2017 Chan Last Minute Tips

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b ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.
LAST-MINUTE
PRE-WEEK NOTES ON LABOR LAW
FOR THE 2017 BAR EXAMS
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Prof. Joselito Guianan Chan
Chan Robles Online Bar Review
b l www.chanroblesbar.com
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NEW LABOR LAWS
R o R.A. No. 10911 [Lapsed into law on July 21, 2016], otherwise known as the ANTI-AGE
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DISCRIMINATION ACT, prohibiting discrimination against any individual in employment on
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account of age and providing penalties therefor.
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R.A. No. 10395 [March 14, 2013], strengthening tripartism, amending for the purpose Article
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290 [275] of the Labor Code, otherwise known as the Tripartism Law.
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Tripartism in labor relations is hereby declared a State policy. Towards this end, workers
and employers shall, as far as practicable, be represented in decision and policy-making
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bodies of the government.
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o R.A. No. 10396 [March 14, 2013], strengthening conciliation-mediation as a voluntary mode of
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dispute settlement for all labor cases, amending for this purpose Article 234 [228] of the Labor
Code, otherwise known as the Mandatory Conciliation-Mediation Law.
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R.A. No. 10361 [January 18, 2013], instituting policies for the protection and welfare of
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domestic workers, otherwise known as the Domestic Workers Act or Batas Kasambahay.
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h R.A. No. 10151 [June 21, 2011], allowing the employment of night workers, thereby repealing
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Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended,
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otherwise known as the Labor Code of the Philippines.
o R.A. No. 10022 [March 8, 2010], amending R.A. No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, as amended, further improving the standard of
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protection and promotion of the welfare of migrant workers, their families and overseas Filipinos
in distress and for other purposes.
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NEW LABOR ISSUANCES
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o Department Order No. 174, Series of 2017 (Issued on March 16, 2017) Rules Implementing
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Articles 106 to 109 of the Labor Code, as Amended.
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Department Circular No. 01, Series of 2017 (Issued on June 09, 2017) Clarifying the
Applicability of Department Order No. 174, Series of 2017.
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- Not applicable to BPO, KPO, LPO, IT Infrastructure Outsourcing, Application Development,
Hardware and/or Software Support, Medical Transcription, Animation Services, Back Office
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Operations/Support, and CONSTRUCTION INDUSTRY
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o Labor Advisory No. 10, Series of 2016 (on July 25, 2016) - Prohibition Against Labor-Only
Contracting.
o Department Order No. 40-I-15, Series of 2015 (Issued on September 07, 2015) -
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REPEALING Voluntary Recognition as a mode of designating a SEBA and replacing it with
the mode known as Request for SEBA Certification.
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ISSUANCES ON OVERSEAS EMPLOYMENT
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1. Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas
Filipinos Act of 1995, as Amended by Republic Act No. 10022, issued on July 8, 2010;1
1 Formerly, Omnibus Rules and Regulations Implementing R.A. No. 8042 jointly issued by the Secretary of Foreign Affairs and Secretary of Labor and Employment on February 29,
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1996;
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PRE-WEEK NOTES ON LABOR LAW FOR THE 2017 BAR EXAMS
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2. Revised POEA Rules and Regulations Governing the Recruitment and Employment of
Land-Based Overseas Filipino Workers of 2016;1 and
3. 2016 Revised POEA Rules and Regulations Governing the Recruitment and
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Employment of Seafarers issued on February 26, 2016.2
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MAJOR TOPIC 1
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FUNDAMENTAL PRINCIPLES AND CONCEPTS
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CONSTITUTIONAL PROVISIONS
x What are the important labor-related constitutional principles?
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x Under Article II (Declaration of Principles and State Policies):
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a. FIRST OF TWO PROTECTION-TO-LABOR CLAUSES: Section 18. The State affirms labor as
a primary social economic force. It shall protect the rights of workers and promote their welfare.
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x Under Article III (Bill of Rights):
a.
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Due process and equal protection of the law.
NOTE: THIS CANNOT BE INVOKED BY EMPLOYEES AGAINST THEIR EMPLOYERS IN
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CASES OFTERMINATION OF THEIR EMPLOYMENT.
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b. Freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble
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and petition the government for redress of grievances.
NOTE: THIS FREEDOM IS RELEVANT ONLY IN PICKETING AND NOT IN STRIKE.
c.
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Right of public and private sector employees to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.
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NOTE: THIS IS KNOWN AS FREEDOM OF ASSOCIATION. THIS PROVISION IS THE BASIS
FOR THE EMPLOYEES RIGHT TO SELF-ORGANIZATION.
d. Non-impairment of obligations of contracts.

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NOTE: THE CONCEPT OF THIS RIGHT IN POLITICAL LAW IS SIMILAR IN LABOR LAW.
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e. Right to speedy disposition of cases in judicial, quasi-judicial or administrative bodies.
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NOTE: THIS CAN BE INVOKED IN LABOR CASES AT ALL LEVELS.
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f. Prohibitions against involuntary servitude.
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NOTE: THIS PRINCIPLE IS RELEVANT ONLY IN TWO (2) SITUATIONS: NAMELY: (1)
RESIGNATION AND (2) RETURN-TO-WORK ORDER IN NATIONAL INTEREST CASES. THIS
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MEANS THAT:
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(1) AN EMPLOYEE HAS THE RIGHT TO RESIGN SINCE HE CANNOT BE FORCED TO
WORK AGAINST HIS WILL;
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(2) A STRIKER CAN BE ORDERED TO RETURN TO WORK EVEN AGAINST HIS WILL IN
NATIONAL INTEREST CASES. ACCORDINGLY, IT IS NOT IN VIOLATION OF THE
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INVOLUNTARY SERVITUDE PRINCIPLE.
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x Under Article XIII (Social Justice and Human Rights):
a. SECOND OF TWO PROTECTION-TO-LABOR CLAUSES:
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Section 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.
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Formerly, POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers issued on February 4, 2002.
Formerly, POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on May 23, 2003.
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It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall
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also participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
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The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce
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their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of
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labor to its just share in the fruits of production and the right of enterprises to reasonable returns to
investments, and to expansion and growth.
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x May cases be filed for violation of the foregoing constitutional provisions?
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The labor-related provisions of the Constitution are merely statements of principles and are all NOT self-
executing provisions. They are used only as guides for judicial decisions or legislative enactments. Being
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mere statement of principles and policies, no case can be filed for their violation. Only violation of the laws
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passed to implement these principles and policies can be proper subject of court litigation.
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x What are the kinds of procedural due process that may be asserted in labor cases?
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The following are the kinds of procedural due process that may be invoked in labor cases, to wit:
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(1) Procedural due process that may be invoked against the employer during the investigation of the
employees administrative case at the company-level that may lead to his dismissal:
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a. Statutory due process per Agabon doctrine which refers to the due process provision in the Labor
Code (Article 277[b]); and
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b. Contractual due process per Abbott Laboratories doctrine which refers to the due process
prescribed in the Company Rules and Regulations or Code of Conduct or Code of Discipline.
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NOTE: CONSTITUTIONAL DUE PROCESS UNDER ARTICLE III, SECTION 1 OF THE
CONSTITUTION CANNOT BE INVOKED AGAINST A PRIVATE PARTY LIKE THE
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EMPLOYER. IT CAN ONLY BE ASSERTED AGAINST THE STATE OR GOVERNMENT.
HENCE, THE EMPLOYEE BEING INVESTIGATED CANNOT INVOKE
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CONSTITUTIONAL DUE PROCESS BUT ONLY STATUTORY AND CONTRACTUAL DUE
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PROCESS.
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(2) Procedural due process that may be invoked once a case has already been filed in the labor court, such
as the Labor Arbiter or the NLRC, and/or brought to higher courts:
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a. Constitutional due process under Section 1, Article III of the Constitution since this right cannot be
invoked against the private employer but only against the State or government as represented by
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Labor Arbiters, NLRC, CA and SC.
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The rule since Agabon is that compliance with the statutorily-prescribed procedural due process under
Article 292(b) [277(b)] of the Labor Code would suffice. It is not important in determining the validity of the
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termination whether there is an existing company policy which also enunciates the procedural due process in
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termination cases. However, under the latest doctrinal en banc ruling in the 2013 case of Abbott Laboratories,
Philippines v. Pearlie Ann F. Alcaraz, it is now required that in addition to compliance with the statutory due
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process, the employer should still comply with the due process procedure prescribed in its own company rules now
called CONTRACTUAL DUE PROCESS. The employers failure to observe its own company-prescribed due
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process, IN ADDITION TO STATUTORY DUE PROCESS, will make it liable to pay an indemnity in the form
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of nominal damages, the amount of which is similar to the P30,000.00 awarded under the Agabon doctrine.
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x When can an employee invoke constitutional due process and right to equal protection of the laws?
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As distinguished from company-level investigation conducted by the employer where only STATUTORY
and CONTRACTUAL DUE PROCESS can be invoked, a dismissed employee can invoke constitutional due
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process only when he files an illegal dismissal case in the labor court and he is deprived due process by a
government functionary like the Labor Arbiter or the Commission (NLRC), or Court of Appeals on Rule 65
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certiorari petition. The reason is that, at this stage, the government is now involved through said labor tribunals.
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x Is right to counsel mandatory?
a
No. Per the prevailing Lopez doctrine (see 2011 case of Lopez v. Alturas Group of Companies), the right to
counsel is neither indispensable nor mandatory. It becomes mandatory only in two (2) situations:
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(1) When the employee himself requests for counsel; or
(2) When he manifests that he wants a formal hearing on the charges against him, in which case,
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he should be assisted by counsel.
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LAST-MINUTE
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B a B.
NEW CIVIL CODE
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x Is Article 1700 of the Civil Code applicable to labor cases?
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Yes, Article 1700 of the Civil Code provides:
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Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts,
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closed shop, wages, working conditions, hours of labor and similar subjects.
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In Davao Integrated Port Stevedoring Services v. Abarquez, March 19, 1993. It was held that a CBA, as a
labor contract within the contemplation of Article 1700 of the Civil Code, is not merely contractual in nature but
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impressed with public interest, thus, it must yield to the common good.
Similarly, an employment contract or any other labor contract is treated as not merely contractual in nature
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similar to an ordinary contract like a lease contract because it is impressed with public interest. Consequently, all
labor laws are deemed incorporated therein even if not so expressly provided or stipulated in its provisions.
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x How is Article 1702 of the Civil Code correlated with Article 4 of the Labor Code?
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Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on interpretation and
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construction provisions of law and labor contracts.
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Article 1702 of the Civil Code provides:
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Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.
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Article 4 of the Labor Code states:
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Article 4. Construction in Favor of Labor. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor.
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Article 1700 applies to doubts and ambiguities in
(1) Labor legislations;
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(2) Labor contracts such as an employment contract or a CBA;
(3) evidence presented in labor cases.
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Article 1700 applies to doubts and ambiguities:
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(1) In the Labor Code; and
(2) In the Implementing Rules of the Labor Code.
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THE LABOR CODE
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x What are the distinctions between Labor Relations and Labor Standards?
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Labor standards law is that part of labor law which prescribes the minimum terms and conditions of
employment which the employer is required to grant to its employees.
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Labor relations law is that part of labor law (Book V of the Labor Code) which deals with unionism,
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collective bargaining, grievance machinery, voluntary arbitration, strike, picketing and lockout.
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Labor relations and labor standards laws are not mutually exclusive. They are complementary to, and
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closely interlinked with, each other. For instance, the laws on collective bargaining, strikes and lockouts which are
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covered by labor relations law necessarily relate to the laws on working conditions found in Book III.
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x What is a SEBA?
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An exclusive bargaining representative or exclusive bargaining agent or Sole and Exclusive
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Bargaining Agent (SEBA), refers to a legitimate labor organization duly certified as the sole and exclusive
bargaining representative or agent of all the employees in a bargaining unit.
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Note must be made of the latest innovative amendment of the Labor Codes Implementing Rules
introduced by Department Order No. 40-I-15, Series of 2015, which has expressly repealed the entire provision on
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Voluntary Recognition of the Implementing Rules on Book V and replaced it with the freshly-minted mode of
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securing the status of a sole and exclusive bargaining agent through a Request for SEBA Certification or
Request. Voluntary recognition is therefore no longer allowed and is effectively replaced by the Request
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mode.
(NOTE: This is extensively discussed in Major Topic No. 7 (Labor Relations, infra)
participation of the SEBA?

