005)

A:Nonpaymentofthe13thmonthpayprovidedby XPN: Ees who are paid a guaranteed minimum
P.D. 851 and the rules of NLRC shall be treated as wageorcommissionsearnedareentitledto13th
moneyclaimscases. month pay based on total earnings. (Philippine
Agricultural Commercial and Industrial Workers
Q: Are the following Ees entitled to 13th month Unionv.NLRC,G.R.No.107994,Aug.14,1995)
pay?
th
Q:Is14 MonthPaylegallydemandable?
a. Eeswhoarepaidbyresults
b. EeswithmultipleErs A: No. The granting of 14th month pay is a
c. Privateschoolteachers management prerogative and is not legally
d. ResignedorseparatedEes demandable.Itisbasicallyabonusandisgratuitous
in nature. (Kamaya Point Hotel v. NLRC, G.R. No.
A: 75289,Aug.31,1989)
1. Eepaidbyresultsentitledto13thmonth
pay. c.Commissionsvisvis13thmonthpay

Note: Ees paid a fixed or guaranteed wage Q: What is commission in relation to 13th month
plus commission are also entitled to the pay?
mandated 13th month pay, based on their
total earnings during the calendar year, i.e. A:
onboththeirfixedorguaranteedwageand 1. The salesmans commissions, comprising
commission a predetermined percent of the selling
priceofthegoodssoldbyeachsalesman,
2. ThosewithMultipleErsGovernmentEes were properly included in the term basic
workingparttimeinaprivateenterprise, salary for purposes of computing their
including private educational institutions, 13thmonthpay.
as well as Ees working in 2 or more
private firms, whether full or part time 2. The so called commission paid to or
th
basis, are entitled to the required 13 received by medical representatives of
month pay from all their private Ers BoieTakedaChemicalsorbytherankand
regardless of their total earnings from file Ees of Phil. Fuji Xerox were excluded
eachoralltheirErs. fromthetermbasicsalarybecausethese
were paid as productivity bonuses. Such
3. Private School Teachers, including faculty bonuses closely resemble profit sharing,
members of universities and colleges payments and have no clear, direct,
entitled regardless of the number of necessaryrelationtotheamountofwork
months they teach or are paid within a actually done by each individual
year, if they have rendered service for at employee.
least1monthwithinayear.
d.CBAvisvis13thmonthpay
4. ResignedorSeparatedEesIfresignedor
separated from work before the time of Q:WhatisCBAinrelationto13thmonthpay?
th
payment of 13 month pay, entitled to
monetary benefit in proportion to the A:TheabsenceofanexpressprovisionintheCBA
length of time he started working during obligating the employer to pay the members of a
the calendar year up to the time of union thirteenth month pay is immaterial.
resignation or termination of service. Notwithstanding therefore the absence of any
th
(Prorated13 monthpay) contractualagreement,thepaymentofathirteenth
monthpaybeingastatutorygrant,compliancewith
th
Q:Whendoesprorationof13 MonthPayapply? the same is mandatory and is deemed incorporate
intheCBA.
A: GR: Proration of this benefit applies only in
cases of resignation or separation from work; 8.WOMENWORKERS
computation should be based on length of
service and not on the actual wage earned by a.Discrimination(Art.135.LC);ProhibitedActs(Art.
the worker (Honda Phils. v. Samahan ng 137.LC)
48
LABORLAWTEAM:

LABOR STANDARDS
Q:WhataretheunlawfulactsagainstwomenEe? Under Sec. 2 of R.A. 9710 or the Magna Carta of

Women, the State condemns discrimination against
A: womeninallitsformsandpursuesbyallappropriate
1. Discrimination with respect to the terms means and without delay the policy of eliminating
and conditions of employment solely on discrimination against women in keeping with the
accountofsex Convention on the Elimination of All Forms of
a. Paymentoflessercompensationtoa Discrimination Against Women (CEDAW) and other
female Ee as against a male Ee for international instruments consistent with Philippine
law. The State shall accord women the rights,
workofequalvalue
protection, and opportunities available to every
b. Favoring a male Ee with respect to
memberofsociety.
promotion, training opportunities,

study and scholarship grants on The State shall take steps to review and, when
accountofgender.(Art.135) necessary,amendand/orrepealexistinglawsthatare
c. Favoring a male applicant with discriminatory to women within three (3) years from
respect to hiring where the theeffectivityofthisAct.(Sec.12,R.A.9710)
particularjobcanequallybehandled
byawoman Q: Can an individual, the sole proprietor of a
d. FavoringamaleEeoverafemaleEe business enterprise, be said to have violated the
with respect to dismissal of AntiSexual Harassment Act of 1995 if he clearly
personnel. discriminates against women in the adoption of
2. Stipulating, whether as a condition for policy standards for employment and promotions
employment or continuation of intheenterprise?Explain.
employment:
a. That a woman Ee shall not get A: When an employer (Er) discriminates against
married,or women in the adoption of policy standards for
b. Thatuponmarriage,suchwomanEe employmentandpromotioninhisenterprise,heis
shall be deemed resigned or not guilty of sexual harassment. Instead, the Er is
separated.(Art.136) guiltyofdiscriminationagainstwomenEeswhichis
Note: A woman worker may not be declaredtobeunlawfulbytheLC.
dismissed on the ground of dishonesty for
havingwrittensingleonthespaceforcivil For an Er to commit sexual harassment, he as a
status on the application sheet, contrary to
personofauthority,influenceormoralascendancy
the fact that she was married. (PT&T Co. v.
should have demanded, requested or otherwise
NLRC,G.R.No.118978,May23,1997)
required a sexual favor from his Ee whether the
3. Dismissing, discriminating or otherwise
demand, request or requirement for submission is
prejudice a woman Ee by reason of her
accepted by the object of said act. (2003 Bar
beingmarried.(Art.136)
Question)
4. DenyinganywomanEebenefitsprovided

bylaw.(Art.137)
Q: At any given time, approximately 90% of the
5. Discharge any woman for the purpose of
production workforce of a semiconductor
preventing her from enjoying any of the
company are females. 75%of the female workers
benefitsprovidedbylaw.(Art.137)
are married and of childbearing years. It is
6. Discharging such woman on account of
imperativethattheCompanymustoperatewitha
her pregnancy, or while on leave or in
minimum number of absences to meet strict
confinement due to her pregnancy. (Art.
delivery schedules. In view of the very high
137)
numberoflostworkinghoursduetoabsencesfor
7. Discharging or refusing the admission of
familyreasonsandmaternityleaves,thecompany
such woman upon returning to her work
adopted a policy that it will employ married
for fear that she may again be pregnant.
women as production workers only if they are at
(Art.137)
least 35 yrs of age. Is the policy violative of any

law?
Note: Discrimination in any form from pre
employment to post employment, including hiring,
promotion or assignment, based on the actual,
A: Yes, it is violative of Art. 140 of the LC which
perceived or suspected HIV status of an individual is provides that no employer shall discriminate
unlawful. (Philippine AIDS Prevention and Control Act against any person in respect to terms and
of1998,[R.A.8504]) conditions of employment on account of his age.
(1998BarQuestion)
b.StipulationAgainstMarriage(Art.136,LC)
49

Q:Whatisthenospouseemploymentpolicy? Glaxo does not impose an absolute prohibition

against relationships between its Ees and those of
A:GR: competitor companies. Its Ees are free to cultivate
1. Policy banning spouses from working in relationships with and marry persons of their own
thesamecompany. choosing.Whatthecompanymerelyseekstoavoid
2. MaynotfaciallyviolateArt.136oftheLC is a conflict of interest between the Ee and the
but it creates a disproportionate effect company that may arise out of such relationships.
and the only way it could pass judicial Furthermore, the prohibition forms part of the
scrutinyisbyshowingthatitisreasonable employment contract and Tecson was aware of
despite the discriminatory albeit such restrictions when he entered into a
disproportionateeffect. relationship with Bettsy. (Duncan Asso. of
DetailmanPTGWO v. Glaxo Wellcome Phil. Inc.,
XPN: Bona fide occupational qualification rule G.R.No.162994,Sep.17,2004)
(BFOQ)
c.ClassificationofCertainWomenWorkers(Art.
Q:WhatistheBFOQrule? 138,LC)
A:TheremustbeafindingofanyBFOQtojustifyan Q:WhoarecoveredunderthisTitle?
Ers no spouse rule. There must be a compelling
business necessity for which no alternative exist A: Any women who is permitted or suffered to
otherthanthediscriminatingpractice. work:
To justify a BFOQ the employer must prove two 1. Withorwithoutcompensation

factors: 2. In any night club, cocktail lounge,
massage clinic, bar or similar
1. That the employment qualification is establishment
reasonably related to the essential 3. Undertheeffectivecontrolorsupervision
operationofthejobinvolved;and oftheErforasubstantialperiodoftime
2. That there is a factual basis for believing 4. Shall be considered as an Ee of such
that all or substantially all persons establishment for purposes of labor and
meeting the qualification would be sociallegislation.
unable to properly perform the duties of
the job. (Star Paper v. Simbol, G.R. No. d.AntiSexualHarrasmentAct
164774,April12,2006) RA7877

Q:WhatistheimportanceoftheBFOQRule? Q: What is the policy of the State in enacting the
AntiSexualHarassmentlaw?
A:
1. To ensure that the Ee can effectively A:TheStateshall:
performhiswork
2. Sothatthenospouserulewillnotimpose 1. Valuethedignityofeveryindividual
anydangertobusiness. 2. Enhance the development of it human
resources
Q: Tecson was employed by Glaxo as medical 3. Guarantee full respect for human rights
representativewhohasapolicyagainstEeshaving and
relationships against competitors Ees. Tecson 4. Uphold the dignity of workers, Ee,
married Bettsy, a Branch coordinator of Astra, applicants for employment, students or
Glaxos competitor. Tecson was transferred to those undergoing training, instruction or
anotherarea.Tecsondidnotacceptsuchtransfer. education.(Sec.2)

IsthepolicyofGlaxovalidandreasonablesoasto Q:Whomaybeheldliableforsexualharassment?
constitute the act of Tecson as willful
disobedience? A: In a work, education or trainingrelated
environmentsexualharassmentmaybecommitted
A: The prohibition against personal or marital byan:
relationships with Ees of competitors companies
upon Glaxos Ees is reasonable under the 1. Ee
circumstances because relationships of that nature 2. Manager
might compromise the interest of the company. 3. Supervisor
50
LABORLAWTEAM:

LABOR STANDARDS
4. Agentofthe(Er) segregating or classifying the Ee

5. Teacher,instructor,professor which in a way would discriminate,
6. Coach,trainer,or deprive or diminish employment
7. Any other person who, having authority, opportunitiesorotherwiseadversely
influence or moral ascendancy over affectsaidEe;
anotherinaworkortrainingoreducation b. TheaboveactswouldimpairtheEes
environment: rights or privileges under existing
a. Demands laborlaws;or
b. Requestsor c. The above acts would result in an
c. Requires intimidating, hostile, or offensive
any sexual favor from the other, environmentfortheEe.
regardless of whether the demand,
request or requirement for 2. Inaneducationortrainingenvironment:
submissionisacceptedbytheobject a. Against one who is under the care,
ofR.A.7877.(Sec.3) custody or supervision of the
offender;
Q:Howissexualharassmentcommitted? b. Against one whose education,
training, apprenticeship or tutorship
A:Generally,apersonliabledemands,requests,or isentrustedtotheoffender;
otherwiserequiresanysexualfavorfromtheother, c. Sexual favor is made a condition to
regardless of whether the demand, request or the giving of a passing grade, or the
requirement for submission is accepted by the granting of honors and scholarships,
latter. or the payment of a stipend,
allowance or other benefits,
Q: Under the Sexual Harassment Act, does the privileges,orconsiderations;or
definition of sexual harassment require a d. Sexual advances result in an
categoricaldemandorrequestforsexualfavor? intimidating, hostile or offensive
environmentforthestudent,trainee
A: No. It is true that the provision calls for a orapprentice.
demand, request or requirement of a sexual
favor. But it is not necessary that the demand, Q:WhatarethedutiesoftheErorheadofoffice
request or requirement of a sexual favor be in a workrelated, education or training
articulated in a categorical manner. It may be environment?
discerned, with equal certitude, from the acts of
theoffender. A:
1. Prevent or deter the commission of acts
Likewise, it is not essential that the demand, ofsexualharassmentand
requestorrequirementbemadeasaconditionfor 2. Providetheproceduresfortheresolution,
continued employment or for promotion to a settlement or prosecution of acts of
higher position. It is enough that the respondents sexualharassment.
acts result in creating an intimidating, hostile or
offensiveenvironmentfortheemployee.(Domingo Towardsthisend,theErorheadofofficeshall:
v.Rayala,G.R.No.155831,Feb.18,2008)
1. Promulgate appropriate rules and
Q:Whenissexualharassmentcommitted? regulationsinconsultationwiththejointly
approved by the Ees or students or
A:Specifically: trainees, through their duly designated
representatives, prescribing the
1. In a workrelated or employment procedure for the investigation or sexual
environment: harassment cases and the administrative
a. The sexual favor is made as a sanctionstherefore.(Sec.4)
condition in the hiring or in the
employment, reemployment or Note:Administrativesanctionsshallnotbe
continued employment of said abartoprosecutioninthepropercourtsfor
individual, or in granting said unlawfulactsofsexualharassment.
individual favorable compensation, The said rules and regulations issued shall
terms, conditions, promotions, or include,amongothers,guidelinesonproper
privileges;ortherefusaltograntthe decorum in the workplace and educational
sexual favor results in limiting, ortraininginstitutions.
51

hostileorunfriendlytotheapplicant'schancesfora
2. Create a committee on decorum and job if she turns down the invitation. [Sec. 3(a)(3),
investigation of cases on sexual R.A. No. 7877, AntiSexual Harassment Act]. (2000
harassment. BarQuestion)
3. The Er or head of office, education or
training institution shall disseminate or Q: In the course of an interview, another female
post a copy of this R.A. 7877 for the applicant inquired from the same Personnel
informationofallconcerned Manager if she had the physical attributes
required for the position she applied for. The
Q: What is the liability of the Er, head of office, Personnel Manager replied: "You will be more
educationalortraininginstitution? attractive if you will wear micromini dresses
without the undergarments that ladies normally
A: Ee shall be solidarily liable for damages arising wear." Did the Personnel Manager, by the above
from the acts of sexual harassment committed in reply, commit an act of sexual harassment?
the employment, education or training Reason.
environmentprovided:
A:Yes.Theremarkswouldresultinanoffensiveor
1. The Er or head of office, educational or hostile environment for the Ee. Moreover, the
training institution is informed of such remarks did not give due regard to the applicants
actsbytheoffendedparty;and feelingsanditisachauvinisticdisdainofherhonor,
2. No immediate action is taken thereon. justifying the finding of sexual harassment
(Sec.5) (Villaramav.NLRC,G.R.No.106341,Sep.2,1994)
Q: Can an independent action for damages be Q:PedritoMasculado,acollegegraduatefromthe

filed? province,triedhisluckinthecityandlandedajob
asutility/maintenancemanatthewarehouseofa
A: Yes.NothingunderR.A.7877shallprecludethe bigshoppingmall.AfterworkingasacasualEefor
victimofwork,educationortrainingrelatedsexual 6 months, he signed a contract for probationary
harassment from instituting a separate and employment for 6 months. Being wellbuilt and
independent action for damages and other physically attractive, his supervisor, Mr. Hercules
affirmativerelief.(Sec.6) Barak,tookspecialinteresttobefriendhim.When
his probationary period was about to expire, he
Q: What is the threefold liability rule in sexual was surprised when one afternoon after working
harassmentcases? hours, Mr. Barak followed him to the mens
comfort room. After seeing that no one else was
A:Anactofsexualharassmentmaygiverisetocivil, around, Mr. Barak placed his arm over Pedritos
criminal and administrative liability on the part of shoulderandsoftlysaid:Youhavegreatpotential
theoffender,eachproceedingindependentlyofthe tobecomearegularEeandIthinkIcangiveyoua
others. favorablerecommendation.Canyoucomeoverto
my condo unit on Saturday evening so we can
Q:Whendoestheactionprescribe? have a little drink? Im alone, and Im sure you
want to stay longer with the company. Is Mr.
A:Anyactionshallprescribein3years. Barakliableforsexualharassmentcommittedina
workrelatedoremploymentenvironment?
Q: A Personnel Manager, while interviewing an
attractive female applicant for employment, A: Yes, the elements of sexual harassment are all
stareddirectlyatherforprolongedperiods,albeit present. The act of Mr. Barak was committed in a
in a friendly manner. After the interview, the workplace. Mr. Barak, as supervisor of Pedrito
manager accompanied the applicant to the door, Masculado, has authority, influence and moral
shook her hand and patted her on the shoulder. ascendancyoverMasculado.
He also asked the applicant if he could invite her
for dinner and dancing at some future time. Did Given the specific circumstances mentioned in the
thePersonnelManager,bytheaboveacts,commit questionlikeMr.BarakfollowingMasculadotothe
sexualharassment?Reason. comfort room, etc. Mr. Barak was requesting a
sexual favor from Masculado for a favorable
A: Yes, because the Personnel Manager, is in a recommendation regarding the latter's
position to grant or not to grant a favor (a job) to employment.Itisnotimpossibleforamale,whois
theapplicant.Underthecircumstances,invitingthe a homosexual, to ask for a sexual favor from
applicant for dinner or dancing creates a situation anothermale.(2000BarQuestion)
52
LABORLAWTEAM:

LABOR STANDARDS
9.MINORWORKERS iii.
the conditions provided in
thefirstinstancearemet.
a.Regulationofworkinghoursofachild, B. Above 15 but below 18 may be
Employmentofthechildinpublicentertainment, employedinanynonhazardouswork
Prohibitionofemployingminorsincertain C. Above18noprohibition
undertakingsandincertainadvertisements
Q:WhatisthedutyoftheErbeforeengagingchild
Q:Whatarethegeneralprohibitions? intowork?
A:GR: A:TheErshallfirstsecureaworkpermitfromthe
1. No person under 18 years of age will be DOLE which shall ensure observance of the
allowedtobeemployedinanundertaking requirements.(Sec.12,R.A.7160)
which is hazardous or deleterious in
nature. Q:Whatistheruleregardingtheissuanceofwork
2. No Er shall discriminate against any certificates/ permits for children at least 15 but
personinrespecttotermsandconditions below18yearsofage?
ofemploymentonaccountofhisage.
A:TheissuanceofaDOLECertificatetoyouthaged
XPN: 15tobelow18yearsofageisnotrequiredbylaw.
A. Below15yrs.Old No employer shall deny opportunity to any such
1. The child works directly under the youthapplyingforemploymentmerelyonthebasis
sole responsibility of his parents, or oflackofworkpermitorcertificateofeligibilityfor
guardians who employ members of employment. Any young person aged 15 to below
his family, subject to the following 18 years of age may present copy of this DOLE
conditions: advisorytoanyemployer,jobprovider,government
a. Employmentdoesnotendanger authority, or his/her representative when seeking
the childs safety, health and employmentoranytimeduringemployment.(DOLE
morals DepartmentAdvisoryNo.0108)
b. Employment does not impair
thechildsnormaldevt Q:Whatisanonhazardouswork?
c. Erparent or legal guardian
provides the child with the A: It is any work or activity in which the Ee is not
primary and/or secondary exposedtoanyriskwhichconstitutesanimminent
education prescribed by the dangertohissafetyandhealth.
Dept.ofEducation
2. The childs employment or Q:Whatarehazardousworkplaces?
participationinpublicentertainment
or information through cinema, A:
theater, radio or television is 1. Nature of work exposes the workers to
essentialprovided: dangerous environmental elements,
a. Employment contract is contaminantsorworkconditions
concludedbythechildsparents 2. Workers are engaged in construction work,
orlegalguardian, logging, firefighting, mining, quarrying,
b. With the express agreement of blasting, stevedoring, dock work, deepsea
thechildconcerned,ifpossible, fishing,andmechanizedfarming
and 3.Workersareengagedinthemanufactureor
c. The approval of DOLE, the handling of explosives and other pyrotechnic
following must be complied products
with: 4. Workers use or are exposed to heavy or
i. The employment does not powerdriventools
involve advertisement or
commercials promoting Q: You were asked by a paint manufacturing
alcoholic beverages, companyregardingthepossibleemploymentasa
intoxicating drinks, tobacco mixer of a person, aged 17, who shall be directly
and its byproducts or under the care of the section supervisor. What
exhibitingviolence advicewouldyougive?Explainbriefly.
ii. there is a written contract
approvedbyDOLE A: I will advise the paint manufacturing company
thatitcannothireapersonwhoisaged17.Art139
53

(c)oftheLCprovidesthatapersonbelow18yrsof the employment of persons below 18 years of age

ageshallnotbeallowedtoworkinanundertaking inanundertakingwhichishazardousordeleterious
which is hazardous or deleterious in nature as innatureasdeterminedbytheSLE.
determined by the SLE. Paint manufacturing has
been classified by the SLE as a hazardous work. 2. An 11year old boy who is an accomplished
(2002BarQuestion) singer and performer in different parts of the
country.
Q: What are the prohibitions on the employment
ofchildrenincertainadvertisements? A:No,heshouldnotbeprohibitedfrombeinghired
andfromperformingasasinger.UnderArt.VIIISec.
A: No employment of child models in all 12par.2ofR.A.7619asamendedbyR.A.7658,this
commercialadvertisementspromoting: constitutesanexceptiontothegeneralprohibition
againsttheemploymentofchildrenbelow15years
1. Violence of age, provided that the following requirements
2. Alcoholicbeverages arestrictlycompliedwith:
3. Intoxicatingdrinks
4. Tobaccoanditsbyproducts 1. TheErshallensuretheprotection,health
safetyandmoralsofthechild
Q: A spinster school teacher took pity on one of 2. TheErshallinstitutemeasurestoprevent
her pupils, a robust and precocious 12year old the childs exploitation or discrimination
boywhosepoorfamilycouldbarelyaffordthecost taking into account the system and level
ofhisschooling.Shelivesaloneatherhousenear of remuneration, and the duration and
the school after her housemaid left. In the arrangementofworkingtime;and
afternoon, she lets the boy do various chores as 3. The Er shall formulate and implement,
cleaning, fetching water and all kinds of errands subjecttotheapprovalandsupervisionof
after school hours. She gives him rice and P30.00 competent authorities, a continuing
beforetheboygoeshomeat7:00everynight.The program for training and skill acquisition
school principal learned about it and charged her ofthechild.Moreover,thechildmustbe
with violating the law which prohibits the directly under the sole responsibility of
employmentofchildrenbelow15yearsofage.In his parents or guardian and his
her defense, the teacher stated that the work employment should not in any way
performedby her pupil isnothazardous, andshe interferewithhisschooling.
invokedtheexceptionprovidedintheDepartment
Order of DOLE for the engagement of persons in 3. A 15year old girl working as a library assistant
domestic and household service. Is her defense inagirls'highschool.
tenable?Reason?
A: No, she should not be prohibited from working
A:No,herdefenseisnottenable.UnderArt.139of asalibraryassistantbecausetheprohibitioninthe
the LC on minimum employable age, no child LC against employment of persons below 18 years
below 15 years of age shall be employed except of age merely pertains to employment in an
when he works directly under the sole undertaking which is hazardous or deleterious in
responsibility of his parents or guardian, the nature as identified in the guidelines issuedby the
provisions of the alleged DO of DOLE to the SLE working as a library assistant is not one of
contrary notwithstanding. A mere DO cannot undertakingsidentifiedtobehazardousunderD.O.
prevail over the express prohibitory provisions of No04Seriesof1999.
theLC.(2004BarQuestion)
4.A16yearoldgirlworkingasmodelpromoting
Q: Determine whether the following minors alcoholicbeverages.
should be prohibited from being hired and from
performing their respective duties indicated A:Yes,sheshouldbeprohibitedfromworkingasa
hereunder: model promoting alcoholic beverages. R.A. 7610
categorically prohibits the employment of child
1. A 17year old boy working as miner at the models in all commercials or advertisements
WalwadiMiningCorporation. promoting alcoholic beverages and intoxicating
drinks,amongotherthings.
A: Yes, he should be prohibited from being hired
andfromperformingthedutiesofaminerbecause 5. A 17year old boy working as a dealer in a
suchconstituteshazardousworkunderD.O.No.04 casino.
Seriesof1999.Art.139(c)ofLCexpresslyprohibits
54
LABORLAWTEAM:

LABOR STANDARDS
A: Yes, he should be prohibited from working as a - Not allowed to work between 8:00
dealer in casino, because Art. 140 of the LC pm6:00am
prohibits the employment of persons below 18
years of age in an undertaking which is hazardous 2. At least 15 years of age but below 18
ordeleteriousinnatureidentifiedintheguidelines years of age will not exceed 8 hours a
issuedbytheSLE.Workingasadealerinacasinois dayor40hoursaweek
classifiedashazardousunderD.O.No.04Seriesof - Notallowedtoworkbetween10:00
1999 as it exposes children to physical, pm6:00am
psychologicalorsexualabuses.(2006BarQuestion)
Q:Whataretheworstformsoflabor?
b.ActAgainstChildLabor(RA9231)andChildAbuse
Law(RA7610) A:
1. All forms of slavery (AntiTrafficking of
Q:Whatischildlabor? Persons Act of 2003) or practices similar
to slavery such as sale and trafficking of
A: Any work or economic activity performed by a children, debt bondage and serfdom and
child that subjects him or her to any form of forced or compulsory labor, including
exploitation or is harmful to his or her health and recruitment of children for use in armed
safety or physical, mental or psychosocial conflict;
development. 2. The use, procuring, offering or exposing
of a child pornography or for
Q:Whoisaworkingchild? pornographicperformances;
3. The use, procuring, offering or exposing
A:Anychildengagedasfollows: of a child for illegal or illicit activities,
includingtheproductionandtraffickingof
1. Whenthechildisbelow18yearsofagein dangerous drugs and volatile substances
a work or economic activity that is not prohibitedunderexistinglaws;
childlabor;or 4. Employingchildmodelsinallcommercials
2. Whenthechildisbelow15yearsofage: or advertisements promoting alcoholic
a. In work where he/she is directly beverages, intoxicating drinks, tobacco
under the responsibility of his/her anditsbyproductsandviolence;and
parents or legal guardianand where 5. Work which, by its nature or
only members of the childs family circumstancesinwhichitiscarriedout,is
areemployed;or hazardous or likely to be harmful to the
b. In public entertainment or health,safetyormoralsofchildren.
information
Q: Who can file a complaint for unlawful acts
Q:WhenmaytheStateinterveneinbehalfofthe committedagainstchildren?
child?
A:
A: 1. Offendedparty
1. The parent, guardian, teacher or person 2. Parentsorguardians
havingcareorcustodyofthechildfailsor 3. Ascendants or collateral relatives within
rd
is unable to protect the child against the3 degreeofconsanguinity
abuse,exploitationanddiscrimination;or 4. Officer,socialworkerorrepresentativeof
2. When such acts are committed against alicensedchildcaringinstitution
the child by the said parent, guardian, 5. OfficerorsocialworkerofDSWD
teacher or person having care and 6. Barangay chairman of the place where
custodyoverthechild the violation occurred, where the child is
residingoremployed
Q:Whatisthelimitationonthehoursofworkofa 7. Atleast3concerned,responsiblecitizens
workingchild? wheretheviolationoccurred

A:Ifthechildis: Q: Which courts have jurisdiction over offenses
punishableunderR.A.9231?
1. Below15yearsofagenotmorethan20
hoursaweekandnotmorethan4hours A:TheFamilyCourtsshallhaveoriginaljurisdiction
aday over all cases involving offenses punishable under
thisAct
55