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x Can individual employee or group of employees bring grievable issues directly to their employer without the
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Yes. The designation of a SEBA does not deprive an individual employee or group of employees to
exercise their right at any time to present grievances to their employer, with or without the intervention of the
SEBA.
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x Can individual employee or group of employees bring grievable issues to voluntary arbitration without the
participation of the SEBA?
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No, as held in the 2009 case of Tabigue v. International Copra Export Corporation, where the Supreme
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Court clarified that an individual employee or group of employees cannot be allowed to submit or refer unsettled
grievances for voluntary arbitration without the participation of the SEBA. The reason is that it is the SEBA
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which is a party to the CBA which contains the provision on voluntary arbitration. Being a party thereto, the SEBA
cannot be disregarded when a grievable issue will be submitted for voluntary arbitration.
R In order to have legal standing, the individual members should be shown to have been duly
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authorized to represent the SEBA. (NOTE: Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel
Davao, Sept. 22, 2010, reiterated Tabigue).
a x What is the principle of co-determination?
B a
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The principle of co-determination refers to the right given to the employees to co-determine or share the
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responsibility of formulating certain policies that affect their rights, benefits and welfare.
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In PAL v. NLRC, it was held that the formulation of a Code of Discipline among employees is a shared
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responsibility of the employer and the employees. It affirmed the decision of the NLRC which ordered that the New
Code of Discipline should be reviewed and discussed with the union, particularly the disputed provisions and that
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copies thereof be furnished each employee.
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x Does the grant of the right of participation mean co-management of business or intrusion into management
prerogatives?
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No. This principle does not mean that workers should approve management policies or decisions.
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x What is Labor-Management Council (LMC)?
a a
The establishment of Labor-Management Council (LMC) is mandated under the said constitutional
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principle of co-determination.
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SYLLABUS
MAJOR TOPIC 2
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RECRUITMENT AND PLACEMENT
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B A.
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ILLEGAL RECRUITMENT
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x Who may commit illegal recruitment?
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Illegal recruitment may be committed by any of the following
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(1) By Non-Licensee or Non-holder of authority; or
(2) By ANY PERSON, regardless of whether a non-licensee, non-holder, licensee or holder of
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authority,
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x What are illegal recruitment acts that can be committed by No. 1 above (NON-LICENSEE or NON-HOLDER
OF AUTHORITY)?
a a
When what is committed by such NON-LICENSEES or NON-HOLDERS OF AUTHORITY is
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any of the acts of recruitment allowed only to be done by licensees or holders of authority such as the
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
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includes referring, contract services, promising or advertising for employment abroad, whether for
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profit or not.
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In other words, had they possessed of license or authority, their commission of any of the
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foregoing acts could have been valid and not constitutive of illegal recruitment.
NOTE: The non-licensee or non-holder of authority is presumed to be engaged in such recruitment
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if he in any manner, offers or promises for a fee employment abroad to two or more persons.
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x What are acts of illegal recruitment when committed by ANY PERSON, whether a NON-LICENSEE,
NON-HOLDER OF AUTHORITY or even by a LICENSEE or HOLDER OF AUTHORITY?
a n
(a) To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the DOLE Secretary, or to make a worker pay or
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acknowledge any amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment or
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employment;
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(c) To give any false notice, testimony, information or document or commit any act of
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misrepresentation for the purpose of securing a license or authority under the Labor Code, or
for the purpose of documenting hired workers with the POEA, which include the act of
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reprocessing workers through a job order that pertains to non-existent work, work different from
the actual overseas work, or work with a different employer whether registered or not with the
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POEA;
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(d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him another unless the transfer is designed to liberate a worker from oppressive terms and
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conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker who has not
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applied for employment through his agency or who has formed, joined or supported, or has
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contacted or is supported by any union or workers' organization;
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(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
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morality or to the dignity of the Republic of the Philippines;
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(g) To fail to submit reports on the status of employment, placement vacancies, remittance of
foreign exchange earnings, separation from jobs, departures and such other matters or
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information as may be required by the Secretary of Labor and Employment;
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(h) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the DOLE from the time of actual signing thereof by the parties up to and including the
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period of the expiration of the same without the approval of the DOLE;
(i) For an officer or agent of a recruitment or placement agency to become an officer or member of
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the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in
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the management of travel agency;
(j) To withhold or deny travel documents from applicant workers before departure for monetary or
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financial considerations, or for any other reasons, other than those authorized under the Labor
Code and its implementing rules and regulations;
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(k) Failure to actually deploy a contracted worker without valid reason as determined by the
Department of Labor and Employment;
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(l) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take
place without the worker's fault. Illegal recruitment when committed by a syndicate or in large
scale shall be considered an offense involving economic sabotage; and
(m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.
PROHIBITED ACTIVITIES
IN RELATION TO ILLEGAL RECRUITMENT
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x What are the PROHIBITED ACTIVITIES in connection with recruitment for overseas employment?
a r
Besides illegal recruitment, the law additionally provides that it shall also be unlawful for any person or
entity to commit the following prohibited acts:
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(1) Grant a LOAN to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which
will be used for payment of legal and allowable placement fees and make the migrant worker issue, either
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personally or through a guarantor or accommodation party, post-dated checks in relation to the said loan;
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(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a
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LOAN only from specifically designated institutions, entities or persons;
(3) Refuse to condone or renegotiate a LOAN incurred by an overseas Filipino worker after the latter's employment
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contract has been prematurely terminated through no fault of his or her own;
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(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo
HEALTH EXAMINATIONS only from specifically designated medical clinics, institutions, entities or
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persons, except in the case of a seafarer whose medical examination cost is shouldered by the
principal/shipowner;
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(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo
TRAINING, SEMINAR, INSTRUCTION OR SCHOOLING of any kind only from specifically designated
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institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners
where the latter shoulder the cost of such trainings;
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(6) For a SUSPENDED RECRUITMENT/MANNING AGENCY to engage in any kind of recruitment activity
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including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or
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deduct from his or her salary the payment of the cost of INSURANCE fees, premium or other insurance
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related charges, as provided under the compulsory worker's INSURANCE coverage.
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LICENSE VS. AUTHORITY
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x What is a license for overseas recruitment?
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License refers to the document issued by the DOLE Secretary authorizing a person, partnership or
corporation to operate a private recruitment or manning agency.
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x What is an authority for overseas employment?
a a
Authority refers to the document issued by the DOLE Secretary authorizing the officers, personnel,
agents or representatives of a licensed recruitment or manning agency to conduct recruitment and placement
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activities in a place stated in the license or in a specified place.
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ELEMENTS OF ILLEGAL RECRUITMENT
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x What are the elements of illegal recruitment?
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The essential elements of illegal recruitment vary in accordance with the following classifications:
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(1) Simple illegal recruitment;
(2) When committed by a syndicate; or
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(3) When committed in large scale.
When illegal recruitment is committed under either Nos. 2 or 3 above or both, it is considered an offense
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involving economic sabotage.
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SIMPLE ILLEGAL RECRUITMENT
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x What are the 2 elements of simple illegal recruitment?
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(1) The offender has no valid license or authority required by law to enable one to lawfully engage in
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recruitment and placement of workers; and
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(2) He undertakes either any activity within the meaning of recruitment and placement defined under
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Article 13(b), (see above enumeration) or any prohibited practices (see above enumeration) under
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Article 34 of the Labor Code.
x Can a recruiter be a natural or juridical person?
Yes.
x What are some relevant principles on illegal recruitment?
o b
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1. Mere impression that a person could deploy workers overseas is sufficient to constitute illegal recruitment. But
if no such impression is given, the accused should not be convicted for illegal recruitment.
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2. Mere promise or offer of employment abroad amounts to recruitment.
3. There is no need to show that accused represented himself as a licensed recruiter.
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4. Referrals may constitute illegal recruitment.
5. It is illegal recruitment to induce applicants to part with their money upon false misrepresentations and
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promises in assuring them that after they paid the placement fee, jobs abroad were waiting for them and that
they would be deployed soon.
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6. Recruitment whether done for profit or not is immaterial.
7. The act of receiving money far exceeding the amount as required by law is not considered as recruitment and
placement as this phrase is contemplated under the law.
8. Actual receipt of fee is not an element of the crime of illegal recruitment.
9. Conduct of interviews amounts to illegal recruitment.
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10.Absence of receipt is not essential to hold a person guilty of illegal recruitment.
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11.Conviction for illegal recruitment may be made on the strength of the testimonies of the complainants.
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12.Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for illegal
recruitment.
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13.Only one person recruited is sufficient to convict one for illegal recruitment.
14.Non-prosecution of another suspect is immaterial.
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15.Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal liability for
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illegal recruitment.
16.Defense of denial cannot prevail over positive identification. Positive identification where categorical and
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consistent and not attended by any showing of ill motive on the part of the eyewitnesses on the matter prevails
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over alibi and denial. Between the categorical statements of the prosecution witnesses, on the one hand, and
bare denials of the accused, on the other hand, the former must prevail.
R o ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE
x When is illegal recruitment considered a crime involving economic sabotage?
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1. when committed by a syndicate; or
a a
2. when committed in large scale.
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x When is illegal recruitment committed by a syndicate?
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If it is carried out by a group of three (3) or more persons conspiring or confederating with one another.
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x Elements of illegal recruitment by a syndicate.
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The essential elements of the crime of illegal recruitment committed by a syndicate are as follows:
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1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried out
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any unlawful or illegal recruitment and placement activities as defined under Article 13(b) or committed
any prohibited activities under Article 34 of the Labor Code; and
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2. Said persons are not licensed or authorized to do so, either locally or overseas.
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The law does not require that the syndicate should recruit more than one (1) person in order to
constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to
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qualify the illegal recruitment act as having been committed by a syndicate.
x When is illegal recruitment considered in large scale?
a a
If committed against three (3) or more persons individually or as a group.
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x Elements of illegal recruitment in large scale.
The elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as
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follows:
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1. The accused engages in the recruitment and placement of workers as defined under Article 13(b) or
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committed any prohibited activities under Article 34 of the Labor Code; and
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2. The accused commits the same against three (3) or more persons, individually or as a group.
x Distinguished from illegal recruitment by a syndicate.
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As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may
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be committed by only one (1) person. What is important as qualifying element is that there should be at least three
(3) victims of such illegal recruitment, individually or as a group.
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x What are some relevant principles on illegal recruitment involving economic sabotage?
a
1. The number of persons victimized is determinative of the crime. A conviction for large scale illegal
recruitment must be based on a finding in each case of illegal recruitment of three (3) or more persons having
h B
been recruited, whether individually or as a group.
2. Failure to prove at least 3 persons recruited makes the crime a case of simple illegal recruitment.
C s
3. There is no illegal recruitment in large scale based on several informations filed by only one complainant.
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4. The number of offenders is not material in illegal recruitment in large scale.
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5. Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.
ILLEGAL RECRUITMENT VS. ESTAFA
o
x Can a person be charged and convicted separately for illegal recruitment and estafa involving one and the
same act of recruitment?
b
R
Yes. It is clear that conviction under the Labor Code does not preclude conviction for estafa or other crimes
under other laws.
Some relevant principles:
Same evidence to prove illegal recruitment may be used to prove estafa.
Conviction for both illegal recruitment and estafa is not double jeopardy.
a n
NATURE OF LIABILITY OF LOCAL RECRUITMENT AGENCY
AND FOREIGN EMPLOYER
C h
x What is the nature of the liability between local recruiter and its foreign principal?
The nature of their liability is solidary or joint and several for any and all claims arising out of the
employment contract of OFWs.
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x Is the solidary liability of corporate officers with the recruitment agency automatic in character?
r
No. In order to hold the officers of the agency solidarily liable, it is required that there must be proof of
a
their culpability therefor. Thus, it was held in the 2013 case of Gagui v. Dejero,1 that while it is true that R.A. 8042
and the Corporation Code provide for solidary liability, this liability must be so stated in the decision sought to be
B
implemented. Absent this express statement, a corporate officer may not be impleaded and made to personally
answer for the liability of the corporation.
s
x What are some relevant principles on the persons liable for illegal recruitment?
e
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as principal by direct
l
participation, together with his employer, if it is shown that he actively and consciously participated in illegal
recruitment.
b
2. Good faith and merely following orders of superiors are not valid defenses of an employee.
o
3. A manager of a recruitment/manning agency is not a mere employee. As such, he receives job applications,
interviews applicants and informs them of the agencys requirement of payment of performance or cash bond
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prior to the applicants deployment. As the crewing manager, he was at the forefront of the companys
recruitment activities.
a n x What is meant by this theory?

THEORY OF IMPUTED KNOWLEDGE
a r
h B
Knowledge of the agent is deemed knowledge of the principal but not the other way around.
s
The theory of imputed knowledge is a rule that any information material to the transaction, either possessed
e
by the agent at the time of the transaction or acquired by him before its completion, is deemed to be the knowledge
of the principal, at least insofar as the transaction is concerned, even though the knowledge, in fact, is not
l
communicated to the principal at all.
b
Sunace International Management Services, Inc. v. NLRC2 - The High Court here has the opportunity
to discuss the application of the theory of imputed knowledge. The OFW (Divina), a domestic helper in Taiwan, has
o
extended her 12-month contract, after its expiration, for two (2) more years after which she returned to the
Philippines. It was established by evidence that the extension was without the knowledge of the local recruitment
R
agency, petitioner Sunace. The Court of Appeals, however, affirmed the Labor Arbiters and NLRCs finding that
Sunace knew of and impliedly consented to the extension of Divinas 2-year contract. It went on to state that It is
n r
undisputed that [Sunace] was continually communicating with [Divinas] foreign employer. It thus concluded that
a a
[a]s agent of the foreign principal, petitioner cannot profess ignorance of such extension as obviously, the act of
the principal extending complainant (sic) employment contract necessarily bound it.
h B
In finding that the application by the CA of this theory of imputed knowledge was misplaced, the High
Court ruled that this theory ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong, not the
C s
other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent,
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Sunace. There being no substantial proof that Sunace knew of and consented to be bound under the 2-year
l
employment contract extension, it cannot be said to be privy thereto. As such, Sunace and its owner cannot be held
solidarily liable for any of Divinas claims arising from the 2-year employment extension. As the New Civil Code
b
provides: Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and
obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.
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TERMINATION OF CONTRACT OF MIGRANT WORKER
o
n
WITHOUT JUST OR VALID CAUSE
x Can an OFW acquire regularity of employment?
a
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular, employees. In fact, they
h B
can never attain regularity of employment. Theirs is always fixed-term in nature.
x What are some relevant principles?
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1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit provision of the
POEA Rules and Regulations on fixed-period employment.
e s
l
2. OFWs do not become regular employees by reason of nature of work, that is, that they are made to
b
perform work that is usually necessary and desirable in the usual business or trade of the employer. The
exigencies of their work necessitate that they be employed on a contractual basis. This notwithstanding
o
the fact that they have rendered more than twenty (20) years of service.
3. Regular employment does not result from the series of re-hiring of OFWs.
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4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor foreign
employers. It is for the mutual interest of both the seafarer and the employer why the employment status
n
must be contractual only or for a certain period of time. Seafarers spend most of their time at sea and
a
understandably, they cannot stay for a long and an indefinite period of time at sea. Limited access to
shore society during the employment will have an adverse impact on the seafarer. The national, cultural
h
and lingual diversity among the crew during the contract of employment is a reality that necessitates the
limitation of its period.
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5. The expiration of the employment contracts of OFWs marks its ending.
x What is the effect of hiring a seafarer for overseas employment but assigning him to local vessel?
1 G.R. No. 196036, Oct. 23, 2013.

2 G.R. No. 161757, Jan. 25, 2006.
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As held in OSM Shipping Philippines, Inc. v. NLRC,1 the non-deployment of the ship overseas did not
r
affect the validity of the perfected employment contract. After all, the decision to use the vessel for coastwise
a
shipping was made by petitioner only and did not bear the written conformity of private respondent. A contract
cannot be novated by the will of only one party. The claim of petitioner that it processed the contract of private
B
respondent with the POEA only after he had started working is also without merit. Petitioner cannot use its own
misfeasance to defeat his claim.
s
x What is the effect of non-deployment of OFW to overseas employment?
e
Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc.2 was not deployed overseas despite
l
the signing of a POEA-approved employment contract. One of his contentions is that such failure to deploy was an
act designed to prevent him from attaining the status of a regular employee. The Supreme Court, however,
b
disagreed and ruled that seafarers are considered contractual employees and cannot be considered as regular
o
employees under the Labor Code. Their employment is governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract expires. The exigencies of their work necessitate that
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they be employed on a contractual basis.
x What is the doctrine of processual presumption?
n r
Presumed-identity approach or processual presumption is an International Law doctrine which
a a
dictates that where a foreign law is not pleaded or, even if pleaded, is not proved, the presumption is that foreign law
is the same as Philippine law. Thus, under this situation, Philippine labor laws should apply in determining the
h B
issues presented in a case.
s
x Is due process under Philippine law applicable to termination of employment of OFWs?
e
Yes. In the absence of proof of applicable foreign law, OFWs are entitled to due process in accordance with
Philippine laws.
l
x Is the Agabon doctrine applicable to OFWs who are dismissed for cause but without due process?
b
Yes. The Agabon doctrine of awarding indemnity in the form of nominal damages in cases of valid
termination for just or authorized cause but without procedural due process also applies to termination of OFWs.
R o
x Who has the burden of proof to show that the dismissal of the OFW is legal?
Burden of proof devolves on both recruitment agency and its foreign principal.
x Are OFWs entitled to the reliefs under the Labor Code?
n r
No. They are not entitled to such reliefs under Article 279 as reinstatement or separation pay in lieu of
a a
reinstatement or full backwages.
B
x What are the reliefs to which OFWs are entitled?
C h They are entitled to the reliefs provided under Section 10 of R.A. No. 8042, as amended, to wit:
(1) All salaries for the unexpired portion of the contract;
s
e
(2) Full reimbursement of placement fees and deductions made with interest at 12% per annum.
l
All the reliefs available to an illegally dismissed OFW are always monetary in nature.
b
It must be noted that under the 2009 Serrano doctrine, (Serrano v. Gallant Maritime Services, Inc.,),3 an
illegally dismissed OFW is now entitled to all the salaries for the entire unexpired portion of their employment
o
contracts, irrespective of the stipulated term or duration thereof. The underlined phrase in Section 10 below has
R
been declared unconstitutional in this case:
In case of termination of overseas employment without just, valid or authorized cause as defined
n
by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be
entitled to the full reimbursement of his placement fee and the deductions made with interest at twelve
a
percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for
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three (3) months for every year of the unexpired term, whichever is less.
h
However, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant Workers and
C s
Overseas Filipinos Act of 1995), has replicated and re-enacted the same unconstitutional provision exactly as
e
above quoted. The question is: was the unconstitutionality of the above-underlined part of the provision cured
by such replication or re-enactment in the amendatory law?
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles,4 answered this in
the negative. The said provision was thus declared still unconstitutional and null and void despite its replication in
R.A. No. 10022.
b l
x What are some principles in regard to monetary awards to OFWs?
1. Monetary award to OFW is not in the nature of separation pay or backwages but a form of indemnity.
R o
n
2. Only salaries are to be included in the computation of the amount due for the unexpired portion of the contract.
Overtime, holiday and leave pay and allowances are not included. However, this rule on exclusion of
a
allowance does not apply in case it is encapsulated in the basic salary clause.
3. Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is concerned, the correct
h
criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board
and cannot leave ship beyond the regular eight (8) working hours a day, but whether they actually rendered
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service in excess of said number of hours. An OFW is not entitled to overtime pay, even if guaranteed, if he
1 G.R. No. 138193, March 5, 2003.

2 G.R. No. 162419, July 10, 2007.
3 G.R. No. 167614, March 24, 2009.
4 G.R. No. 170139, Aug. 05, 2014. The foreign employer alleged in this case that respondents dismissal was due to inefficiency in her work and negligence in her duties.
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failed to present any evidence to prove that he rendered service in excess of the regular eight (8) working hours
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a day.
a
4. In case of unauthorized deductions from OFWs salary, he shall be entitled to the full reimbursement of the
deductions made with interest at 12% per annum. This is in addition to the full reimbursement of his placement
B
fee with the same interest of 12% per annum plus his salaries for the unexpired portion of his employment
contract if he is terminated without just, valid or authorized cause as defined by law or contract.
s
CLAIMS FOR DISABILITY AND DEATH BENEFITS OF OFWs
l e
x Which/Who has jurisdiction over an OFWs claims for disability and death benefits?
b
a) The Labor Arbiters, NOT the SSS, have jurisdiction over claims for disability, death and other benefits
of OFWs.
o
b) Labor Arbiters have jurisdiction even if the case is filed by the heirs of the deceased OFW.
x Is the Labor Codes concept of permanent total disability similar to that of OFWs?
R
Yes. The concept of this kind of disability under Article 192 of the Labor Code is applicable to them as
reiterated lately in the 2013 case of Kestrel Shipping Co., Inc. v. Munar.
a n x What are the requisites for compensability of injury or illness of seafarers?

1. It should be work-related; and
a r
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2. The injury or illness existed during the term of the seafarers employment contract.
h s
DIRECT HIRING
What is direct hiring?
l e
Direct Hiring refers to the process of directly hiring workers by employers for overseas employment as
b
authorized by the DOLE Secretary and processed by the POEA, including:
1. Those hired by international organizations;
o
2. Those hired by members of the diplomatic corps;
3. Name hires or workers who are able to secure overseas employment opportunity with an employer
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without the assistance or participation of any agency.
n r
Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director have the power to issue
closure order?
a a
Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA Administrator or
B
DOLE Regional Director is satisfied that such danger or exploitation exists, a written order may be issued for the
h
closure of the establishment being used for illegal recruitment activity.
C s
x Does the DOLE Secretary have the power to issue warrant of arrest and search and seizure orders?
e
No. Salazar v. Achacoso,1 declared that the exercise by the DOLE Secretary of his twin powers to issue
l
arrest warrant and search and seizure orders provided under Article 38[c] of the Labor Code is unconstitutional.
Only regular courts can issue such orders.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
x Is remittance of foreign exchange earnings by OFWs mandatory?
o b
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Yes. It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange
earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations
n
prescribed by the DOLE Secretary. It should be made through the Philippine banking system.
a B
h
B.
EMPLOYMENT OF NON-RESIDENT ALIENS
x
C
What is an ALIEN EMPLOYMENT PERMIT (AEP)?
e s
AEP - a document issued by the DOLE Secretary through the DOLE-Regional Director who has
b l
jurisdiction over the intended place of work of the foreign national, authorizing the foreign national to work in the
Philippines.
x Who are required to procure AEP?
R o
All foreign nationals who intend to engage in gainful employment in the Philippines are required to apply
n
for AEP.
a
Gainful employment refers to a state or condition that creates an employer-employee relationship
between the
h
Philippine-based company and the foreign national where the former has the power to hire or dismiss the
foreign national from employment, pays the salaries or wages thereof and has authority to control the performance
C
or conduct of the tasks and duties.
1 G.R. No. 81510, March 14, 1990.
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x What are the categories of foreign nationals EXEMPTED from securing AEP?
a r
a) All members of the diplomatic service and foreign government officials accredited by and with reciprocity
arrangement with the Philippine government;
B
b) Officers and staff of international organizations of which the Philippine government is a member, and their
legitimate spouses desiring to work in the Philippines;
s
c) All foreign nationals granted exemption by law;
e
l
d) Owners and representatives of foreign principals whose companies are accredited by the POEA, who come to
the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for
b
employment abroad;
o
e) Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in
universities and colleges as visiting, exchange or adjunct professors under formal agreements between the
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universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine
government and foreign government: provided that the exemption is on a reciprocal basis; and
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f) Permanent resident foreign nationals and probationary or temporary resident visa holders under Section 13 of
a a
the Philippine Immigration Act of 1940.
B
x What are the categories of foreign nationals EXCLUDED from securing AEP?
h
a) Members of the governing board with voting rights only and do not intervene in the management of the
s
corporation or in the day-to-day operation of the enterprise.
b) Corporate officers as provided under the Corporation Code of the Philippines, Articles of Incorporation,
e
and By-laws of the Corporation such as President, Secretary and Treasurer.
l
c) Those providing consultancy services who do not have employers in the Philippines.
b
d) Intra-corporate transferee who is a manager, executive or specialist as defined below in accordance with
Trade Agreements and an employee of the foreign service supplier for at least one (1) year prior to
o
deployment to a branch, subsidiary, affiliate or representative office in the Philippines:
(i) an EXECUTIVE: a natural person within the organization who primarily directs the management of
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the organization and exercises wide latitude in decision making and receives only general supervision
or direction from higher level executives, the board of directors or stockholders of the business; an
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executive would not directly perform tasks related to the actual provision of the service or services of
the organization;
a a
(ii) a MANAGER: a natural person within the organization who primarily directs the
B
organization/department/ subdivision and exercises supervisory and control functions over other
h
supervisory, managerial or professional staff; does not include first-line supervisors unless employees
C s
supervised are professionals; does not include employees who primarily perform tasks necessary for
the provision of the service; or
e
(iii) a SPECIALIST: a natural person within the organization who possesses knowledge at an advanced
l
level of expertise essential to the establishment/provision of the service and/or possesses proprietary
b
knowledge of the organization's service, research equipment, techniques or management; may include,
but is not limited to, members of a licensed profession.
o
e) Contractual service supplier who is a manager, executive or specialist and an employee of a foreign service
supplier which has no commercial presence in the Philippines:
R
(i) who enters the Philippines temporarily to supply a service pursuant to a contract between his/her
employer and a service consumer in the Philippines;
n
(ii) must possess the appropriate educational and professional qualifications; and
(iii) must be employed by the foreign service supplier for at least one (1) year prior to the supply of service
a
in the Philippines.
x What is the validity of an AEP?
h B
C s
One (1) year is the validity of an AEP.
e
Exception: When employment contract provides otherwise but not to exceed three (3) years.
The AEP may be renewed subject to the conditions imposed by law.
C.
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS
b l

1.
APPRENTICES AND LEARNERS
R o
n
What are the distinctions between learnership and apprenticeship?
The following are the distinctions:
a
1. Practical training. Both learnership and apprenticeship involve practical training on-the-job.
h
2. Training agreement. Learnership is governed by a learnership agreement; while apprenticeship is
governed by an apprenticeship agreement.
C
2. Occupation. Learnership involves learnable occupations consisting of semi-skilled and other industrial
occupations which are non-apprenticeable; while apprenticeship concerns apprenticeable occupations
or any trade, form of employment or occupation approved for apprenticeship by the DOLE Secretary.
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3. Theoretical instructions. Learnership may or may not be supplemented by related theoretical
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instructions; while apprenticeship should always be supplemented by related theoretical instructions.
a
4. Ratio of theoretical instructions and on-the-job training. For both learnership and apprenticeship, the
B
normal ratio is one hundred (100) hours of theoretical instructions for every two thousand (2,000) hours
of practical or on-the-job training. Theoretical instruction time for occupations requiring less than two
s
thousand (2,000) hours for proficiency should be computed on the basis of such ratio.
e
5. Competency-based system. Unlike in apprenticeship, it is required in learnership that it be implemented
based on the TESDA-approved competency-based system.
l
6. Duration of training. Learnership involves practical training on the job for a period not exceeding
b
three (3) months; while apprenticeship requires for proficiency, more than three (3) months but not
over six (6) months of practical training on the job.
o
7. Qualifications. The law does not expressly mention any qualifications for learners; while the following
R
qualifications are required to be met by apprentices under Article 59 of the Labor Code:
(a) Be at least fourteen (14) years of age;
n r
(b) Possess vocational aptitude and capacity for appropriate tests; and
a a
(c) Possess the ability to comprehend and follow oral and written instructions.
h B
CONFLICT IN THE AGE REQUIREMENT FOR APPRENTICES:
Under the Labor Code as stated above 14 years of age
s
Under the Labor Codes Implementing Rules Be at least 15 years of age, provided those who are at
e
least 15 years of age but less than 18 may be eligible for apprenticeship only in non-hazardous
occupations.
CONFLICT, HOW RESOLVED:
b l
It should be 15 years of age but the more appropriate basis is not the Labor Codes Implementing Rules
o
(which cannot amend the Labor Code) but another law, R.A. No. 9231, (AN ACT PROVIDING FOR
THE ELIMINATION OF THE WORST FORMS OF CHILD LABOR AND AFFORDING
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STRONGER PROTECTION FOR THE WORKING CHILD) where it is provided that:
(1) All persons under eighteen (18) years of age shall be considered as a child; and
n r
(2) Children below fifteen (15) years of age shall not be employed EXCEPT if he/she falls under any
a a
of the exceptions mentioned and enumerated in the law.
8. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership, the law, Article
h B
74 of the Labor Code, expressly prescribes the pre-requisites before learners may be validly employed,
to wit:
C (a) When no experienced workers are available;
e s
(b) The employment of learners is necessary to prevent curtailment of employment opportunities; and
l
(c) The employment does not create unfair competition in terms of labor costs or impair or lower
b
working standards.
9. Limitation on the number of trainees. In learnership, a participating enterprise is allowed to take in
o
learners only up to a maximum of twenty percent (20%) of its total regular workforce. No similar cap is
R
imposed in the case of apprenticeship.
10. Option to employ. In learnership, the enterprise is obliged to hire the learner after the lapse of the
n
learnership period; while in apprenticeship, the enterprise is given only an option to hire the
a
apprentice as an employee.
B
11. Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the
h
statutory minimum wage.
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2.
DISABLED WORKERS
e s
l
(PERSONS WITH DISABILITY)
b
(R.A. No. 7277, as Amended by R.A. No. 9442)

o
Who are persons with disability (PWDs)?
Persons with Disability are those suffering from restriction or different abilities, as a result of a mental,
R
physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a
human being.
n
What is impairment?
a
Impairment refers to any loss, diminution or aberration of psychological, physiological, or anatomical
structure or function.
h
What is disability?
Disability means (1) a physical or mental impairment that substantially limits one or more psychological,
C
physiological or anatomical functions of an individual or activities of such individual; (2) a record of such an
impairment; or (3) being regarded as having such an impairment.
What is handicap?
o
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Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability
r
that limits or prevents the function or activity that is considered normal given the age and sex of the individual.
a
a.
B
EQUAL OPPORTUNITY
What are the rights of PWDs?
s
Under the law, PWDs are entitled to equal opportunity for employment. Consequently, no PWD shall be
e
denied access to opportunities for suitable employment. A qualified employee with disability shall be subject to
l
the same terms and conditions of employment and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able-bodied person.

o b
What is the wage rate of PWDs?
The wage rate of PWDs is 100% of the applicable minimum wage.
R
What is the wage rate of PWD if hired as apprentice or learner?
A PWD hired as an apprentice or learner shall be paid not less than seventy-five percent (75%) of the
n r
applicable minimum wage.
a a
b.
DISCRIMINATION ON EMPLOYMENT
h
What is the rule on discrimination against employment of PWDs?
B
s
No entity, whether public or private, shall discriminate against a qualified PWD by reason of disability in
regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job
e
training, and other terms, conditions and privileges of employment. The following constitute acts of discrimination:
l
(a) Limiting, segregating or classifying a job applicant with disability in such a manner that adversely
b
affects his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to
o
screen out a PWD unless such standards, tests or other selection criteria are shown to be job-related for
R
the position in question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
n r
(1) have the effect of discrimination on the basis of disability; or
a a
(2) perpetuate the discrimination of others who are subject to common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits,
h B
to a qualified employee with disability, by reason of his disability, than the amount to which a non-
disabled person performing the same work is entitled;
C s
(e) Favoring a non-disabled employee over a qualified employee with disability with respect to promotion,
e
training opportunities, study and scholarship grants, solely on account of the latters disability;
l
(f) Re-assigning or transferring an employee with a disability to a job or position he cannot perform by
b
reason of his disability;
(g) Dismissing or terminating the services of an employee with disability by reason of his disability unless
o
the employer can prove that he impairs the satisfactory performance of the work involved to the
prejudice of the business entity; provided, however, that the employer first sought to provide
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reasonable accommodations for persons with disability;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect
n
the skills, aptitude or other factor of the applicant or employee with disability that such tests purports
a
to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee,
if any; and
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(i) Excluding PWD from membership in labor unions or similar organizations.
C e s
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SYLLABUS
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MAJOR TOPIC 3
a
B LABOR STANDARDS
e s A.
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CONDITIONS OF EMPLOYMENT
b
1.
SCOPE
R o
x Who are covered by the labor standards provisions of the Labor Code?
Employees in ALL establishments, whether operated for profit or not, are covered by the law on labor
standards.
a n x Who are excluded?
a r
The following are excluded from the coverage of the law on labor standards:
h B
a. Government employees;
b. Managerial employees;
s
c. Other officers or members of a managerial staff;
e
d. Domestic workers or kasambahay and persons in the personal service of another;
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e. Workers paid by results;
f. Non-agricultural field personnel; and
b
g. Members of the family of the employer.
R o 2.
HOURS OF WORK
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a.
a a
PRINCIPLES IN DETERMINING HOURS WORKED
h B
x What are compensable hours worked?
The following shall be considered as compensable hours worked:
C s
a) All time during which an employee is required to be on duty or to be at the employers premises or
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to be at a prescribed workplace; and
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b) All time during which an employee is suffered or permitted to work.
wages and backwages.
o b
Fair days wage for a fair days labor, remains the basic factor in determining the employees
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b.
NORMAL HOURS OF WORK
x What is the total normal hours of work per day?

Eight (8) hours daily.
a n
x What is overtime work?
h B
C s
Any work in excess of said eight (8) normal hours is considered overtime work.
e
x May normal working hours be reduced?
l
Yes, provided that no corresponding reduction is made on the employees wage or salary equivalent to an
8-hour work day. In instances where the number of hours required by the nature of work is less than 8 hours, such
b
number of hours should be regarded as the employees full working day.
o
x What are flexible working hours?
Flexible work arrangements refer to alternative arrangements or schedules other than the traditional or
R
standard work hours, workdays and workweek. The effectivity and implementation of any of the flexible work
arrangements should be temporary in nature.
n
Under R.A. No. 8972, otherwise known as The Solo Parents Welfare Act of 2000, solo parents are
a
allowed to work on a flexible schedule. The phrase flexible work schedule is defined in the same law as the right
granted to a solo parent employee to vary his/her arrival and departure time without affecting the core work hours as
h
defined by the employer.
C
i.
COMPRESSED WORK WEEK
x What is compressed work week?

Compressed Workweek or CWW refers to a situation where the normal workweek is reduced to less
than six (6) days but the total number of work-hours of 48 hours per week remains. The normal workday is
o
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increased to more than eight (8) hours but not to exceed twelve (12) hours, without corresponding overtime
r
premium. This concept can be adjusted accordingly in cases where the normal workweek of the firm is five (5) days.
a
x What are the conditions for its validity?
The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the
B
covered employees or their duly authorized representatives.
s
x How should compensation be made under a valid CWW?
e
Unless there is a more favorable practice existing in the firm, work beyond eight (8) hours will not be
compensable by overtime premium provided the total number of hours worked per day shall not exceed
l
twelve (12) hours. In any case, any work performed beyond twelve (12) hours a day or forty-eight (48) hours a
b
week shall be subject to overtime pay.
o
ii.
R
POWER INTERRUPTIONS/BROWNOUTS
n r
x What are the effects of power interruptions/brownouts?
The following are the effects of work interruption due to brownouts:
a a
a. Brown-outs of short duration but not exceeding twenty (20) minutes shall be treated as worked or
h B
compensable hours whether used productively by the employees or not.
b. Brown-outs running for more than twenty (20) minutes may not be treated as hours worked
s
provided any of the following conditions are present:
e
1. The employees can leave their workplace or go elsewhere whether within or without the work
l
premises; or
2. The employees can use the time effectively for their own interest.
b
c. In each case, the employer may extend the working hours of his employees outside the regular
o
schedules to compensate for the loss of productive man-hours without being liable for overtime
pay.
R
c.
MEAL BREAK
n r
(Article 85, Labor Code)
a
x What is the rule on time-off for regular meal?
B a
h
Every employer is required to give his employees, regardless of sex, not less than one (1) hour (or 60
minutes) time-off for regular meals.
C
x Is meal break compensable?
e s
l
Being time-off, it is not compensable hours worked. In this case, the employee is free to do anything he
wants, except to work. If he is required, however, to work while eating, he should be compensated therefor.
d.
o b
R
WAITING TIME
n
When is waiting time compensable?
Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his
a
work or the employee is required or engaged by the employer to wait. Time spent waiting for work is compensable
B
if it is spent primarily for the benefit of the employer and [its] business.
C h e.
s
e
OVERTIME
l
b
What are some basic principles on overtime work?
1. Work rendered after normal eight (8) hours of work is called overtime work.
o
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without
deduction for facilities provided by the employer.
R
3. "Premium pay" means the additional compensation required by law for work performed within eight (8)
hours on non-working days, such as regular holidays, special holidays and rest days.
n
4. "Overtime pay" means the additional compensation for work performed beyond eight (8) hours.
a
5. Illustrations on how overtime is computed:
a. For overtime work performed on an ORDINARY DAY, the overtime pay is plus 25% of the
h
basic hourly rate.
C
b. For overtime work performed on a REST DAY OR ON A SPECIAL DAY, the overtime
pay is plus 30% of the basic hourly rate which includes 30% additional compensation as
provided in Article 93 [a] of the Labor Code.
c. For overtime work performed on a REST DAY WHICH FALLS ON A SPECIAL DAY,
the overtime pay is plus 30% of the basic hourly rate which includes 50% additional
compensation as provided in Article 93 [c] of the Labor Code.
o
16
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d. For overtime work performed on a REGULAR HOLIDAY, the overtime pay is plus 30% of
r
the basic hourly rate which includes 100% additional compensation as provided in Article 94
a
[b] of the Labor Code.
e. For overtime work performed on a REST DAY WHICH FALLS ON A REGULAR
B
HOLIDAY, the overtime pay is plus 30% of the basic hourly rate which includes 160%
additional compensation.
e s
What is the distinction between PREMIUM PAY and OVERTIME PAY?
l
Premium pay refers to the additional compensation required by law for work performed within the eight
(8) normal hours of work on non-working days, such as rest days and regular and special holidays.
b
Overtime pay refers to the additional compensation for work performed beyond the eight (8) normal
o
hours of work on a given day. An employee is entitled to both premium pay and overtime pay if he works on a non-
working day and renders overtime work on the same day.
R
What is built-in overtime pay?
In case the employment contract stipulates that the compensation includes built-in overtime pay and the
n r
same is duly approved by the DOLE, the non-payment by the employer of any overtime pay for overtime work is
a a
justified and valid.
B
What is emergency overtime work? (Article 89, Labor Code).
h
a. General rule.
s
The general rule is that no employee may be compelled to render overtime work against his will. The
e
reason is that this will constitute involuntary servitude.
l
b. Exceptions when employee may be compelled to render overtime work:
b
1. When the country is at war or when any other national or local emergency has been declared by the
National Assembly or the Chief Executive;
o
2. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to
R
public safety due to actual or impending emergency in the locality caused by serious accident, fire,
floods, typhoons, earthquake, epidemic or other disasters or calamities;
n r
3. When there is urgent work to be performed on machines, installations or equipment, or in order to
avoid serious loss or damage to the employer or some other causes of similar nature;
a a
4. When the work is necessary to prevent loss or damage to perishable goods;
h B
5. When the completion or continuation of work started before the 8th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the employer; and
C s
6. When overtime work is necessary to avail of favorable weather or environmental conditions where
e
performance or quality of work is dependent thereon.
l
x May an employee validly refuse to render overtime work under any of the afore-said circumstances?
b
No. When an employee refuses to render emergency overtime work under any of the foregoing conditions,
he may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the
o
employer.
R
Can overtime pay be waived?
No. The right to claim overtime pay is not subject to a waiver. Such right is governed by law and not
n
merely by the agreement of the parties.
a
f.
B
NIGHT SHIFT DIFFERENTIAL
h
(ARTICLE 86, LABOR CODE)
How is it reckoned and computed?
C
Night shift differential is equivalent to 10% of employee's regular wage for each hour of work performed
e s
l
between 10:00 p.m. and 6:00 a.m. of the following day.
b
What is the distinction between night shift differential pay and overtime pay?
When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right to
o
receive night differential pay. The reason is the payment of the night differential pay is for the work done during the
night; while the payment of the overtime pay is for work in excess of the regular eight (8) working hours.
R
How is Night Shift Differential Pay computed?
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.
a n
a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly
rate.
b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a rest
h
day, special day or regular holiday or a total of 110% of the regular hourly rate.
C
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of 110%
of the overtime hourly rate on an ordinary day.
b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on a rest
day or special day or regular holiday.
o
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3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours, the
r
compensation for overtime night shift work is also computed on the basis of the hourly rate.
a
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic
B
hourly rate.
b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate on
s
said days or a total of 110% of 130% of the applicable regular hourly rate.
l e g.
REST PERIODS
o b 1.
WEEKLY REST DAY
R
What is the duration of weekly rest period?
n r
It shall be the duty of every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive
a a
normal work days.
B
x Is the employers prerogative to determine the rest period of its employees subject to limitations?
h s
Yes. The employer shall determine and schedule the weekly rest day of his employees subject to CBA and
to such rules and regulations as the DOLE Secretary may provide. However, the employer shall respect the
e
preference of employees as to their weekly rest day when such preference is based on religious grounds.
b l2.
EMERGENCY REST DAY WORK