5. Nonassignment to a work in a
commercial, industrial or agricultural
10.EMPLOYMENTOFHOUSEHELPERS enterprise at a wage or salary rate lower
thanthatprovidedforagriculturalornon
a.Definition agriculturalworkers.(Art.145)
Q:Whatisdomesticorhouseholdservice? 6. Ees under 18 years of age shall be given
A: opportunity for at least elementary
1. ServicesintheErshome education.Thecostofeducationshallbe
2. Usuallynecessaryordesirable part of the HHs compensation, unless
3. For the maintenance and employment otherwisestipulated.(Art146)
thereof 7. Should be treated in a just and humane
4. Includes ministering to the personal manner.(Art.147)
comfortandconvenienceofthemembers 8. Not to be treated with physical violence
oftheErshousehold (Art.147)
5. Includingservicesoffamilydrivers. 9. Suitable and sanitary living headquarters
as well as adequate food and medical
Q:Whoisahousehelper? attendance.(Art.148)
10. Terminationofemploymentshouldbe
A: A househelper is synonymous to domestic a. upon expiration of term of
servant employment,or
b. basedonjustcause(Art.149)
1.Anyperson,maleorfemale; 11. Indemnity for unjust termination of
2.WhorendersservicesinandabouttheErs service
homeand; 12. Employmentcertificationastonatureand
3. ServicesareusuallynecessaryorDesirable duration of service and efficiency and
for the maintenance and enjoyment conductofhousehelper.
thereof,and
4. Ministers exclusively to the personal Q:Whatistheminimumwageforhousehelpers?
comfortandenjoymentofErsfamily
A:
Note:Thechildrenandrelativesofahousehelperwho 1.MetoManilaP800/month
live under the Ers roof and who share the 2. Other Chartered Cities or First Class
accommodationsprovidedforthehousehelperbythe MunicipalitiesP650/month
Ershallnotbedeemedashousehelpersiftheyarenot
3.InotherMunicipalitiesP550/month
otherwise engaged as such and are not required to

perform any substantial household work. (Sec 3, Rule
Note: The minimum cash wage rates shall be paid to
XII,BookIII,IRR)
the househelpers in addition to lodging, food and
medicalattendance.
Thedefinitionofahousehelpercannotbeinterpreted
to include househelp or laundry women working in
Q:IsthereanOTPayforhousehelpers?
staffhouses of a company. (APEX Mining CO., Inc., v.
NLRC,G.R.No.94951,April22,1991)
A: No. The LC is silent on the grant of OT pay, HP,
b.Benefitsaccordedhousehelpers Premium Pay and SIL to those engaged in the
domesticorhouseholdservice.MoreoverArt.82of
Q:Whataretherightsofhousehelpers? LC expressly excludes domestic helpers from its
coverage. (Ultra Villa Food Haus v. Geniston, G.R.
A: No.120473,June23,1999)
1. Originalcontractofdomesticserviceshall
notlastformorethan2yearsbutitmay Q: Erlinda worked as a cook, preparing the lunch
berenewedbytheparties.(Art.142) and merienda of the Ees of Remington Industrial
2. Entitled to minimum wage in addition to Sales Corp. She worked at the premises of the
lodging, food, and medical attendance. company. When Erlinda filed an illegal dismissal
(Art.144) case,Mr.Tan,themanagingdirectorofRemington
3. Employmentcontractshouldbereviewed Corp.claimedthatErlindawasadomestichelper,
every 3 years with the end view of andnotaregularEeofRemingtonCorp.Mr.Tan
improving the terms and conditions of argued that it is only when the househelper or
employment.(Art.143) domestic servant is assigned to certain aspects of
4. SSS benefits for those who are receiving the business of the Er that such househelper or
atleastP1,000permonth.(Art.143)
56
LABORLAWTEAM:

LABOR STANDARDS
domestic servant may be considered as such an d.ReliefsforUnjustTermination

employee.IsErlindaadomesticorhousehelper?
Q:Whataretherulesforindemnity?
A: No, Erlinda is clearly not a househelper. A
househelper or domestic servant under the A:
Implementing Rules of the LC is one who is 1. If the period for household service is
employed in the Ers home to minister exclusively fixed, neither the Er nor the househelper
to the personalcomfort and enjoyment of the Ers may terminate the contract before the
family. A househelper, domestic servant or expiration of the term except for just
laundrywoman in a home or in a company cause.
staffhouse is different in the sense that in a 2.Ifthehousehelperisunjustlydismissed,he
corporation or a single proprietorship engaged in or she shall be paid the compensation
business or industry or any agricultural or similar already earned plus that for the 15 days
pursuit,serviceisbeingrenderedinthestaffhouses bywayofindemnity.
orwithinthepremisesofthebusinessoftheEr.In 3. If the househelper leaves without
suchinstance,theyareEesofthecompanyorErin justifiable reason, he or she shall forfeit
thebusinessconcerned,entitledtotheprivilegesof any unpaid salary due him or her not
aregularEe.Themerefactthatthehousehelperor exceeding15days.
domesticservantisworkingwithinthepremisesof
thebusinessoftheemployerandinrelationtoorin Q: When can the HH demand for employment
connection with its business, as in its staffhouses certification?
for its guest or even for its officers and Ees,
warrants the conclusion that such househelper or A: Upon the severance of the household service
domestic servant is and should be considered a relationship, the househelper may demand from
regular Ee and not a househelper. (Remington the Er a written statement of the nature and
Industrial v. Castaneda, G.R. Nos. 16929596, duration of the service and his/ her efficiency and
Nov.20,2006) conductashousehelper.

Q:NBChasaresthouseandrecreationalfacilityin 11.EMPLOYMENTOFHOMEWORKERS
thehighlandsofTagaytayCityfortheuseofitstop
executives and corporate clients. The resthouse a.Defintion
staff includes a caretaker, two cooks and a
laundrywoman. All of them are reported to the Q:Whoarehomeworkers?
SSSasdomesticorhouseholdEesoftheresthouse
and recreational facility and not of NBC. Can NBC A:Theyarethosewhoperforminorabouthisown
legally consider the caretaker, cooks and home any processing or fabrication of goods or
laundrywoman as domestic Ees of the resthouse materials, in whole or in part, which have been
andnotofNBC? furnished directly or indirectly, by an Er and sold
thereaftertothelatter.
A: No, they are not domestic Ees. They are NBCs
Ees because the resthouseandrecreational facility Q:WhoistheErofHomeworker?
arebusinessfacilitiesastheyareforuseofthetop
executives and clients of NBC. (Traders Royal Bank A:Includesanyperson,naturalorartificialwho,for
v.NLRC,G.R.No.127864,Dec.22.1999).(2000Bar his account or benefit, or on behalf of any person
Question) residing outside the country, directly or indirectly,
or through an Ee, agent contractor, subcontractor
c.Termination oranyotherperson:

Q: What is the proper procedure in the 1. Delivers or causes to be delivered, any
terminationofahousehelper? goods, articles or materials to be
processed or fabricated in or about a
A: The termination of the employment of a homeandthereaftertobereturnedorto
househelpershouldbe: be disposed of or distributed in
accordancewithhisdirections.
a. Upon expiration of the term of 2. Sellsanygoods,articlesormaterialstobe
employment,or processedorfabricatedinorabutahome
b. Basedonjustcause(Art.149) and then rebuys them after such
processing or fabrication, either by
himselforthroughsomeotherperson.
57

4. The deduction is made at such rate that

b.Rightsandbenefitsaccordedhomeworkers the amount deducted does not exceed
20%oftheHWsearningsinaweek.
Q:WhatisthedutyoftheErincasehecontracts
withanothertheperformanceofhiswork?
Q:Distinguishhousehelpersfromhomeworkers.
A: It shall be the duty of the Er to provide in such
contractthattheEesorHWsofthecontractorand A:
the latters subcontractor shall be paid in HOUSEHELPERS HOMEWORKERS
accordancewiththeLC. Performs in or about his
ownhomeanyprocessing
Q:WhatistheliabiltyoftheErifthecontractoror or fabrication of goods or
subcontractorfailstopaythewagesorearningsof Minister to the personal materials, in whole or in
hisEes? needsandcomfortofhis part, which have been
Erinthelattershome furnished directly or
A: Er shall be jointly and severally liable with the indirectly, by an Er and
contractor or subcontractor to the workers of the sold thereafter to the
latter to the extent that such work is performed latter.
under such contract, in the same manner as if the Q: Josie is the confidential secretary of the
EesorHWsweredirectlyengagedbytheEr. Chairman of the Board of the bank. She is
presently on maternity leave. In an arrangement
Q:CanHomeworkersformlabororganizations? where the Chairman of the Board can still have
accesstoherservices,thebankallowshertowork
A:Yes.DONo.5,replacingRuleXIVoftheIRRBook inherresidenceduringherleave.Forthispurpose,
3 of the LC, authorizes the formation and thebankinstalledafaxmachineinherresidence,
registrationoflabororganizationofindustrialHWs. and gave her a cellphone and a beeper. Is Josie a
ItalsomakesexplicittheErsdutytopayandremit homeworkerunderthelaw?Explain.
SSS,PhilhealthandECCpremiums.
A:No,sheisactuallyanofficeworker.Sheisnotan
Q:Whataretheprohibitionsagainsthomework? industrial homeworker who accepts work to be
fabricated or processed at home for a contractor,
A:Nohomeworkshallbeperformedon: which work, when finished, will be returned to or
repurchasedbysaidcontractor.(Art.155,LC)(2000
1. Explosives,fireworksandsimilararticles; BarQuestion)
2. Drugsandpoisons;and
3. Other articles, the processing of which 12.APPRENTICESANDLEARNERS
requires exposure to toxic substances.
(Sec.13,RuleXIV,BookIII,IRR) a.Apprentices

c.Conditionsfordeductionfromhomeworkers Q:Whoisanapprentice?
earnings A: Any worker who is covered by a written
apprenticeship agreement with an individual
Q: Can the Er make deductions on homeworkers employer or any of the entities recognized under
earnings? theLC.
A: GR: No Er, contractor or subcontractor shall Q:Whatisapprenticeship?

make any deduction from the HWs earnings
forthevalueofmaterialswhichhavebeenlost, A: It is practical training on the job supplemented
destroyed,soiledorotherwisedamage. byrelatedtheoreticalinstruction.
XPN:Unlesstheff.conditionsaremet: Q:Whatisanapprenticeableoccupation?
1. TheHWisclearlyshowntoberesponsible
forthelossordamage A: That which requires more than 3 months of
2. TheEeisgivenreasonableopportunityto practicaltrainingwiththeoreticalinstruction
showcausewhydeductionsshouldnotbe
made; Q:Whatisonthejobtraining(OJT)?
3. Theamountofsuchdeductionisfairand
A: It is practical work experience through actual
reasonable and shall not exceed the
participation in productive activities given to or
actuallossordamages;and
acquiredbyanapprentice.
58
LABORLAWTEAM:

LABOR STANDARDS
Q:Whatarehighlytechnicalindustries? Q:Whatistheemploymentstatusofapprentices?
A: Those which are engaged in the application of A: They are contractual workers whose length of
advancedtechnology. service depends on the term provided for in the
apprenticeship agreement. Thus, the employer is
Q:Whatarerelatedtheoreticalinstructions? not obliged to employ the apprentice after the
completionofhistraining.
A: Technical information based on apprenticeship
standardsapprovedbytheBureau. Q:Whatistheperiodofapprenticeship?
Note:PriorapprovalbyTESDA(formerlyDOLE)ofthe A:Mustnotexceed6months:
proposed apprenticeship program is a condition sine
quanon.Otherwise,apprenticebecomesaregularEe. 1. 2months/400hours:Tradesoroccupations
(Nitto Enterprises v. NLRC, G.R. No. 114337, Sep. 29, whichnormally require 1 yearormorefor
1995). proficiency
2. 1 month/200 hours: Occupations and jobs
Q:Whatarethequalificationsofanapprentice? whichrequiremorethan3monthsbutless
than1yearforproficiency.(Sec.19,RuleVI,
A: BookII,IRR)
1. Atleast15yearsofage
Note:Thosebelow18yearsofageshallnot Q: What is the status of an apprentice hired after
workinhazardousoccupations suchterm?
2. Physicallyfitfortheoccupation
3. Possessvocationalaptitudeandcapacity A:HeisdeemedaregularEe.Hecannotbehiredasa
4. Possess: probationary Ee since the apprenticeship is deemed
a. Theabilitytocomprehend,and theprobationaryperiod.
b. Followoralandwritteninstructions
5. The company must have an Q:Whatisthewagerateofanapprentice?
apprenticeshipprogramdulyapprovedby
theDOLE. A: Start at not less than 75% of the statutory
minimum wage for the 1st 6 months (except OJT);
Note: Trade and industry associations may thereafter, shall be paid in full minimum wage,
recommend to the SLE appropriate educational includingthefullCOLA.
requirementsfordifferentoccupations.
Note: GR: Apprenticeship programs shall be primarily
Q:Whenisanoccupationdeemedhazardous? voluntary
A: XPN:Compulsoryapprenticeship:
1. Nature of work exposes worker to 1. National security or economic
dangerous environmental elemental developmentsodemand,thePresident
contaminantsorworkconditions mayrequirecompulsorytraining
2. Workers are engaged in construction 2. Services of foreign technicians are
work, logging, firefighting, mining, utilized by private companies in
quarrying,blasting,stevedoring,deepsea apprenticeabletrades.
fishing,andmechanizedfarming
3. Workersareengagedinthemanufacture Q: What are the rules regarding apprenticeship
or handling of explosives and other agreements?
pyrotechnicproducts
4. Workers use, or are exposed to heavy or A: Apprenticeship agreements, including the wage
powerdrivenmachineryorequipment. ratesofapprentices,shall:

Q:Whomayemployapprentices? 1. ConformtotherulesissuedbySLE.
2. The period of apprenticeship shall not
A: exceed6months.
1. Only employers in highly technical 3. Apprenticeship agreements providing for
industriesand wage rates below the legal minimum
2. Only in apprenticeable occupations wage, which in no case shall start below
approvedbySLE 75%oftheapplicablemin.wage,maybe
entered into only in accordance with
59

apprenticeship programs duly approved A: Gomburza College is not liable for the acts of
bytheSLE. Padilla because there is no ErEe relationship
4. The DOLE shall develop standard model between them. As provided in the Rules and
programsofapprenticeship.(Sec.18,Rule RegulationsImplementingtheLC"thereisnoErEe
VI,BookII,IRR) relationship between students on one hand, and
schools, colleges, or universities on the other,
Q:Whosignstheapprenticeshipagreement? wherestudentsworkwiththelatterinexchangefor
the privilege to study free of charge, provided the
A: Every apprenticeship agreement shall be signed students aregiven real opportunity, including such
by: facilities as may be reasonable and necessary to
finish their chosen courses under such
1. Theemployerorhisagent,or arrangement."(1997BarQuestion)
2. An authorized representative of any of
therecognizedorganizations,associations Q: Who may terminate an apprenticeship
orgroups,and agreement?
3. Theapprentice.
A:
Q:Whowillsigniftheapprenticeisaminor? 1. Eitherpartymayterminateanagreement
aftertheprobationaryperiodbutonlyfor
A:Anapprenticeshipagreementwithaminorshall avalidcause.
besignedinhisbehalfby: 2. It may be initiated by either party upon
filing a complaint or upon DOLEs own
1. His parent or guardian, or if the latter is initiative.
notavailable,
2. An authorized representative of the Q:Whomayappealthedecisionoftheauthorized
DOLE. agencyoftheDOLE?
Q: May apprentices be hired without A: It may be appealed by any aggrieved person to

compensation? theSLEwithin5daysfromreceiptofthedecision.
A:Required: Note: The decision of the SLE shall be final and

executory.
1. Byschool
2. Bythetrainingprogramcurriculum Q:WhatisExhaustionofAdministrativeRemedies
3. ForGraduation (EAR)?
4. Forboardexaminations
A: It is a condition precedent to the institution of
Q:Whataretherulesonworkingscholars? action.(Sec.32b,RuleVI,BookII,IRR)
A:ThereisnoErEerelationshipbetweenstudents Q: How is the principle of Exhaustion of

on one hand, and schools, where there is written AdministrativeRemediesappliedincaseofbreach
agreement between them under which the former ofapprenticeshipagreement?
agree to work for the latter in exchange for the
A: No person shall institute any action for the
privilegetostudyfreeofcharge.Thestudentisnot
enforcement of any apprenticeship agreement or
consideredanEe.(Sec.14,RuleIX,BookIII,IRR)
damagesforbreachofanysuchagreement,unless
Q: Padilla entered into a written agreement with he has exhausted all available administrative
Gomburza College to work for the latter in remedies.
exchange for the privilege of studying in said
Q: Who shall settle differences arising out of
institution.Hisworkwasconfinedtokeepingclean
apprenticeshipagreement?
the lavatory facilities of the school. One school
day, he got into a fist fight with a classmate,
A: The plant apprenticeship committee shall have
Monteverde, as a result of which the latter
the initial responsibility for settling differences
sustained a fractured arm. Victor filed a civil case
arisingoutofapprenticeshipagreement.(Sec.32b,
for damages against him, impleading Gomburza
RuleVI,BookII,IRR)
Collegeduetothelatter'sallegedliabilityashisEr.
Underthecircumstances,couldGomburzaCollege Q: What is the procedure for the termination of
beheldliablebyVictorMonteverdeasanPadillas apprenticeship?
Er?
60
LABORLAWTEAM:

LABOR STANDARDS
A:Thepartyterminatingshall: A: Only employers in semiskilled and other

industrial occupations which are non
1. Serve a written notice on the other at apprenticeable.
least5daysbeforeactualtermination,
2. Statingthereasonforsuchdecision;and Q: What is the status of learners who have been
3. A copy of said notice shall be furnished allowed or suffered work during the first 2
theApprenticeshipDivisionconcerned. months, if training is terminated by the Er before
the end of the stipulated period through no fault
b.Learners ofthelearner?

Q:Whoarelearners? A: They are deemed regular employees. (Sec. 4,
RuleVII,BookII,IRR)
A:
1. They are persons hired as trainees in c.DistinctionsbetweenLearnershipand
semiskilled and other industrial Apprenticeship
occupations
2. Whicharenonapprenticeableand Q:DistinguishLearnershipfromApprenticeship.
3. Which may be learned through practical
training on the job in a relatively short A:
periodoftime Learnership Apprenticeship
4. Whichshallnotexceed3months Nature
5. Whether or not such practical training is Trainingonthejobinsemi
supplementedbytheoreticalinstructions. Trainingintradeswhich
skilledandotherindustrial
(Sec.1a,RuleVII,BookII,IRR) areapprenticeable,that
occupationortradeswhich
is,practicaltrainingon
arenonapprenticeable
thejobsupplemented
Q:Whenmaylearnersbeemployed? andwhichmaybelearned
byrelatedtheoretical
thrupracticaltrainingon
instructionformore
A: thejobinarelativelyshort
than3months.
1. Whennoexperiencedworkerisavailable periodoftime.
2. It is necessary to prevent curtailment of
Durationoftraining
employmentopportunities;and
3. Employment does not create unfair Min:3months
Max:3months
competition in terms of labor costs or Max:6months
impairorlowerworkingstandards. Commitmenttoemploy
Withcommitmentto
Q:Whatisalearnershipagreement? employthelearnerasa
regularEeifhedesires Nocommitmenttohire
uponcompletionof
A: Any employer desiring to employ learners shall
learnership
enter into a learnership agreement with them,
whichagreementshallinclude: Incaseofpreterminationofcontract
ConsideredaregularEeif
1. Thenamesandaddressesofthelearners; preterminationoccurs
2. The duration of the learnership period, after2monthsoftraining Workernotconsidered
whichshallnotexceed3months; andthedismissalis asregularemployee.
withoutfaultofthe
3. The wages or salary rates of the learners
learner.
whichshallbeginatnotlessthan75%of
Coverage
theapplicableminimumwage;and
Highlytechnical
4. A commitment to employ the learners if Semiskilled/Industrial
industriesandonlyin
theysodesire,asregularemployeesupon occupations
industrialoccupation
completionofthelearnership.
Thereisalistoflearnable
Nolist
tradesbyTESDA
Q:Whatisthequalificationofalearner? Writtenagreement
RequireLearnership RequiresApprenticeship
A:Mustbeatleast15yearsofage. Agreement Agreement

Note: Those below 18 years of age shall not work in

hazardousoccupations.

Q:Whomayemploylearners?
61

disability he can still efficiently perform his work, he

13.HANDICAPPEDWORKERS(RA9277) cannot be classified as handicapped; he would be
13. consideredaqualifieddisabledworkerentitledtothe
a.Definition sametreatmentasqualifiedablebodiedworkers.
Q:Whoarehandicappedworkers(HW)? b.Rightsofdisabledworkers
A:Thosewhoseearningcapacityisimpairedby: Q: What are the rights and privileges of disabled

workers?
1. Physicaldeficiency
2. Age A:
3. Injury 1. Equalopportunityforemployment
4. Disease 2. Sheltered employment (the govt shall
5. Mentaldeficiency endeavourtoprovidethemworkifsuitable
6. Illness employment for disabled persons cannot
befoundthroughopenemployment)
Q:Whatisthedurationoftheemploymentperiod 3. Apprenticeship
ofhandicappedworkers? 4. Vocationalrehabilitation(meanstodevelop
theskillsandpotentialsofdisabledworkers
A: There is no minimum or maximum duration. It and enable them to compete in the labor
depends on the agreement butit is necessary that market)
thereisaspecificdurationstated. 5. Vocationalguidanceandcounselling
Q: May handicapped workers be hired as c.Prohibitionsondiscriminationagainstdisabled

apprenticesorlearners? persons
A:Yes,iftheirhandicapisnotsuchastoeffectively Q: What is the prohibition on discrimination

impede the performance of job operations in the againstdisabledworkers?
particular occupations for which they are hired.
(Art.81) A: No disable person shall be denied access to
opportunities for suitable employment. A qualified
Q: Can a handicapped workers acquire the status disabled employee shall be subject to the same
ofaregularEe? termsandconditionsofemploymentandthesame
compensation, privileges, benefits, fringe benefits,
A:Yes,ifworkisusuallyornecessarilyordesirable incentives or allowances as aqualified able bodied
to the business. (Bernardo v. NLRC, G.R No. person.
122917,July12,1999)
Five percent (5%) of all casual emergency and
Q:Whomayemployhandicappedworkers? contractual positions in the Departments of Social
Welfare and Development; Health; Education,
A: Employers in all industries. Provided, the Culture and Sports; and other government
handicap is not such as to effectively impede the agencies, offices or corporations engaged in social
performance of job operations in the particular development shall be reserved for disabled
occupationsforwhichtheyarehired persons.
Q:Whencanhandicappedworkersbeemployed? d.Incentivesforemployers
A: Q: What are the incentives provided for employers

1. When their employment is necessary to inemployingdisabledworkers?
prevent curtailment of employment
opportunitiesand A:1.Entitledtoanadditionaldeduction,fromtheir
2. Whenitwillnotcreateunfaircompetition gross income, equivalent to twentyfive percent
inlaborcostsorlowerworkingstandards. (25%) of the total amount paid as salaries and
(Art.79) wagestodisabledpersons:Provided,however,That
such entities present proof as certified by the
Q:Doesthemerefactthataworkerhasadisability, Department of Labor and Employment that
makehimahandicappedworker? disabledpersonsareundertheiremploy:Provided,
further, That the disabled employee is accredited
A: No, because his disability may not impair his withtheDepartmentofLaborandEmploymentand
efficiency or the quality of his work. If despite his
62
LABORLAWTEAM:

LABOR STANDARDS
the Department of Health as to his disability, skills

andqualifications
2. Private entities that improve or modify their

physical facilities in order to provide reasonable
accommodation for disabled persons shall also be
entitled to an additional deduction from their net
taxableincome,equivalenttofiftypercent(50%)of
the direct costs of the improvements or
modifications
Q:Distinguishhandicappedfromdisabled?
A:
Disabled
Handicapped
(DifferentlyAbled)
Referstoallsufferingfrom
restrictionofdifferentabilities
Earningcapacityis asaresultofmental,physical
impairedbyage,or orsensoryimpairmentto
physicalormental performanactivityinthe
deficiencyorinjury. mannerorwithinrange
considerednormalfora
humanbeing.
Coversallactivitiesor
Coversonlyworkers.
endeavors.
Basis:rangeofactivitywhich
Basis:loss/impairment
isnormalforahuman
ofearningcapacity.
being.
Lossduetoinjuryor Restrictionduetoimpairment
physicalormental ofmental/physical/sensory
defectorage. defect.
Ifhired,entitledto75%
ofminimumwage.
Ifqualified,entitledtoall

termsandconditionsas
Subjecttodefinite
qualifiedablebodiedperson.
periodsof
employment.
Employableonlywhen Norestrictionson
necessarytoprevent employment.
curtailmentof
employment Mustgetequalopportunity
opportunity. andnounfaircompetition.

63

D.TERMINATIONOFEMPLOYMENT suspensions, dismissals and award citations for

meritorious services were all done upon approval
1.EMPLOYEREMPLOYEERELATIONSHIP by BARON's chief security officer. After the
expiration of the contract with ASIA, BARON did
Q: What determines the existence of an notrenewthesameandinsteadexecutedanother
employmentrelationship? contractforsecurityserviceswithanotheragency.
ASIA placed the affected security guards on
A: It is determined by law and not by contract. "floating status" on "no work no pay" basis.
Whether or not an ErEe relationship exists Having been displaced from work, the ASIA
between the parties is a question of fact. In this securityguardsfiledacaseagainsttheBARONfor
regard, the findings of the NLRC are accorded not illegal dismissal, overtime pay, minimum wage
onlyrespectbutfinalityifsupportedbyevidence. differentials, vacation leave and sick leave
benefits, and 13th month pay. BARON denied
Note: Taxi or jeepney drivers under the boundary liability alleging that ASIA is the employer of the
system are Ees of the taxi or jeepney securityguards and therefore, their complaint for
owners/operators; so also the passenger bus drivers illegal dismissal and payment of money claims
and conductors. (Jardin vs. NLRC and Goodman Taxi,
should be directed against ASIA. Nevertheless,
G.R.No.119268,Feb.23,2000)
BARONfiledaThirdPartyComplaintagainstASIA.