R o
When can an employer require work on a rest day?
The employer may require any of its employees to work on their scheduled rest day for the duration of the
following emergency and exceptional conditions:
a n a r
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity, to prevent loss of life and property, or in case of force majeure or
B
imminent danger to public safety;
h
b. In case of urgent work to be performed on machineries, equipment, or installations, to avoid serious loss
s
which the employer would otherwise suffer;
C
c. In the event of abnormal pressure of work due to special circumstances, where the employer cannot
e
ordinarily be expected to resort to other measures;
l
d. To prevent serious loss of perishable goods;
b
e. Where the nature of the work is such that the employees have to work continuously for seven (7) days
in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other
o
similar cases; and
f. When the work is necessary to avail of favorable weather or environmental conditions where
R
performance or quality of work is dependent thereon.
n
h.
HOLIDAY PAY/PREMIUM PAY
1.
a B
h
COVERAGE, EXCLUSIONS
C
Who are covered by the law on holiday pay?
e s
l
Generally, all employees are entitled to and covered by the law on holiday pay.

b
Who are EXCLUDED from its coverage?
The following are excluded:
o
a. Those of the government and any of the political subdivisions, including government-owned and
R
controlled corporations;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
n
c. Domestic workers or Kasambahays;
d. Persons in the personal service of another;
a
e. Managerial employees as defined in Book III of the Labor Code;
f. Field personnel and other employees whose time and performance is unsupervised by the employer;
h
g. Those who are engaged on task or contract basis or purely commission basis;
h. Those who are paid a fixed amount for performing work irrespective of the time consumed in the
C
performance thereof;
i. Other officers and members of the managerial staff;
j. Members of the family of the employer who are dependent on him for support.
x What are REGULAR and SPECIAL HOLIDAYS?
o
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A. Regular Holidays
New Years Day
Araw ng Kagitingan- 9
- 1
r
January (Wednesday)
a
April (Wednesday)
B
Maundy Thursday - 17 April
Good Friday - 18 April
s
Labor Day - 1 May (Thursday)
Independence Day - 12 June (Thursday)
e
National Heroes Day- 25 August (Last Monday of August)
l
Bonifacio Day - 30 November (Sunday)
Christmas Day - 25 December (Thursday)
b
Rizal Day - 30 December (Tuesday)
o
B. Special (Non-Working) Days
R
Chinese New Year - 31 January (Friday)
Black Saturday - 19 April
n r
Ninoy Aquino Day - 21 August (Thursday)
a a
All Saints Day - 1 November (Saturday)
h B
C. Special Holiday (for all schools)
s
EDSA Revolution
Anniversary 25 February (Tuesday)
l e
Not included in the enumeration above on regular holidays are (1) Eidl Fitr and (2)
Eidul Adha. The reason is that proclamations declaring the observance of these national holidays
b
are issued after the approximate dates of the Islamic holidays have been determined in accordance
with the Islamic calendar (Hijra) or the lunar calendar, or upon Islamic astronomical calculations,
o
whichever is possible or convenient. To this end, the National Commission on Muslim Filipinos
(NCMF) shall inform the Office of the President on which days the holidays shall respectively
R
fall.
n r
What is the total number of regular holidays?
The total number of regular holidays is twelve (12) days per year. This is important for purposes of
a a
reckoning certain divisors and computation of employee benefits.
h B
What is the principal distinction between regular and special (non-working) days?
The said 12 regular holidays are considered GUARANTEED WITH PAY since employees should be paid
C s
their wages during regular holidays regardless of whether they work or not on those days.
e
As far as special (non-working) days are concerned, the principle of NO WORK, NO PAY applies, which
l
means that if workers do not work on special (non-working) days, they do not receive any wages for those days,
unlike in the case of regular holidays as above discussed.
What is premium pay for holidays (and also for rest days)?
o b
Premium pay refers to the additional compensation required by law to be paid for work performed
within the regular eight (8) normal working hours on non-working days, such as rest days, regular and special
R
holidays.
n
How is premium pay for holidays computed?
a. Regular Holidays
a
If the employee did not work, he/she shall be paid 100 % of his/her salary for that day. Computation:
h B
(Daily rate + Cost of Living Allowance) x 100%. The COLA is included in the computation of
holiday pay.
C s
If the employee worked, he/she shall be paid 200 % of his/her regular salary for that day for the first
e
eight hours. Computation: (Daily rate + COLA) x 200%. The COLA is also included in computation
l
of holiday pay.
If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30
b
percent of his/her hourly rate on said day. Computation: Hourly rate of the basic daily wage x 200% x
130% x number of hours worked.
R o
If the employee worked during a regular holiday that also falls on his/her rest day, he/she shall be paid
an additional 30 % of his/her daily rate of 200 %. Computation: (Daily rate + COLA) x 200%] + (30%
[Daily rate x 200%)].
n
If the employee worked in excess of eight hours (overtime work) during a regular holiday that also
a
falls on his/her rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said day.
Computation: (Hourly rate of the basic daily wage x 200% x 130% x 130% x number of hours
h
worked);
b. Special (Non-Working) Days
C
If the employee did not work, the no work, no pay principle shall apply, unless there is a favorable
company policy, practice, or CBA granting payment on a special day.
If the employee worked, he/she shall be paid an additional 30 % of his/her daily rate on the first eight
hours of work. Computation: [(Daily rate x 130%) + COLA).
o
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If the employee worked in excess of eight hours (overtime work), he/she shall be paid an additional 30
r
% of his/her hourly rate on said day. Computation: (Hourly rate of the basic daily wage x 130% x
a
130% x number of hours worked).
If the employee worked during a special day that also falls on his/her rest day, he/she shall be paid an
B
additional 50% of his/her daily rate on the first eight hours of work. Computation: [(Daily rate x 150%)
+ COLA].
s
If the employee worked in excess of eight hours (overtime work) during a special day that also falls on
e
his/her rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said day.
l
Computation: (Hourly rate of the basic daily wage x 150% x 130% x number of hours worked).
b
c. Special Holiday for all schools
x For private establishments, 25 February 2014 is an ordinary workday and no premium is required to be
o
paid for work on said day.
x On the other hand, employees in private schools, whether academic or administrative personnel, shall
R
be paid in accordance with the rules for pay on special (non-working) days as stated above.
x What are the effects of absences on the computation of holiday pay?
n r
1. Employees on leave of absence with pay - entitled to holiday pay when they are on leave of absence
a a
with pay.
2. Employees on leave of absence without pay on the day immediately preceding the regular holiday -
h B
may not be paid the required holiday pay if they have not worked on such regular holiday.
s
3. Employees on leave while on SSS or employees compensation benefits - Employers should grant
the same percentage of the holiday pay as the benefit granted by competent authority in the form of
e
employees compensation or social security payment, whichever is higher, if they are not reporting
l
for work while on such benefits.
b
4. When day preceding regular holiday is a non-working day or scheduled rest day - should not be
deemed to be on leave of absence on that day, in which case, employees are entitled to the regular
o
holiday pay if they worked on the day immediately preceding the non-working day or rest day.
2.
R
HOLIDAY PAY/PREMIUM PAY OF
n r
TEACHERS, PIECE WORKERS, TAKAY,
SEASONAL WORKERS, SEAFARERS
x
a
Are private school teachers entitled to holiday pay during semestral vacations? What about Christmas
B a
h
vacation
C s
No, as far as regular holidays during semestral vacations are concerned.
e
Yes, as far as regular holidays during Christmas vacation are concerned.
l
x Are hourly-paid teachers entitled to holiday pay?
A school is exempted from paying hourly-paid faculty members their pay for regular holidays, whether
b
the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations.
However, it is liable to pay the faculty members their regular hourly rate on days declared as special holidays or if,
o
for some reason, classes are called off or shortened for the hours they are supposed to have taught, whether
extensions of class days be ordered or not; and in case of extensions, said faculty members shall likewise be paid
R
their hourly rates should they teach during said extensions.
n
x Are piece-workers, takay and others paid by results entitled to holiday pay?
Yes. Where a covered employee is paid by results or output such as payment on piece-work, his holiday
a
pay should not be less than his average daily earnings for the last seven (7) actual working days preceding the
B
regular holiday. In no case, however, should the holiday pay be less than the applicable statutory minimum wage
h
rate.
C s
x What are the distinctions between supervised and unsupervised workers paid by results to determine
e
their entitlement to holiday pay?
l
The principal test to determine entitlement to holiday pay is whether the employees time and performance
of the work are supervised or unsupervised by their employer. If supervised, the employee is entitled to
b
holiday pay. If unsupervised, he is not.
o
The distinctions between supervised and unsupervised workers paid by results are as follows:
(1) Those whose time and performance are supervised by the employer. Here, there is an element of
R
control and supervision over the manner as to how the work is to be performed. A piece-rate worker
belongs to this category especially if he performs his work in the company premises; and
a n
(2) Those whose time and performance are unsupervised. Here, the employers control is over the result
of the work. Workers on pakyao and takay basis belong to this group. Both classes of workers are
paid per unit accomplished. Piece-rate payment is generally practiced in garment factories where work
h
is done in the company premises, while payment on pakyao and takay basis is commonly observed in
C
the agricultural industry, such as in sugar plantations where the work is performed in bulk or in
volumes, hence, difficult to quantify.
x Are seasonal workers entitled to holiday pay?
Yes. Seasonal workers are entitled to holiday pay while working during the season. They may not be paid
the required regular holiday pay during off-season where they are not at work.
o
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x Are seafarers entitled to holiday pay?
r
Yes. Any hours of work or duty including hours of watch-keeping performed by the seafarer on designated
a
rest days and holidays shall be paid rest day or holiday pay accordingly.

B
What are important principles on holiday pay?
x In case of two (2) regular holidays falling on the same day, the worker should be compensated as follows:
e s
o If unworked 200% for the two regular holidays;
o If worked 200% for the two regular holidays plus premium of 100% for work on that day.
l
x Monthly-paid employees are not excluded from the coverage of holiday pay.
o b 13 TH
i.
MONTH PAY
R
x Who are covered by the 13th month pay law?
Only rank-and-file employees, regardless of their designation or employment status and irrespective of the
n r
method by which their wages are paid, are entitled to the 13th month pay benefit. Managerial employees are not
entitled to 13th month pay.
a x
a
What is the minimum period of service required in a calendar year to be entitled to 13th month pay?
B
h
To be entitled to the 13th month pay benefit, it is imposed as a minimum service requirement that the
employee should have worked for at least one (1) month during a calendar year.
s
x When should 13th month pay be paid?
e
It must be paid not later than December 24 of every year.
l
x Who are excluded from its coverage?
b
The following employers are not covered by the 13th month pay law:
1. The government and any of its political subdivisions, including government-owned and
o
controlled corporations, except those corporations operating essentially as private subsidiaries of the
R
government.
2. Employers already paying their employees 13th month pay or more in a calendar year or its equivalent
n r
at the time of the issuance of the Revised Guidelines.
3. Employers of those who are paid on purely commission, boundary, or task basis, and those who
a a
are paid a fixed amount for performing a specific work, irrespective of the time consumed in the
B
performance thereof, except where the workers are paid on piece-rate basis, in which case, the
h
employer shall be covered by the Revised Guidelines insofar as such workers are concerned. Workers
s
paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or unit of
C
work produced that is more or less regularly replicated without regard to the time spent in producing
e
the same.
l
x Are domestic workers or Kasambahays covered?
b
Yes. They are now covered under the Kasambahay Law.
x Are extras, casuals and seasonal employees entitled to 13th month pay?
o
Yes, they are entitled thereto.
R
x Is 13th month pay part of wage?
13th month pay which is in the nature of additional income, is based on wage but not part of wage.
n
x What is the minimum amount of the 13th month pay?
a
The minimum 13th month pay should not be less than one-twelfth (1/12) of the total basic salary earned
by an employee within a calendar year.
x
h
What is meant by basic salary or basic wage?
B
C s
Basic salary or basic wage contemplates work within the normal eight (8) working hours in a day. This
means that the basic salary of an employee for purposes of computing the 13th month pay should include all
e
remunerations or earnings paid by the employer for services rendered during normal working hours.
l
For purposes of computing the 13th month pay, basic salary should be interpreted to mean not the amount actually
b
received by an employee, but 1/12 of their standard monthly wage multiplied by their length of service within a
given calendar year.
o
j.
SERVICE CHARGE
What are the kinds of establishment covered by the law on service charge?
R
n
The rules on service charge apply only to establishments collecting service charges, such as hotels,
a
restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and
similar enterprises, including those entities operating primarily as private subsidiaries of the government.
h
Who are the employees covered by this law?
The same rules on service charges apply to all employees of covered employers, regardless of their
C
positions, designations or employment status, and irrespective of the method by which their wages are paid except
those receiving more than P2,000.00 a month.
Who are not covered?
o
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Specifically excluded from coverage are employees who are receiving wages of more than P2,000.00 a
r
month. However, it must be pointed out that the P2,000.00 ceiling is no longer realistic considering the applicable
a
minimum wages prevailing in the country. Hence, it must be disregarded.

B
How is the service charge distributed?
a. Percentage of sharing.
s
All service charges collected by covered employers are required to be distributed at the following rates:
e
1. 85% to be distributed equally among the covered employees; and
l
2. 15% to management to answer for losses and breakages and distribution to employees receiving more
than P2,000.00 a month, at the discretion of the management.
o b
b. Frequency of distribution.
The share of the employees referred to above should be distributed and paid to them not less often than
once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
R Can the service charge be integrated into the wages of covered employees?
n r
Yes. In case the service charge is abolished, the share of covered employees should be considered
integrated in their wages, in accordance with Article 96 of the Labor Code. The basis of the amount to be integrated
a a
is the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition
B
or withdrawal of such charges.
h x What are some principles on service charge?
s
x Tips and services charges are two different things. Tips are given by customers voluntarily to waiters and other
e
people who serve them out of recognition of satisfactory or excellent service. There is no compulsion to give
tips under the law. The same may not be said of service charges which are considered integral part of the cost of
l
the food, goods or services ordered by the customers.
b
x Service charges are not in the nature of profit share and, therefore, cannot be deducted from wage.
R o B.
WAGES
n r
1.
a a
WAGE VS. SALARY
h B
What is the basic distinction between wage and salary?
The term wage is used to characterize the compensation paid for manual skilled or unskilled labor.
C s
Salary, on the other hand, is used to describe the compensation for higher or superior level of employment.
e
What is the distinction in respect to execution, attachment or garnishment?
l
In cases of execution, attachment or garnishment of the compensation of an employee received from
b
work issued by the court to satisfy a judicially-determined obligation, a distinction should be made whether such
compensation is considered wage or salary. Under Article 1708 of the Civil Code, if considered a wage, the
o
employees compensation shall not be subject to execution or attachment or garnishment, except for debts incurred
for food, shelter, clothing and medical attendance. If deemed a salary, such compensation is not exempt from
R
execution or attachment or garnishment. Thus, the salary, commission and other remuneration received by a
managerial employee (as distinguished from an ordinary worker or laborer) cannot be considered wages. Salary is
n
understood to relate to a position or office, or the compensation given for official or other service; while wage is the
compensation for labor.
a2.
B
h
PAYMENT OF WAGES
C s
What are the attributes of wage?
e
Wage has the following attributes:
l
1) It is the remuneration or earnings, however designated, for work done or to be done or for services rendered
b
or to be rendered;
2) It is capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or
o
commission basis, or other method of calculating the same;
3) It is payable by an employer to an employee under a written or unwritten contract of employment for work
R
done or to be done or for services rendered or to be rendered; and
4) It includes the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or other
n
facilities customarily furnished by the employer to the employee. Fair and reasonable value shall not
include any profit to the employer or to any person affiliated with the employer.
a
What is basic wage?
Basic wage means all the remuneration or earnings paid by an employer to a worker for services
h
rendered on normal working days and hours but does not include cost-of-living allowances, profit-sharing
payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or
C
integrated into the regular salary of the workers.
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the following
should be excluded from the computation of basic salary, to wit: payments for sick, vacation and maternity
leaves, night differentials, regular holiday pay and premiums for work done on rest days and special holidays.
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What is minimum wage?
r
The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of
a
whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay.

B
What is statutory minimum wage?
The term statutory minimum wage refers simply to the lowest basic wage rate fixed by law that an
s
employer can pay his workers.
e
What is regional minimum wage rate?
The term regional minimum wage rates refers to the lowest basic wage rates that an employer can pay
l
his workers, as fixed by the Regional Tripartite Wages and Productivity Boards (RTWPBs), and which shall
b
not be lower than the applicable statutory minimum wage rates.

o
What are included/excluded in the term wage rate?
The term "wage rate" includes cost-of-living allowances as fixed by the RTWPB, but excludes other
R
wage-related benefits such as overtime pay, bonuses, night shift differential pay, holiday pay, premium pay, 13th
month pay, premium pay, leave benefits, among others.
n r
Can COLA be integrated into the minimum wage?
a a
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage by the
Regional Tripartite Wages and Productivity Board (RTWPB or Regional Board).
h
What is COLA?
B
s
COLA is not in the nature of an allowance intended to reimburse expenses incurred by employees in the
performance of their official functions. It is not payment in consideration of the fulfillment of official duty. As
e
defined, cost of living refers to the level of prices relating to a range of everyday items or the cost of
l
purchasing the goods and services which are included in an accepted standard level of consumption. Based on this
b
premise, COLA is a benefit intended to cover increases in the cost of living.
What is the NO WORK, NO PAY principle?
o
The no work, no pay or fair days wage for fair days labor means that if the worker does not work,
R
he is generally not entitled to any wage or pay. The exception is when it was the employer who unduly prevented
him from working despite his ableness, willingness and readiness to work; or in cases where he is illegally locked
n r
out or illegally suspended or illegally dismissed, or otherwise illegally prevented from working, in which event, he
should be entitled to his wage.
a B a
h
3.
FACILITIES VERSUS SUPPLEMENTS
C s
What are facilities?
e
The term facilities includes articles or services for the benefit of the employee or his family but does
l
not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the
conduct of the employers business. They are items of expense necessary for the laborers and his familys existence
b
and subsistence which form part of the wage and when furnished by the employer, are deductible therefrom, since if
they are not so furnished, the laborer would spend and pay for them just the same.
What are supplements?
R o
The term supplements means extra remuneration or special privileges or benefits given to or received
by the laborers over and above their ordinary earnings or wages.
n
What are the distinctions between facilities and supplements?
a
The benefit or privilege given to the employee which constitutes an extra remuneration over and above his
basic or ordinary earning or wage is supplement; and when said benefit or privilege is made part of the laborers
h B
basic wage, it is a facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or
sick leave) given but its purpose. Thus, free meals supplied by the ship operator to crew members, out of necessity,
C s
cannot be considered as facilities but supplements which could not be reduced having been given not as part of
e
wages but as a necessary matter in the maintenance of the health and efficiency of the crew during the voyage.
l
What is the rule on deductibility of facilities and supplements?
b
Facilities are deductible from wage but not supplements.
o
4.
R
NON-DIMINUTION OF BENEFITS
What is the applicability of the non-diminution rule in Article 100 of the Labor Code?
n
Albeit Article 100 is clear that the principle of non-elimination and non-diminution of benefits apply only
a
to the benefits being enjoyed at the time of the promulgation of the Labor Code, the Supreme Court has
consistently cited Article 100 as being applicable even to benefits granted after said promulgation. It has, in fact,
h
been treated as the legal anchor for the declaration of the invalidity of so many acts of employers deemed to have
eliminated or diminished the benefits of employees.
C
The 2014 case of Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and
Staff Association,1 succinctly pointed out that the Non-Diminution Rule found in Article 100 of the Labor Code
1 G.R. No. 181806, March 12, 2014.
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explicitly prohibits employers from eliminating or reducing the benefits received by their employees. This rule,
r
however, applies only if the benefit is based on any of the following:
a
(1) An express policy;
B
(2) A written contract; or
(3) A company practice.
s
There is not much controversy if the benefit involved is provided for under Nos. 1 and 2 above. Thus, if it
e
is expressly laid down in a written policy unilaterally promulgated by the employer, the employer is duty-bound to
adhere and comply by its own policy. It cannot be allowed to renege from its commitment as expressed in the
l
policy.
b
If the benefit is granted under a written contract such as an employment contract or a collective bargaining
agreement (CBA), the employer is likewise under legal compulsion to so comply therewith.
o
On No. 3 above, please see discussion below.
R
4.1.
n r
COMPANY PRACTICE
a a
What is company practice?
Company practice is a custom or habit shown by an employers repeated, habitual customary or succession
h B
of acts of similar kind by reason of which, it gains the status of a company policy that can no longer be disturbed or
withdrawn.
s
To ripen into a company practice that is demandable as a matter of right, the giving of the benefit should
e
not be by reason of a strict legal or contractual obligation but by reason of an act of liberality on the part of
l
the employer.
b
What are the criteria that may be used to determine existence of company practice?
o
Since there is no hard and fast rule which may be used and applied in determining whether a certain act of
the employer may be considered as having ripened into a practice, the following criteria may be used to determine
R
whether an act has ripened into a company practice:
(1) The act of the employer has been done for a considerable period of time;
n r
(2) The act should be done consistently and intentionally; and
a a
(3) The act should not be a product of erroneous interpretation or construction of a doubtful or difficult
question of law or provision in the CBA.
h B
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.1)
s
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF
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TIME.
If done only once as in the case of Philippine Appliance Corporation (Philacor) v. CA,2 where the CBA
l
signing bonus was granted only once during the 1997 CBA negotiation, the same cannot be considered as having
e
b
ripened into a company practice.
In the following cases, the act of the employer was declared company practice because of the considerable
o
period of time it has been practiced:
R
(a) Davao Fruits Corporation v. Associated Labor Unions.3 - The act of the company of freely and
continuously including in the computation of the 13th month pay, items that were expressly excluded
n
by law has lasted for six (6) years, hence, was considered indicative of company practice.
a
(b) Sevilla Trading Company v. A. V. A. Semana.4 - The act of including non-basic benefits such as
paid leaves for unused sick leave and vacation leave in the computation of the employees 13th month
h B
pay for at least two (2) years was considered a company practice.
s
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor Union-
C
NLU,5 also ruled as company practice the act of petitioner of granting for thirty (30) years, its workers
e
the mandatory 13th month pay computed in accordance with the following formula: Total Basic
l
Annual Salary divided by twelve (12) and Including in the computation of the Total Basic Annual
b
Salary the following: basic monthly salary; first eight (8) hours overtime pay on Sunday and
legal/special holiday; night premium pay; and vacation and sick leaves for each year.
o
2. THE ACT SHOULD BE DONE CONSISTENTLY AND INTENTIONALLY.
R
The following cases may be cited to illustrate this principle:
(a) Tiangco v. Leogardo, Jr.,6 where the employer has consistently been granting fixed monthly
n
emergency allowance to the employees from November, 1976 but discontinued this practice effective
February, 1980 insofar as non-working days are concerned based on the principle of no work, no
a
pay. The Supreme Court ruled that the discontinuance of said benefit contravened Article 100 of the
Labor Code which prohibits the diminution of existing benefits.
2
3 C h
G.R. No. 176985, April 1, 2013; See also Supreme Steel Corporation v. Nagkakaisang Manggagawa ng Supreme Independent Union (NMS-IND-APL), G.R. No.
185556, March 28, 2011, 646 SCRA 501, 527; TSPIC Corporation v. TSPIC Employees Union (FFW), G.R. No. 163419, Feb. 13, 2008, 545 SCRA 215, 226.
G.R. No. 149434, June 3, 2004.
G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
4 G.R. No. 152456, April 28, 2004, 438 SCRA 239.
5 G.R. No. 188949, July 26, 2010.
6 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
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3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR
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CONSTRUCTION OF A DOUBTFUL OR DIFFICULT QUESTION OF LAW OR PROVISION
a
IN THE CBA.
The general rule is that if it is a past error that is being corrected, no vested right may be said to have arisen
B
therefrom nor any diminution of benefit may have resulted by virtue of the correction thereof. The error, however,
must be corrected immediately after its discovery; otherwise, the rule on non-diminution of benefits would still
s
apply.
e
The following cases would illuminate this principle:
l
(a) Globe Mackay Cable and Radio Corporation v. NLRC,1 where the Supreme Court ruled on the
b
proper computation of the cost-of-living allowance (COLA) for monthly-paid employees. Petitioner
corporation, pursuant to Wage Order No. 6 (effective October 30, 1984), increased the COLA of its
o
monthly-paid employees by multiplying the P3.00 daily COLA by 22 days which is the number of
working days in the company. The union disagreed with the computation, claiming that the daily
R
COLA rate of P3.00 should be multiplied by 30 days which has been the practice of the company for
several years. The Supreme Court, however, upheld the contention of the petitioner corporation. It
n r
held that the grant by the employer of benefits through an erroneous application of the law due to
absence of clear administrative guidelines is not considered a voluntary act which cannot be
a a
unilaterally discontinued.
B
(b) TSPIC Corp. v. TSPIC Employees Union [FFW],2 where the Supreme Court reiterated the rule
h
enunciated in Globe-Mackay, that an erroneously granted benefit may be withdrawn without violating
s
the prohibition against non-diminution of benefits. No vested right accrued to individual respondents
when TSPIC corrected its error by crediting the salary increase for the year 2001 against the salary
e
increase granted under Wage Order No. 8, all in accordance with the CBA. Hence, any amount given
l
to the employees in excess of what they were entitled to, as computed above, may be legally deducted
b
by TSPIC from the employees salaries.
But if the error does not proceed from the interpretation or construction of a law or a provision in the CBA,
o
the same may ripen into a company practice.
Example:
R
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC,3 where the act of the employer in
granting separation pay to resigning employees, despite the fact that the Labor Code does not grant it,
n r
was considered an established employer practice.
a 5.
B a
h
PROHIBITIONS REGARDING WAGES
C s
(See Articles 112 to 119 of the Labor Code)
e
(1) NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR WAGES.
l
Article 112 of the Labor Code - No employer is allowed to limit or otherwise interfere with the freedom of
b
any employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize
any store or avail of the services offered by any person.
o
(2) WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION.
The general rule is that laborers wages are not subject to execution or attachment. The exception is when
R
such execution or attachment is made for debts incurred for food, shelter, clothing and medical attendance.
n
(3) PROHIBITION ON DEDUCTIONS FROM WAGES.
a
May employer deduct from wage of employees?
The general rule is that an employer, by himself or through his representative, is PROHIBITED from
h B
making any deductions from the wages of his employees. The employer is not allowed to make unnecessary
deductions without the knowledge or authorization of the employees.
Are there EXCEPTIONS to this rule?
Yes.
C e s
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to
recompense the employer for the amount paid by him as premium on the insurance;
b
(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized l
o
by the employer or authorized in writing by the individual worker concerned; and
R
(c) In cases where the employer is authorized by law or regulations issued by the DOLE Secretary.
(d) Deductions for loss or damage under Article 114 of the Labor Code;
n
(e) Deductions made for agency fees from non-union members who accept the benefits under the CBA
a
negotiated by the bargaining union. This form of deduction does not require the written authorization
of the non-bargaining union member concerned;
h
(f) Deductions for value of meal and other facilities;
C
(g) Deductions for premiums for SSS, PhilHealth, employees compensation and Pag-IBIG;
(h) Withholding tax mandated under the National Internal Revenue Code (NIRC);
1 G.R. No. 74156, June 29, 1988, 163 SCRA 71.

2 G.R. No. 163419, Feb. 13, 2008.
3 G.R. No. 117394, Feb. 21, 1997.
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(i) Withholding of wages because of the employees debt to the employer which is already due;
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(j) Deductions made pursuant to a court judgment against the worker under circumstances where the
a
wages may be the subject of attachment or execution but only for debts incurred for food, clothing,
shelter and medical attendance;
B
(k) When deductions from wages are ordered by the court;
s
(4) PROHIBITION AGAINST DEPOSIT REQUIREMENT.
e
Article 114 of the Labor Code prohibits the employer to require that workers should make a deposit from
l
which deductions shall be made for the reimbursement of loss of tools, materials or equipment supplied by him, or
any damages thereto.
b
PERMISSIBLE DEDUCTIONS FOR LOSS OR DAMAGES.
o
If the employer is engaged in a trade, occupation or business where there is such practice of making
deductions or requiring deposits to answer for the reimbursement of loss of or damage to tools, materials or
R
equipment supplied by the employer to the employee.
(5) PROHIBITION ON WITHHOLDING OF WAGES.
n r
Article 116 of the Labor Code prohibits any person, whether employer or not, directly or indirectly, to
a a
withhold any amount from the wages of a worker.
B
Under Article 1706 of the Civil Code, withholding of the wages, except for a debt due, is not allowed to be
h
made by the employer.
s
Moreover, under Article 1709 of the same Code, the employer is not allowed to seize or retain any tool or
e
other articles belonging to the laborer.
l
(6) KICKBACKS.
Article 116 of the Labor Code also prohibits kickback which consists in the act of any person, whether
b
employer or not, directly or indirectly, to induce a worker to give up any part of his wages by force, stealth,
intimidation, threat or by any other means whatsoever, without the workers consent.
o
(7) PROHIBITION AGAINST DEDUCTION TO ENSURE EMPLOYMENT.
R
Article 117 of the Labor Code prohibits any person, whether the employer himself or his representative or
an intermediary, to require that a deduction be made or to actually make any deduction from the wages of any
n r
employee or worker, for the benefit of such employer or his representative or an intermediary, as consideration of a
a a
promise of employment or, when already employed, for the continuation of such employment or retention therein.
(8) RETALIATORY ACTIONS BY EMPLOYER.
h B
Article 118 of the Labor Code prohibits the employer:
s
(a) to refuse to pay the wages and benefits of an employee; or
C (b) to reduce his wages and benefits; or
e
l
(c) to discharge him from employment; or
(d) to discriminate against him in any manner;
b
on account and by reason of said employees:
o
(1) act of filing any complaint or institution of any proceeding under Title II [Wages], Book III of the
Labor Code; or
R
(2) act of testifying in said proceedings or when he is about to testify therein.
n
(9) FALSE STATEMENT, REPORT OR RECORD.
Article 119 of the Labor Code prohibits any person, whether employer or not, to make any false statement,
a
report or record required to be filed or kept in accordance with and pursuant to the provisions of the Labor Code,
B
knowing such statement, report or record to be false in any material respect.
C h
Examples: Payrolls, time records, employment records and production records, among others.
s
e
6.
l
WAGE ORDER
b
What is a Wage Order?
The term Wage Order refers to the order promulgated by the Regional Tripartite Wages and Productivity
o
Board (Regional Board) pursuant to its wage fixing authority.
x When is it proper to issue a Wage Order?
R
Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent
n
facts and based on the prescribed standards and criteria, shall proceed to determine whether a Wage Order should be
issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one
a
(1) newspaper of general circulation in the region.
What are the standards/criteria for minimum wage fixing?
consider the following:

(1) Needs of workers and their families
C h
In the determination of regional minimum wages, the Regional Board shall, among other relevant factors,
1) Demand for living wages;

2) Wage adjustment vis--vis the consumer price index;
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3) Cost of living and changes therein;
r
4) Needs of workers and their families;
a
5) Improvements in standards of living.
B
(2) Capacity to pay
1) Fair return on capital invested and capacity to pay of employers;
s
2) Productivity.
e
(3) Comparable wages and incomes
l
1) Prevailing wage levels.
b
(4) Requirements of economic and social development
o
1) Need to induce industries to invest in the countryside;
2) Effects on employment generation and family income;
R
3) Equitable distribution of income and wealth along the imperatives of economic and social
development.
n r
What are the methods of fixing the minimum wage rates?
a a
There are two (2) methods, to wit:
B
1. Floor-Wage method which involves the fixing of a determinate amount to be added to the prevailing
h
statutory minimum wage rates. This was applied in earlier wage orders; and
s
2. Salary-Cap or Salary-Ceiling method where the wage adjustment is to be applied to employees
receiving a certain denominated salary ceiling. In other words, workers already being paid more than
e
the existing minimum wage (up to a certain amount stated in the Wage Order) are also to be given a
l
wage increase.
b
The Salary-Cap or Salary-Ceiling method is the preferred mode.
The distinction between the two (2) methods is best shown by way of an illustration. Under the Floor
o
Wage Method, it would be sufficient if the Wage Order simply set P15.00 as the amount to be added to the
prevailing statutory minimum wage rates; while in the Salary-Ceiling Method, it would be sufficient if the Wage
R
Order states a specific salary, such as P250.00, and only those earning below it shall be entitled to the wage increase.
n r
MINIMUM WAGE OF WORKERS PAID BY RESULTS
a a
What are the minimum wage rates of workers paid by results?
According to Article 124 of the Labor Code:
h B
All workers paid by results, including those who are paid on piecework, takay, pakyaw or task
C s
basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a
e
proportion thereof for working less than eight (8) hours.
l
Who are workers paid by results?
They are workers who are engaged on pakyao, piecework, task and other non-time work. They are so
b
called because they are paid not on the basis of the time spent on their work but according to the quantity, quality or
kind of job and the consequent results thereof.
What are the categories of workers paid by results?
Workers paid by results may be classified into:
R o
n
a) Supervised workers; and
a
b) Unsupervised workers.
As the term clearly connotes, supervised workers are those whose manner of work is under the control of
h B
the employer; while unsupervised workers are those whose work is controlled more in the results than in the
manner or method of performing it.
C
The law does not make any categorical differentiation among the workers paid by results. Thus, the
workers may be on pakyao (sometimes spelled pakyaw), takay or piece-rate or output basis. All of them are
e s
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similar in character in that they are all paid on the basis of the results of their work. When the law does not
distinguish, we should not distinguish.