Q:Theemploymentcontractstipulatesthatthere
IsthereanErEerelationshipbetweentheBARON,
is no ErEe relationship between the parties. Is
ononehand,andtheASIAsecurityguards,onthe
thatvalid?
otherhand?Explainbriefly.
A: No. The existence of an ErEe relation is a
questionoflawandbeingsuch,itcannotbemade A:Asageneralrule,thesecurityguardsofaprivate
the subject of agreement. (Tabas v. California security guard agency are the employees of the
ManufacturingCo.,G.R.No.L80680,Jan.26,1989) latterandnotoftheestablishmentthathasentered
into a contract with the private security guard
Q: Banco de Manila and the Ang Husay Janitorial agency for security services. But under the facts in
and Pest Control Agency entered into an thequestion,BaronHotelappeartohavehiredthe
IndependentContractorAgreementwiththeusual security guards, to have paid their wages, to have
stipulations: specifically, the absence of ErEe the power to promote, suspend or dismiss the
relationship, and the relief from liability clauses. security guards and the power of control over
Can the bank, as a client, and the agency, as an them, namely, the security guards were under
independent contractor, stipulate that no ErEe ordersofBaronHotelasregardtheiremployment.
relationship exists between the bank and the Ees Because of the abovementioned circumstances,
oftheAgencywhomaybeassignedtoworkinthe BaronHotelistheErofthesecurityguards.
Bank?Reason.
Q:AssumingthatASIAistheEr,istheactofASIA
A:Yes,theycanstipulateprovidedtherelationship in placing the security guards on "floating status"
isjobcontracting.Howeverthestipulationcannot lawful?Why?
prevailoverthefactsandthelaws.Theexistenceof
ErEe relationship is determined by facts and law A:Itislawfulforaprivatesecurityguardagencyto
and not by stipulation of the parties. (Insular Life place its security guard on a "floating status" if it
AssuranceCo..Ltd.v.NLRC,G.R.No.119930,March has no assignment to give to said security guards.
12,1998) But if thesecurity guardsare placed on a "floating
status"formorethan6months,thesecurityguards
Q:ASIAexecuteda1yearcontractwiththeBaron mayconsiderthemselvesashavingbeendismissed.
Hotel(BARON)fortheformertoprovidethelatter (1999BarQuestion)
with 20 security guards to safeguard the persons
andbelongingsofhotelguests,amongothers.The Q:Lacsonwasoneofmorethan100Eeswhowere
security guards filled up Baron application form terminated from employment due to the closure
and submitted the executed forms directly to the ofLBMConstructionCorporation.LBMwasasister
SecurityDepartmentofBaron.Thepayslipsofthe company of Lastimoso Construction, Inc. and RL
security guards bore BARON's logo and showed Realty & Devt Corp. All 3 entities formed what
that Baron deducted therefrom the amounts for came to be known as the Lastimoso Group of
SSS premiums, medicare contributions and Companies. The 3 corporations were owned and
withholdingtaxes.Assignmentsofsecurityguards, controlled by members of the Lastimoso family;
who should be on duty or on call, promotions, their incorporators and directors all belonged to
64
LABORLAWTEAM:

TERMINATION OF EMPLOYMENT
the Lastimoso family. The 3 corporations were 4. Power of control. (The Labor Code with
engaged in the same line of business, under one Comments and Cases 2007, Azucena, Vol
management, and used the same equipment I,p.158)
including manpower services. Lacson and his co
Ees filed a complaint with the Labor Arbiter Q:Whatiscontroltest?
againstLBM,RLRealtyandLastimosoConstruction
to hold them jointly and severally liable for A:Thepersonforwhomtheservicesareperformed
backwages and separation pay. Lastimoso reserves a right to control not only the end to be
Construction, Inc. RL Realty & Development achievedbutalsothemeanstobeusedinreaching
Corporation interposed a Motion to Dismiss suchend.
contending that they are juridical entitles with
distinct and separate personalities from LBM Note:However,incertaincasesthecontroltestisnot
Construction Corporation and therefore, they sufficienttogiveacompletepictureoftherelationship
cannot be held jointly and severally liable for the betweentheparties,owingtothecomplexityofsucha
money claims of workers who are not their Ees. relationshipwhereseveralpositionshavebeenheldby
Rule on the motion to dismiss. Should it be theworker.Thebetterapproachistoadoptthetwo
tieredtest.(Franciscovs.NLRC,G.R.No.170087,Aug.
grantedordenied?Why?
31,2006)

A: It is very clear that even if LBM Construction
Q: Genesis entered into a Careers Agent
company, Lastimoso Construction Company, Inc.
Agreement with EmoLife Insurance Company, a
and RL Realty & Devt Corp. all belong to the
domestic corporation engaged in insurance
Lastimosofamilyandareengagedinthesameline
business. In the Agreement, it provides that the
of business under one management and used the
agent is an independent contractor and nothing
same equipment including manpower services,
therein shall be construed or interpreted as
these corporations were separate juridical entities.
creating an employer employee relationship. It
Thus, only the LBM Construction Corp. is the Er of
furtherprovidesthattheagentmustcomplywith
Teofilo Lacson. The other corporation do not have
three requirements: (1) compliance with the
any ErEe relations with Lacson. The case in
regulationsandrequirementsofthecompany;(2)
question does not include any fact that would
maintenance of a level of knowledge of the
justify piercing the veil of corporate fiction of the
company's products that is satisfactory to the
othercorporationsinordertoprotecttherightsof
company;and(3)compliancewithaquotaofnew
workers. In a case (Concept Builders, Inc. v. NLRC,
businesses.However, EmoLifeinsurance company
G.R.No.108734,May29,1996)theSCruledthatit
terminated Genesis services. Genesis filed an
isafundamentalprincipleofcorporationlawthata
illegaldismissalcomplaintallegingthereinthatan
corporation is an entity separate and distinct from
employeremployeerelationshipexistsandthathe
its stockholders and from other corporations to
was illegally dismissed. Is he an employee of the
which it may be connected. But this separate and
insurancecompany?
distinct personality of a corporation is merely a
fiction created by law for convenience and to A:GenesisisnotanemployeeofEmoLifeInsurance
promote justice. So, when the notion of separate Company. Generally, the determinative element is
juridical personality is used to defeat public the control exercised over the one rendereing the
convenience,justifywrong,protectfraudordefend service.TheconceptofcontrolinLaborCodehas
crime, or is used as a device to defeat the labor to be compared and distinguished with control
laws, this separate personality of the corporation that must necessarily exist in a principalagent
maybe disregarded or the veil of corporate fiction relationship. The employer controls the employee
pierced.(1999BarQuestion) bothintheresultsandinthemeansandmannerof
achieving this result. The principal in an agency
a.Fourfoldtest relationship, e.g. insurance agent, on the other
hand, also has the prerogative to exercise control
Q:WhatfactorsdeterminetheexistenceofanEr over the agent in undertaking the assigned task
Eerelationship? based on the parameters outlined in the pertinent
laws. In the present case, the Agreement fully
A:Thefourfoldtest: servesasgrantofauthoritytoGenesisasEmoLifes
insurance agent. This agreement is supplemented
1. Selection and engagement of the
bythecompanysagencypracticesandusages,duly
employee;
accepted by the agent in carrying out the agency.
2. Paymentofwages;
Foremost among these are the directives that the
3. Powerofdismissal;and
principal may impose on the agent to achieve the
65

assigned tasks, to the extent that they do not justcause,whenhefailstoqualifyasaregularEein

involve the means and manner of undertaking accordance with reasonable standards prescribed
thesetasks.Thelawlikewiseobligatestheagentto bytheEr.
renderanaccount;inthissense,theprincipal may
imposeontheagentspecificinstructionsonhowan Q: Michelle Miclat was employed on a
accountshallbemade,particularlyonthematterof probationary basis as marketing assistant by
expenses and reimbursements. To these extents, ClarionPrintingHousebutduringheremployment
control can be imposed through rules and shewasnotinformedofthestandardsthatwould
regulations without intruding into the labor law qualify her as a regular employee (Ee). 30 days
concept of control for purposes of employment. after, Clarion informed Miclat that her
(Gregorio Tongko v. ManuLife Insurance Company, employment contract had been terminated
G.R.No.167622,Jun.29,2010) withoutanyreason.Miclatwasinformedthather
termination was part of Clarions costcutting
b.TwotieredTest measures.IsMiclatconsideredasaregularEeand
henceentitledtoitsbenefits?
Q:Whatisthetwotieredtest?
A:Yes.Probationaryemploymentshallbegoverned
A: by the following rules: (d) In all cases of
1. TheputativeErspowertocontroltheEe probationaryemployment,theErshallmakeknown
with respect to the means and methods totheEethestandardsunderwhichhewillqualify
bywhichtheworkistobeaccomplished; as a regular Ee at the time of his
and engagement.Wherenostandardsaremadeknown
2. The underlying economic realities of the totheEeatthattime,heshallbedeemedaregular
activityorrelationship. Ee. In the case at bar, she was deemed to have
been hired from day one as a regular Ee. (Clarion
Note: This twotiered test would provide us with a PrintingHouseInc.,vs.NLRC,G.R.No.148372,June
framework of analysis, which would take into 27,2005)
consideration the totality of circumstances
surrounding the true nature of the relationship
Q: What are the characteristics of probationary
between the parties. This is especially appropriate in
employment?
this case where there is no written agreement or

termsofreferencetobasetherelationshiponanddue
to the complexity of the relationship based on the A:
various positions and responsibilities given to the 1. Itisanemploymentforatrialperiod;
worker over the period of the latters employment. 2. Itisatemporaryemploymentstatusprior
(Franciscovs.NLRC,G.R.No.170087,Aug.31,2006) toregularemployment;
3. It arises through a contract with the
Q: What is the proper standard for economic followingelements:
dependence? a. The employee (Ee) must learn and
workataparticulartypeofwork
A: The proper standard is whether the worker is b. Such work calls for certain
dependent on the alleged employer for his qualifications
continuedemploymentinthatlineofbusiness c. Theprobationisfixed
d. The Er reserves the power to
c.Probationaryemployment terminateduringorattheendofthe
trialperiod
Q:Whatisprobationaryemployment? e. And if the Ee has learned the job to
the satisfaction of the Er, he
A:Employmentwheretheemployee(Ee),uponhis becomesaregularEe.
engagement:
Q: What is the period of probationary
1. Ismadetoundergoatrialperiod employment?
2. DuringwhichtheErdetermineshisfitness
toqualifyforregularemployment, A:GR:Itshallnotexceed6months.
3. Based on reasonable standards made
known to the Ee at the time of XPNs:
engagement.(Sec6,RuleI,BookVI,IRR) 1. Covered by an apprenticeship or
learnership agreement stipulating a
Note:TheservicesofanEewhohasbeenengaged differentperiod
on probationary basis may be terminated only for
66
LABORLAWTEAM:

2. Voluntary agreement of parties AccordingtoAlcirascomputation,sinceArt.13of

(especially when the nature of work theCivilCodeprovidesthat1monthiscomposed
requiresalongerperiod) of 30 days, 6 months totaling 180 days, then his
th
3. The Er gives the(Ee a second chance to 180 daywouldfallonNov.16,96makinghima
pass the standards set. (Mariwasa regular Ee before his termination. Is the
Manufacturing, Inc. v. Leogardo, Jr.,G.R. contentionofthepetitionerinthecomputationof
No.74246,Jan.26,1989) 6monthscorrect?
4. Whenthesameisrequiredbythenature
ofthework,e.g.theprobationaryperiod A: No, the computation of the 6month
set for professors, instructors and probationary period is reckoned from the date of
teachers is 3 consecutive years of appointment up to the same calendar date of the
th
satisfactory service pursuant to DOLE 6 monthfollowing.Inshort,sincethenumberof
ManualofRegulationsforPrivateSchools. daysineachparticularmonthwasirrelevant,Alcira
5. When the same is established by was still a probationary Ee when Middleby opted
companypolicy. nottoregularizehimonNov.20,1996.(Alcirav.
NLRC,G.R.No.149859,June9,2004)
Note:Periodofprobationshallbereckonedfromthe
datetheEeactuallystartedworking.(Sec.6[b],RuleI, Note: In Mitsubishi Motors v. Chrysler Phils. Labor
BookVI,IRR) Union,G.R.No.148738,June29,2004,theSCruledin
thiswise:
Afterthelapseoftheprobationaryperiod(6months),
Eebecomesregular. Applying Art. 13 of the Civil Code, the probationary
periodof6monthsconsistsofthe180days.Thisisin
ProbationaryEesmaybedismissedbeforeendofthe conformity with par.1, Art. 13 of the Civil Code. The
probationaryperiod. number of months in the probationary period, 6,
should then be multiplied by the number of days
Q: May the Er and Ee validly agree to extend the withinamonth,30;hence,theperiodof180days.As
probationaryperiodbeyond6months? clearly provided for the in last par. of Art. 13, in
computingaperiod,thefirstdayshallbeexcludedand
A: Yes. Such an extension may be lawfully agreed thelastdayincluded.Thus,the180dayscommenced
upon,despitetherestrictivelanguageofArt.281.A on May 27, 1996, and ended on Nov. 23, 1996. The
voluntary agreement extending the original terminationletterdatedNov.25,1996wasservedon
probationaryperiodtogivetheEeasecondchance ParasonlyonNov.26,1996.Hewas,bythenalreadya
regularEeofthecompanyunderArt.281oftheLC.
topasstheprobationstandardsconstitutesalawful

exception to the statutory limit. (Mariwasa
How to resolve the conflict between the Alcira and
Manufacturing,Inc.v.Leogardo,Jr.,G.R.No.74246, MitsubishiMotorscase
Jan.26,1989)
1. Statutory Construction The latter case
Note:Byvoluntarilyagreeingtosuchanextension,the prevails(MitsubishiMotors);or
Ee waived any benefit attaching to the completion of 2. Rule more favorable to the Ee use the
the period if he still failed to make the grade during computation which would amount to
the period of extension. (Mariwasa Mfg. Inc. v. Hon. grantingthesubjectEeregularemployment
Leogardo,G.R.No.74246,Jan.26,1989) status (based on Constitutional and
statutory provisions for the liberal
Q:Isdoubleorsuccessiveprobationallowed? interpretationoflaborlaws)

A: No. The evil sought to be prevented is to
Q:Whatisthepurposeoftheperiod?
discourage scheming employers from using the
system of double or successive probation to A: To afford the employer an opportunity to
circumvent the mandate of the law on observe the fitness of a probationary employee at
regularization and make it easier for them to work.
dismiss their employees. (Holiday Inn Manila v.
NLRC,G.R.No.109114,Sep.14,2003) Q: In what instances is a probationary employee
(Ee)deemedaregularEe?
Q: Middleby Phils. Corp. hired Alcira as engg
support services supervisor on a probationary A:
basis for 6 months. Apparently unhappy with 1. If he is allowed to work after a
Alciras performance, Middleby terminated his probationaryperiod.(Art.281)
services. Alcira contends that he was already a
regular employee (Ee) when he was terminated.
67

2. If no standards, under which he will A: Yes, there is no dispute that as a probationary

qualify as a regular Ee, are made known employee (Ee), Cruz had but limited tenure.
to him at the time of his engagement. Althoughonprobationarybasis,however,Cruzstill
(Sec.6[d],RuleI,BookVI,IRR) enjoys the constitutional protection on security of
tenure.Duringhistenureofemployment,therefore,
Q: What are the grounds for terminating or before his contract expires, Cruz cannot be
probationaryemployment? removedexceptforcauseasprovidedforbylaw.

A: WhatmakesCruzdismissalhighlysuspiciousisthat
1. Just/authorizedcauses it took place at a time when he needs only but a
2. WhenhefailstoqualifyasaregularEein day to be eligible as a regular Ee. That he is
accordance with reasonable standards competentfindssupportinhisbeingpromotedtoa
made known by the employer (Er) to the lead gardener in so short span of less than 6
Eeatthetimeofhisengagement(ICMCv. months. By terminating his employment or
NLRC,G.R.No.72222,Jan.30,1989) abolishing his position with but only one day
remaining in his probationary appointment, the
Note:WhileprobationaryEesdonotenjoypermanent hotel deprived Cruz of qualifying as a regular Ee
status, they are afforded the security of tenure with its concomitant rights and privileges. (Manila
protection of the Constitution. Consequently, they Hotel Corp. v. NLRC, G.R. No. L53453, Jan. 22,
cannot be removed from their positions unless for 1986)
cause. Such constitutional protection, however, ends
upon the expiration of the period stated in their
Q:ColegioSanAgustin(CSA)hiredtheGelaJoseas
probationarycontractofemployment.Thereafter,the
a grade school classroom teacher on a
parties are free to renew the contract or not. (CSA v.
probationary basis for SY 84 85. Her contract
NLRC,G.R.No.87333,Sep.6,1991)
wasrenewedforSYs8586and8687.OnMar.
Q: What are the limitations on the employers 24, 87, the CSA wrote theGela that "itwouldbe
(Ers) power to terminate a probationary in the best interest of the students and their
employmentcontract? families that she seek employment in another
school or business concern for next school year".
A: Notwithstandingthesaidnotice,theCSAstillpaid
1. The power must be exercised in Gela her salary for April 15 to May 15, 1987. On
accordancewiththespecificreqtsofthe April 6, 87, Gela wrote the CSA and sought
contract reconsideration but she received no reply.
2. If a particular time is prescribed, the Thereafter, she filed a complaint for illegal
terminationmustbewithinsuchtimeand dismissal.WasGelaillegallydismissed?
if formal notice is required, then that
formmustbeused A: No. The Faculty Manual of CSA underscoresthe
3. The Ers dissatisfaction must be real and completionof3yearsofcontinuousserviceatCSA
in good faith, not feigned so as to before a probationary teacher acquires tenure.
circumventthecontractorthelaw Hence,theGelacannotclaimanyvestedrighttoa
4. Theremustbenounlawfuldiscrimination permanent appointment since she had not yet
inthedismissal achieved the prerequisite 3year period under the
Manual of Regulation for Private Schools and the
Note: The probationary employee is entitled to FacultyManualofCSA.
proceduraldueprocesspriortodismissalfromservice.
In the instant case where the CSA did not wish to
Q:R.L. CruzwasemployedasgardenerbyManila renew the contract of employment for the next
HotelonprobationstatuseffectiveSep.22,76. schoolyear,theGelahasnogroundtoprotest.She
The appointment signed by Cruz provided for a 6 was not illegally dismissed. Her contract merely
monthprobationaryperiod.OnMar.20,77,ora expired.(CSAv.NLRC,G.RNo.87333,Sep.6,1991)
day before the expiration of the probationary
period, Cruzs was promoted to lead gardener Q: During their probationary employment, 8 Ees
position. On the same day Cruz position was wereberatedandinsultedbytheirsupervisor.In
abolished by Manila Hotel allegedly due to protest,theywalkedout.Thesupervisor shouted
economic reverses or business recession, and to at them to go home and nevertoreportbackto
salvage the enterprise from imminent danger of work. Later, the personnel manager required
collapse.WasCruzillegallydismissed? themtoexplainwhytheyshouldnotbedismissed
from employment for abandonment and failure
toqualifyforthepositionsappliedfor.Theyfiled
68
LABORLAWTEAM:

a complaint for illegal dismissal against their Er. Regular employment does not mean permanent
AsaLA,howwillyouresolvethecase? employment.AprobationaryEebecomesaregularEe
after 6 months. A regular Ee may only be terminated
A: AsaLAIwillresolvethecaseinfavorofthe 8 forjust/authorizedcauses.
probationary Ees due to theff::
The practice of entering into employment contracts
1. Probationary Ees also enjoy security of which would prevent the workers from becoming
tenure. (Biboso v. Victoria Milling, G.R. regular should be struck down as contrary to public
No. L44360,Mar.31,1977) policy and morals. (Universal Robina Corp. v.
2. InallcasesinvolvingEesonprobationary Catapang,G.R.No.164736,Oct.14,2005)
status, the Er shall make known to the
Eeatthetimeheishired,the standards (a)Reasonableconnectionrule
by which he will qualify for the
positionsappliedfor. Q: What is the test to determine regular
3. The filing of the complaint for illegal employment?
dismissal effectively negates the Ers
A:
theory of abandonment. (Rizada v.
1. The primary standard of determining
NLRC,G.R. No.96982,Sep.21,1999)
regular employment is the reasonable
4. The order togo homeandnottoreturn
connection between the particular
to work constitutes dismissal from
activity performed by the employee (Ee)
employment.
to the usual trade or business of the
5. The8probationaryEeswereterminated
employer.Thetestiswhethertheformer
without just cause and without due
is usually necessary or desirable in the
process
usualbusinessortradeoftheEr.(DeLeon

v.NLRC,G.R.No.70705,Aug.21,1989)
In view of the foregoing, I will order

reinstatement to their former positions without
Note:Theconnectioncanbedeterminedby
loss of seniority rights with full backwages, plus
considering the nature of the work
damagesandattysfees.(2006BarQuestion) performedanditsrelationtotheschemeof
the particular business or trade in its
d.Kindsofemployment entirety. (Highway Copra Traders v. NLRC,
G.R.No.108889,July30,1998)
(1)Regularemployment
Q:Whatisregularemployment? 2. Also,theperformanceofajobforatleast
A: a year is sufficient evidence of the jobs
1. An employment shall be deemed to be necessity if not indispensability to the
regularwheretheEehasbeenengagedto business. This is the rule even if its
perform activities which are usually performance is not continuous and
necessary or desirable in the usual merely intermittent. The employment is
businessortradeoftheEr,theprovisions considered regular, but only with respect
of written agreements to the contrary to such activity and while such activity
notwithstanding and regardless of the exists. (Universal Robina Corp. v.
oralagreementsoftheparties.(Sec.5[a], Catapang, G.R. No. 164736, Oct. 14,
RuleI,BookVI,IRR) 2005).

2. Any Ee who has rendered at least one Note: The status of regular employment attaches to
year of service, whether such service is thecasualEeonthedayimmediatelyaftertheendof
continuousorbroken,shallbeconsidered hisfirstyearofservice.Thelawdoesnotprovidethe
aregularEewithrespecttotheactivityin qualificationthattheEemustfirstbeissuedaregular
which he is employed and his appointmentormustfirstbeformallydeclaredassuch
employment shall continue while such before he can acquire a regular status. (Aurora Land
activity exists. (Sec. 5 [b], Rule I, Book VI, ProjectsCorp.v.NLRC,G.R.No.114733,Jan.2,1997)
IRR)
Q:Isthemodeofcompensationdeterminativeof
Note:Regularizationisnotamanagementprerogative; regularemployment?
rather,itisthenatureofemploymentthatdetermines
it.Itisamandateofthelaw.(PALv.Pascua,G.R.No. A:No,whiletheEesmodeofcompensationwason
143258,Aug.15,2003) a per piece basis the status and nature of their
employment was that of regular Ees. (Labor
69

CongressofthePhilsv.NLRC,G.R.No.123938,May were directly related to the business of the

21,1998) Tanjangcosaslessorsofresidentialandapartment
bldgs. Moreover, such a continuing need for his
Q:WhendoesArt.280notapply? servicesbytheTanjangcosissufficientevidenceof
thenecessityandindispensabilityofhisservicesto
A:ItdoesnotapplyincaseofOFWs. theirbusinessortrade.

Note: Seafarers cannot be considered as regular Ees. DaguishouldlikewisebeconsideredaregularEeby
Their employment is governed by the contracts they the mere fact that he rendered service for the
sign everytime they are hired and their employment Tanjangcos for more than one year, that is,
terminated when the contract expires. Their beginning 53 until 82, under Doa Aurora; and
employment is fixed for a certain period of time. then from 1982 up to June 8, 91 under the
(Ravago v. Esso Eastern Maritime Ltd., G.R. No. daughter,foratotalof29and9yearsrespectively.
158324,Mar.14,2005) Owing to Dagui's length of service, he became a
regular Ee, by operation of law, one year after he
Q: Moises was employed by La Tondea at the was employed in 53 and subsequently in 82.
maintenance section of its Engg Dept paid on a (Aurora Land Projects Corp. v. NLRC, G.R. No.
dailybasisthroughpettycashvouchers.Hiswork 114733,Jan.2,1997)
consistedmainlyofpaintingcompanybuildingand
equipment and other odd jobs relating to Q: A total of 43 Ees who are deafmutes were
maintenance.Afteraserviceofmorethan1year, hired and rehired on various periods by Far East
Moises requested that he be included in the BankandTrustCo.asmoneysortersandcounters
payroll of regular workers, instead of being paid through a uniformly worded agreement called
throughpettycashvouchers.InsteadLaTondeas EmploymentContractforHandicappedWorkers.
dismissed Moises and claimed that Moises was The company disclaimed that these Ees were
contracted on a casual basis specifically to paint regular Ees and maintained among others that
certaincompanybuildingsandthatitscompletion theyareaspecialclassofworkers,whowerehired
terminated Moises employment. Can Moises be temporarily under a special employment
consideredasaregularEe? arrangement which was a result of overtures
made by some civic and political personalities to
A: Yes, the law demands that the nature and theBank.ShouldthedeafmuteEesbeconsidered
entirety of the activities performed by the Ee be asregularEes?
considered. Here, the painting and maintenance
work given Moises manifests a treatment A: Yes. The renewal of the contracts of the
consistent with a maintenance man and not just a handicappedworkersandthehiringofothersleads
painter, for if his job was only to paint a building to the conclusion that their tasks were beneficial
there would be no basis for giving him other work andnecessarytothebank.Italsoshowsthatthey
assignmentsinbetweenpaintingactivities. were qualified to perform the responsibilities of
theirpositions;theirdisabilitydidnotrenderthem
It is not tenable to argue that the painting and unqualifiedorunfitforthetasksassignedtothem.
maintenance work of Moises are not necessary in
La Tondeas business of manufacturing liquors; The Magna Carta for Disabled Persons mandates
otherwise, there would be noneedfor the regular that a qualified disabled Ee should be given the
maintenancesectionofthecompanysenggdept. same terms and conditions of employment as a
(DeLeonv.NLRC,G.R.No.70705,Aug.21,1989) qualifiedablebodiedperson.ThefactthattheEes
were qualified disabled persons necessarily
Q: Honorio Dagui was hired by Doa Aurora removestheemploymentcontractsfromtheambit
Suntay Tanjangco in 1953 to take charge of the ofArt.80.SincetheMagnaCartaaccordsthemthe
maintenance and repair of the Tanjangco rights of qualified ablebodied persons, they are
apartments and residential bldgs. He was to thus covered by Art. 280 of the LC. (Bernardo v.
perform carpentry, plumbing, electrical and NLRC,G.R.No.122917,July12,1999)
masonry work. Upon the death of Doa Aurora
Tanjangcoin82herdaughter,TeresitaTanjangco Q: CocaCola Bottlers Phils, Inc., (CCBPI) engaged
Quazon, took over the administration of all the the services of the workers as sales route
Tanjangco properties, and dismissed Dagui. Is helpersforaperiodof5months.After5months,
HonorioDaguiaregularemployee(Ee)? theworkerswereemployedbythecompanyona
daytoday basis. According to the company, the
A: Yes. The jobs assigned to Dagui as maintenance workerswerehiredtosubstituteforregularroute
man, carpenter, plumber, electrician and mason helperswheneverthelatterwouldbeunavailable
70
LABORLAWTEAM:

or when there would be an unexpected shortage (2)ProjectEmployment

of manpower in any of its work places or an
unusually high volume of work. The practice was Q:Whatisprojectemployment?
fortheworkerstowaiteverymorningoutsidethe
gates of the sales office of the company, if thus A: Employment that has been fixed for a specific
hired,theworkerswouldthenbepaidtheirwages project or undertaking the completion for which
at the end of the day. Should the workers be hasbeendeterminedatthetimeofengagementof
consideredasregularemployees(Ees)ofCCBPI? the employee (Ee). (Sec.5 [a], Rule I, Book VI, IRR).
The period is not the determining factor, so that
A:Yes,therepeatedrehiringoftheworkersandthe eveniftheperiodismorethan1year,theEedoes
continuing need for their services clearly attest to notnecessarilybecomeregular.
the necessity or desirability of their services in the
regular conduct of the business or trade of the Note: Where the employment of a project Ee is
company.Thefactthattheworkershaveagreedto extended long after the supposed project has been
be employed on such basis and to forego the finished, the Ees are removed from the scope of
protection given to them on their security of projectEesandconsideredasregularEes.
tenure,demonstratenothingmorethantheserious
Repeated hiring on a projecttoproject basis is
problem of impoverishment of so many of our
considerednecessaryanddesirabletothebusinessof
peopleandtheresultingunevennessbetweenlabor
theEr.TheEeisregular(Maraguinotv.NLRC,G.R.No.
and capital. (Magsalin & CocaCola v. N.O.W.M., 120969,Jan.22,1998).However,repeatedhiringdoes
G.R.No.148492,May9,2003) not necessarily mean regular employment. (Filipinas
PreFabricated Building Systems (FILSYSTEMS), Inc. v.
Q: Metromedia Times Corp. entered, for the fifth Puente,G.R.No.153832,.March18,2005)
time, into an agreement with Efren Paguio,
appointing him to be an account executive of the (a)Indicatorsofprojectemployment
firm. He was to solicit advertisements for The
ManilaTimes,.Thewrittencontractbetweenthe Q: What are the Indicators of Project
parties provided that, You are not an Ee of the Employment?
Metromedia Times Corp. nor does the company
have any obligations towards anyone you may A: Either one or more of the following
employ, nor any responsibility for your operating circumstances,amongothers,maybeconsideredas
expenses or for any liability you may incur. The indicatorsthatanemployeeisaprojectemployee.
only rights and obligations between us are those (Hanjinv.Ibaez,G.R.No.170181,June26,2008)
setforthinthisagreement.Thisagreementcannot
be amended or modified in any way except with a. The duration of the specific/identified
the duly authorized consent in writing of both undertaking for which the worker is
parties. Is Efren Paguio a regular employee of engagedisreasonablydeterminable
MetromediaTimesCorporation?
b. Such duration, as well as the specific
A: Yes, he performed activities which were work/service to be performed, is defined
necessary and desirable to the business of the Er, in an employment agreement and is
and that the same went on for more than a year. madecleartotheemployeeatthetimeof
He was an account executive in soliciting hiring.
advertisements,clearlynecessaryanddesirable,for
the survival and continued operation of the Note: Absent any other proof that the
businessofthecorp. project employees were informed of their
statusassuch,itwillbepresumedthatthey
The corporation cannot seek refuge under the areregularemployees.
terms of the agreement it has entered into with
EfrenPaguio.Thelaw,indefiningtheircontractual c. The work/service performed by the
relationship,doesso,notnecessarilyorexclusively employee is in connection with the
uponthetermsoftheirwrittenororalcontract,but particular project/undertaking for which
alsoonthebasisofthenatureoftheworkofEfren heisengaged
has been called upon to perform. A stipulation in
an agreement can be ignored as and when it is d. The employee, while not employed and
utilized to deprive the Ee of his security of tenure. awaiting engagement, is free to offer his
(Paguiov.NLRC,G.R.No.147816,May9,2003) servicestoanyotheremployer

71

e. Theterminationofhisemploymentinthe projects.Thesefactsarethebasisinconsideringthem
particularproject/undertakingisreported as regular Ees of the company. (Maraguinot v. NLRC,
to the Department of Labor and G.R.No.120969,Jan.22,1998)
Employment Regional Office having
jurisdiction over the workplace within 30 Members of a work pool from which a construction
days following the date of his separation companydrawsitsprojectEes,ifconsideredEesofthe
constructioncompanywhileintheworkpool,arenon
from work, using the prescribed form on
projectEesorEesforanindefiniteperiod.Iftheyare
employees
employedinaparticularproject,thecompletionofthe
termination/dismissal/suspensions
projectoranyphasethereofwillnotmeanseverance
of ErEe relationship. Unless the workers in the work
f. An undertaking in the employment poolarefreetoleaveanytimeandoffertheirservices
contract by the employer to pay to other Ers. (L.T. Datu & Co., Inc. v. NLRC, G.R. No.
completion bonus to the project 113162,Feb.9,1996)
employee as practiced by most
constructioncompanies Q:Whatisthedaycertainrule?