WAGE RATE OF APPRENTICES AND LEARNERS
What is the wage rate of apprentices and learners?
o b
R
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory
minimum wage.
WAGE RATE OF PERSONS WITH DISABILITY (PWDs)
a n
h
What is the wage rate of PWD?
Under R.A. No. 7277, the wage rate of PWDs had been increased to and fixed at 100% of the applicable
C
minimum wage.
6.1.
WAGE DISTORTION
What is wage distortion?
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Wage distortion contemplates a situation where an increase in prescribed wage rates results in either of
r
the following:
a
1. Elimination of the quantitative differences in the rates of wages or salaries; or
B
2. Severe contraction of intentional quantitative differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage
s
structure based on the following criteria:
a. Skills;
e
b. Length of service; or
l
c. Other logical bases of differentiation.
b
Wage distortion presupposes a classification of positions and ranking of these positions at various
levels. One visualizes a hierarchy of positions with corresponding ranks basically in terms of wages and other
o
emoluments. Where a significant change occurs at the lowest level of positions in terms of basic wage without a
corresponding change in the other level in the hierarchy of positions, negating as a result thereof the distinction
R
between one level of position from the next higher level, and resulting in a parity between the lowest level and the
n r
next higher level or rank, between new entrants and old hires, there exists a wage distortion. xxx. The concept of
wage distortion assumes an existing grouping or classification of employees which establishes distinctions among
a a
such employees on some relevant or legitimate basis. This classification is reflected in a differing wage rate for
each of the existing classes of employees.
h
What are the elements of wage distortion?
B
s
The four (4) elements of wage distortion are as follows:
e
(1) An existing hierarchy of positions with corresponding salary rates;
l
(2) A significant change in the salary rate of a lower pay class without a concomitant increase in the
salary rate of a higher one;
b
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the country.
R o
Normally, a company has a wage structure or method of determining the wages of its employees. In a
problem dealing with wage distortion, the basic assumption is that there exists a grouping or classification of
employees that establishes distinctions among them on some relevant or legitimate bases.
n r
Involved in the classification of employees are various factors such as the degrees of responsibility, the
a a
skills and knowledge required, the complexity of the job, or other logical basis of differentiation. The differing
wage rate for each of the existing classes of employees reflects this classification.

h
What is the formula for rectifying or resolving wage distortion?
B
C s
Following is the formula for the correction of wage distortion in the pay scale structures:
e
Minimum Wage = % x Prescribed Increase = Distortion Adjustment
l
Actual Salary
b
The above formula was held to be just and equitable.
o
C.
LEAVES
1.
R
n
SERVICE INCENTIVE LEAVE
a
What is service incentive leave?
B
Every covered employee who has rendered at least one (1) year of service is entitled to a yearly service
h
incentive leave of five (5) days with pay.
C s
The term at least one year of service should mean service within twelve (12) months, whether
e
continuous or broken, reckoned from the date the employee started working, including authorized absences and paid
l
regular holidays, unless the number of working days in the establishment as a matter of practice or policy, or that
provided in the employment contract, is less than twelve (12) months, in which case, said period should be
b
considered as one (1) year for the purpose of determining entitlement to the service incentive leave benefit.
o
Who are excluded from its coverage?
All employees are covered by the rule on service incentive leave except:
R
a. Those of the government and any of its political subdivisions, including government-owned and
n
controlled corporations;
b. Domestic workers or kasambahays;
a
c. Persons in the personal service of another;
d. Managerial employees as defined in Book III of the Labor Code;
h
e. Field personnel and other employees whose performance is unsupervised by the employer;
f. Those who are engaged on task or contract basis, purely commission basis, or those who are paid in a
C
fixed amount for performing work irrespective of the time consumed in the performance thereof;
g. Those who are already enjoying the benefit provided in the law;
h. Those enjoying vacation leave with pay of at least five (5) days;
i. Those employed in establishments regularly employing less than ten (10) employees;
j. Other officers and members of the managerial staff; and
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k. Members of the family of the employer who are dependent on him for support.
r
Are unavailed service incentive leaves commutable to cash?
a
Yes. The service incentive leave is commutable to its money equivalent if not used or exhausted at the end
of the year.
B
2.
s
MATERNITY LEAVE
e
What is maternity leave?
l
Maternity leave is the period of time which may be availed of by a woman employee, married or
unmarried, to undergo and recuperate from childbirth, miscarriage or complete abortion during which she is
b
permitted to retain her rights and benefits flowing from her employment.
o
What is the period of leave?
60 days for normal delivery
R
78 days for caesarian delivery
What is the amount granted?
n r
Daily maternity benefit equivalent to 100% of her average daily salary credit for sixty (60) days or
a a
seventy-eight (78) days in case of caesarian delivery/
What is the number of delivery or miscarriage covered?
h B
The maternity benefits shall be paid only for the first four (4) deliveries or miscarriages/
s
Is an unmarried woman entitled to maternity leave benefit?
e
Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless of whether she
is married or unmarried.

b l 3.
PATERNITY LEAVE
o
What is paternity leave benefit?
Paternity leave covers a married male employee allowing him not to report for work for seven (7)
R
calendar days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child
or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery
n r
and/or in the nursing of the newly-born child.
a a
Delivery includes childbirth or any miscarriage.
B
Spouse refers to the lawful wife. For this purpose, lawful wife refers to a woman who is legally
h
married to the male employee concerned.
C s
Cohabiting refers to the obligation of the husband and wife to live together.
e
What is the covered total number of deliveries?
l
Every married employee in the private and public sectors is entitled to a paternity leave of seven (7)
b
calendar days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting.
Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without
o
prejudice to an employer allowing an employee to avail of the benefit before or during the delivery, provided that
the total number of days should not exceed seven (7) calendar days for each delivery.
x Is an unavailed paternity leave benefit convertible to cash?
R
n
No. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to cash.
a
4.
B
PARENTAL LEAVE FOR SOLO PARENTS
h
(R.A. No. 8972)
C
What is parental leave?
Parental leave is the leave benefit granted to a male or female solo parent to enable him/her to perform
e
parental duties and responsibilities where physical presence is required.
How many days may be availed of as parental leave?
The parental leave shall not be more than seven (7) working days every year to a solo parent who has
rendered service of at least one (1) year, to enable him/her to perform parental duties and responsibilities where
b l
o
his/her physical presence is required. This leave shall be non-cumulative.
R
It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from any
other leave benefits provided under existing laws or agreements.
n
Who is a solo parent?
a
The term "solo parent" refers to any individual who falls under any of the following categories:
h
(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final
conviction of the offender: Provided, That the mother keeps and raises the child;
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(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving
sentence for a criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental incapacity
of spouse as certified by a public medical practitioner;
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(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto
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separation from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the
a
children;
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or
B
annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the
custody of the children;
s
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at
e
least one (1) year;
l
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having
others care for them or give them up to a welfare institution;
b
(9) Any other person who solely provides parental care and support to a child or children;
o
(10) Any family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the parents or solo parent.
R
What is the effect of change of status of the solo parent?
A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no
n r
longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.
a a
Who are considered children under this law?
B
"Children" refer to those living with and dependent upon the solo parent for support who are unmarried,
h
unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years but are incapable of self-
s
support because of mental and/or physical defect/disability.
e
Is an unavailed parental leave convertible to cash?
l
No. In the event that the parental leave is not availed of, said leave shall not be convertible to cash unless
specifically agreed upon previously.
b
5.
o
SPECIAL LEAVES FOR WOMEN WORKERS
(MAGNA CARTA OF WOMEN)

R
What is this special leave benefit [GYNECOLOGICAL SURGERY LEAVE]?
n r
A special leave benefit for women was granted under R.A. No. 9710, otherwise known as The Magna
Carta of Women [August 14, 2009]. Thus, any female employee in the public and private sector regardless of age
a a
and civil status shall be entitled to a special leave of two (2) months with full pay based on her gross monthly
B
compensation subject to existing laws, rules and regulations due to surgery caused by gynecological disorders
h
under the following terms and conditions:
C s
1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve
e
(12) months prior to surgery;
l
2. In the event that an extended leave is necessary, the female employee may use her earned leave credits;
and
b
3. This special leave shall be non-cumulative and non-convertible to cash.
o
Gynecological disorders refer to disorders that would require surgical procedures such as, but not
limited to, dilatation and curettage and those involving female reproductive organs such as the vagina, cervix,
R
uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent physician. Gynecological
surgeries shall also include hysterectomy, ovariectomy, and mastectomy.
n
Is this leave similar to maternity leave?
a
No. This leave should be distinguished from maternity leave benefit, a separate and distinct benefit, which
may be availed of in case of childbirth, miscarriage or complete abortion.
h
A woman, therefore, may avail of this special leave benefit in case she undergoes surgery caused by
B
C s
gynecological disorder and at the same time maternity benefit as these two leaves are not mutually exclusive.
6.
l e
b
LEAVE FOR VICTIMS OF VIOLENCE
AGAINST WOMEN AND CHILDREN
o
(R.A. No. 9262)
What is this kind of leave?
R
This special leave is granted to a woman employee who is a victim under this law. It is for a total of ten
(10) days of paid leave of absence, in addition to other paid leaves under the law. It is extendible when the
n
necessity arises as specified in the protection order. Its purpose is to enable the woman employee to attend to the
a
medical and legal concerns relative to said law. This leave is not convertible to cash.
What is the requirement for its entitlement?
h
At any time during the application of any protection order, investigation, prosecution and/or trial of the
criminal case, a victim of Violence Against Women and their Children (VAWC) who is employed shall be entitled
C
to said paid leave of up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the
case may be, shall issue a certification at no cost to the woman that such an action is pending, and this is all that is
required for the employer to comply with the 10-day paid leave.
o
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D.
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SPECIAL GROUPS OF EMPLOYEES
B a 1.
WOMEN
s
a.
e
DISCRIMINATION
l
What are acts of discrimination under the Labor Code?
b
(a) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe
benefits, to a female employee as against a male employee, for work of equal value; and
o
(b) Favoring a male employee over a female employee with respect to promotion, training opportunities,
study and scholarship grants solely on account of their sexes.
R What are acts of discrimination under the Magna Carta of Women?
n r
R.A. No. 9710, otherwise known as The Magna Carta of Women, is a comprehensive womens human
a a
rights law that seeks to eliminate discrimination against women by recognizing, protecting, fulfilling and promoting
the rights of Filipino women, especially those in marginalized sector.
h B
Based on the definition of the term Discrimination Against Women in R.A. No. 9710, the following are
considered discriminatory acts:
e s
1. Any gender-based distinction, exclusion, or restriction which has the effect or purpose of impairing or
nullifying the recognition, enjoyment, or exercise by women, irrespective of their marital status, on a
l
basis of equality of men and women, of human rights and fundamental freedoms in the political,
b
economic, social, cultural, civil or any other field;
2. Any act or omission, including by law, policy, administrative measure, or practice, that directly or
o
indirectly excludes or restricts women in the recognition and promotion of their rights and their access
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to and enjoyment of opportunities, benefits or privileges;
3. A measure or practice of general application that fails to provide for mechanisms to offset or address
n r
sex or gender-based disadvantages or limitations of women, as a result of which women are denied or
a a
restricted in the recognition and protection of their rights and in their access to and enjoyment of
opportunities, benefits, or privileges; or women, more than men, are shown to have suffered the greater
h B
adverse effects of those measures or practices; and
s
4. Discrimination compounded by or intersecting with other grounds, status, or condition, such as
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ethnicity, age, poverty or religion.
l e
Additionally, women are guaranteed their right to decent work. The State shall progressively realize and
ensure decent work standards for women that involve the creation of jobs of acceptable quality in conditions of
b
freedom, equity, security and human dignity.
o
b.
STIPULATION AGAINST MARRIAGE
R
Is the prohibition against marriage valid?
n
Article 136 of the Labor Code considers as an unlawful act of the employer to require as a condition for or
continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that
a
upon getting married, a woman employee shall be deemed resigned or separated. It is likewise an unlawful act of the
employer, to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason
h B
of her marriage.
C
What are the relevant pieces of jurisprudence on marriage?
1. Philippine Telegraph and Telephone Company (PT&T) v. NLRC.1 - It was declared here that the
e
company policy of not accepting or considering as disqualified from work any woman worker who
l
contracts marriage runs afoul of the test of, and the right against, discrimination afforded all women
b
workers by our labor laws and by no less than the Constitution.
2. Star Paper Corp. v. Simbol.2 - The following policies were struck down as invalid for violating the
o
standard of reasonableness which is being followed in our jurisdiction, otherwise called the
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Reasonable Business Necessity Rule:
1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3 rd degree
n
of relationship, already employed by the company.
a
2. In case of two of our employees (both singles [sic], one male and another female) developed a
friendly relationship during the course of their employment and then decided to get married, one of them
h
should resign to preserve the policy stated above.
3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc.1 In this case, the
C
prohibition against marriage embodied in the following stipulation in the employment contract was held
as valid:
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
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10. You agree to disclose to management any existing or future relationship you may have, either by
r
consanguinity or affinity with co-employees or employees of competing drug companies. Should it pose
a possible conflict of interest in management discretion, you agree to resign voluntarily from the
a
Company as a matter of Company policy.
B
The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a valid
exercise of management prerogative. The prohibition against personal or marital relationships with employees of
s
competitor companies upon its employees was held reasonable under the circumstances because relationships of that
e
nature might compromise the interests of the company. In laying down the assailed company policy, the employer
only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and
l
procedures.
b
c.
o
PROHIBITED ACTS
R
What are the prohibited acts against women under the Labor Code?
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of the
n r
employer:
a a
1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying
maternity leave, facilities and other benefits provided under the Labor Code;
h B
2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her
s
pregnancy;
3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may
e
again be pregnant;
l
4. To discharge any woman or any other employee for having filed a complaint or having testified or
b
being about to testify under the Labor Code; or
5. To require as a condition for or continuation of employment that a woman employee shall not get
o
married or to stipulate expressly or tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise
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prejudice a woman employee merely by reason of marriage.
n r
d.
SEXUAL HARASSMENT
a a
(ANTI-SEXUAL HARASSMENT ACT)
B
(R.A. No. 7877)

C h
What are the 3 situations contemplated under this law?
R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely:
s
(1) employment;
(2) education; and
l e
b
(3) training environment.
Can sexual harassment be committed also against a man?
o
Yes. Sexual harassment is not the sole domain of women as men may also be subjected to the same
despicable act. Said law does not limit the victim of sexual harassment to women.
Who are the persons who may be held liable for sexual harassment?
R
n
Work, education or training-related sexual harassment is committed by any employer, employee, manager,
supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having
a
authority, influence or moral ascendancy over another in a work or training or education environment, demands,
B
requests or otherwise requires any sexual favor from another, regardless of whether the demand, request or
h
requirement for submission is accepted by the object of said act.
C s
Further, any person who directs or induces another to commit any act of sexual harassment as defined in
e
the law, or who cooperates in the commission thereof by another without which it would not have been committed,
shall also be held liable under the law.
How is sexual harassment committed in a work-related or employment environment?
In a work-related or employment environment, sexual harassment is committed when:
b l
o
1. The sexual favor is made a condition in the hiring or in the employment, re-employment or continued
employment of said individual or in granting said individual favorable compensation, terms, conditions,
R
promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or
classifying the employee which in any way would discriminate, deprive or diminish employment
n
opportunities or otherwise adversely affect said employee;
a
2. The above acts would impair the employees rights or privileges under existing labor laws; or
3. The above acts would result in an intimidating, hostile, or offensive environment for the employee.
h
What are duties of the employer in regard to sexual harassment complaints?
It is the duty of the employer to prevent or deter the commission of acts of sexual harassment and to
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provide the procedures for the resolution or prosecution of acts of sexual harassment.
The employer or head of office is required to:
1 G.R. No. 162994, Sept. 17, 2004.
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1. promulgate appropriate rules and regulations, in consultation with and jointly approved by the
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employees or students or trainees, through their duly designated representatives, prescribing the
a
procedure for the investigation of sexual harassment cases and the administrative sanctions therefor.
The said rules and regulations issued shall include, among others, guidelines on proper decorum in the
B
workplace and educational or training institutions.
s
2. create a committee on decorum and investigation of cases on sexual harassment. The committee shall
conduct meetings, as the case may be, with officers and employees, teachers, instructors, professors,
e
coaches, trainors and students or trainees to increase understanding and prevent incidents of sexual
l
harassment. It shall also conduct the investigation of alleged cases constituting sexual harassment.
b
2.
MINORS
o
(Labor Code and R.A. No. 7678, R.A. No. 9231)
R
Who is a child or working child?
For legal purposes, the term child refers to any person less than eighteen (18) years of age.
n r
A working child refers to any child engaged as follows:
a a
i. when the child is below eighteen (18) years of age, in work or economic activity that is not child
B
h
labor; and
ii. when the child below fifteen (15) years of age:
s
(a) in work where he/she is directly under the responsibility of his/her parents or legal guardian and
e
where only members of the childs family are employed; or
l
(b) in public entertainment or information which refers to artistic, literary, and cultural performances
b
for television show, radio program, cinema or film, theater, commercial advertisement, public
relations activities or campaigns, print materials, internet, and other media.
o
What are the working hours of a child?
R
The term hours of work includes (1) all time during which a child is required to be at a prescribed
workplace, and (2) all time during which a child is suffered or permitted to work. Rest periods of short duration
n r
during working hours shall be counted as hours worked.
a a
The following hours of work shall be observed for any child allowed to work under R.A. No. 9231 and its
Implementing Rules:
h B
(a) For a child below 15 years of age, the hours of work shall not be more than twenty (20) hours per
s
week, provided that the work shall not be more than four (4) hours at any given day;
C e
(b) For a child 15 years of age but below 18, the hours of work shall not be more than eight (8) hours a
l
day, and in no case beyond forty (40) hours a week; and
b
(c) No child below 15 years of age shall be allowed to work between eight (8) oclock in the evening and
six (6) oclock in the morning of the following day and no child 15 years of age but below 18 shall be
o
allowed to work between ten (10) oclock in the evening and six (6) oclock in the morning of the
following day.
R
x What is the prohibition of employing minors in certain undertakings and advertisements?
n
No child below 18 years of age is allowed to be employed as a model in any advertisement directly or
indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, gambling or any form of
a
violence or pornography.
h B
3.
KASAMBAHAY
C s
(FORMERLY CALLED HOUSEHELPERS)
e
(R.A. No. 10361, otherwise known as Domestic Workers Act or Batas Kasambahay
l
Approved on January 18, 2013).
b
What is the coverage of the Kasambahay Law?
R.A. No. 10361 applies to all domestic workers employed and working within the country. It shall cover
o
all parties to an employment contract for the services of the following Kasambahay, whether on a live-in or live-out
R
arrangement, such as, but not limited to:
(a) General househelp;
n
(b) Yaya;
a
(c) Cook;
(d) Gardener;
h
(e) Laundry person; or
(f) Any person who regularly performs domestic work in one household on an occupational basis.

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Who are excluded from its coverage?
The following are not covered:
(a) Service providers;
(b) Family drivers;
(c) Children under foster family arrangement; and
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(d) Any other person who performs work occasionally or sporadically and not on an occupational basis.
r
Who is a domestic worker or kasambahay?
a
Domestic worker or kasambahay refers to any person engaged in domestic work within an
employment relationship, whether on a live-in or live-out arrangement, such as, but not limited to, general
B
househelp, "yaya", cook, gardener, or laundry person, but shall exclude service providers, family drivers, children
who are under foster family arrangement, or any person who performs domestic work only occasionally or
s
sporadically and not on an occupational basis.
e
This term shall not include children who are under foster family arrangement which refers to children
l
who are living with a family or household of relative/s and are provided access to education and given an allowance
incidental to education, I.e., "baon", transportation, school projects, and school activities.
o b
Because of these new terminologies prescribed in the law, the use of the term househelper may no longer
be legally correct.
R
Is the employment contract required to be in writing?
Yes. The employment contract must be in writing and should contain the conditions set by law.
n r
What are the rights and privileges of a kasambahay?
a a
The rights and privileges of the Kasambahay are as follows:
h B
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods, service incentive leave, and 13th
s
month pay;
e
(c) Freedom from employers' interference in the disposal of wages;
l
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
b
(f) Board, lodging and medical attendance;
(g) Right to privacy;
o
(h) Access to outside communication;
(i) Access to education and training;
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(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
n r
(I) Right to certificate of employment;
a a
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices.
h
The foregoing rights and privileges are discussed below.
B
C s
What is the minimum wage of kasambahay?
e
Under the Kasambahay Law, the following are the minimum wages of kasambahays:
l
(a) P2,500.00 a month for those employed in the National Capital Region (NCR);
(b) P2,000.00 a month for those employed in chartered cities and first class municipalities; and
b
(c) P1,500.00 a month for those employed in other municipalities.
Are the minimum wages subject to review by the RTWPBs or Regional Boards?
o
Yes. After one (1) year from the effectivity of the Kasambahay Law, and periodically thereafter, the
R
Regional Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if proper, determine and adjust
the minimum wage rates of domestic workers.
n
x What are some important principles on wage of kasambahay?
a
x Frequency of payment of wages. - The wages of the Kasambahay shall be paid at least once a
B
h
month. This is so because the minimum wage rates are on a monthly basis.
x The equivalent minimum daily wage rate of the Kasambahay shall be determined by dividing the
C s
applicable minimum monthly rate by thirty (30) days.
e
x The amount of the minimum wage depends on the geographical area where the Kasambahay works.
x Payment of wages:
1. To whom paid. - It should be made on time directly to the Kasambahay to whom they are due in cash at
least once a month.
2. Deductions, prohibition; when allowed. - The employer, unless allowed by the Kasambahay through a
b l
o
written consent, shall make no deductions from the wages other than that which is mandated by law such as
for SSS, PhilHealth or Pag-IBIG contributions.
R
3. Mode of payment. - It should be paid in cash and not by means of promissory notes, vouchers, coupons,
n
tokens, tickets, chits, or any object other than the cash wage as provided for under this Act.
4. Pay slip. The employer shall at all times provide the Kasambahay with a copy of the pay slip containing
a
the amount paid in cash every pay day, and indicating all deductions made, if any. The copies of the pay
h
slip shall be kept by the employer for a period of three (3) years.
5. Prohibition on Interference in the disposal of wages. It shall be unlawful for the employer to interfere
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with the freedom of the Kasambahay in the disposition of his/her wages, such as:
(a) Forcing, compelling, or obliging the Kasambahay to purchase merchandise, commodities or
other properties from the employer or from any other person; or
(b) Making use of any store or services of such employer or any other person.
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6. Prohibition against withholding of wages. It shall be unlawful for an employer, directly or indirectly, to
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withhold the wages of the Kasambahay. If the Kasambahay leaves without any justifiable reason, any
a
unpaid salary for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the employer shall
not induce the Kasambahay to give up any part of the wages by force, stealth, intimidation, threat or by any
B
other means whatsoever.
What are important terms and conditions of employment of kasambahay?
s
The following is a rundown of the basic terms and conditions that should be observed in the employment of
e
a Kasambahay:
l
a. Employable age. - Children whose age is below 15 years are absolutely prohibited to work as
Kasambahay.
o b
b. Normal daily hours of work. Because R.A. No. 10361 does not contain any provision on the number
of normal hours of work that a Kasambahay should render in a day but merely prescribes said daily rest
period of eight (8) hours per day, it may be concluded that the Kasambahay should work for at least a
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total of sixteen (16) hours per day as normal hours of work. However, it must be noted that the Labor
Code does not contain any provision on the normal hours of work of househelpers. Article 1695 of the
n r
Civil Code, however, specifically provides that househelpers shall not be required to work for more
a a
than ten (10) hours a day. Since R.A. No. 10361, a special law, is the most recent piece of legislation,
it should prevail over the general provision of the Civil Code.
h B
c. Normal daily hours of work for working child-kasambahay is eight (8) hours per day.
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month of service is entitled to a
s
13th month pay which shall not be less than one-twelfth (1/12) of his/her total basic salary earned in a
e
calendar year. The 13th month pay shall be paid not later than December 24 of every year or upon
l
separation from employment.
b
e. Daily rest period. The Kasambahay shall be entitled to an aggregate daily rest period of eight (8)
hours.
o
f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four (24) consecutive
hours of rest in a week. The employer and the Kasambahay shall agree in writing on the schedule of the
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weekly rest day but the preference of the Kasambahay, when based on religious grounds, shall be
respected.
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g. Service incentive leave. - A Kasambahay who has rendered at least one (1) year of service shall be
a a
entitled to an annual service incentive leave of at least five (5) days with pay. Any unused portion of
said annual leave shall not be cumulative or carried over to the succeeding years. Unused leaves shall
h B
not be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1) month of service shall be
C s
covered by the Social Security System (SSS), Employees Compensation Commission (ECC), Philippine
e
Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, and
l
shall be entitled to all the benefits in accordance with their respective policies, laws, rules and
regulations.
o b
i. Obligation of employer to register and enroll with SSS, PhilHealth, and Pag-IBIG. - As employer
of the Kasambahay, he/she shall register himself/herself with, and enroll the latter as his/her employee
to the SSS, PhilHealth, and Pag-IBIG.
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j. Deposits for loss or damage. - It shall be unlawful for the employer or any other person to require a
Kasambahay to make deposits from which deductions shall be made for the reimbursement of loss or
n
damage to tools, materials, furniture and equipment in the household.
a
k. Standard of treatment. - The Kasambahay shall be treated with respect by the employer or any
B
member of the household. He/she shall not be subjected to any kind of abuse, including repeated verbal
h
or psychological, nor be inflicted with any form of physical violence or harassment or any act tending to
s
degrade his/her dignity, as defined under the Revised Penal Code, Violence Against Women and their
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Children Law (R.A. No. 9262), Special Protection of Children Against Child Abuse, Exploitation and
e
Discrimination Act (R.A. No. 7610) as amended by R.A. No. 9231, Anti-Trafficking in Persons Act of
l
2003 (R.A. No. 9208), and other applicable laws.
b
l. Board, lodging and medical attendance. - The employer shall provide for the basic necessities of the
Kasambahay, to include the following:
o
(1) At least three (3) adequate meals a day, taking into consideration the Kasambahay's religious
beliefs and cultural practices;
R
(2) Humane sleeping condition that respects the person's privacy for live-in arrangement; and
(3) Appropriate rest and medical assistance in the form of first-aid medicines, in case of illnesses and
n
injuries sustained during service without loss of benefits.
a
m. Opportunities for education and training. - The Kasambahay shall be afforded the opportunity to
finish basic education, which shall consist of elementary and secondary education. He/she may be allowed access to
h
alternative learning systems and, as far as practicable, higher education or technical vocational education and
training.
C
n. Membership in labor organization. - The Kasambahay shall have the right to join a labor organization
of his/her own choosing for purposes of mutual aid and collective negotiation.
r. Health and safety. - The employer shall safeguard the safety and health of the Kasambahay in
accordance with the standards which the DOLE shall develop through the Bureau of Working Conditions (BWC)
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and the Occupational Safety and Health Center (OSHC) within six (6) months from the promulgation of this IRR.
r
The said standards shall take into account the peculiar nature of domestic work.
a
s. Prohibition on debt bondage. - It shall be unlawful for the employer or any person acting on his/her
B
behalf to place the Kasambahay under debt bondage. Debt bondage refers to the rendering of service by the
Kasambahay as security or payment for a debt where the length and nature of service is not clearly defined or when
s
the value of the service is not reasonably applied in the payment of the debt.
e
t. Assignment to non-household work. - The employer shall not assign the Kasambahay to work, whether
in full or part-time, in a commercial, industrial or agricultural enterprise at a wage rate lower than that provided for
l
agricultural or non-agricultural workers.
b
If so assigned, the Kasambahay will no longer be treated as such but as a regular employee of the
o
establishment.
What are the rules on termination of Kasambahay?
R
a. Pre-termination of employment. The following rules shall be observed:
n r
(1) In case the duration of employment is specified in the contract, the Kasambahay and the employer may
mutually agree upon notice to terminate the contract of employment before the expiration of its term.
a a
(2) In case the duration is not determined by stipulation or by nature of service, the employer or the
B
h
Kasambahay may give notice to end the employment relationship five (5) days before the intended
termination of employment.
e s
b. Termination of employment initiated by the Kasambahay. - The Kasambahay may terminate the
employment relationship at any time before the expiration of the contract for any of the following causes:
l
(1) Verbal or emotional abuse of the Kasambahay by the employer or any member of the household;
b
(2) Inhuman treatment including physical abuse of the Kasambahay by the employer or any member of the
household;
o
(3) Commission of a crime or offense against the Kasambahay by the employer or any member of the
R
household;
(4) Violation by the employer of the terms and conditions of the employment contract and other standards
n r
set forth in the law;
a a
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household;
and
h B
(6) Other causes analogous to the foregoing.
C s
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding the equivalent of 15 days
e
work, shall be forfeited. In addition, the employer may recover from the Kasambahay deployment expenses, if any,
if the services have been terminated within six (6) months from employment.
b l
c. Termination of employment initiated by the employer. - An employer may terminate the employment
of the Kasambahay at any time before the expiration of the contract for any of the following causes:
o
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order of the employer in
connection with the former's work;
R
(2) Gross or habitual neglect or inefficiency by the Kasambahay in the performance of duties;
n
(3) Fraud or willful breach of the trust reposed by the employer on the Kasambahay;
a
(4) Commission of a crime or offense by the Kasambahay against the person of the employer or any
immediate member of the employer's family;
h B
(5) Violation by the Kasambahay of the terms and conditions of the employment contract and other
standards set forth under the law;
C s
(6) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household;
e
and
l
(7) Other causes analogous to the foregoing.
b
If the employer dismissed the Kasambahay for reasons other than the above, he/she shall pay the
Kasambahay the earned compensation plus indemnity in the amount equivalent to fifteen (15) days work.
o
d. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay are not valid grounds
R
for termination of employment.
e. Employment Certification. - Upon the termination of employment, the employer shall issue the
n
Kasambahay, within five (5) days from request, a certificate of employment indicating the nature, duration of the
a
service and work description.
4.
h
HOMEWORKERS
C
What are important terms that should be noted in employment of homeworkers?
a. Industrial homeworker. It refers to a worker who is engaged in industrial homework.
b. Industrial homework. It refers to a system of production under which work for an employer or
contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer
o
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or contractor. It differs from regular factory production principally in that, it is a decentralized form of production
r
where there is ordinarily very little supervision or regulation of methods of work.
a
c. Home. - It means any nook, house, apartment or other premises used regularly, in whole or in part, as
a dwelling place, except those situated within the premises or compound of an employer, contractor/subcontractor
B
and the work performed therein is under the active or personal supervision by or for the latter.
s
d. Field personnel. It refers to a non-agricultural employee who regularly performs his duties away
from the principal place of business or branch office of the employer and whose actual hours of work in the field
e
cannot be determined with reasonable certainty.
l
e. Employer. It refers to any natural or artificial person who, for his own account or benefit, or on
b
behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent,
contractor, subcontractor or any other person:
o
1. delivers or causes to be delivered any goods, articles or materials to be processed or fabricated in or
about a home and thereafter to be returned or to be disposed of or distributed in accordance with his
R
direction; or
2. sells any goods, articles or materials for the purpose of having such goods or articles processed in or
n r
about a home and then repurchases them himself or through another after such processing.
a a
f. Contractor or subcontractor. - It refers to any person who, for the account or benefit of an
B
employer, delivers or causes to be delivered to a homeworker, goods or articles to be processed in or about his home
h
and thereafter to be returned, disposed of or distributed in accordance with the direction of the employer.
s
g. Processing. - It refers to manufacturing, fabricating, finishing, repairing, altering, packing, wrapping
or handling in any way connected with the production or preparation of an article or material.
How is homework paid?
l e
Immediately upon receipt of the finished goods or articles, the employer is required to pay the homeworker
b
or the contractor or subcontractor, as the case may be, for the work performed less the corresponding homeworkers
share of SSS, PhilHealth and ECC premium contributions which should be remitted by the contractor or
o
subcontractor or employer to the SSS with the employers share. However, where payment is made to a contractor
or subcontractor, the homeworker should likewise be paid immediately after the goods or articles have been
R
collected from the workers.
n r
What are prohibited homeworks?
No homework shall be performed on the following:
a
1. Explosives, fireworks and articles of like character;
B a
h
2. Drugs and poisons; and
3. Other articles, the processing of which requires exposure to toxic substances.
C 5
e s
l
NIGHT WORKERS
(R.A. NO. 10151)
What is the new law on night work?
R.A. No. 10151 [JUNE 21, 2011].
o b
R
a. Significance of the law.
R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and Article 131 [Exceptions] of the
n
Labor Code and accordingly renumbered the same articles. Additionally, it has inserted a new Chapter V of Title III
of Book III of the Labor Code entitled Employment of Night Workers which addresses the issue on nightwork of
a
all employees, including women workers. Chapter V covers newly renumbered Articles 154 up to 161 of the Labor
B
Code.
h
b. Coverage of the law.
C s
The law on nightwork applies not only to women but to all persons, who shall be employed or permitted
e
or suffered to work at night, except those employed in agriculture, stock raising, fishing, maritime transport and
inland navigation, during a period of not less than seven (7) consecutive hours, including the interval from
l
midnight to five o'clock in the morning, to be determined by the DOLE Secretary, after consulting the workers
b
representatives/labor organizations and employers.
c. Night worker, meaning.
o
"Night worker" means any employed person whose work covers the period from 10 o'clock in the
evening to 6 o'clock the following morning provided that the worker performs no less than seven (7) consecutive
R
hours of work.
d. Mandatory facilities.
a n
(1) Suitable first-aid and emergency facilities as provided for under Rule 1960 (Occupational Health
Services) of the Occupational Safety and Health Standards (OSHS);
h
(2) Lactation station in required companies pursuant to R.A. No. 10028 (The Expanded Breastfeeding
C
Promotion Act of 2009);
(3) Separate toilet facilities for men and women;
(4) Facility for eating with potable drinking water; and
o
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(5) Facilities for transportation and/or properly ventilated temporary sleeping or resting quarters, separate
r
for male and female workers, shall be provided except where any of the following circumstances is
a
present:
i. Where there is an existing company guideline, practice or policy, CBA or any similar agreement
B
between management and workers providing for an equivalent or superior benefit; or
ii. Where the start or end of the night work does not fall within 12 midnight to 5 o'clock in the
s
morning; or
e
iii. Where the workplace is located in an area that is accessible 24 hours to public transportation;
l
iv. Where the number of employees does not exceed a specified number as may be provided for by
b
the DOLE Secretary in subsequent issuances.
e. Maternity leave benefits under existing laws cannot be diminished.
R o ------------oOo------------
a n a r
h B
e s
b l
R o
a n a r
h B
C e s
b l
R o
a n
h B
C e s
b l
R o
a n
C h
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SYLLABUS
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MAJOR TOPIC 4
a
B POST EMPLOYMENT
e s A.
l
EMPLOYER-EMPLOYEE RELATIONSHIP
b
1.
TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP
o
Four-Fold Test
R What is the 4-fold test of existence of employer-employee relationship?
n r
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
a a
3. Exercise of the power of dismissal; or
B
4. Exercise of the power to control the employees conduct.
h x
These tests, however, are not fool-proof as they admit of exceptions.
What is the control test?
s
l e
The 4th test above, the control test, is the controlling test which means that the employer controls or has
reserved the right to control the employee not only as to the result of the work to be done but also as to the means
b
and methods by which the same is to be accomplished.
o
The three (3) terms: (1) means, (2) methods and (3) results are the critical elements of the control test, thus:
Situation 1: If the employer controls the means and methods of performing the job, work or service, including the
R
results thereof, then the arrangement is one of employer-employee relationship.
n r
Situation 3: If the so-called employer does not control such means and methods but is only interested in the results
thereof, then the arrangement is called independent job contracting or contractualization, the party controlling
a a
the means and methods is called the independent contractor and the party interested only in the results is called the
B
principal/client/indirect employer/statutory employer.
C h Two-Tiered Test
s
e
x What is the 2-tiered test of employment relationship?
l
The two-tiered test enunciated in Francisco v. NLRC,1 is composed of:
(1) The putative employers power to control the employee with respect to the means and methods by which
b
the work is to be accomplished [control test]; and
(2) The underlying economic realities of the activity or relationship [broader economic reality test].2
R o
Employment relationship under the control test is determined under the same concept as discussed above, that is,
by asking whether the person for whom the services are performed reserves the right to control not only the end to be
achieved but also the manner and means to be used in reaching such end.3
n
Under the economic reality test, the proper standard of economic dependence is whether the worker is dependent
on the alleged employer for his continued employment in that line of business.4
a
These 2-tiered test applies to cases where there are several parties alleged to be employers of one individual. The
B
determinant factor is economic dependency of such individual. In other words, under the economic reality test, the
h
question to ask is - among the parties alleged to be the employer, to whom is the individual economically dependent?
C s
Following the broader economic reality test, the Supreme Court found petitioner in Orozco v. The Fifth
e
Division of the Hon. CA,5 who is a columnist in the Philippine Daily Inquirer (PDI), not an employee of PDI but an
l
independent contractor. Thus:
b
Petitioners main occupation is not as a columnist for respondent but as a womens rights advocate
working in various womens organizations. Likewise, she herself admits that she also contributes articles to other
o
publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employment in respondents line of business.
R
The inevitable conclusion is that petitioner was not respondent PDIs employee but an independent
contractor, engaged to do independent work.
n
Is it necessary to have a written contract of employment in order to establish employer-employee
a
relationship?
No. It may be an oral or written contract. A written contract is not necessary for the creation and validity of
h
the relationship.
1
2
3
4
G.R. No. 170087, Aug. 31, 2006.
Id.
Id.
Id.
C
5 G.R. No. 155207, Aug. 13, 2008.
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The only exception is in the case of Kasambahay where, under the Kasambahay Law, it is required
r
that the contract of employment should be in writing.
a
2.
KINDS OF EMPLOYMENT
x
B
s
What is the general classification of employment?
There are five (5) classifications of employment:
e
(a) Regular employees referring to those who have been engaged to perform activities which are usually
l
necessary or desirable in the usual business or trade of the employer;
b
(b) Project employees referring to those whose employment has been fixed for a specific project or
undertaking, the completion or termination of which has been determined at the time of the engagement
o
of the employee;
(c) Seasonal employees referring to those who work or perform services which are seasonal in nature, and
R
the employment is for the duration of the season;
n r
(d) Casual employees referring to those who are not regular, project, or seasonal employees;
a a
(e) Fixed-term employees whose term is freely and voluntarily determined by the employer and the
employee. NOTE: This is not provided in the Labor Code.
h
x What is the default employment?
B
s
The default employment is regular employment. This means that generally, in the absence of any specific
e
agreement to the contrary, the employer-employee relationship is deemed to be regular in nature. Therefore, in
order to make the employment some other kind of employment, such as project, seasonal, casual, fixed-term or
l
probationary, there must be a written contract of employment stipulating the specific kind of employment.
b
So, therefore, if there is no written employment contract, the employment should be deemed REGULAR.
However, even if there is a written employment contract, if it is not clear that the parties have stipulated such other
o
kinds of employment (such as project, seasonal, casual, fixed-term or probationary), the employment relationship
will still be considered REGULAR employment which, as earlier stated, is the default employment.
R a.
n r
PROBATIONARY EMPLOYMENT
a a
x Is the period of 6 months in the law on probationary employment (Article 296 [281], LC) the minimum or
B
maximum period?
h
The answer is it is neither the minimum nor the maximum period of probationary employment. The 6-month
s
period is mentioned in the law for purposes of setting the standard period. Proof that it is not the maximum is
C
the case of Buiser v. Leogardo where the probationary period of 18 months was considered reasonable. In other
e
words, probationary period may be for a day, a week, a month or several months, depending on the reasonable
l
discretion of management.
b
x How is probationary period, say, of 6 months computed?
The 6-month probationary period should be reckoned from the date of appointment up to the same
o
calendar date of the 6th month following.
R
x May probationary period be extended?
Yes, but only upon the mutual agreement in writing by the employer and the probationary employee.
n
x What is the effect of allowing a probationary employee to work beyond the probationary period?
a
He is considered a regular employee.
B
x
h
What is the effect if there is no written contract providing for probationary employment?
s
If there is no written contract, the employee is considered a regular employee from day one of his
C
employment. And even if there is one, he is deemed regular if there is no stipulation on probationary period.
x What are the grounds to terminate probationary employment?