Q:Whataretherequisitesindeterminingwhether A:Itstatesthataprojectemploymentthatendson
anemployee(Ee)isaprojectEe? a certain date does not end on an exact date but
uponthecompletionoftheproject.
A:
1. TheprojectEewasassignedtocarryouta Q:AreprojectEesentitledtoseparationpay?
specificprojectorundertaking,and
2. The duration and scope of which were A: GR: Project Ees are not entitled to separation
specifiedatthetimetheEewasengaged pay if they are terminated as a result of the
for that project. (Imbuido v. NLRC, G.R. completionproject.
No.114734,Mar.31,2000)
3. The Ee must have been dismissed every XPN: If the projects they are working on have
aftercompletionofhisprojectorphase notyetbeencompletedwhentheirservicesare
4. Report to the DOLE of Ees dismissal on terminated; project Ees also enjoy security of
account of completion of contract (Policy tenure during the limited time of their
Inst.No.20;D.O.19[1997]) employment. (De Ocampo v. NLRC, G.R. No.
81077,June6,1990)
Q:Whatisaproject?
Q: Roger Puente was hired by Filsystems, Inc.,
A: A "project" has reference to a particular job or initiallyasaninstallerandeventuallypromotedto
undertaking that may or may not be within the mobile crane operator, and was stationed at the
regular or usual business of the Er. In either case, companys premises. Puente claimed in his
the project must be distinct, separate and complaint for illegal dismissal, that his work was
identifiable from the main business of the Er, and continuousandwithoutinterruptionfor10years,
its duration must be determined or determinable and that he was dismissed from his employment
(PALv.NLRC,G.R.No.125792,Nov.9,1998). without any cause. Filsystems on its part averred
that Puente was a project Ee in the companys
Q: Can a project employee(Ee) or a member of a variousprojects, and that after thecompletion of
workpoolacquirethestatusofaregularEe? eachproject,hisemploymentwasterminated,and
suchwasreportedtotheDOLE.IsRogerPuentea
A:Yes,whenthefollowingconcur: regularEe?

1. There is a continuous rehiring of project A: No, Puente is a project Ee. The contracts of
Eesevenaftercessationofaproject;and employment of Puente attest to the fact that he
2. The tasks performed by the alleged washiredforspecificprojects.Hisemploymentwas
project Ee are vital, necessary and coterminouswiththecompletionoftheprojectsfor
indispensable to the usual business or whichhehadbeenhired.Thosecontractsexpressly
tradeoftheemployer(Er). providedthathistenureofemploymentdepended
on the duration of any phase of the project or on
Note: The length of time during which the Ee was the completion of the construction projects.
continuously rehired is not controlling, but merely Furthermore, the company regularly submitted to
serves as a badge of regular employment. Enero and the labor dept reports of the termination of
Maraguinot have been employed for a period of not services of project workers. Such compliance with
lessthan2yearsandhavebeeninvolvedinatleast18
72
LABORLAWTEAM:

the reportorial reqt confirms that Puente was a duration of the season does not detract from
projectEe. considering them in regular employment. Seasonal
workers who are called to work from time to time
ThemererehiringofPuenteonaprojecttoproject and are temporarily laid off during offseason are
basisdidnotconferuponhimregularemployment not separated from service in that period, but
status.Thepracticewasdictatedbythepractical merelyconsideredonleaveuntilreemployed.
consideration that experienced construction
workersaremorepreferred.Itdidnotchangehis IftheEehasbeenperformingthejobforatleasta
status as a project Ee. (Filipinas PreFabricated year,eveniftheperformanceisnotcontinuousand
Building Systems (FILSYSTEMS), Inc. v. Puente, G.R. merely intermittent, the law deems repeated and
No.153832,Mar.18,2005) continuing need for its performance as sufficient
evidence of the necessity if not indispensability of
(3)Seasonalemployment that activity to the business. Hence, the
employment is considered regular, but only with
Q:Whatisseasonalemployment? respect to such activity and while such activity
exists. (Benares v. Pancho, G.R. No. 151827, April
A: Employment where the job, work or service to 29,2005)
be performed is seasonal in nature and the
employment is for the duration of the season. Q: Carlito Codilan and Maximo Docena had been
(Sec.5[a],RuleI,BookVI,IRR) working for the rice mill for 25 years, while
Eugenio Go, Teofilo Trangria and Reynaldo Tulin
An employment arrangement where an employee have been working for 22, 15, and 6 years
(Ee) is engaged to work during a particular season respectively. The operations of the rice mill
onanactivitythatisusuallynecessaryordesirable continue to operate and do business throughout
intheusualbusinessortradeoftheemployer(Er). the year even if there are only two or three
harvest seasons within the year. This seasonal
Note:ForseasonalEes,theiremploymentlegallyends harvesting is the reason why the company
upon completion of the project or the season. The considers the workers as seasonal Ees. Is the
termination of their employment cannot and should
companycorrectinconsideringtheEesasseasonal
not constitute an illegal dismissal. (Mercado v. NLRC,
Ees?
G.R.No.79869,Sept.5,1991)

One year duration on the job is pertinent in deciding A:No,thefactisthatbigricemillssuchastheone
whetheracasualEehasbecomeregularornot,butit ownedbythecompanycontinuetooperateanddo
isnotpertinenttoaseasonalorprojectEe.Passageof businessthroughouttheyearevenifthereareonly
time does not make a seasonal worker regular or twoorthreeharvestseasonswithintheyear.Itisa
permanent.(Mercadov.NLRC,G.R.No.78969,Sep.5, common practice among farmers and rice dealers
1991) tostoretheirpalayandtohavethesamemilledas
the need arises. Thus, the milling operations are
During offseason, the relationship of ErEe is not not seasonal. Finally, considering the number of
severed;theseasonalEeismerelyconsideredonLOA years that they have worked, the lowest being 6
without pay. Seasonal workers who are repeatedly years,theworkershavelongattainedthestatusof
engaged from season to season performing the same regular Ees as defined under Art. 280. (Tacloban
tasks are deemed to have acquired regular SagkahanRiceMillv.NLRC,G.R.No.73806,Mar.21,
employment.(HaciendaFatimav.NationalFederation 1990)
of Sugarcane WorkersFood and General Trade, G.R.
No.149440,Jan.28,2003)
(4)Casualemployment

Q:AreseasonalEesentitledtoseparationpay? Q:Whatiscasualemployment?

A: When the business establishment is sold which A:
effectively terminates the employment of the 1. It is an employment where the Ee is engaged in
seasonal Ees, the latter would be entitled to an activity which is not usually necessary or
separationpay. desirable in the usual business or trade of the Er,
provided: such employment is not project nor
Q:Canseasonalemployees(Ees)beconsideredas seasonal(Art.281).
regularEes?
Note:Butdespitethedistinctionbetweenregular
A: Yes. The fact that seasonal Ees do not work and casual employment, every Ee shall be
continuously for one whole year but only for the entitled to the same rights and privileges, and
73

shall be subject to the same duties as may be A:

grantedbylawtoregularEesduringtheperiodof CASUALor
theiractualemployment. PROJECTWORKER CONTRACTUAL
WORKER
2.AnEeisengagedtoperformajob,workorservice Used to designate
whichismerelyincidentaltothebusinessoftheEr, workers in the
andsuchjob,workorserviceisforadefiniteperiod construction industry,
Generic term used to
made known to the Ee at the time of engagement hired to perform a
designate any worker
(Sec.5[b],RuleI,BookVI,IRR) specificundertakingfor
covered by a wrtitten
a fixed period, co
contract to perform a
Note:Ifhehasrenderedatleast1yearofservice, terminuswithaproject
specificundertakingfor
whethersuchserviceiscontinuousorbroken,he or phase thereof
afixedperiod
is considered as regular Ee with respect to the determinedatthetime
activity in which he is employed and his of the engagement of
employment shall continue while such activity theEe
exists. Tobeconsideredatrue
project worker, it is
ACasualEeisonlycasualfor1year,anditisthe required that a
passage of time that gives him a regular status. termination report be
(KASAMMACCOv.CA,G.R.No.159828,April19, submitted to the
There is no such
2006) nearest public
requirement for an
employment office
ordinary contractual
The purpose is to give meaning to the uponthecompletionof
worker
constitutionalguaranteeofsecurityoftenureand the construciton
righttoselforganization.(Mercadov.NLRC,G.R. project. (Aurora Land
No.79868,Sep.5,1991) Projects Corp. v. NLRC,
G.R. No. 114733, Jan.
Q: Yakult Phils. is engaged in the manufacture of 2,1997)
cultured milk. The workers were hired to cut
cogon grass and weeds at the back of the factory
building used by Yakult. They were not required (5)Fixedtermemployment;Requisitesforvalidity
toworkonfixedscheduleandtheyworkedonany
day of the week on their own discretion and Q:Whatisthenatureoftermemployment?
convenience. The services of the workers were
A: A contract of employment for a definite period
terminated by Yakult on less than 1year after.
terminates by its own terms at the end of such
MaycasualortemporaryEesbedismissedbythe
period. (Brent School v. Zamora, G.R. No. L48494,
Er before the expiration of the 1year period of
Feb.5,1990)
employment?

A:Yes,theusualbusinessortradeofYakultPhils.is Q: What is the decisive determinant in term
the manufacture of cultured milk. The cutting of employment?
the cogon grasses in the premises of its factory is
hardly necessary or desirable in the usual business A: It is the day certain agreed upon by the parties
oftheYakult. for the commencement and the termination of
theiremploymentrelation.
TheworkersarecasualEes.Nevertheless,theymay
be considered regular Ees if they have rendered Q:Whatisafixedtermemployment?
services for at least 1 year. When, as in this case,
theyweredismissedfromtheiremploymentbefore A: It is an employment where a fixed period of
the expiration of the 1year period they cannot employmentwasagreedupon:
lawfully claim that their dismissal was illegal.
(Capule, et al. v. NLRC, G.R. No. 90653, Nov. 12, 1. Knowinglyandvoluntarilybytheparties,
1990) 2. Without any force, duress or improper
pressure being brought to bear upon the
Q: How is the project worker different from a employee(Ee)and
casualorcontractualworker?Brieflyexplainyour 3. Absent any other circumstances vitiating
answers. hisconsent,or
4. WhereitsatisfactorilyappearsthattheEr
andEedealtwitheachotheronmoreor
less equal terms with no moral
74
LABORLAWTEAM:

dominance whatever being exercised by Q:DoestheReasonableConnectionRuleapplies

the former over the latter. (Brent School, in fixed term employment for a fixed term
Inc. v. Zamora, G.R. No. 48494, Feb. 5, employee be eventually classified as regular
1990) employee?

Note:AfixedperiodEedoesnotbecomearegularEe A: No. It should be apparent that this settled and
becausehisemploymentiscoterminuswithaspecific familiar notion of a period, in the context of a
periodoftime. contractofemployment,takesnoaccountatallof
the nature of the duties of the employee; it has
Ee hired on a fixedterm is regular if job is necessary absolutely no relevance to the character of his
and desirable to the business of Er. (Philips duties as being usually necessary and desirable to
Semiconductor v. Fadriquela, G.R. No. 141717, April theusualbusinessoftheemployer,ornot.
2004)

Q: Dean Jose and other employees are holding
Q: Is term employment a circumvention of the
administrativepositions asdean,dept heads and
lawonsecurityoftenure?
institutesecretaries.Intheimplementationofthe

Reorganization, Retrenchment and Restructuring
A: No, it is not a circumvention of the law if it
program effective Jan. 1, 1984, Dean Jose and
followstherequisiteslaiddownbytheBrentruling.
other employees were retired but subsequently
(Romaresv.NLRC,G.R.No.122327,Aug.19,1998)
rehired.Theirappointmenttotheiradministrative

positions as dean, dept heads and institute
Q: Rene was hired as an athletic director in
secretaries had been extended by the company
ChristOmarDivivaSchoolforaperiodoffiveyears.
fromtimetotimeuntiltheexpirationoftheirlast
As such, he oversees the work of coaches and
appointment on May 31, 1988. Were Dean Jose
related staff involved in intercollegiate or
andotheremployeesillegallydismissed?
interscholastic athletic programs. However, he

wasnotrehiredupontheexpirationofsaidperiod.
A:No.Petitionersweredismissedbyreasonofthe
Rene questions his termination alleging that he
expiration of their contracts of employment.
was a regular employee and could not be
Petitioners'appointmentsasdean,deptheadsand
dismissed without valid cause. Is he a regular
institutesecretarieswereforfixedtermsofdefinite
employee?
periods as shown by their respective contracts of

employment, which all expired on the same date,
A: No. Rene was not a regular employee but an
May 31, 1988. The validity of employment for a
employeeunderafixedtermcontract.Whileitcan
fixed period has been acknowledged and affirmed
be said that the services he rendered were usually
bytheSC.(Blancaflorv.NLRC,G.R.No.101013,Feb.
necessary and desirable to the business of the
2,1993)
school, it cannot also be denied that his

employmentwasforafixedtermoffiveyears.The
e.Jobcontractingandlaboronlycontracting
decisive determinant in fixed term employment
should not be the activities that the employee is Q:Whenistherejobcontracting?
calledupontoperform,butthedaycertainagreed
upon by the parties for the commencement and A:Specifically,thereisjobcontractingwhere:
termination of their employment relation (Brent
SchoolInc.v.Zamora,G.R.No.48494,Feb.5,1990). 1. The contractor carries on an
independent business and
Q: In the above mentioned facts, will Rene undertakes thecontract work on his
automatically become a regular employee if he is own account under his own
rehired by the school for another definite period responsibility according to his own
ofemployment? manner and method, free from the
controlanddirectionofhisemployer
A: No. The decisive determinant in term or principal in all matters connected
employmentisthedaycertainagreeduponbythe with the performance of the work
parties for the commencement and termination of exceptastotheresultsthereof;and
their employment relationship, a day certain being
understoodtobethatwhichmustnecessarilycome, 2. The contractor has substantial
although it may not be known when and not capital or investment in the form of
whethertheworkisusuallynecessaryanddesirable tools, equipment, machineries, work
tothebusinessoftheemployer. premises, and other materials which

75

are necessary in the conduct of his Phils.,Inc.,G.R.No.179807,July31,2009,

business. J.CarpioMorales)

Q:Whenistherelaboronlycontracting? Q:Whatarethefactorstoconsiderindetermining
whethercontractoriscarryingonanindependent
A: A person is deemed to be engaged in labor business?
onlycontractingwhere:
A:
1. The person supplying workers to an 1. Natureandextentofwork
employer does not have substantial 2. Skillrequired
capital or investment in the for of 3. Termanddurationoftherelationship
tools, equipment, machineries, work 4. Right to assign the performance of
premises,amongothers;and specifiedpiecesofwork
5. Controlandsupervisionofworker
2. Theworkersrecruitedandplacedby 6. Power of employer to hire, fire and pay
suchpersonareperformingactivities wages
which are directly related to the 7. Controlofthepremises
principal business of such employer. 8. Duty to supply premises, tools,
(Baguio v. NLRC, G.R. No. 7900408, appliances,materialsandlabor
Oct.4,1991) 9. Mode, manner and terms of payment.
(Vinoya v. NLRC, G.R. No. 126286, Feb 2,
Q: What is a permissible job contracting or 2000)
subcontracting?
Note:Individualswithspecialskills,expertiseortalent
A: It refers to an arrangementwhereby aprincipal enjoy the freedom to offer their services as
agrees to farm out with a contractor or independentcontractors.Anindividuallikeanartistor
subcontractor the performance of a specific job, talent has a right to render his services without any
work,orservicewithinadefiniteorpredetermined one controlling the means and methods by which he
period, regardless of whether such job, work or, performshisartorcraft.(Sonzavs.ABSCBN,G.R.No.
service is to be performed or completed within or 138051,June10,2004)
outsidethepremisesoftheprincipal.
Q: Who are the parties in contracting and
Q: What are the conditions that must be met in subcontracting?
order to be considered as permissible job
contractingorsubcontracting? A:
1. Contractor/subcontractor Refers to any
A:Thefollowingconditionsmustbemet: person engaged in a legitimate contracting or
subcontractingarrangement.
1. The contractor carries on a distinct and
independentbusinessandundertakesthe 2. Contractual Ee One who is employed by a
contract work on his account under his contractor or subcontractor to perform or
own responsibility according to his own completeajob,work,orservicepursuanttoan
manner and method, free from the arrangement between the latter and a
control and direction of his employer or principal.(D.O.1802)
principalinallmattersconnectedwiththe
performanceofhisworkexceptastothe 3. PrincipalAnyErwhoputsoutorfarmsouta
resultsthereof; job, service, or work to a contractor or
subcontractor.
2. The contractor has substantial capital or
investment;and Q: Describe the relationship arising from
contractualarrangements.
3. Theagreementbetweentheprincipaland
contractor or subcontractor assures the A: There is a trilateral relationship between the
contractual employees entitlement to all principal, contractor and Ee. There exists a
labor and occupational safety and health contractual relationship between the principal and
standards, free exercise of the right to thecontractororsubcontractortoitsEes.
selforganization, security of tenure, and
Q:WhataretherightsofacontractualEe(CEe)?
socialwelfarebenefits.(Gallegov.BAYER

76
LABORLAWTEAM:

A: They shall be entitled to all the rights and A: The principal shall be solidarily liable with the
privilegesduetoaregularEeasprovidedintheLC, contractor in the event of any violation of any
asamendedtoincludetheff: provision of the LC, including the failure to pay
wages. This will not prevent the principal from
1. Safeandhealthfulworkingconditions claimingreimbursementfromthecontractor.
2. ServiceIncentiveLeave,restdays,OTpay,
holiday pay, 13th month pay and Q: What does substantial capital or investment
separationpay mean?
3. Socialsecurityandwelfarebenefits;
4. Selforganization, CBA and peaceful A: It refers to the capital stocks and subscribed
concertedactions capitalization in case of corporations, tools,
5. Securityoftenure(Sec.8,DO1802) equipments, implement, machineries and work
premises, actually and directly used by the
Q: What are the effects of termination of CEe to contractor or subcontractor in the performance or
separationpayandotherbenefits? completion of the job, work or service contracted
out.(D.O.1802)
A:
1. If prior to the expiration of the Note:Thelawdoesnotrequirebothsubstantialcapital
employment contract between the and investment in the form of tools, equipments,
principal and the contractor or machineries, etc. This is clear from the use of
conjunctionor.Ifthecontentionwastorequirethe
subcontractor The right of CEe to
contractor to prove that he has both capital and
separation pay or other related benefits
requisite investment, then the conjunction and
shall be governed by the applicable laws
should have been used. (Virginia Neri v. NLRC, G.R.
and jurisprudence on termination of No.97008,July21,1993)
employment
Q:Whatdoestherighttocontrolmean?
2. If the termination results from the
expiration of the contract between the A: It refers to the right reserved to the person for
principal and the contractor or whom the services of the contractual workers are
subcontractor The Ee shall not be performed, to determine not only the end to be
entitled to separation pay. However, this achieved, but also the manner and means to be
isw/oprejudicetocompletionbonusesor usedinreachingthatend.(D.O.1802)
other emoluments including retirement
pay as may be provided by law or in the Q:SMCandSunflowerCooperativeenteredintoa
contract between the principal and the 1yr Contract of Services, to be renewed on a
contractor. month to month basis until terminated by either
party. Pursuant to the contract, Sunflower
Q:Whenistheprincipaldeemedtheemployerof engagedprivaterespondentstorenderservicesat
thecontractualemployee? SMCs Bacolod Shrimp Processing Plant. The
contract was deemed renewed by the parties
A:Where: everymonthafteritsexpirationonJan.1,94and
respondentscontinuedtoperformtheirtasksuntil
1. Thereislaboronlycontracting Sep.11,95.InJuly95,privaterespondentsfileda
2. The contracting arrangement falls within complaintbeforetheNLRC,prayingtobedeclared
theprohibitedacts asregularEesofSMC,withclaimsforrecoveryof
all benefits and privileges enjoyed by SMC rank
Q:MaytheErorindirectErrequirethecontractor and file Ees. Respondents subsequently filed an
or subcontractor to furnish a bond equal to the AmendedComplainttoincludeillegaldismissalas
cost of labor under contract to answer for the additionalcauseofactionfollowingSMCsclosure
wages due to Ees in case the contractor or of its Bacolod Shrimp Processing Plant on which
subcontractorfailstopaythesame? resulted in the termination of their services. SMC
filed a Motion for Leave to File Attached Third
rd
A: Yes. The Er or indirect Er may require the PartyComplainttoimpleadSunfloweras3 Party
contractor or subcontractor to furnish a bond that Defendant. Are private respondents Ees of the
willanswerforthewagesduetotheEes. independent cooperative contractor (Sunflower)
oroftheSMC?
Q:Whatistheliabilityoftheprincipal?

77

A:ThecontentionofSMCholdsnobasis.Usingthe
substantial capital doctrine and the right of A:ItgivesrisetoconfusionastowhoistherealEr
control test, the Court found that the Sunflower of the workers and who is liable to their claims. It
had no substantial capital in the form of tools, alsodeprivesworkersoftheopportunitytobecome
equipment, machineries, work premises and other regularEes.
materials to qualify itself as an independent
contractor. The lot, building, machineries and all Q: How do we determine if one is engaged in
otherworkingtoolsutilizedbyprivaterespondents labor/jobonlycontracting?
in carrying out their tasks were owned and
provided by SMC. In addition, the shrimp A:Thetesttodeterminewhetheroneisajob/labor
processing company was found to have control of onlycontractingistolookintotheelementsofajob
the manner and method on how the work was contractor. If all the elements of a job contractor
done.Thus,thecomplainantsweredeemedEesnot arepresent,thenheisajobcontractor.Absentone
of the cooperative but of the shrimp processing of the elements for a job contractor, then the
company. Sincerespondents who were engaged in personisalaboronlycontractor.
shrimp processing performed tasks usually
necessary or desirable in the aquaculture business Note: It is the opinion of Dean Antonio H. Abad, Jr.
ofSMC,theyshouldbedeemedregularEesofthe thatthedecisivedeterminantinjobcontractingshould
not be the fact that the contracted workers are
latter and as such are entitled to all the benefits
performingactivitieswhicharedirectlyrelatedtothe
and rights appurtenant to regular employment.
mainbusinessof theprincipal,but that the principal
(SMC vs. Prospero Aballa, et al., G.R. No. 149011, has no right to control the conduct of the employees
June28,2005,J.CarpioMorales) astothemeansemployedtoachieveanend;notthe
character of the activities as being usually necessary
Q: What are the conditions before permitting job ordesirableintheusualbusinessoftheemployer.
contracting?
It cannot be gainsaid that the activities of the
A: contractedworkersarealwaysnecessaryordesirable;
1. The labor contractor must be duly even that they are directly related to the main
licensed by the appropriate Regional businessoftheprincipal.Theprimordialconsideration
OfficeoftheDOLE should be the control test. Hence, if the
2. There should be a written contract arrangement passes the control test, it is job
between the labor contractor and his contracting.Ifitfails,itislaboronlycontracting.
clientEr that will assure the Ees at least
the minimum labor standards and Q:Distinguishbetweenjobcontractingandlabor
benefitsprovidedbyexistinglaws. onlycontracting

Note:TheEesofthecontractororsubcontractorshall A:
be paid in accordance with the provisions of the LC. LABORONLY
JOBCONTRACTING
(Art.106) CONTRACTING
Liabilityislimited(shallbe
Q:Whatislaboronlycontracting? solidarily liable with Er
Liability extends to all
only when the Er fails to
those provided under
A:Itreferstoanarrangementwherethefollowing comply with reqts as to
theLaborStandardslaw
conditionsconcur: unpaid wages and other
laborstandardsviolations)
1. The person supplying workers to an Er Permissible, subject only
ProhibitedbyLaw
does not have substantial capital or tocertainconditions
investment in the form of tools, The contractor has
Has no substantial
equipment, machineries, work, premises, substantial capital or
capitalorinvestment
investment
amongothers,or
2. Evenifsuchpersonhassubstantialassets,
thesamearenotactuallyordirectlyused Q: SMPC entered into a contract with Arnold for
bytheEescontractedout; the milling of lumber as well as the hauling of
3. Theworkersrecruitedandplacedbysuch waste woodproducts. The company provided the
personareperformingactivitieswhichare equipment and tools because Arnold had neither
directly related to the principal business tools and equipment nor capital for the job.
ofsuchEr. Arnold, on the other hand, hired his friends,
relatives and neighbors for the job. Their wages
Q:Whyislaboronlycontractingprohibited? were paid by SMPC to Arnold, based on their
78
LABORLAWTEAM:

productionorthenumberofworkersandthetime A:SubstantiveDueProcessprovidesthegroundfor
used in certain areas of work. All work activities disciplinaryaction,i.e.correctiveorretributive
andscheduleswerefixedbythecompany.
(a)Justcauses
1.IsArnoldajobcontractor?Explainbriefly
Q: What are the just causes for termination (Art.
2.Whoisliablefortheclaimsoftheworkershired 282,LC)?
byArnold?Explainbriefly.
A:
A: 1. Serious misconduct or willful
1. No. In the problem given, Arnold did not disobediencebytheemployee(Ee)ofthe
have sufficient capital or investment for lawful orders of his employer (Er) or
one. For another, Arnold was not free representative in connection with his
from the control and direction of SMPC work
because all work activities and schedules 2. Gross and habitual neglect by the Ee of
were fixed by the company. Therefore, hisduties
Arnold is not a job contractor. He is 3. Fraud or willful breach by the Ee of the
engagedinlaboronlycontracting. trust reposed in him by his Er or duly
2. SMPC is liable for the claims of the organizedrepresentative
workers hired by Arnold. A finding that 4. Commission of a crime or offense by the
Arnold is a labor only contractor is Ee against the person of his Er or any
equivalenttodeclaringthatthereexistan immediate member of his family or his
ErEe relationship between SMPC and dulyauthorizedrepresentative.
workers hired by Arnold. This is so 5. Othercausesanalogoustotheforegoing
because Arnold is considered a mere
agent of SMPC (Lim v. NLRC, G.R. No. Note:Theburdenofprovingthattheterminationwas
124630, Feb. 19, 1999); 2002 Bar foravalidorauthorizedcauseshallrestontheEr.(Art.
Question) 277[b])

Q: What are the grounds for delisting of 1.SeriousMisconduct
contractorsorsubcontractors?
Q:Whatisseriousmisconduct?
A:
1. Nonsubmissionofcontractsbetweenthe A: It is an improper or wrong conduct; the
principal and the contractor or transgressionofsomeestablishedanddefiniterule
subcontractorwhenrequiredtodoso; of action, a forbidden act, a dereliction of duty,
2. Nonsubmissionofannualreport; willfulincharacter,andimplieswrongfulintentand
3. Findings through arbitration that the not mere error in judgment. To be serious within
contractor or subcontractor has engaged the meaning and intendment of the law, the
in laboronly contracting and other misconduct must be of such grave and aggravated
prohibitedactivities; character and not merely trivial or unimportant.
4. Noncompliancewithlaborstandardsand (Villamor Golf Club v. Pehid, G.R. No. 166152, Oct.
workingconditions.(Sec.16,D.O.1802) 4,2005)

Q: What are the effects of finding that there is Q:Whataretheelementsofseriousmisconduct?
laboronlycontracting?
A:
A: A finding that a contractor is a laboronly 1. Itmustbeseriousorofsuchagraveand
contractorisequivalenttodeclaringthatthereisan aggravatedcharacter;
employeremployee relationship between the 2. Must relate to the performance of the
principal and the employees of the laboronly employees(Ee)duties;
contractor. (Assoc. AngloAmerican Tobacco Corp. 3. Eehasbecomeunfittocontinueworking
v.Clave,G.R.No.50915,Aug.30,1990) for the employer. (Philippine Aeolus
Automotive United Corp. v. NLRC, G.R.
2.TERMINATIONOFEMPLOYMENT No.124617,April28,2000)

a.Substantivedueprocess Q:Givesomeexamplesofseriousmisconduct.
Q:WhatisSubstantivedueprocess? A:
79

1. Sexualharassment 2. The disobeyed orders, regulations or

2. Fightingwithinthecompanypremises instructionsoftheErmustbe:
3. Uttering obscene, insulting or offensive a. Reasonableandlawful
wordsagainstasuperior b. SufficientlymadeknowntotheEe
4. Falsificationoftimerecords c. Must pertain to or be in connection
5. Grossimmorality with the duties which the Ee has
beenengagedtodischarge.(CosepV.
Q: Escando, upset at his transfer to the washer NLRC, G.R. No. 124966 June 16,
section, repeatedly uttered gago ka and 1998)
threatened bodily harm to his superior Mr.
Andres.Istheutteranceoftheobscenewordsand Note: ThereisnolawthatcompelsanEetoaccepta
threats of bodily harm gross and willful promotion for the reason that a promotion is in the
misconduct? natureofagiftorreward,whichapersonhastheright
torefuse.TheexerciseoftheEeoftherighttorefusea
A: Yes. The repeated utterances by Escando of promotion cannot be considered in law as
obscene, insulting or offensive words against a insubordinationorwillfuldisobedience.(PT&TCorp.v.
superiorwerenotonlydestructiveofthemoralsof CA,G.R.No.152057,Sep.29,2003)
his coemployees (Ees) and a violation of the
company rules and regulations, but also constitute Q: The company vehicle was brought out of the
gross misconduct which is one of the grounds companypremiseswithoutauthorizationtwice.In
providedbylawtoterminatetheservicesofanEe. the first instance the company opted not to
(Autobus Workers Union v. NLRC, G.R. No. 11753, implement any action against Dioks and instead
June26,1998) issuedamemorandumreimindingDioksaswellas
the security guards of the proper procedure.
Q:Samsonmadeinsultingandobsceneutterances However, in the second instance the vehicle met
towards the General Manager saying Si EDT anaccident.IsDioksguiltyofwillfuldisobedience
bullshit yan, sabihin mo kay EDT yan among even though he was not the one who personally
others during the Christmas party. Are the brought the company vehicleout of the company
utterances towards the General Manager gross premises and was merely a passenger in the
misconduct? secondincident?
A:TheallegedmisconductofSamsonwhenviewed A: Yes. A rule prohibiting Ees from using company

in its context is not of such serious and grave vehiclesforprivatepurposewithoutauthorityfrom
characterastowarranthisdismissal.Samsonmade managementisareasonableone.WhenDioksrode
theutterancesandobscenegesturesataninformal thecompanyvehiclehewasundoubtedlyawareof
Christmasgatheringanditistobeexpectedduring thepossibleconsequencesofhisactandtakinginto
this kind of gatherings, where tongues are more consideration his moral ascendancy over the
oftenthannotloosenedbyliquorofotheralcoholic securityguardsitwasincumbentuponhimnotonly
beverages,thatemployees(Ees)freelyexpresstheir toadmonishthembutalsotorefrainfromusingthe
grievancesandgripesagainsttheiremployers(Ers). company car himself. (Family Planning Org. of the
Ees should be allowed wider latitude to freely Phil.v.NLRC,G.R.No.75907,Mar.23,1992)
express heir grievances andgripesagainst their Er.
Ees should be allowed wider latitude to freely Q: Escobins group were security guards based in
express their sentiments during these kinds of Basilan. They were placed in floating status and
occasions which are beyond the disciplinary were asked to report for reassignment in Metro
authority of the Er. (Samson v. NLRC, G.R. No. Manila by PISI. Upon failure to report or respond
121035,April12,2000) to such directives they were ordered dismissed
fromemploymentbyPISIforwillfuldisobedience.
2.WillfulDisobedience Did the failure to report to Manila amount to
willfuldisobedience?
Q: When is willful disobedience of the Ers lawful
ordersajustcausefortermination? A: The reasonableness of the rule pertains to the
kind of character of directives and commands and
A:2requisitesmustconcur: tothemannerinwhichtheyaremade.Inthiscase,
the order to report to the Manila office fails to
1. The employees (Ees) assailed conduct meet this standard. The order to report to Manila
musthavebeenwillfulorintentional,the was inconvenient, unreasonable, and prejudicial to
willfulness being characterized by a Escobins group since they are heads of families
wrongfulandperverseattitude. residing in Basilan and they were not given
80
LABORLAWTEAM:

transportationmoneyorassuranceofavailabilityof A: Yes, failure to observe prescribed standards of

workinManila.(Escobinv.NLRC,G.R.No.118159. work,ortofulfillreasonableworkassignmentsdue
April15,1998) to inefficiency may constitute just cause for
dismissal. Such inefficiency is understood to mean
3.Negligence failure to attain work goals or work quotas, either
byfailingtocompletethesamewithintheallotted
Q: When is negligence a just cause for reasonable period, or by producing unsatisfactory
termination? results. (Buiser v. Leogardo, G.R. No. L63316, July
31,1984)
A:Whenitisgrossandhabitual.
This ground is considered analogous to those
Q:WhenisthereGrossNegligence? enumeratedunderArt.282.(SkippersUnitedPacific
v.Magud,G.R.No.166363,Aug.15,2006)
A:Grossnegligenceimpliesawantorabsenceofor
failure to exercise slight care of diligence of the Q: Gamido was a quality control inspector of VH
entire absence of care it evinces thoughtless Manufacturing. Gamido was allegedly caught by
disregard of consequences without exerting any thecompanyPres.DyJuancoofsleepingandwas
effort to avoid them. However, such neglect must dismissed from employment. Did Gamidos act of
not only be gross but habitual in character. (Judy sleeping on the job constitute a valid cause of
Phils.v.NLRC,G.R.No.111934,April29,1998) dismissal?
Q:WhenisthereHabitualNeglectofduties? A: Sleeping on the job as a valid ground for

dismissalonlyappliestosecurityguardswhoseduty
A: Habitual Neglect implies repeated failure to necessitatesthattheybeawakeandwatchfulatall
perform ones duties over a period of time, times. Gambidos single act of sleeping further
depending upon the circumstance. (JGB and shows that the alleged negligence or neglect of
Associatesv.NLRC,GRNo.10939,Mar.7,1996) duty was neither gross nor habitual. (VH
Manufacturing v. NLRC, G.R. No. 130957, Jan. 19,
Q: Antiola, as assorter of baby infant dress as for
2000)
Judy Phils. erroneously assorted and packaged
2,680 dozens of infant wear. Antiola was Q:Givesomeformsofneglectofduty.
dismissed from employment for this infraction.
Does the single act of misassortment constitute A:
grossnegligence? 1. Habitualtardinessandabsenteeism
2. Abandonment:
A:No.Suchneglectmustnotonlybegrossbutalso a. Failuretoreportforworkorabsence
habitual in character. Hence, the penalty of withoutjustifiablereason
dismissal is quite severe considering that Antiola b. Clear intention to sever ErEe
committed the infraction for the first time. (Judy relationship manifested by some
Phils.v.NLRC,G.R.No.111934.April29,1998) overt acts. (Labor et. al v. NLRC, GR
No.110388,Sep.14,1995)
Q: Does the failure in performance evaluations

amounttogrossandhabitualneglectofduties?
4.Abandonment
A: As a general concept poor performance is
Q: What is abandonment as a just cause for
equivalent to inefficiency and incompetence in the
termination?
performance of official duties. The fact that an
employees(Ees)performanceisfoundtobepoor A:Itmeansthedeliberate,unjustifiedrefusalofan
or unsatisfactory does not necessarily mean that employeetoresumehisemployment.
the Ee is grossly and habitually negligent of his
duties.Grossnegligenceimpliesawantorabsence Q:Whataretherequirementsforavalidfindingof
of or failure to exercise slight care of diligence or abandonment?
theentireabsenceorcare.Heevincesathoughtless
disregard of consequences without exerting any A: For a valid finding of abandonment, 2 factors
effort to avoid them. (Eastern Overseas mustbepresent:
Employment Center Inc. v. Bea, G.R. 143023, 1. Thefailuretoreportforwork,orabsence
Nov.29,2005) withoutvalidorjustifiablereason;and
2. A clear intention to sever ErEe
Q:Isinefficiencyajustcausefordismissal? relationship,withthe2ndelementasthe
81

more determinative factor, being money or property to this class

manifested by some overt acts. (Sta. belong cashiers, auditors, property
Catalina College s. NLRC, G.R. No. custodians,etc.,orthosewho,inthe
144483,Nov.19,2003) normal and routine exercise of their
functions, regularly handle
Q:Howtoproveabandonment? significant amounts of money or
property. (Mabeza v. NLRC, G.R. No.
A: To prove abandonment, the Er must show that 118506April18,1997)
the Ee deliberately and unjustifiably refused to
resume his employment without any intention of 2. The loss of trust and confidence must be
returning. There must be a concurrence of the basedonwillfulbreach.
intention to abandon and some overt acts from
which an Ee may be deduced as having no more Note: A breach is willful if it is done
intention to work. The law, however, does not intentionally, knowingly, and purposely
enumerate what specific overt acts can be without justifiable excuse, as distinguished
considered as strong evidence of the intention to from an act done carelessly, thoughtlessly,
sever the EeEr relationship. (Sta. Catalina College heedlessly, or inadvertently (De la Cruz v.
v.NLRC,G.R.No.144483.Nov.19,2003) NLRC,G.R.No.119536,Feb.17,1997)

Q: Mejila a barber at Windfield Barber Shop, had 3. The act constituting the breach must be
analtercationwithafellowbarberwhichresulted workrelated such as would show the
in his subsequent turning over the duplicate keys Ee concerned to be unfit to continue
of the shop to the cashier and took away all his working for the Er. (Gonzales V. NLRC,
belongings there from and worked at different G.R.No.131653,Mar.26,2001)
barbershop. Mejila then filed an illegal dismissal
casebutdidnotseekreinstatementasarelief.Did 4. It must be substantial and founded on
Mejilacommitabandonment? clearly established facts sufficient to
warrant the Ees separation from
A: Mejilas acts such as surrendering the shops employment.(SulpicioLinesInc.V.Gulde,
keys, not reporting to the shop anymore without G.R.No.149930,Feb.22,2002)
any justifiable reason, his employment in another
barbershop,andthefilingofacomplaintforillegal 5. Fraud must be committed against the Er
dismissal without praying for reinstatement clearly orhisrepresentatives,e.g.:
showthattherewasaconcurrenceoftheintention a. Falsificationoftimecards
toabandonandsomeovertactsfromwhichitmay b. Theftofcompanyproperty
be inferred that the Ee concerned has no more c. Unauthorized use of company
interest in working. (Jo v. NLRC, G.R. No. 121605, vehicle
Feb.2,2000)
Note: The treatment of rank and file personnel and
5.Fraud;BreachofTrust/LossofConfidence managerial Ees in so far as the application of the
doctrineoflossoftrustandconfidenceisconcernedis
Q: When is breach of trust/loss of confidence a different. As regards managerial Ees, such as Caoile,
mereexistenceofabasisforbelievingthatsuchEehas
justcausefortermination?
breached the trust of his Er would suffice for his
dismissal. (Caoile v. NLRC, G.R. No. 115491, Nov. 24,
A:
1998)
1. Itappliesonlytocasesinvolving:

a. Employees (Ees) occupying positions
Q:Whataretheguidelinesforthedoctrineofloss
of trust and confidence (confidential
ofconfidencetoapply?
and managerial Ees) to this class
belong managerial Ees, i.e., those A:
vested with the powers or 1. Loss of confidence should not be
prerogatives to lay down simulated (reasonable basis for loss of
managementpoliciesand/ortohire, trustandconfidence)
transfer, suspend, layoff, recall, 2. Notusedforsubterfugeforcauseswhich
discharge, assign or discipline Ees or are improper and/or illegal and
effectively recommend such unjustified
managerialactions 3. Not arbitrarily asserted in the face of
b. Ees routinely charged with the care overwhelmingevidencetothecontrary
and custody of the employers (Ers)
82
LABORLAWTEAM:

4. Must be genuine, not a mere An investigation was promptly launched by the

afterthoughttojustifyearlieractiontaken companys officers. Abel attended the meetings
inbadfaithand but claimed that he was neither asked if he
5. The Ee involved holds a position of trust needed the assistance of counsel nor allowed to
andconfidence properlypresenthisside.Bymemo,thecompany
found Abel guilty of (1) fraud resulting in loss of
Note: The breach of trust must rest on substantial trustandconfidenceand(2)grossneglectofduty,
grounds and not on the Ers arbitrariness, whims, and was meted out the penalty of dismissal from
caprices, or suspicion; otherwise, the Ee would employment. Was Abel validly dismissed for any
eternally remain at the mercy of the Er. It should be ofthecausesprovidedforinArt.282oftheLC?
genuine and not simulated, nor should it appear as a
mereafterthoughttojustifyearlieractiontakeninbad A:No.The1strequisitefordismissalontheground
faith of a subterfuge for causes which are improper, of loss of trust and confidence is that the Ee
illegal, or unjustified. It has never been intended to concerned must be holding a position of trust and
affordandoccasionforabusebecauseofitssubjective
confidence.Abelwasacontractclaimsassistantat
nature.Theremust,therefore,beanactualbreachof
thetimeheallegedlycommittedtheactswhichled
dully committed by the employee which must be
to its loss of trust and confidence. It is not thejob
established by substantial evidence. (Dela Cruz v.
NLRC,G.R.No.119536,Feb.17,1997) title but the actual work that the Ee performs. It
was part of Abels responsibilities to monitor the
Q:MabezaachambermaidatHotelSupremewas performance of the companys contractors in
terminated from employment because of her relation to the scope of work contracted out to
refusal to sign an affidavit attesting to their them.
employers(Ers)compliancewithminimumwage
and other labor standards. Mabeza filed a The2ndrequisiteisthattheremustbeanactthat
complaint for illegal dismissal against Hotel wouldjustifythelossoftrustandconfidence.Loss
Supreme. As a defense, Hotel Supreme claimed of trust and confidence, to be a valid cause for
that she abandoned her work and belatedly dismissal,mustbebasedonawillfulbreachoftrust
claimed loss of confidence as the ground for the andfoundedonclearlyestablishedfacts.Thebasis
dismissalofMabezabecauseshestolesomeofthe for the dismissal must be clearly and convincingly
properties of her Er. Is loss of confidence a valid established but proof beyond reasonable doubt is
groundfordismissalofahotelchambermaid? not necessary. The companys evidence against
Abel fails to meet this standard. Its lone witness,
A: No. Loss of confidence as a just cause for Lupega,didnotsupporthisaffidavitandtestimony
dismissalwasneverintendedtoprovideErswitha duringthecompanyinvestigationwithanypieceof
blankcheckforterminatingtheirEes.Evidently,an evidence at all. It could hardly be considered
ordinarychambermaidwhohastosignoutforlinen substantial evidence. (Abel v. Philex Mining Corp.,
and other hotel property from the property G.R.No.178976,July31,2009,J.CarpioMorales)
custodian each day and who has to account for
each and every towel or bed sheet utilized by the 6.TerminationofEmploymentpursuanttoUnion
hotel'sguestsattheendofhershiftwouldnotfall SecurityClause
underanyofthesetwoclassesofEesforwhichloss
Q:MSMGwasalocalunionaffiliatedwithULGWP
ofconfidence,ifablysupportedbyevidence,would
a national federation. MSMG had a dispute with
normallyapply.(Mabezav.NLRC,G.R.No.118506,
ULGWP over an imposition of a fine prompting
April18,1997)
MSMG to declare independence from ULGWP.
Q: Abelardo Abel was first hired by Philex Mining Because of the dispute, ULGWP asked for the
Corp. in Jan. 88. He was later assigned to the dismissal from employment of the officers of
companys Legal Dept as a Contract Claims Asst., MDMG from the company by virtue of a union
andheldthepositionfor5yrspriortohistransfer securityclauseintheCBA.Thecompanydismissed
totheMineEnggandDrawControlDeptwherein the officers. Does a union security clause absolve
he was appointed Unit Head. In 02, he was the company form observing the requirement of
implicated in an irregularity occurring in the dueprocess?
subsidence area of the companys mine site at
A:Althoughunionsecurityclausesembodiedinthe
Benguet. His coworker Danilo, executed an
CBA may be validly enforced and dismissals
affidavit known as the Subsidence Area
pursuant thereto may likewise be valid, this does
Anomaly. The incidents in Lupegas affidavit
not erase the fundamental requirement of due
supposedly took place when Abel was still a
process. An employer cannot merely rely upon a
ContractClaimsAsst.atthecompanyslegaldept.
labor federations allegations in terminating union
83

officers expelled by the federation for allegedly 9.AnalogousCases

committingactsofdisloyaltyand/orinimicaltothe
interest of the federation and in violation of its Q: What is required for an act to be included in
constitutionandbylaws. analogouscasesofjustcausesoftermination?

The right of an Ee to be informed of the charges A: Must be due to the voluntary and/or willful act
against him and to be given a reasonable or omission of the employee (Nadura v. Benguet
opportunity to present his side in a controversy Consolidated,G.R.No.L17780,Aug.24,1962),e.g.:
with either the company or his own union is not
wiped away by a union security clause in a CBA. 1. Violation of company rules and
Evenassumingthatafederationhadvalidgrounds regulations
to expel union officers, due process requires that 2. Drunkenness
theseunionofficersbeaccordedaseparatehearing 3. Grossinefficiency
by the company. (MSMG v. Ramos, G.R. No. 4. Illegallydivertingemployersproducts
113907,Feb.28,2000) 5. Failure to heed an order not to join an
illegalpicket
7.TotalityofInfractionsdoctrine 6. Violation of safety rules and code of
discipline
Q:Whatisthetotalityofinfractionsdoctrine?
Q:Whatisthedoctrineofincompatibility?
A:Itisthetotality,notthecompartmentalizationof
company infractions that the Ee has committed, A:Wheretheemployeehasdonesomethingthatis
which justifies the penalty of dismissal. (MERALCO contrary or incompatible with the faithful
v.NLRC,G.R.No.114129,Oct.24,1996) performance of his duties, his employer has a just
cause for terminating his employment. (Manila
Note: Where the Ee has been found to have
ChauffeursLeaguev.BachrachMotorCo.,G.R.No.
repeatedly incurred several suspensions or warnings
L47071,June17,1940)
on account of violations of company rules and
regulations, the law warrants their dismissal as it is
(b).AuthorizedCauses
akin to habitual delinquency. (Villeno v. NLRC, G.R.
No.108153,Dec.26,1995)
Q:Whataretheauthorizedcausesoftermination
Q: What are the guidelines to determine the bytheemployer(Er)?
validityoftermination?
A:
A:Gravityoftheoffense 1. Installation of laborsaving devices
1. Positionoccupiedbytheemployee (automation/robotics)
2. Degreeofdamagetotheemployer
3. Previousinfractionsofthesameoffense 2. Redundancy (superfluity in the
4. LengthofService performanceofaparticularwork)exists
where the services of an employee (Ee)
8.CommissionofaCrime are in excess of what is reasonably
demanded by the actual reqts of the
Q: Whatdo you meanby commission of a crime enterprise.(WiltshireFileCo.,Inc.v.NLRC,
or offense as a just cause for termination of an G.R.No.82249,Feb.7,1991)
Ee?
Note:Theredundancyshouldnothavebeen
createdbytheEr.
A: It refers to an offense by the Ee against the

person of his employer or any immediate member
3. Reorganization
of his family or his duly authorized representative

and thus, conviction of a crime involving moral
Note: AnErisnotprecludedfromadopting
turpitude is not analogous thereto as the element
a new policy conducive to a more
ofrelationtohisworkortohisemployerislacking.
economicalandeffectivemanagement,and
thelawdoesnotrequirethattheErshould
Note: A criminal case need not be actually filed.
be suffering financial losses before he can
Commission of acts constituting a crime itself is
terminate the services of the employee on
sufficient.
thegroundofredundancy(DOLEPhil.,Inc.v.
NLRC,G.R.No.L55413,July25,1983)
84
LABORLAWTEAM:

4. Retrenchment cutting of expenses and Purpose: To enable it to ascertain the

includesthereductionofpersonnel;Itisa verityofthecauseoftermination.
management prerogative, a means to
protectandpreservetheErsviabilityand 2. Written notice to Ee concerned 30 days
ensure his survival. To be an authorized priortheintendeddateoftermination.
cause it must be affected in good faith
(GF) and for the retrenchment, which is 3. Payment of separation pay Serious
after all a drastic recourse with serious businesslossesdonotexcusetheErfrom
consequences for the livelihood of the complying with the clearance or report
Eesorotherwiselaidoff. required in Art. 283 of the LC and its IRR
beforeterminatingtheemploymentofits
Note:Thephrasetopreventlossesmeans workers. In the absence of justifying
that retrenchment or termination from the circumstances, the failure of the Er to
service of some Ees is authorized to be observe the procedural reqts under Art.
undertaken by the Er sometime before the 284 taints their actuations with bad faith
anticipated losses are actually sustained or if the layoff was temporary but then
realized. Evidently, actual losses need not serious business losses prevented the
setinpriortoretrenchment.(CajucomVIIv. reinstatement of respondents, the Ers
TP Phils Cement Corp., et al, G.R. No.
should have complied with the reqts of
149090,Feb.11,2005)
writtennotice.

5. Closing or cessation of operation of the
Redundancy
establishment or undertaking must be

done in good faith and not for the
Q:Whataretherequisitesofavalidredundancy?
purpose of circumventing pertinent labor

laws.
A:

1. Written notice served on both the
6. Disease must be incurable within 6
employees (Ees) and the DOLE at least 1
monthsandthecontinuedemploymentis
monthpriortoseparationfromwork
prohibited by law or prejudicial to his
2. Payment of separation pay equivalent to
health as well as to the health of his co
at least 1 month pay or at least 1 month
Ees with a certification from the public
payforeveryyearofservice,whicheveris
healthofficerthatthediseaseisincurable
higher
within 6 months despite due to
3. Good faith in abolishing redundant
medicationandtreatment
position

4. Fair and reasonable criteria in
Q:Whatareotherauthorizedcauses?
ascertaining what positions are to be

declaredredundant:
A:
a. Lesspreferredstatus,e.g.temporary
1. TotalandpermanentdisabilityofEe
Ee
2. Validapplicationofunionsecurityclause
b. Efficiencyand
3. Expiration of period in term of
c. Seniority
employment

4. Completion of project in project
Q:Ong,aSalesManagerofWiltshireFileCo.,Inc.,
employment
was informed of the termination of his
5. Failureinprobation
employment due to redundancy upon returning
6. Relocationofbusinesstoadistantplace
from a trip abroad. Ong maintains that there can
7. Defianceofreturntoworkorder
be no redundancy since he was the only person
8. CommissionofIllegalactsinstrike
occupyinghispositioninthecompany.
9. Violationofcontractualagreement
10. Retirement
IsthereredundancyeventhoughOngwastheonly

oneoccupyinghisposition.
Q: What are the procedural steps required in
termination of an employee for authorized A: Redundancy in an employers (Ers) personnel
causes? does not necessarily or even ordinarily refer to
duplication of work. The characterization ofOngs
A: services as no longer necessary or sustainable and
1. Written Notice to DOLE 30 days prior to therefore properly terminable, was an exercise of
theintendeddayoftermination. business judgment on the part of Wiltshire.
85

Furthermore, a position is redundant where it is

superfluous, and superfluity of a position or Retrenchmentisameansoflastresort.
positions may be the outcome of a number of
factors, such as over hiring of workers, decreased Q: What are the requisites of a valid
volume of business, or dropping of a particular retrenchment?
product line or service activity previously
manufacturedorundertakenbytheenterprise.The A:
Erhasnolegalobligationtokeepinitspayrollmore 1. WrittennoticeservedonboththeEeand
employees that are necessary for the operation of the DOLE at least 1 month prior to the
itsbusiness.(WiltshireFileCo.,Inc.v.NLRC,G.R.No. intendeddateofretrenchment
82249,Feb.7,1991) 2. Payment of separation pay equivalent to
at least one month pay or at least 1/2
Retrenchment month pay for every year of service,
whicheverishigher
Q: What are the circumstances that must be 3. Goodfaith
presentforavalidretrenchment? 4. Proofofexpectedoractuallosses
5. The employer used fair and reasonable
A: criteria in ascertaining who would be
retained among the Ees, such as status,
1. Thelossesexpectedshouldbesubstantial efficiency, seniority, physical fitness, age,
and not merely de minimis in extent If and financial hardship of certain workers
the loss purportedly sought to be (Asian Alcohol Corp. v. NLRC, G.R. No.
forestalled by retrenchment is clearly 131108,Mar.25,1999).
shown to be insubstantial and
inconsequential in character, the bona Q: What are the criteria in selecting employees
fide nature of the retrenchment would (Ees)toberetrenched?
appeartobeseriouslyinquestion.
A:Theremustbefairandreasonablecriteriatobe
2. Thesubstantiallossapprehendedmustbe usedinselectingEestobedismissedsuchas:
reasonablyimminentassuchimminence 1. Lesspreferredstatus;
can be perceived objectively and in good 2. Efficiencyrating;
faith by the employer (Er). There should 3. Seniority. (Phil. Tuberculosis Society, Inc.
be a certain degree of urgency for the v.NationalLaborUnion,G.R.No.115414,
retrenchment. Aug.25,1998)

3. Itmustbereasonablynecessaryandlikely Q:Whatisthelastinfirstout(LIFO)rule?
to prevent the expected losse The Er
should have taken other measures prior A: It applies in the termination of employment in
or parallel to retrenchment to forestall thelineofwork.WhatiscontemplatedintheLIFO
losses such as cutting other costs than rule is that when there are two or more Ees
laborcosts. occupying the same position in the company
affectedbytheretrenchmentprogram,thelastone
4. Theallegedlossesifalreadyrealized,and employed will necessarily be the first one to go.
the expected imminent losses sought to (Maya Farms Ees Organization v. NLRC, G.R. No.
be forestalled, must be proved by 106256,Dec.28,1994)
sufficient and convincing evidence The
reason for requiring this quantum of Q: Is the seniority rule or "last in first out"
proof is readily apparent: any less policy to be strictly followed in effecting a
exacting standard of proof would render retrenchmentorredundancyprogram?
too easy the abuse of this ground for
termination of services of employees. A: Again, in Asian Alcohol Corp., the SC stated
(Lopez Sugar Corp. v. Federation of Free that with regard the policy of "first in, last out"
Workers, G.R. No. 7570001, Aug. 30, in choosing which positions to declare as
1990) redundantorwhomtoretrenchtopreventfurther
business losses, there is no law that mandates
Note: The losses which the company may suffer or is suchapolicy.Thereasonissimpleenough.Ahost
suffering may be proved by financial statements of relevant factors come into play in determining
audited by independent auditors (Asian Alcohol cost efficient measures and in choosing the Ees
Corporationv.NLRC,G.R.No.131108,Mar.25,1999) who will be retained or separated to save the
86
LABORLAWTEAM:

companyfrom closingshop. In frombankruptcy.(AsianAlcoholCorp.v.NLRC,G.R.

determining these issues, management plays a No.131108,Mar.25,1999)
preeminentrole.Thecharacterizationofpositions
as redundant is an exercise of business judgment Closure
on the part of the Er. It will be upheld as long
as it passes the test of arbitrariness. (2001 Bar Q:Whataretherequisitesofavalidclosure?
Question)
A:
Q: What is the difference between redundancy 1. Written notice served on both the
andretrenchment? employees (Ees) and the DOLE at least 1
month prior to the intended date of
A: In redundancy, company has no financial closure
problems, unlike in retrenchment where the 2. Payment of separation pay equivalent to
companywillsufferfinanciallosses. at least one month pay or at least 1/2
month pay for every year of service,
Q:PhilippineTuberculosisSociety,Inc.retrenched whicheverishigher,exceptwhenclosure
116 Ees after incurring deficits amounting to 9.1 isduetoseriousbusinesslosses
million pesos. Aside for retrenching some of its 3. Goodfaith
Ees, the company also implemented cost cutting 4. Nocircumventionofthelaw
measurestopreventsuchlossesforincreasingand 5. NootheroptionavailabletotheEr
minimizing it. The NLRC ruled that the
retrenchmentwasnotvalidonthegroundthatthe Q: What is the test for the validity of closure or
Societydidnottakeseniorityintoaccountintheir cessationofestablishmentorundertaking?
selection. Was the retrenchment done by the
Society not valid for its failure to follow the A: The ultimate test of the validity of closure or
criterialaiddownbylaw? cessationofestablishmentorundertakingisthatit
must be bonafide in character. And theburden of
A: No. The Society terminated the employment of proving such falls upon the Er. (Capitol Medical
severalworkerswhohaveworkedwiththeSociety Center,Inc.vs.Dr.Meris,G.R.No.155098,Sep.16,
forgreatnumberofyearswithoutconsiderationfor 2005,J.CarpioMorales)
the number of years of service and their seniority
indicates that they had been retained for such a Q: When is separation pay required in case of
longtimebecauseofloyalandefficientservice.The closure?
burdenofprovingthecontraryrestontheSociety.
(Phil. Tuberculosis Society, Inc. v. National Labor A:Onlywhereclosureisnotduetoseriousbusiness
Union,G.R.No.115414,Aug.25,1998) losses nor due to an act of govt. (North Davao
Mining Corp v. NLRC, G.R. No. 112546, Mar. 13,
Q: Due to mounting losses the former owners of 1996;NFLv.NLRC,G.R.No.127718,Mar.2,2000)
Asian Alcohol Corporation sold its stake in the
companytoPriorHoldings.Upontakingcontrolof Q: Galaxie Steel Corp. decided to close down
thecompanyandtopreventlosses,PriorHoldings becauseofseriousbusinessloses.Itfiledawritten
implementedareorganizationplanandothercost notice with the DOLE informing its intended
saving measures and one of them is the closureandtheterminationofitsemployees(Ees).
retrenchment of 117 employees (Ees) of which It posted the notice of closure on the corporate
somearemembersoftheunionandthemajority bulletinboard.
held by nonunion members. Some retrenched
workers filed a complaint for illegal dismissal Q: Does the written notice posted by Galaxie on
alleging that the retrenchment was a subterfuge the bulletin board sufficiently comply with the
forunionbustingactivities. noticereqtunderArt.283oftheLC?

Was the retrenchment made by Asian Alcohol A:No.Inordertomeetthepurpose,serviceofthe
validandjustified? writtennoticemustbemadeindividuallyuponeach
and every Ee of the company. However, the Court
A: Yes. Even though the bulk of the losses were held that where the dismissal is for an authorized
sufferedundertheoldmanagementandcontinued cause, noncompliance with statutory due process
only under the new management ultimately the shouldnotnullifythedismissal,orrenderitillegal,
newmanagementofPriorHoldingswillabsorbsuch orineffectual.Still,theemployershouldindemnify
losses. The law gives the new management every the Ee, in the form of nominal damages, for the
right to undertake measures to save the company violation of his right to statutory due process.
87

(Galaxie Steel Workers Union v. NLRC, G.R. No. damages and claim for employment benefits.
165757,Oct.17,2006) Werethelossesincurredbythecompanyenough
tojustifyclosureofitsoperations?
AreEesentitledtoseparationpay?
A: The determination to cease operations is a
A: No. Galaxie had been experiencing serious prerogative of management that is usually not
financial losses at the time it closed business interfered with by the State as no business can be
operations.Art.283oftheLCgovernsthegrantof required to continue operating at a loss simply to
separationbenefits"incaseofclosuresorcessation maintain the workers in employment. That would
of operation" of business establishments "not due beatakingofpropertywithoutdueprocessoflaw
to serious business losses or financial reverses." whichtheemployerhasarighttoresist.Butwhere
Where, the closure then is dueto serious business itismanifestthattheclosureismotivatednotbya
losses,theLCdoesnotimposeanyobligationupon desiretoavoidfurtherlossesbuttodiscouragethe
the employer to pay separation benefits. (Galaxie workers from organizing themselves into a union
Steel Workers Unin v. NLRC, G.R. No. 165757, Oct. for more effective negotiations with management,
17,2006) the State is bound to intervene. The losses of less
than P2,000 for a corporation capitalized at P3
Q:RankandfileworkersofSIMEXfiledapetition millioncannotbeconsideredseriousenoughtocall
fordirectcertificationandaffiliatedwithUnionof for the closure of the company. (Carmelcraft Corp.
FilipinoWorkers(UFW).Subsequently,36workers v.NLRC,G.R.No.9063435,June6,1990)
of the companys lumpia dept and 16 other
workersfromotherdeptswereeffectivelylocked Q: Is the transferee of the closed corporation
out when their working areas were cleaned out. requiredtoabsorbtheemployees(Ees)oftheold
The workers through UFW filed a complaint for corporation?
unfairlaborpracticesagainstthecompany.SIMEX
then filed a notice of permanent shutdown/total A:
closure of all units of operation in the GR:Thereisnolawrequiringabonafidepurchaser
establishment with the DOLE allegedly due to of assets of an ongoing concern to absorb in its
businessreversesbroughtaboutbytheenormous employ the Ees of the latter except when the
rejectionoftheirproductsforexporttotheUnited transaction between the parties is colored or
States. clothedwithbadfaith(BF).(SundownerDevtCorp.
v.Drilon,G.R.No.82341,Dec.6,1989)
Wastheclosurewarrantedbytheallegedbusiness
reverses? XPNs:
1. Where the transferee was found to be
A: The closure of a business establishment is a merely an alter ego of the different
ground for the termination of the services of any mergingfirms.(FilipinasPortServices,Inc.
employee unless the closing is for the purpose of v.NLRC,G.R.No.97237,Aug.16,1991)
circumventingtheprovisionsofthelaw.But,while 2. Where the transferee voluntarily agrees
business reverses can be a just cause for to do so. (Marina Port Services, Inc. v.
terminating employees, they must be sufficiently Iniego,G.R.No.77853,Jan.22,1990)
proved.Inthiscase,theauditedfinancialstatement
ofSIMEXclearlyindicatesthattheyactuallyderived Q:MarikinaDairyIndustries,Inc.decidedtosellits
earnings.Althoughtherejectionsmayhavereduced assets and close operations on the ground of
theirearningstheywerenotsufferinglosses.There heavylosses.Theunionsallegedthatthefinancial
is no question that an employer may reduce its losses were imaginary and the dissolution was a
workforcetopreventlossesbutitmustbeserious, schememaliciouslydesignedtoevadeitslegaland
actual and real otherwise this ground for social obligations to its employees (Ees). The
termination would be susceptible to abuse by unionswantthebuyersofthecorporationsassets
schemingemployerswhomightbemerelyfeigning restrained to operate unless the members of the
business losses or reverses in their business unions were the ones hired to operate the plant
ventures to ease out employees. (Union of Filipino under the terms and conditions specified in the
Workersv.NLRC,G.R.No.90519,Mar.23,1992) collectivebargainingagreements.
Q: Carmelcraft Corporation closed it business Is the buyer of a companys assets required to

operations allegedly due to losses of P1, 603.88 absorbtheEesoftheseller?
aftertheCarmelcraftEesUnionfiledapetitionfor
certification election. Carmelcraft Union filed a A:Thereisnolawrequiringthatthepurchaserofa
complaint for illegal lockout and ULP with companys assets should absorb its Ees and the
88
LABORLAWTEAM:

most that can be donefor reasons of public policy 2. With a certification by competent public
andsocialjusticewastodirectthatbuyersofsuch health authority that the disease is
assetstogivepreferencetothequalifiedseparated incurable within 6 months despite due
Ees in the filling up of vacancies in the facilities of medicationandtreatment.(Solisv.NLRC,
the buyer. (MDII Supervisors & Confidential Ees GRNo.116175,Oct.28,1996)
Assn(FFW)v.residentialAssistantonLegalAffairs,
G.R.Nos.L4542123,Sep.9,1977) Note:Thereqtforamedicalcertificationcannot
be dispensed with; otherwise, it would sanction
Q: What is the difference between closure and theunilateralandarbitrarydeterminationbythe
retrenchment? ErofthegravityorextentoftheEesillnessand
thusdefeatthepublicpolicyontheprotectionof
A: labor.(ManlyExpressvPayong,G.R.No.167462,
CLOSURE RETRENCHMENT Oct.25,2005)
Is the reversal of Is the reduction of
fortune of the Er personnel for the purpose Termination of services for health reasons must
whereby there is a ofcuttingdownoncostsof beeffectedonlyuponcompliancewiththeabove
complete cessation of operations in terms of requisites. The reqt for a medical certificate
business operations to salaries and wages under Art. 284 of the LC cannot be dispensed
preventfurtherfinancial resorted to by an Er with; otherwise, it would sanction the unilateral
drain upon an Er who because of losses in and arbitrary determination by the Er of the
cannotpayanymorehis operation of a business gravity or extent of the Ees illness and thus
Ees since business has occasionedbylackofwork defeat the public policy on the protection of
alreadystopped. andconsiderablereduction labor. (Sy et. al v. CA, G.R. No. 142293, Feb. 27,
inthevolumeofbusiness. 2003)
As in the case of
retrenchment, however, Q: What is the procedure in terminating an
for the closure of a employee(Ee)onthegroundofdisease?
One of the prerogatives
business or a department
of management is the A:
due to serious business
decision to close the
lossestoberegardedasan 1. Theemployer(Er)shallnot terminatehis
entire establishment or
authorized cause for employmentunless:
to close or abolish a
terminatingEes,itmustbe a. There is a certification by a
department or section
proven that the losses competentpublichealthauthority
thereof for economic
incurred are substantial b. Thatthediseaseisofsuchnatureor
reasons, such as to
and actual or reasonably at such a stage that it cannot be
minimize expenses and
imminent; that the same cured within a period of 6 months
reducecapitalization.
increasedthroughaperiod evenwithpropermedicaltreatment.

of time; and that the

condition of the company
2. If the disease or ailment can be cured
is not likely to improve in
within the period, the Er shall not
thenearfuture.
terminate the Ee but shall ask the Ee to
LC provides for the
DoesnotobligatetheEr takealeave.TheErshallreinstatesuchEe
payment of separation
for the payment of to his former position immediately upon
package in case of
separation package if therestorationofhisnormalhealth.(Sec.
retrenchment to prevent
there is closure of 8,RuleI,BookVI,IRR)
losses.
business due to serious

losses. Q:Isanemployeesufferingfromadiseaseentitled

toreinstatement?

Disease A: Yes, provided he presents a certification by a
competent public health authority that he is fit to
Q:Whenisdiseaseagroundfordismissal? return to work. (Cebu Royal Plant v. Deputy
Minister,G.R.No.L58639,Aug.12,1987)
A:WheretheEesuffersfromadisease,and:
1. His continued employment is prohibited Q: Is the requirements of a medical certificate
by law or prejudicial to his health or to mandatory?
the health of his coEes. (Sec.8, Rule I,
BookVI,IRR) A:Yes,itisonlywherethereisapriorcertification
fromacompetentpublicauthoritythatthedisease
89

afflictingtheemployeesoughttobedismissedisof Closures or cessation

Equivalenttoatleast1month
suchnatureoratsuchstagethatitcannotbecured of operation not due
pay or at least 1 month pay
within 6 months even with proper medical to serious
for every year of service (if
treatment that the latter could be validly business
duetoseverefinanciallosses,
terminated from his job. (Tan v. NLRC, G. R. No. losses/financial
noseparationpay
116807,April14,1997) reverses
Equivalenttoatleast1month
Note: Termination from work on the sole basis of pay or at least month pay
actual perceived or suspected HIV status is deemed Disease for every year of service,
unlawful.(Sec.35,R.A.8504HIV/AIDSLaw) whicheverishigher
Q: Anna Ferrer has been working as

bookkeeperatGreatFoods,Inc.,whichoperatesa Note: A fraction of at least 6 months shall be
considered1wholeyear.
chain of highend restaurants throughout the

country, since 1970 when it was still a small
Thereisnoseparationpaywhentheclosureisdueto
eatery at Binondo. In the early part of the year
anactofthegovt.
2003, Anna, who was already 50 years old,

reported for work after a weeklong vacation in
Q: What is the purpose of the 2 notices served to
herprovince.ItwastheheightoftheSARSscare, theEeandDOLE1monthpriortotermination?
andmanagementlearnedthatthefirstconfirmed
SARSdeathcaseinthePhils,abalikbayannurse A:
from Canada, is a townmate of Anna.
1. TogivetheEessometimetopreparefor
Immediately, a memorandum was issued by
the eventual loss of their jobs and their
managementterminatingtheservicesofAnnaon
corresponding income, look for other
thegroundthatsheisaprobablecarrierofSARS
employment and ease the impact of the
virus and that her continued employment is
lossoftheirjobs.
prejudicial to the health of her coEes. Is the
2. TogiveDOLEtheopportunitytoascertain
actiontakenbytheemployer(Er)justified?
the verity of the alleged cause of
termination.(Phil.Telegraph&Telephone
A: The Ers act of terminating the employment of
Corp. v. NLRC, G.R. No. 147002, April 15,
Anna is not justified. There is no showing that said
2005)
employeeissickwithSARS,orthatsheassociatedor

had contact with the deceased nurse. They are
Note:NoticetoboththeEesconcernedandtheDOLE
merely town mates. Furthermore, there is no aremandatoryandmustbewrittenandgivenatleast
certificationbyacompetentpublichealthauthority 1 month beforethe intendeddate of retrenchment
thatthediseaseisofsuchanatureorsuchastage and the fact that the Ees were already on temporary
thatitcannotbecuredwithinaperiodof6months layoff at the time notice should have been given to
evenwithpropermedicaltreatment.(Implementing them is not an excuse to forego the 1month written
Rules, Book VI, Rule 1, Sec. 8, LC) (2004 Bar notice. (Sebuguero v. NLRC, G.R. No.115394, Sep. 27,
Question) 1995)
Q:Discusstherulesonseparationpaywithregard Q: DAP Corp. ceased its operation due to the

toeachcauseoftermination. terminationofitsdistributionagreementwithIntl
Distributors Corp. which resulted in its need to
A: ceaseitsbusinessoperationsandtoterminatethe
employment of its Ees. Marcial et al. filed a
CAUSEOF complaint for illegal dismissal and for failure to
SEPARATIONPAY
TERMINATION give the Ees written notices regarding the
Equivalenttoatleast1month termination of their employment. On the other
pay or at least 1 month pay hand, DAP claims that their Ees actually knew of
Automation for every year of service, the termination therefore the written notices
whicheverishigher were no longer required. Are written notices
Equivalenttoatleast1month dispensed with when the Ees have actual
pay or at least 1 month pay knowledgeoftheredundancy?
Redundancy for every year of service,
whicheverishigher A:TheEesactualknowledgeoftheterminationof
Equivalentto1monthpayor a companys distributorship agreement with
at least month pay for another company is not sufficient to replace the
Retrenchment
everyyearorservice formal and written notice required by law. In the
90
LABORLAWTEAM:

writtennotice,theEesareinformedofthespecific 1. The reqt of notice is intended to inform

date of the termination, at least a month prior to the Ee concerned of the Ers intent to
thedateofeffectivity,togivethemsufficienttime dismiss him and the reason for the
to make necessary arrangements. In this case, proposeddismissal
notwithstanding the Ees knowledge of the 2. On the otherhand the reqt of hearing
cancellationofthedistributorshipagreement,they affords the Ee the opportunityto answer
remained uncertain about the status of their his Ers charges against him and
employment when DAP failed to formally inform accordingly to defend himself there from
themabouttheredundancy.(DAPCorp.v.CA,G.R. before dismissal is effected. (Salaw v.
No.165811,Dec.14,2005) NLRCG.R.No.90786Sep.27,1991)

b.Proceduraldueprocess Note:Failuretocomplywiththereqtofthe
2 notices makes the dismissal illegal. The
Q: What are the 2fold requirements of a valid procedure is mandatory. (Loadstar Shipping
dismissalforajustcause? Co.Inc.v.Mesano,G.R.No.138956,Aug.7,
2003)
A:
1. Substantiveitmustbeforajustcause Q: While it may be true that the Er enjoys wider
2. Procedural there must be notice and latitude of discretion in terminating employees
hearing (Ees) should there exists valid and just cause,
would this be sufficient for the Er to depart from
Q: What is the process to be observed by the givingtheEetherighttobeheard?
employer (Er) for termination of the employment
basedonanyofthejustcausesfortermination? A: Art. 277(b) of the LC mandates that an Er who
seekstodismissanEemustaffordthelatterample
A: opportunitytobeheardandtodefendhimselfwith
1. A written notice should be served to the theassistanceofhisrepresentativeifhesodesires.
Ee specifying the ground/s for Expounding on this provision, the SC held that
termination and giving the said Ee ample opportunity connotes every kind of
reasonableopportunitytoexplain. assistancethatmanagementmustaccordtheEeto
enable him to prepare adequately for his defense
Note: This first written notice must apprise including legal representation. (UBIX Corp. vs.
the Ee that his termination is being Bravo,G.R.No.177647,Oct.31,2008)
considered due to the acts stated in the
notice. (Phil. Pizza Inc. v. Bungabong, G.R. Q: What is included in the opportunity to be
No.154315,May9,2005) heard?

2. A hearing or conference should be held A:Theissuewasaddressedinanenbancdecision
during which the Ee concerned, with the renderedbytheSupremeCourt.Witha141vote
assistanceofcounsel,iftheEesodesires, the Court through Chief Justice Corona held as
isgiventheopportunitytorespondtothe follows:
charge, present his evidence and present
theevidencepresentedagainsthim. a) Ample opportunity to be heard in an
employee dismissal case means any
3. A written notice of termination If meaningful opportunity (verbal or
termination is the decision of the Er, it written)giventotheemployeetoanswer
shouldbeservedontheEeindicatingthat thechargesagainsthimorherandsubmit
upon due considerations of all the evidence in support of the defences,
circumstance, grounds have been whetherinahearing,conferenceorsome
established to justify his termination, at otherfair,justandreasonableway.
leastonemonthpriortohistermination. b) A formal hearing or conference becomes
mandatory only when requested by the
Note:Singlenoticeofterminationdoesnot employee in writing or substantial
comply with the requirements of the law. evidentiary disputes exist or a company
(Aldeguer & Co.,Inc. vs. Honeyline Tomboc, rule or practice requires it, or when
G.R.No.147633,July28,2008) similarcircumstancejustifyit.
c) The ample opportunity to be heard
Q:Whatisthepurposeofnoticeandhearing? standard in the Labor Code prevails over
the hearing or conference requirement
A:
91

in the implementing rules and opportunity to explain his side and (2) another
regulations. (Perez v. PT&T, G.R. No. written notice indicating that, upon due
152048,Apr.7,2009) consideration of all circumstances, grounds have
been established to justify the Er's decision to
Q:Whohastheburdenofproof? dismisstheEe.
A:Theburdenofproofrestsupontheemployerto There is however, no need for a hearing or

showthatthedismissaloftheemployeeisforajust conference. To be heard does not mean verbal
cause,andfailuretodosowouldnecessarilymean argumentation alone inasmuch as one may be
that the dismissal is not justified, consonant with heard just as effectively through written
theconstitutionalguaranteeofsecurityoftenure. explanations, submissions or pleadings. In other
words, the existence of an actual, formal trial
Note: Due process refers to the process to be typehearing,althoughpreferred,isnotabsolutely
followed; burden of proof refers to the amount of necessary to satisfy the employees right to be
prooftobeadduced. heard. (Perez. v. Phil. Telegraph and Telephone
Company,G.R.No.152048,April7,2009)
Inmoneyclaims,theburdenofproofastotheamount
to be paid the Ees rests upon the Er since he is in
Q: What are the guidelines in determining
custodyofdocumentsthatwouldbeabletoprovethe
whetherpenaltyimposedonEeisproper?
amountdue,suchasthepayroll.
A:
Q:Whatisthedegreeofproof?
1. Gravityoftheoffense
2. PositionoccupiedbytheEe
A: In administrative or quasijudicial proceedings,
3. Degreeofdamagetotheemployer(Er)
substantial evidence is considered sufficient in
4. Previousinfractionsofthesameoffense
determiningthelegalityofanemployersdismissal
5. Lengthofservice(ALUTUCPv.NLRC,G.R.
of an employee. (Pangasinan III Electric
No.120450,Feb.10,1999;PALv.PALEA,
Cooperative,Inc.v.NLRC,G.R.No.89878,Nov.13,
G.R.No.L24626,June28,1974)
1992)

Q: Felizardo was dismissed from Republic Flour
Q:PerezandDoriawereemployedbyPT&T.After
MillsSelectaicecreamCorporationfordishonesty
investigation, Perez and Doria were placed on
and theft of company property for bringing out a
preventivesuspensionfor30daysfortheiralleged
pair of boots, 1 piece aluminum container and 15
involvement in anomalous transactions in the
pieces of hamburger patties. Is the penalty of
shipping section. PT&T dismissed Perez and Doria
dismissal commensurate with the offense
fromserviceforfalsifyingdocuments.Theyfileda
committed?
complaint for illegal suspension and illegal
dismissal.TheLAfoundthatthe30dayextension
A: There is no question that the employer has the
of suspension and the subsequent dismissal were
inherent right to discipline its Ees which includes
bothillegal.TheNLRCreversedtheLAsdecision,it
therighttodismiss.Howeverthisrightissubjectto
ruledthatPerezandDoriaweredismissedforjust
thepolicepoweroftheState.InthiscasetheCourt
cause, that they were accorded due process and
finds that the penalty imposedupon Felizardo was
thattheywereillegallysuspendedforonly15days
not commensurate with the offense committed
(without stating the reason for the reduction of
consideringthevalueofthearticleshepilferedand
the period of petitioners illegal suspension). On
thefactthathehadnopreviousderogatoryrecord
appeal,CAheldthattheyweredismissedwithout
during his 2 years of employment in the company.
due process. Whether petitioners were illegally
Moreover,itshouldalsobetakenintoaccountthat
dismissed?
FelizardowasnotamanagerialorconfidentialEein
whomgreatertrustisreposedbymanagementand
A: Yes. The Er must establish that the dismissal is
from whom greater fidelity to duty is
forcauseinviewofthesecurityoftenurethatEes
correspondinglyexpected.(ALUTUCPv.NLRC,G.R.
enjoy under the Constitution and the LC. PT&T
No.120450,Feb.10,1999)
failedtodischargethisburden.PT&Tsillegalactof
dismissingPerezandDoriawasaggravatedbytheir
(1)AgabonDoctrine
failure to observe due process. To meet the reqts
ofdueprocessinthedismissalofanEe,anErmust Q:Ifthedismissalisforajustorauthorizedcause
furnish the worker with 2 written notices: (1) a buttherequirementofdueprocessofnoticeand
written notice specifying the grounds for hearing were not complied with should the
termination and giving to said Ee a reasonable dismissalbeheldillegal?
92
LABORLAWTEAM:

A: No, In Agabon v. NLRC, G.R. No. 158693, Nov. Note:AnorderofreinstatementbytheLAisnotthe

17,2004,itwasheldthatwhendismissalisforjust same as actual reinstatement of a dismissed or
or authorized cause but due process was not separated Ee. Thus, until the Er continuously fails to
observed,thedismissalshouldbeupheld. actually implement the reinstatement aspect of the
decision of the LA, their obligation to the illegally
However, the employer (Er) should be held liable dismissedEe,insofarasaccruedbackwagesandother
for noncompliance with the procedural reqts of benefitsareconcerned,continuestoaccumulate.Itis
only when the illegally dismissed Ee receives the
dueprocess(e.g.damages).TheAgabonrulingwas
separation pay (in case of strained relations) that it
modifiedbyJAKAFoodProcessingv.Pacot(G.R.No.
could be claimed with certainty that the ErEe
515378,Mar.28,2005)whereitwasheldthat: realtionship has formally ceased thereby precluding
thepossibilityofreinstatement.Inthemeantime,the
1. Ifbasedonjustcause(Art.282)buttheEr illegally dismissed Ees entitlement to backwages, 13th
failedtocomplywiththenoticereqt,the month pay, and other benefits subsists. Until the
sanction to be imposed upon him should paymentofseparationpayiscarriedout,theErshould
be tempered because the dismissal notbeallowedtoremainunpunishedforthedelay,if
process was, in effect, initiated by an act not outright refusal, to immediately execute the
imputabletotheEe;and reinstatementaspectoftheLAsdecision.
2. If based on authorized causes (Art. 283)
buttheErfailedtocomplywiththenotice Further, the Er cannot refuse to reinstate the illegally
reqt, the sanction should be stiffer dismissed Ee by claiming that the latter had already
because the dismissal process was foundajobelsewhere.Minimumwageearnersareleft
initiated by Ers exercise of his with no choice after they are illegally dismissed from
managementprerogative. their employment, but to seek new employment in
ordertoearnadecentliving.Surely,wecouldnotfault

them for their perseverance in looking for and
c.Reliefsforillegaldismissal
eventually securing new employment opportunities

instead of remaining idle and waiting the outcome of
(1)Reinstatementaspect the case. (TriadSecurity & AlliedServices, Inc. etal v.
Ortega,G.R.No.160871,Feb.6,2006).
Q:Whataretheremediesavailabletoanillegally
dismissedemployee(Ee)? Q:DistinguishArts.223from279oftheLC?

A:AnEewhoisunjustlydismissedfromworkshall A:
byentitledto: Art.279 Art.223
1. Reinstatement without loss of seniority Presupposes that the Maybeavailedofassoon
rightsand judgment has already as the labor arbiter
2. Full backwages. (Sec. 3, Rule I, Book VI, become final and renders a judgment
IRR) executory. declaring that the
3. Separationpayinlieuofreinstatement,if dismissal of the Ee is
thelatterisnolongerfeasible Consequently, there is illegal and ordering said
nothing left to be done reinstatement. It may be
Q:Whatisreinstatement? except the execution availed of even pending
thereof. appeal
A:Itistherestorationoftheemployeetothestate
from which he has been unjustly removed or Note: An award or order for reinstatement is self
separatedwithoutlossofseniorityrightsandother executory.Itdoesnotrequiretheissuanceofawritof
privileges. execution.(PioneerTexturizingCorp.v.NLRC,G.R.No.
118651,Oct.16,1997)

(a)Immediatelyexecutory:actualreinstatementand
Q:PALdismissedGarcia,forviolatingPALsCode
payrollreinstatement
of Discipline for allegedly sniffing shabu in PALs
Technical Center Toolroom Section. Garcia then
Q:Whataretheformsofreinstatement?
filed for illegal dismissal and damages where the
A: Labor Arbiter (LA) ordered PAL to immediately
1. Actual or physical the employee (Ee) is reinstate Garcia. On appeal, the NLRC reversed
admittedbacktowork the decision and dismissed Garcias complaint for
2. PayrolltheEeismerelyreinstatedinthe lackofmerit.Garciasmotionforreconsideration
payroll wasdeniedbytheNLRC.Itaffirmedthevalidityof
the writ and the notice issued by the LA but
suspended and referred the action to the
93

Rehabilitation Receiver for appropriate action. not include a prayer for reinstatement, unless, of
WhetherGarciamaycollecttheirwagesduringthe coursetheEehaswaivedhisrighttoreinstatement.
period between the LAs order of reinstatement Bylaw,anEewhoisunjustlydismissedisentitledto
pendingappealandtheNLRCdecisionoverturning reinstatement among others. The mere fact that
thatoftheLA? the complaint did not pray for reinstatement will
not prejudice the Ee, because technicalities of law
A: Par. 3 of Art. 223 of the LC provides that the and procedure are frowned upon in labor
decision of the LA reinstating a dismissed or proceedings (Pheschem Industrial Corp. v. Moldez,
separatedEe,insofarasthereinstatementaspectis G.R.No.1161158,May9,2005).
concerned, shall immediately be executory,
pendingappeal. Q: What happens if there is an Order of
Reinstatement but the position is no longer
Even if the order of reinstatement of the LA is available?
reversed on appeal, it is obligatory on the part of
the Er to reinstate and pay the wages of the A: The employee (Ee) should be given a
dismissed Ee during the period of appeal until substantiallyequivalentposition.Ifnosubstantially
reversal by the higher court. On the other hand, if equivalent position is available, reinstatement
theEehasbeenreinstatedduringtheappealperiod shouldnotbeorderedbecausethatwouldineffect
and such reinstatement order is reversed with compeltheemployertodotheimpossible.Insuch
finality, the Ee is not required to reimburse a situation, the Ee should merely be given a
whatever salary he received for he is entitled to separation pay consisting of 1month salary for
such, more so if he actually rendered services every year of service (Grolier Intl Inc. v. ELA, G.R.
duringtheperiod. No.83523,Aug.31,1989)
In other words, a dismissed Ee whose case was (2)Separationpayinlieuofreinstatement

favorably decided by the LA is entitled to receive
wagespendingappealuponreinstatement,whichis Q:Howcanseparationpaybeviewed?
immediatelyexecutory.Unlessthereisarestraining
order,itisministerialupontheLAtoimplementthe A: Under present laws and jurisprudence,
order of reinstatement and it is mandatory on the separationpaymaybeviewedin4ways:
Er to comply therewith. (Garcia vs. PAL, G.R. No.
164856,Jan.20,2009) 1. Inlieuofreinstatementinillegaldismissal
cases,whereEeisorderedreinstatedbut
Q: What is the effect of the reversal of LAs reinstatementisnotfeasible.
decisiontothereinstatedemployee(Ee) 2. As Ers statutory obligation in cases of
legal termination due to authorized
A: If the decision of the LA is later reversed on causesunderArt.283and284oftheLC.
appeal upon the finding that the ground for 3. Asfinancialassistance,asanactofsocial
dismissal is valid, then the Er has the right to justiceandevenincaseoflegaldismissal
require the dismissed Ee on payroll reinstatement underArt.282oftheLC.
to refund the salaries he/she received while the 4. AsemploymentbenefitgrantedinCBAor
case was pending appeal, or it can be deducted companypolicy.(Poquiz,2005)
from the accrued benefits that the dismissed Ee
was entitled to receive from the employer under Q: Is an illegally dismissed employee entitled to
existing laws, CBA provisions, and company reinstatementasamatterofright?
practices.However,iftheEewasreinstatedtowork
during the pendency of the appeal, then the Ee is A:GR:Yes.
entitled to receive the compensation received for
actual services rendered without need of refund XPNS: Proceeds from an illegal dismissal
(Citibank v. NLRC, G.R. No. 14273233, Dec. 4, whereinreinstatementisorderedbutcannotbe
2007). carriedoutasinthefollowingcases:
Q: May a court order the reinstatement of a 1. Reinstatementcannotbeeffectedinview

dismissedemployee(Ee)eveniftheprayerofthe ofthelongpassageoftimeorbecauseof
complaintdidnotincludesuchrelief? therealitiesofthesituation.
2. It would be inimical to the employers
A:Yes.SolongasthereisafindingthattheEewas interest.Whenreinstatementisnolonger
illegally dismissed, the court can order the feasible.
reinstatement of an Ee even if the complaint does
94
LABORLAWTEAM:

3. Whenitwillnotservethebestinterestof asthatprovidedunderArt.283oftheLCincaseof
thepartiesinvolved. retrenchmenttopreventlosses?
4. Company will be prejudiced by
reinstatement. A: No. The separation pay awarded to employees
5. Whenitwillnotserveaprudentpurpose. duetoillegaldismissalisdifferentfromtheamount
6. When there is resultant strained relation ofseparationpayprovidedforinArt.283oftheLC.
(applies to both confidential and Prescinding from the above, Phil. Tobacco is liable
managerialemployees(Ees)only). for illegal dismissal and should be responsible for
7. When the position has been abolished the reinstatement of the Lubat group and the
(applies to both managerial, supervisory payment of their backwages. However, since
andrankandfileEes). reinstatementisnolongerpossibleasPhil.Tobacco
have already closed its Balintawak plant, members
Note:Insuchcases,itwouldbemoreprudenttoorder of the said group should instead be awarded
payment of separation pay instead of reinstatement. normal separation pay (in lieu of reinstatement)
(Quijano v. Mercury Drug Corporation, G.R. No. equivalenttoatleastonemonthpay,oronemonth
126561,July8,1998) payforeveryyearofservice,whicheverishigher.It
must be stressed that the separation pay being
Q: Respondents are licensed drivers of public awarded to the Lubat group is due to illegal
utility jeepneys owned by Moises Capili. When dismissal;hence,itisdifferentfromtheamountof
Capili assumed ownership and operation of the separationpayprovidedforinArticle283incaseof
jeepneys, the drivers were required to sign retrenchmenttopreventlossesorincaseofclosure
individual contracts of lease of the jeepneys. The orcessationoftheErsbusiness,ineitherofwhich
drivers gathered the impression that signing the theseparationpayisequivalenttoatleastone(1)
contract was a condition precedent before they month or onehalf (1/2) month pay for every year
couldcontinuedriving.Thedriversstoppedplying ofservice,whicheverishigher.(Phil.TobaccoFlue
their assigned routes and a week later filed with Curing & Redrying Corp. v. NLRC, G.R. No. 127395,
the Labor Arbiter a complaint for illegal dismissal Dec.10,1998)
praying not for reinstatement but for separation
pay. Are the respondents entitled to separation (a)Strainedrelationrule
pay?
Q:Whatisthedoctrineofstrainedrelations?
A:No.Whendriversvoluntarilychosenottoreturn
to work anymore, they must be considered as A:WhentheErcannolongertrusttheEeandvice
having resigned from their employment. The versa, or there were imputations of bad faith to
common denominator of those instances where each other, reinstatement could not effectively
paymentofseparationpayiswarrantedisthatthe serve as a remedy. This doctrine applies only to
employeewasdismissedbytheemployer.(Capiliv. positionswhichrequiretrustandconfidence(Globe
NLRC,G.R.117378,Mar.26,1997) Mackayv.NLRC,G.R.No.82511,March3,1992).

Q: Two groups of seasonal workers claimed Note: Under the circumstances where the
separation benefits after the closure of Phil. employment relationship has become so strained to
Tobacco processing plant in Balintawak and the preclude a harmonious working relationship and that
transfer of its tobacco operations to Candon, all hopes at reconciliation are naught after
Ilocos Sur. Phil. Tobacco refused to grant reinstatement, it would be more beneficial to accord
separation pay to the workers belonging to the theEebackwagesandseparationpay.
first batch (Lubat group), because they had not
been given work during the preceding year and, Q: What must be proven before the principle of
hence,werenolongerinitsemployatthetimeit strained relations can be applied to a particular
closed its Balintawak plant. Likewise, it claims case?
exemption from awarding separation pay to the
secondbatch(Lurisgroup),becausetheclosureof A:
its plant was due to "serious business losses," as 1. The Ee concerned occupies a position
defined in Art. 283 of the LC. Both labor agencies whereheenjoysthetrustandconfidence
heldthattheLurisandLubatgroupswereentitled ofhisEr;and
to separation pay equivalent to 1/2 month salary 2. That it is likely that if reinstated, an
for every of service, provided that the Ee worked atmosphereofantipathyandantagonism
atleast1monthinagivenyear.Istheseparation may be generated as to adversely affect
pay granted to an illegally dismissed Ee the same the efficiency and productivity of the Ee
concerned. (Globe Mackay Cable & Wire
95

Corp. v. NLRC G.R. No. 82511, Mar. 3, A: The payment of backwages is generally granted
1992) on the ground of equity. It is a form of relief that
restorestheincomethatwaslostbyreasonofthe
Q: Does the doctrine of strained relationship unlawfuldismissal;thegrantthereofisintendedto
alwaysbarreinstatementinallcases? restoretheearningsthatwouldhaveaccruedtothe
dismissedEeduringtheperiodofdismissaluntilitis
A:No.Thedoctrineshouldbeappliedonacaseto determinedthattheterminationofemploymentis
casebasis,basedoneachcasespeculiarconditions for a just cause. It is not private compensation or
and not universally. Otherwise, reinstatement can damages but is awarded in furtherance and
never be possible simply because some hostility is effectuationofthepublicobjectiveoftheLC.Noris
invariably engendered between the parties as a it a redress of a private right but rather in the
result of litigation. That is human nature. (Anscor nature of a command to the employer to make
Transportv.NLRC,G.R.No.85894,Sept.28,1990) publicreparationfordismissinganEeeitherdueto
the formers unlawful act or bad faith. (Tomas
Besides, no strained relations should arise from a Claudio Memorial College Inc., v. CA, G.R. No.
valid and legal act of asserting one's right; 152568,Feb.16,2004)
otherwiseanEewhoshallasserthisrightcouldbe
easilyseparatedfromtheservice,bymerelypaying Q: What is theperiod coveredby the payment of
his separation pay on the pretext that his backwages?
relationship with his employer (Er) had already
become strained. (Globe Mackay Cable & Wire A: The backwages shall cover the period from the
Corp.v.NLRC,G.R.No.82511,Mar.3,1992) dateofdismissaloftheemployeeuptothedateof:
Q: Differentiate Art. 279 of the LC from Sec. 7 of 1. Actual reinstatement, or if reinstatement

R.A.10022. isnolongerfeasible
2. Finality of judgment awardingbackwages
A: (Buhainv.CA,G.R.143709,July2,2002)

Art.279,LC(Local Sec.7,RA10022 Note: The backwages to be awarded should not be
Workers) (MigrantWorkers) diminished or reduced by earnings elsewhere during
Reinstatement the period of his illegal dismissal. The reason is that
the Ee while litigating the illegality of his dismissal
FullReimbursementofhis must earn a living to support himself and his family.
Fullbackwagesfromthe
placementfeewith (Bustamantev.NLRC,G.R.No.111651,Mar.15,1996;
timeofhiscompensation
interestof12%per Buenviajev.CA,G.R.No.147806,Nov.2002)
waswithheldfromhim
annum.
uptothetimeofhis
actualreinstatement. (a)Componentsoftheamountofbackwages

Q: What is included in the computation of
(3)Backwages backwages?
Q:Whatarebackwages? A:Theycoverthefollowing:
A: It is the relief given to an employee (Ee) to 1. Transportation and emergency

compensate him for the lost earnings during the allowances
period of his dismissal. It presupposes illegal 2. Vacation or service incentive leave and
termination. sickleave
th
3. 13 monthpay
Note: Entitlement to backwages of the illegally
dismissed Ee flows from law. Even if he does not ask Note: Facilities such as uniforms, shoes, helmets and
forit,itmaybegiven.Thefailuretoclaimbackwages ponchosshouldnotbeincludedinthecomputationof
in the complaint for illegal dismissal is a mere backwagesbecausesaiditemsaregivenforfree,tobe
procedural lapse which cannot defeat a right granted useonlyduringofficialtourofdutynotforprivateor
under substantive law. (St. Michaels Institute v. personaluse.
Santos,G.R.No.145280,Dec.4,2001)
The award of backwages is computed on the basis of
Q:Whatisthebasisofawardingbackwagestoan 30day month. (JAM Trans Co. v. Flores, G.R. No. L
illegallydismissedemployee(Ee)? 63555,Mar.19,1993)

Q:Whatdoesthetermfullbackwagesmean?
96
LABORLAWTEAM:

A:TheLaborCodeasamendedbyR.A.6715points Q: Reynaldo was hired by Geminilou Trucking

to "full backwages" as meaning exactly that, i.e., Service(GTS)asatruckdrivertohaulanddeliver
without deducting from backwages the earnings productsofSanMiguelPureFoodsCompany,Inc.
derived elsewhere by the concerned Ee during the HewaspaidP400pertripandmade4tripsaday.
periodofhisillegaldismissal.(Buenviajev.CA,G.R. HeclaimedthathewasrequestedbyGTStosigna
147806,Nov.12,2002) contract entitled Kasunduan Sa PagUpa ng
Serbisyowhichherefusedashefoundittoalter
The underlying reason for this ruling is that the hisstatusasaregularEetomerelycontractual.He
employee, while litigating the legality (illegality) of averred that on account of his refusal to sign the
his dismissal, must still earn a living to support Kasunduan, his services were terminated
himselfandfamily,whilefullbackwageshavetobe promptinghimtofileacomplaintbeforetheNLRC
paidbytheemployeraspartofthepricehehasto for constructive dismissal against the GTS. Would

pay for illegally dismissing his Ee. (Bustamante v. Reynaldos refusal to sign the Kasunduan
NLRC,G.R.No.111651,Mar.15,1996) adequatelysupporthisallegationofconstructively
dismissal?
Q: Is an Ee entitled to backwages even after the
closureofthebusiness? A:No.Thetestofconstructivedismissaliswhether
a reasonable person in the employees (Ee's)
A: Yes. The closure of the business rendered the position would have felt compelled to give up his
reinstatement of complainant to her previous job under the circumstances. In the present case,
position impossible but she is still entitled to the the records show that the lone piece of evidence
paymentofbackwagesuptothedateofdissolution submittedbyReynaldotosubstantiatehisclaimof
orclosure.Anemployerfoundguiltyofunfairlabor constructive dismissal is an unsigned copy of the
practiceindismissinghisEemaynotbeorderedto Kasunduan. This falls way short of the required
pay backwages beyond the date of closure of quantumofproofwhichissubstantialevidence,or
businesswheresuchclosurewasduetolegitimate suchrelevantevidenceasareasonablemindmight
business reasons and not merely an attempt to accept as adequate to support a conclusion.
defeat the order of reinstatement. (Pizza Inn v. Reynaldo was not dismissed, but that he simply
NLRC,G.R.No.74531,June28,1988) failedtoreportforworkafteranaltercationwitha
fellow driver. (Madrigalejos vs. Geminilou Trucking
Q:Whatarethecircumstancesthatpreventaward Service,G.R.No.179174,Dec.24,2008)
ofbackwages?
Q: Flores, a conductor of JAM TransportationCo.,
A: Inc., had an accident where he had to be
1. Dismissalforcause hospitalizedforanumberofdays.Uponreporting
2. Death, physical or mental incapacity of back to the company he was told to wait. For
theemployee severaldaysthiscontinuedandhewaspromiseda
3. Businessreverses routeassignmentwhichdidnotmaterialize.Upon
4. Detentioninprison speaking to Personnel Manager Medrano, he was
toldthathewillbeacceptedbacktoworkbutasa
(4)ConstructiveDismissal newemployee.Floresrejectedtheofferbecauseit
wouldmeanforfeitureofhis18yearsofserviceto
Q:Whatisconstructivedismissal? the company. Is the offer for reinstatement as a
newemployee(Ee)aconstructivedismissal?
A:Aninvoluntaryresignationresortedtowhen:
A: Yes. Flores reemployment as a new Ee would
1. continued employment becomes be very prejudicial to him as it would mean a
impossible,unreasonable,orunlikely demotion in rank and privileges, retirement
2. thereisademotioninrankordiminution benefitsashisprevious18yearsofservicewiththe
inpayor company would simply be considered as non
3. clear discrimination, insensibility or existent.Itamountstoconstructivedismissal.(JAM
disdain by an Er becomes unbearable to Transportation Co., Inc. v. Flores, G.R. No. 82829,
the Ee. (Leonardo v. NLRC, G.R. Mar.19,1993)
No.125303,June16,2000)
Q:Quinanolawastransferredfromthepositionof
Note:Thereisnoformaldismissal.TheEeisplacedin Executive Secretary to the Executive Vice
a situation by the Er such that his continued PresidentandGeneralManagertotheProduction
employmenthasbecomeunbearable.Abandonmentis DeptasProductionSecretary.Quinanolarejected
incompatiblewithconstructivedismissal.
the assignment and filed a complaint for illegal
97

dismissal due to constructive dismissal. Did the This period is intended only for the purpose of
transfer of Quinanola amount to constructive investigating the offense to determine whether he
dismissal? istobedismissedornot.Itisnotapenalty.
A: No. Quinanolas transfer was not unreasonable Note: The Er may continue the period of preventive
since it did not involve a demotion in rank nor a suspensionprovidedthathepaysthesalaryoftheEe.
changeinherplaceofworknoradiminutioninpay,
benefits and privileges. It did not constitute a If more than 1 month, the Ee must actually be
constructivedismissal.Furthermore,anemployees reinstated or reinstated in the payroll. Officers are
securityoftenuredoesnotgivehimavestedright liableonlyifdonewithmalice.
inhispositionaswoulddeprivethecompanyofits
Q:CantorandPepitowerepreventivelysuspended
prerogative to change his assignment or transfer
pending application for their dismissal by Manila
himwherehewillbemostuseful.(PhilippineJapan
Doctors Hospital after being implicated by one
Active Carbon Corp. v. NLRC, G.R. No. 83239, Mar.
Macatubal when they refused to help him when
8,1989)
he was caught stealing xray films from the
Q: Sangil was a utility man/assistant steward of hospital.WasthepreventivesuspensionofCantor
thepassengercruisevesselCrownodysseyundera andPepitoproper?
oneyear contract. Sangil suffered head injuries
A: Where the continued employment of an Ee
after an altercation with a Greek member of the
posesaseriousandimminentthreattothelifeand
crew. He informed the captain that he no longer
propertyoftheemployeroronhiscoEes,theEes
intends to return aboard the vessel for fear that
preventive suspension is proper. In this case, no
further trouble may erupt between him and the
suchthreattothelifeandpropertyoftheErorof
otherGreekcrewmembersoftheship.WasSangil
their coEes is present and they were merely
constructivelydismissed?
implicated by the Macatubal. (Manila Doctors
A:Yes.Thereisconstructivedismissalwheretheact Hospitalv.NLRC,G.R.No64897,Feb.28,1985)
of a seaman in leaving ship was not voluntary but
(6)Quitclaim
was impelled by a legitimate desire for self
preservation or because of fear for his life
Q:Whatisaquitclaim?
Constructive dismissal does not always involve
diminutioninpayorrankbutmaybeinferredfrom A: It is a document executed by an employee in
an act of clear discrimination, insensibility or favor of the employer preventing the former from
disdain by an Er may become unbearable on the filing any further money claim against the latter
partoftheEethatitcouldforecloseanychoiceby arisingfromemployment.
him except to forego his continued employment.
(Sunga Ship Management Phils., Inc. v. NLRC, G.R. Q:Whataretheelementsofavalidquitclaim?
No.119080,April14,1998)
A:
(5)PreventiveSuspension 1.Voluntarily entered into with full
understanding of what the employee is
Q:Whatispreventivesuspension? doing
2. Representsareasonablesettlement
A:Duringthependencyoftheinvestigation,theEr

may place the Ee under preventive suspension
Q:Whatconstitutesreasonablesettlement?
leading to termination when there is an imminent
threatorareasonablepossibilityofathreattothe A: Reasonable settlement requires that the
lives and properties of the Er, his family and consideration for the quitclaim is credible and
representativesaswellastheoffenderscoworkers reasonable.(Periquetv.NLRC,G.R.No.91298,June
bythecontinuedserviceoftheEe. 22,1990)
Q:Whatisthedurationofpreventivesuspension? Q: Is dire necessity a ground to nullify a
quitclaim?
A:Itshouldnotlastformorethan30days.TheEe
shouldbemadetoresumehisworkafter30days.It A: Dire necessity is not an acceptable ground for
can be extended provided the Ees wages are paid annulling the releases, especially since it has not
afterthe30dayperiod. beenshownthattheemployeeshadbeenforcedto
executethem.Ithasnotevenbeenproventhatthe
considerations for the quitclaims were
98
LABORLAWTEAM:

unconscionably low and that the petitioners had A: Itistheresultofabilateralactoftheparties,a

beentrickedintoacceptingthem.Furthermore,no voluntary agreement between the employer and
deception has been established on the part of the the employees whereby the latter after reaching a
employer that would justify the annulment of the certain age agrees and/or consents to sever his
employees quitclaim. (Veloso v. DOLE, G.R. No. employment with the former. (Soberano v. Sec. of
87297,August5,1991.) Labor, G.R. Nos. L4375356 and L50991, Aug. 29,
1980)
(7)Terminationofemploymentbyemployee
Q:Whatarethekindsofretirementschemes?
Q:Howcananemployee(Ee)terminatehisservice
withhisemployer(Er)? A:
1. Compulsoryandcontributoryinnature;
A: 2. One set up by the agreement between
1. Without just cause by serving written theemployer(Er)andemployees(Ees)in
notice on the Er at least 1 month in the CBA or other agreements between
advance. The Er upon whom no such them (other applicable employment
notice was served may hold the Ee liable contract);
fordamages. 3. One that is voluntarily given by the Er,
expressly as announced company policy
2. WithjustcauseanEemayputanendto or impliedly as in the failure to contest
employment without serving any notice the Ees claim for retirement benefits.
on the Er for any of the following just (Marilyn Odchimar Gertach v. Reuters
causes: Limited, Phils., G.R. No. 148542, Jan. 17,
a. Serious insult by the Er or his 2005)
representative on the hour and
personoftheEe Q: Who are covered by the LC provisions on
b. Inhuman and unbearable treatment retirement?
accorded the Ee by the Er or his
representative A:
c. Commissionofacrimeoroffenseby GR:Allemployees(Ees)intheprivatesector:
the Er or his representative against 1. Regardless of their position, designation
the person of the Ee or any of the orstatus;and
immediatemembersofhisfamily 2. Irrespectiveofthemethodbywhichtheir
d. Othercausesanalogoustoanyofthe wages are paid. (Sec.1, Rule II, Book VI,
foregoing IRR)

Q:Whenisemploymentnotdeemedterminated? XPN:
1. Ees of the National Govt and its political
A: subdivisions,includingGOCCs(iftheyare
1. Bona fide suspension of the operation of coveredbytheCivilServiceLaw)
abusinessorundertakingforaperiodnot 2. Domestic helpers and persons in the
exceeding6months,or personalserviceofanother
2. The fulfillment by the Ee of a military or 3. Ees of retail, service, and agricultural
civic duty shall not terminate establishments or operations employing
employment. notmorethan10Ees(Sec.2,RuleII,Book
VI,IRR)
Note:Inallsuchcases,theErshallreinstatetheEeto
hisformerpositionwithoutlossofseniorityrightsifhe Q:Whatistheretirementage?
indicateshisdesiretoresumehisworknotlaterthan1
monthfromtheresumptionofoperationsofhisEror A:Itistheageofretirementthatisspecifiedinthe:
fromhisrelieffromthemilitaryorcivicduty.(Art.286) 1. CBA;or
2. Employmentcontract;or
3.RETIREMENTPAYLAW 3. Retirement plan (Sec. 3, Rule II, Book VI,
IRR).
a.Coverage,Exclusionsfromcoverage,Components 4. Optional retirement age for underground
ofretirementpay mining employees: 5060 years provided
Q:Whatisretirement? theyhaveatleastservedforaperiodof5
years.(Art.285asamendedbyR.A.8558)

99

Q:Whatistheretirementageintheabsenceofa 6 months being considered as 1 whole year.

retirementplanorotherapplicableagreement? (Sec.5.1,RuleII,BookVI,IRR)
A: Q: What comprises month salary or retirement

1. Optional60yearsold/5yearsinservice pay?
(includes authorized absences, vacations,
regular holidays, mandatory military or A:Unlesspartiesprovideforbroaderinclusions:
civicservice) 1. 15dayssalarybasedonlatestsalaryrate;
2. Cash equivalent of not more than 5 days
Note:Theoptiontoretireuponreachingthe of service incentive leaves (22.5/year of
ageof60yearsormorebutnotbeyond65 service)
istheexclusiveprerogativeoftheemployee 3. 1/12ofthe13thmonthpay
(Ee)ifthereisnoprovisiononretirementin 4. Allotherbenefitsasmaybeagreedupon
a CBA or any other agreement or if the by the employer and employee (Ee).
employer (Er) has no retirement plan. (R.A. (Sec.5.2,RuleII,BookVI,IRR)
7641;Capiliv.NLRC,G.R.No.117378,Mar.
26,1997)
Note:UnderSec.26ofR.A.No.4670,otherwiseknown
2. Compulsory 65 years old, regardless of as Magna Carta for Public School Teachers, public
yearsofservice(companyisnotboundto school teachers having fulfilled the age and service
dismissEe;itisautomatic).(Sec.4,RuleII, reqtsoftheapplicableretirementlawsshallbegiven
BookVI,IRR) one range salary raise upon the retirement, which
shallbethebasisofthecomputationofthelumpsum
Note: Retirement benefits, where not oftheretirementpayandmonthlybenefitthereafter.
mandated by law, may be granted by
agreement of the Ees and their Er or as a Q: Can Art. 287 of the LC (on retirement) as
voluntary act on the part of the Er. amendedbyR.A.7641beappliedretroactively?
Retirement benefits are intended to help
theEeenjoytheremainingyearsofhislife, A:Yes,provided:
lessening the burden of worrying for his 1. The claimant for retirement benefits was
financialsupport,andareaformofreward stilltheemployeeoftheemployeratthe
forhisloyaltyandservicetotheEr(Aquino timethestatutetookeffect;and
v.NLRC,G.R.No.87653,Feb.11,1992) 2. The claimant was in compliance with the
reqts for eligibility under the statute for
Q: Is compulsory retirement age below 60 suchretirementbenefits.(PSVSIAv.NLRC,
allowed? G.R.No.115019,April14,1997)

A: Yes. Art. 287 permits Er and Ee to fix the Q: Are the provisions of the retirement plan
applicableretirementageatbelow60.Thesameis bindingaspartoftheemploymentcontract?
legalandenforceablesolongasthepartiesagreeto
begovernedbysuchCBA.(PantrancoNorthExpress A: Yes. The retirement plan forms part of the
v.NLRC,G.R.No.95940,July24,1996) employmentcontractsinceitismadeknowntothe
Ees and accepted by them, and such plan has an
Q: What is the rule for extension of service of expressprovisionthatthecompanyhasthechoice
retiree upon his reaching the compulsory to retire an Ee regardless of age, with 20 years of
retirementage? service, said policy is within the bounds
contemplated by the LC. Moreover, the manner of
A:Uponthecompulsoryretirementofanemployee
computationofretirementbenefitsdependsonthe
(Ee) or official in the public or private service, his
stipulation provided in the company retirement
employment is deemed terminated. The matter of
plan. (Progressive Devt Corporation v. NLRC, G.R.
extension of service of such Ee or official is
No.138826,Oct.30,2000)
addressed to the sound discretion of the Er. (UST
FacultyUnionv.NLRC,G.R.No.89885,Aug.6,1990) Q: Rivera was employed as senior manufacturing
pharmacistbyUNILAB.ShelaterbecameDirector
Q:Whatareretirementbenefits?
of UNILAB's Manufacturing Division. UNILAB
adopted a comprehensive retirement plan (the
A: In the absence of an applicable agreement or
plan or retirement plan) supported by a
retirement plan A retiree is entitled to a
retirement fund. A member is compulsorily
retirement pay equivalent to at least month
retireduponreachingage60orhascompleted30
salaryforeveryyearofservice,afractionofatleast
100
LABORLAWTEAM:

years of service, whichever comes first. Rivera Q: In 55, Hilaria was hired as a grade school
completed30yearsofserviceandUNILABretired teacher at the Sta. Catalina College.In 70, she
herpursuanttothetermsoftheplan,shereceived applied for and was granted a 1 yr LOA without
the benefits in 88. At Rivera's request, UNILAB pay due to the illness of her mother.After the
allowedhertocontinueworkingforthecompany. expiration in 71 of her LOA, she had not been
She continued working beyond the compulsory heardfrombySta.Catalina.Inthemeantime,she
separation from service that resulted from her was employed as a teacher at the San Pedro
retirement.From1993to1994,Riveraservedasa ParochialSchoolduringSY8081andattheLiceo
personal consultant under contract for UNILABs deSanPedro,duringSY8182.In82,sheapplied
sister companies which assigned Rivera to render anewatSta.Catalinawhichhiredher.OnMar22,
st
service involving UNILAB.In 1992, the company 97, during the 51 Commencement Exercises of
amended its retirement plan, providing, among Sta. Catalina, Hilaria was awarded a Plaque of
others, for an increase in retirement benefits. Appreciation for 30 yrs of service and P12,000 as
Rivera asked that her retirement benefits be gratuity pay. On May 31, 97, Hilaria reached the
increased in accordance with the amended compulsory retirement age of 65. Sta. Catalina
retirementprogram.WhetherRiveraisentitledto pegged her retirement benefits at
theadditionalretirementbenefitsoftheamended P59,038.35.Deducted was theamount of P12,000
retirementplan? representing the gratuity pay which was given to
her.
A: No. Whether these terms included renewed
coverage in the retirement plan is an evidentiary Should the gratuity pay be deducted from the
gap that could have been conclusively shown by retirementbenefits?
evidenceofdeductionsofcontributionstotheplan
after1988.Twoindicators,however,tellusthatno A: No. As for the ruling of theCA affirming that of
suchcoveragetookplace.Thefirstisthattheterms the NLRC that the P12,000 gratuity pay earlier
of the retirement plan, before and after its 1992 awardedtoHilariashouldnotbedeductedfromthe
amendment,continuedtoexcludethosewhohave retirement benefits due her, the same is in order.
rendered 30 years of service or have reached 60 Gratuity pay is separate and distinct from
years of age. Therefore, the plan could not have retirement benefits. It is paid purely out of
coveredher.Thesecondistheabsenceofevidence generosity.
of, or of any demand for, any reimbursement of
whatRiverawouldhavepaidascontributionstothe Q: What is the difference between gratuity pay
plan had her coverage and deductions continued andretirementbenefits?
after 1988. Thus, the Court concludes that her
renewed service did not have the benefit of any A:
retirement plan coverage. (Rivera v. United GRATUITYPAY RETIREMENTBENEFITS
Laboratories,Inc.,G.R.No.155639,April22,2009) Itispaidtothe
beneficiaryforthepast Areintendedtohelpthe
Q:Isaspecialretirementplandifferentfromthose servicesorfavor Eeenjoytheremaining
contemplatedundertheLCasagreeduponbythe renderedpurelyoutof yearsofhislife,releasing
partiesvalid? thegenerosityofthe himfromtheburdenof
giverorgrantor.Itisnot worryingforhisfinancial
A:Yes.Apilotwhoretiresafter20yearsofservice intendedtopayaworker support,andareaformof
or after flying 20,000 hours would still be in the foractualservices rewardforhisloyaltyto
prime of his life and at the peak of his career, renderedorforactual theEr.(Sta.Catalina
performance.Itisa CollegeandSr.Loreta
comparedtoonewhoretiresattheageof60years
moneybenefitorbounty Oranza,vs.NLRCand
old. Based on this peculiar circumstance that PAL
giventotheworker,the HilariaTercera,G.R.No.
pilots are in, the parties provided for a special purposeofwhichisto 144483.November19,
scheme of retirement different from that rewardEeswhohave 2003,J.CarpioMorales)
contemplated in the LC. Conversely, the provisions renderedsatisfactory
of Art. 287 of the LC could not have contemplated servicetothecompany.
thesituationofPAL'spilots.Rather,itwasintended
for those who have no more plans of employment
after retirement, and are thus in need of financial b.RetirementpayunderRA7641visvisretireent
assistanceandrewardfortheyearsthattheyhave benefitsunderSSSandGSISlaws
rendered service. (PAL v. Airline Pilots Assn of the
Phils.,G.R.No.143686,Jan.15,2002) Q:WhatisretirementpayundertheLCinrelation
toretirementbenefitsunderSSSandGSISlaws?
101

A:
Revised
Employees
Social Government
Compensation
SecurityLaw Service
Act
InsuranceAct
Compulsory
upon all E e s
n o t o v e r 6 0 Compulsory for
years of age all permanent
andtheirErs. Ees below 60 Compulsory upon
years of age all Ers and their
1.Filipinos upon Ees not over 60
recruited in appointment to years of age;
the Phils. by permanent Provided, that an
foreignbased status, and for Ee who isover 60
Ers for all elective years of age and
employment officials for the paying
abroadmaybe duration oftheir contributions to
coveredbythe tenure. qualify for the
SSS on a retirement or life
voluntary 1. Any person, insurance benefit
basis. whether elected administered by
or appointed, in the System shall
2. theserviceofan be subject to
Compulsory Er is a covered compulsory
upon all self Ee if he receives coverage.
employed compensation
persons forsuchservice.
earning P1,800
or more per
annum.
Note: The Ees Compensation Commission shall ensure

adequate coverage of Filipino Ees employed abroad,
subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS
including the members of the AFP, and any person
employed as casual, emergency, temporary, substitute
or contractual, or any person compulsorily covered by
theSSSarecoveredbytheEesCompensationProgram.
(1997BarQuestion)
102
LABORLAWTEAM:

MANAGEMENT PREROGATIVE
E.MANAGEMENTPREROGATIVE the school's laudable mission which, as

already stated, accords with high
Q:WhatisManagementPrerogative? constitutionalprecepts.Thisanswerdoes
not contradict the ruling in ChuaQua
A: wheretheteachermerelyfellinlovewith
GR: It is the right of an Er to regulate, a bachelor student and the teacher, also
accordingtohisowndiscretionandjudgment, single, did not get pregnant out of
allaspectsofemployment,including: wedlock.(2000BarQuestion)
1. Hiring
2. Workassignments Q:LittleHandsGarmentCompany,anunorganized
3. Workingmethods manufacturer of children's apparel with around
4. Time,placeandmannerofwork 1,000workers,sufferedlossesforthe1stfirsttime
5. Toolstobeused in history when its US and European customers
6. Processestobefollowed shiftedtheirhugeorderstoChinaandBangladesh.
7. Supervisionofworkers ThemanagementinformeditsEesthatitcouldno
8. Workingregulations longer afford to provide transportation shuttle
9. TransferofEes services. Consequently, it announced that a
10. Worksupervision normal fare would be charged depending on the
11. Layoffofworkers distance traveled by the workers availing of the
12. Discipline service.
13. Dismissal
14. Recallofworkers WastheLittleHandsGarmentsCompanywithinits
rights to withdraw this benefit which it had
XPNs:Otherwiselimitedbyspeciallaws. unilaterallybeenprovidingtoitsEes?

Note: So long as a companys prerogatives are A: Yes, because this is a management prerogative
exercised in good faith for the advancement of the which is not due any legal or contractual
Ersinterest and not for the purpose of defeating or obligation.Thefactsofthecasedonotstatethe
circumventingtherightsoftheEesunderspeciallaws circumstances through which the shuttle service
or under valid agreements, the Supreme Court will maybeconsideredasabenefitthatripenedintoa
upholdthem. demandable right. There is no showing that the
benefit has been deliberately and consistently
Q: 1. An exclusive school for girls, run by a granted,i.e.withtheemployersfullconsciousness
religious order, has a policy of not employing thatdespiteitsnotbeingboundbylaworcontract
unwedmothers,womenwithliveinpartners,and to grant it, it just the same granted the benefit.
lesbians.Isthepolicyviolativeofanyprovisionof (2005BarQuestion)
theLConemploymentofwomen?
1.DISCIPLINE
2. The same school dismissed 2 female faculty
membersonaccountofpregnancyoutofwedlock. Q:DiscussbrieflytheErsrighttodisciplinehisEes.
Did the school violate any provision of the LC on
employmentofwomen? A: TheErhastheprerogativetoinstilldisciplinein
his Ees and to impose reasonable penalties,
A: including dismissal, on erring Ees pursuant to
1. No,thepolicydoesnotviolatetheLC.The company rules and regulations. (San Miguel
practiceisavalidexerciseofmanagement Corporationv.NLRC,G.R.No.87277,May12,1989)
function. Considering the nature and
reasonforexistenceoftheschool,itmay Q: Is the power of the Er to discipline his Ees
adopt such policy as will advance its absolute?
laudable objectives. In fact, the policy
accordswiththeconstitutionalpreceptof A: No. While management has the prerogative to
inculcating ethical and moral values in discipline its Ees and to impose appropriate
schools. The school policy does not penalties on erring workers, pursuant to company
discriminate against women solely on rules and regulations, however, such management
account of sex (Art. 135, LC) nor are the prerogativesmustbeexercisedingoodfaithforthe
actsprohibitedunderArt.137oftheLC. advancement of the Ers interest and not for the
purposeofdefeatingorcircumventingtherightsof
2. No,becausetotoleratepregnancyoutof the Ees under special laws and valid agreements.
wedlockwillbeablatantcontradictionof
103

(PLDT vs. Teves, G.R. No. 143511, November 10, or a reward, which a person has a right to refuse.
2010) When an Ee refused to accept his promotion, he
wasexercisinghisrightandcannotbepunishedfor
Q: May the Er be compelled to share with its Ees it.Whileitmaybetruethattherighttotransferor
the prerogative of formulating a code of reassign an Ee is an Ers exclusive right and the
discipline? Is a code of discipline unilaterally prerogative of management, such right is not
formulatedbytheErenforceable? absolute. (Dosch vs. NLRC and Northwest Airlines,
G.R.No.51182,July5,1983)
A:TheErhastheobligationtosharewithitsEesits
prerogativeofformulatingacodeofdiscipline.This Q: Who has the burden of proving that the
is in compliance with the States policy stated in transferwasreasonable?
Article 211 of the Labor Code, to ensure the
participation of workers in decision and policy A:TheErmustbeabletoshowthatthetransferis
making processes affecting their rights, duties and notunreasonable,inconvenientorprejudicialtothe
welfare. The exercise of management prerogatives Ee; nor does it involve a demotion in rank or a
has, furthermore, never been considered to be diminution of his salaries, privileges and other
boundless.Thisobligationisnotdispensedwithby benefits.ShouldtheErfailtoovercomethisburden
a provision in the collective bargaining agreement of proof, the Ees transfer shall be tantamount to
recognizing the exclusive right of the Er to make constructive dismissal. (Blue Dairy Corporation v.
andenforcecompanyrulesandregulationstocarry NLRC,314SCRA401[1999])
outthefunctionsofmanagementwithouthavingto
discuss the same with the union and much less 3.PRODUCTIVITYSTANDARD
obtain the latters conformity thereto. A code of
discipline unilaterally formulated and promulgated Q:MayanErimposeproductivitystandardsforits
by the Er would be unenforceable. (Philippine workers?
Airlines, Inc. vs. NLRC et al., G.R. No. August 13,
1993.) A: Yes. An Er is entitled to impose productivity
standards for its workers, and in fact, non
2.TRANSFEROFEMPLOYEES compliance may be visited with a penalty even
more severe than demotion. The practice of a
Q: Discuss briefly the Ers right to transfer and company in laying off workers because they failed
reassignEes. tomaketheworkquotahasbeenrecognizedinthis
jurisdiction. Failure to meet the sales quota
A:Inthepursuitofitslegitimatebusinessinterests, assignedtoeachofthemconstituteajustcauseof
especially during adverse business conditions, their dismissal, regardless of the permanent or
management has the prerogative to transfer or probationarystatusoftheiremployment.Failureto
assign Ees from one office or area of operation to observe prescribed standards of work, or to fulfill
another provided there is no demotion in rank or reasonable work assignments due to inefficiency
diminution of salary, benefits and other privileges may constitute just cause for dismissal. Such
and the action is not motivated by discrimination, inefficiencyisunderstoodtomeanfailuretoattain
bad faith, or effected as a form of punishment or work goals or work quotas, either by failing to
demotion without sufficient cause. This privilege is complete the same within the allotted reasonable
inherent in the right of Ers to control and manage period, or by producing unsatisfactory results. This
theirenterpriseseffectively. management prerogative of requiring standards
may be availed of so long as they are exercised in
Note: The right of Ees to security of tenure does not goodfaithfortheadvancementoftheErsinterest.
givethemvestedrightstotheirpositionstotheextent (Leonardovs.NLRC,G.R.No.125303,June16,2000)
ofdeprivingmanagementofitsprerogativetochange
their assignments or to transfer them. (Endico v. 4.GRANTOFBONUS
Quantum Foods Distribution Center, G.R. No. 161615,
Jan.30,2009) Q:Whatisabonus?

Q: May the Er exercise his right to transfer an Ee A:ItisanamountgrantedandpaidtoanEeforhis
and compel the latter to accept the same if said industry and loyalty which contributed to the
transfer is coupled with or is in the nature of success of the Ers business and made possible the
promotion? realizationofprofits.

A:No.ThereisnolawthatcompelsanEetoaccept Q:Canbonusbedemanded?
promotion,asapromotionisinthenatureofagift
104
LABORLAWTEAM:

MANAGEMENT PREROGATIVE
oftimehasbeenpayinghisEeswagesdueforeight
A: hours work although the work shift less than eight
GR: Bonus is not demandable as a matter of hours (e.g. seven) it cannot later on increase the
right. It is a management prerogative given in workinghourswithoutanincreaseinthepayofthe
addition to what is ordinarily received by or employees affected. An Er is not allowed to
strictlyduetorecipient.(ProducersBankofthe withdraw a benefit which he has voluntarily given.
Phil.v.NLRC,G.R.No.100701,March28,2001) AnErisnotallowedtowithdrawabenefitwhichhe
hasvoluntarilygiven.
XPNs:Givenforalongperiodoftime
1. Consistent and deliberate Er continued 6.MARITALDISCRIMINATION
giving benefit without any condition
imposedforitspayment Q: Is a company policy prohibiting marriage
2. Er knew he was not required to give betweencoworkersvalid?
benefit
3. Nature of benefit is not dependent on A: There must be a finding of a bona fide
profit occupational qualification (BFOQ) to justify an Ers
4. Made part of the wage or compensation No Spouse Rule. There must be a compelling
agreed and stated in the employment business necessity for which no alternative exists
contract. other than the discriminating practice. (Star Paper
vs.Simbol,G.R.No.164774,April12,2006)
Q: The projected bonus for the Ees of Suerte Co.
was 50% of their monthly compensation. Q: What are the factors that the Er must prove
Unfortunately, due to the slump in the business, inordertojustifyBFOQ?
the president reduced the bonus to 5% of their
compensation. Can the company unilaterally A:TheErmustprove2factors:
reducetheamountofbonus?Explainbriefly. 1. That the employment qualification is
reasonably related to the essential
A: Yes. The granting of a bonus is a management operationofthejobinvolved;and
prerogative,somethinggiveninadditiontowhatis 2. Thatthereisafactualbasisforbelieving
ordinarily received by or strictly due the recipient. that all or substantially all persons
AnErcannotbeforcedtodistributebonuseswhen meeting the qualification would be
it can no longer afford to pay. To hold otherwise unabletoproperlyperformthedutiesof
wouldbetopenalizetheErforhispastgenerosity. thejob.(StarPaperetal.vs.Simbol,G.R.
(Producers Bank of the Phil. v NLRC, G.R. No. No.164774,April12,2006)
100701,March28,2001).(2002BarQuestion)
Q: Peds was employed by Glaxo as medical
5.CHANGEOFWORKINGHOURS representativewhohasapolicyagainstEeshaving
relationships against competitors Ees. Peds
Q:DiscussbrieflytheErsrighttochangeworking marriedJali,aBranchcoordinatorofAstra,Glaxos
hours. competitor.Pedswastransferredtoanotherarea.
Pedsdid not accept such transfer.Is the policy of
A:Wellsettledistherulethatmanagementretains Glaxovalidandreasonablesoastoconstitutethe
theprerogative,wheneverexigenciesoftheservice actofPedsaswillfuldisobedience?
sorequire,tochangetheworkinghoursofitsEes.
A: The prohibition against personal or marital
Q: May the normal hours fixed in Article 83 be relationships with Ees of competitorscompanies
reducedbytheEr?Explain. upon Glaxos Ees is reasonable under the
circumstances because relationships of that nature
A: The present article provides that the normal might compromise the interest of the company.
hours of work of an Ee shall not exceed eight (8) Glaxo does not impose an absolute prohibition
hoursaday.ThisimpliesthattheEr,intheexercise against relationships between its Ees and those of
of its management prerogatives, may schedule a competitorcompanies.ItsEesarefreetocultivate
work shift consisting of less than eight hours. And relationships with and marry persons of their own
following the principle of a fair days wage for a choosing.Whatthecompanymerelyseekstoavoid
fairdayslabor,theErisnotobligedtopayanEe, is a conflict of interest between the Ee and the
workingfor lessthaneighthoursaday,thewages company that may arise out of such relationships.
due for eight hours. Nonetheless, if by voluntary Furthermore, the prohibition forms part of the
practiceorpolicy,theEeforaconsiderableperiod employment contract and Peds was aware of such
105

restrictions when he entered into a relationship 3. Generalprinciplesoffairplayandjustice

withJali.(DuncanAssociationofDetailmanPTGWO
v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, Sep. Furthermore, a line must be drawn between
17,2004) management prerogatives regarding business
operationsperseandthosewhichaffecttherights
7.POSTEMPLOYMENTBAN of Ees. In treating the latter, management should
seetoitthatitsEesareatleastproperlyinformed
Q: Genesis Fulgencio had been working for of its decisions and modes of actions. So long as a
Solidbank Corporation since 1977. He later on companysprerogativesareexercisedingoodfaith
appliedforretirement.SolidbankrequiredGenesis fortheadvancementoftheErsinterestandnotfor
to sign an undated Undertaking where he the purpose of defeating or circumventing the
promised that "[he] will not seek employment rights of the Ees under special laws or under valid
with a competitor bank or financial institution agreements, the Supreme Court will uphold them.
within one (1) year from February 28, 1995, and (PAL v. NLRC, G.R. No. 85985, Aug. 13, 1993; San
that any breach of the Undertaking or the Miguel Brewery Sales v9. Ople, G.R. No. 53515,
provisions of the Release, Waiver and Quitclaim February8,1989)
would entitle Solidbank to a cause of action
againsthimbeforetheappropriatecourtsoflaw. Note:Itmustbeestablishedthattheprerogativebeing
Equitable Banking Corporation (Equitable) invokedisclearlyamanagerialone
employed Genesis. Is the postretirement
employmentbanincorporatedintheUndertaking
which Genesis executed upon his retirement is
unreasonable, oppressive, hence, contrary to
publicpolicy?
A: No. There is a distinction between restrictive

covenants barring an Ee to accept a post
employment competitive employment or restraint
ontradeinemploymentcontractsandrestraintson
postretirement competitive employment in
pensionandretirementplanseitherincorporatedin
employment contracts or in collective bargaining
agreements between the Er and the union of Ees,
or separate from said contracts or collective
bargaining agreements which provide that an Ee
who accepts post retirement competitive
employment will forfeit retirement and other
benefitsorwillbeobligedtorestitutethesameto
theemployer.Thestrongweightofauthorityisthat
forfeitures for engaging in subsequent competitive
employment included in pension and retirement
plansarevalideventhoughunrestrictedintimeor
geography. A postretirement competitive
employment restriction is designed to protect the
EragainstcompetitionbyformerEewhomayretire
and obtain retirement or pension benefits and, at
thesametime,engageincompetitiveemployment.
(Rivera vs. Solidbank, G.R. No. 163269, April 19,
2006)
8.LIMITATIONSINITSEXERCISE
Q: Is the exercise of management prerogative

unlimited?
A:No.Itiscircumscribedbylimitationsfoundin:
1. Law,
2. CBA,or
106
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FUNDAMENTAL PRINCIPLES AND POLICIES

LABORLAW 3. Social legislation It includes laws that

rightsandbenefitsasmaybeprovidedby provides incentives to needed

adoption by the government of measures A:No,theConstitutionprovidesthattheStateshall

1. One employed in an agricultural or farm

A: When it is acting as such in relation to persons or representation of persons in

A: A: The Labor Organization designated or selected

recognized as such. Whether the Union may

A: No. Art. 255 of the LC declares that only the

Q: Are probationary Ees allowed to vote at the

A: Yes. Under Art. 255 of the LC the labor

B. RECRUITMENTANDPLACEMENT 3. Members of the diplomatic corps (but

A: It is employment of a worker outside the andexecutoryorderswithintheperiodof

private recruitment and placement agency, is (b)IllegalRecruitment

dismissal and for payment of his money claims. thePOEAorentitiesauthorizedbytheSecretaryof

2. Employers Will be excluded from the processing of pending workers'

3. When public welfare so requires. (Sec. 4 3. Ithasconcludedabilateralagreementor

of not less than P500,000 but not more than JURISDICTION

Art.25.PrivateSectorParticipationinthe Q: Is a corporation, 70% of the authorized and

Recruitment and Employment of Land

A: They are prohibited from engaging in the

Q: WTTA is a wellknown travel agency and an

A: The application should be disapproved, as it is

Q: What are the only authorized payments that

consultations with the workers and supervisors, a

Note: Where during meal period, the laborers are

A: Rest periods or coffee breaks running from 5 to 20

d. Value of the benefits derived by the to travel to his regular place of

and holidays are required for entitlement to Rateofthefirst8hoursworkedon

coverage of Art. 82, under the provisions of hours

nonprofit institutions. A covered Ee who works

when the company's executives using the cars do specificwagesperday,withoutproviding

between midnight and 6am of the

Q:WhoareentitledtoNSD? 1. For work done or to be done, or for

2. Fair and reasonable value of board, c.FacilitiesandSupplements

1. Declaration of bankruptcy or judicial mortgagee of property. Was the Labor Arbiter

(c) Incaseswheretheemployerisauthorized worker concerned (Art. 113). Art. 241(o)

A: A method of minimum wage adjustment (MBTCvNWPCCommission,G.R.NO.144322,Feb.

A:GR:No. Workonascheduled +30%PremiumPay(PP)

tolaw,morals,goodcustoms,publicorderorpublic considered regular holidays. (Presidential

Q: Can a Muslim Ee working outside the Muslim 8.Eepaidfixedamountforperformingwork

Q: Distinguish between monthly paid and daily cleaning of machineries compensated.

of work interruptions is defeated when a Authorized 300%

practice or policy, or that provided in the theSILmaybeonaproratabasis.(No.VI(c),DOLE

b.MaternityLeave said Ee would otherwise have been

Manggagawa sa Honda, G.R. No. 145561, June

Q:WhataretheunlawfulactsagainstwomenEe? Under Sec. 2 of R.A. 9710 or the Magna Carta of

Q:Whatisthenospouseemploymentpolicy? Glaxo does not impose an absolute prohibition

To justify a BFOQ the employer must prove two 1. Withorwithoutcompensation

4. Agentofthe(Er) segregating or classifying the Ee

Q: Can an independent action for damages be Q:PedritoMasculado,acollegegraduatefromthe

(c)oftheLCprovidesthatapersonbelow18yrsof the employment of persons below 18 years of age

domestic servant may be considered as such an d.ReliefsforUnjustTermination

4. The deduction is made at such rate that

A: GR: No Er, contractor or subcontractor shall Q:Whatisapprenticeship?

Q: May apprentices be hired without A: It may be appealed by any aggrieved person to

A:Required: Note: The decision of the SLE shall be final and

A:ThereisnoErEerelationshipbetweenstudents Q: How is the principle of Exhaustion of

A:Thepartyterminatingshall: A: Only employers in semiskilled and other

disability he can still efficiently perform his work, he

A:Thosewhoseearningcapacityisimpairedby: Q: What are the rights and privileges of disabled

Q: May handicapped workers be hired as c.Prohibitionsondiscriminationagainstdisabled

A:Yes,iftheirhandicapisnotsuchastoeffectively Q: What is the prohibition on discrimination

A: Q: What are the incentives provided for employers