Under Article 281, a probationary employee may be terminated only on three (3) grounds, to wit:
l e
b
1. For a just cause; or
o
2. For authorized cause; or
3. When the probationary employee fails to qualify as a regular employee in accordance with
R
reasonable standards made known by the employer to the employee at the start of the
employment.
n
x Is procedural due process required in termination of probationary employment?
a
Yes, but only in the case of Numbers 1 and 2 above.
However, procedural due process is not required if the 3rd ground above is invoked, except when the
h
employer prescribes in its company rules, a procedure for such termination, in which case, such should be followed
in accordance with the Abbott Laboratories doctrine (Contractual Due Process). Generally, in the case of No. 3
C
above, the probationary employment is terminated by merely serving a notice of termination setting forth the results
of the performance evaluation conducted on the employee which forms as the basis for deciding to terminate the
probationary employment.
x When should termination of probationary employment be made?
o
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Termination to be valid must be done prior to lapse of probationary period. Termination a few days after
r
lapse of probationary period cannot be done without due process as he has already become a regular employee by
a
that time.
B
b.
REGULAR EMPLOYMENT
s
x How does one become a regular employee?
e
Under the Labor Code, regular employment may be attained in either of three (3) ways, namely:
l
1. By nature of work. - The employment is deemed regular when the employee has been engaged to
b
perform activities which are usually necessary or desirable in the usual business or trade of the
employer.
o
2. By period of service. - The employment is reckoned as regular when the employee has rendered at least
R
one (1) year of service, whether such service is continuous or broken, with respect to the activity in
which he is employed and his employment shall continue while such activity exists.
n r
3. By probationary employment. - The employment is considered regular when the employee is allowed
a a
to work after a probationary period.
x
B
Is the manner or method of paying wage material in determining regularity of employment?
h
No. The manner and method of payment of wage or salary is immaterial to the issue of whether the
s
employee is regular or not. So, the fact that an employee is paid on a daily basis or monthly basis is inconsequential
on the regularity issue.
l
c.
e
PROJECT EMPLOYMENT
x
b
What is the litmus test of project employment?
o
The litmus test of project employment, as distinguished from regular employment, is whether or not the
R
project employees were assigned to carry out a specific project or undertaking, the duration and scope of which
were specified at the time the employees were engaged for that project.
n r
A true project employee should be assigned to a project which begins and ends at determined or
a a
determinable times and be informed thereof at the time of hiring.
x
B
What are the indicators of project employment?
h
Either one or more of the following circumstances, among others, may be considered as indicator/s that an
s
employee is a project employee:
C e
1. The duration of the specific/identified undertaking for which the worker is engaged is reasonably
determinable.
agreement and is made clear to the employee at the time of hiring.
b l
2. Such duration, as well as the specific work/service to be performed, are defined in an employment
3. The work/service performed by the employee is in connection with the particular project or
o
undertaking for which he is engaged.
R
4. The employee, while not employed and awaiting engagement, is free to offer his services to any
other employer.
n
5. A report of the termination of employment in the particular project/undertaking is submitted to the
a
DOLE Regional Office having jurisdiction over the workplace, within thirty (30) days following the
date of his separation from work.
h B
6. An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies.
x
C
Is length of service material in determining validity of project employment?
No. Length of service is not a controlling determinant of employment tenure.
e s
l
x What are some principles on project employment?
b
1. Project employees should be informed of their status as such at inception of the employment
relationship.
o
2. There must be a written contract of project employment stating the duration of the project employment
as well as the particular work or service to be performed. A written project employment contract is an
R
indispensable requirement.
3. Intervals in employment contracts indicate project employment.
n
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
a
5. Project-to-project basis of employment is valid.
On termination of project employment.
h
1. Project employees enjoy security of tenure only during the term of their project employment.
C
2. Project employees have presumably become regular employees if they are allowed to work beyond the
completion of the project or any phase thereof to which they were assigned or after the day certain
which they and their employer have mutually agreed for its completion. Having become regular
employees, they can no longer be terminated on the basis of the completion of the project or any phase
thereof to which they were deployed.
o
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d.
r
SEASONAL EMPLOYMENT
B a
Can a seasonal employee become a regular seasonal employee?
Yes, provided the following requisites are complied with:
1. The seasonal employee should perform work or services that are seasonal in nature; and
s
2. They must have also been employed for more than one (1) season.
e
x Can a regular seasonal worker file an illegal dismissal case in the event he is not hired for the next season?
l
Yes. The reason is, being a regular seasonal employee, the employer should re-hire him in the next season.
During off-season, his employment is deemed suspended and he is considered as being on leave of absence without
b
pay.
o
e.
CASUAL EMPLOYMENT
Rx What is the most important distinguishing feature of casual employment?
n r
The most important distinction is that the work or job for which he was hired is merely incidental to the
a a
principal business of the employer and such work or job is for a definite period made known to the employee at
the time of engagement.
h B
Capule v. NLRC, Yakult Philippines, Inc., G.R. No. 90653, Nov. 12, 1990.
s
Private respondent company is engaged in the manufacture of cultured milk which is sold under the brand
e
name Yakult. Petitioners were hired to cut cogon grass and weeds at the back of the factory building used
l
by private respondents. They were not required to work on fixed schedule and they worked on any day of
the week on their own discretion and convenience. They were held to be casual employees because cutting
b
cogon grass and weeds is but incidental to the principal business of the company.
o
x When does a casual employee become regular?
Casual employee becomes regular after one year of service by operation of law. The one (1) year period should
R
be reckoned from the hiring date. Repeated rehiring of a casual employee makes him a regular employee.
n r
f.
FIXED-TERM EMPLOYMENT
x
a
What are the requisites in order for fixed-term employment to be valid?
B a
h
The two (2) requisites or criteria for the validity of a fixed-term contract of employment are as follows:
C s
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties,
e
without any force, duress or improper pressure being brought to bear upon the employee and absent
l
any other circumstances vitiating his consent; or
b
2. It satisfactorily appears that the employer and employee dealt with each other on more or less equal
terms with no moral dominance whatever being exercised by the former on the latter.
o
x Is fixed-term employment valid if the job is directly related to the principal business of the employer?
Yes. Fixed-term employment is the only exception to the rule that one becomes regular if he is made to perform
R
activities directly related to the principal business of the employer (Regularity by virtue of nature of work)
n
Thus, it was ruled in Philippine Village Hotel v. NLRC,1 that the fact that private respondents were required to
render services necessary or desirable in the operation of petitioners business for the duration of the one-month dry-
a
run operation period, did not in any way impair the validity of their contracts of employment which specifically
B
stipulated that their employment was only for one (1) month.
h
When does a fixed-term employee become regular?
C s
1. When he is allowed to work beyond the agreed fixed term.
e
2. When there are successive renewals of fixed-period contracts.
l
NOTE: The practice of hiring of employees on a uniformly fixed 5-month basis and replacing them upon the
expiration of their contracts with other workers with the same employment status circumvents their right to
b
security of tenure.
o
3.
JOB CONTRACTING

R
n
What is the latest Implementing Rules on contractualization issued by the DOLE Secretary?
Department Order No. 174, Series of 2017 (issued on March 16, 2017) Rules Implementing
a
Articles 106 to 109 of the Labor Code, as Amended.
h
Shortly after its issuance, Department Circular No. 01, Series of 2017 (Issued on June 09, 2017)
was issued by the DOLE Secretary to clarify the inapplicability of Department Order No. 174, Series
C
of 2017 to BPO, KPO, LPO, IT Infrastructure Outsourcing, Application Development, Hardware
and/or Software Support, Medical Transcription, Animation Services, Back Office
Operations/Support, and CONSTRUCTION INDUSTRY.
1 G.R. No. 105033, Feb. 28, 1994.
o
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d.
r
TRILATERAL RELATIONSHIP IN JOB CONTRACTING
B a
What is meant by trilateral relationship?
As distinguished from employment relationship which is bilateral in nature, involving as it does only
two (2) parties, namely: (1) the employer, and (2) the employee, in legitimate job contracting, it is trilateral in
s
character, there being three (3) parties involved, to wit:
e
1. The principal who farms out a job, work or service to a contractor;
l
2. The contractor who has the capacity to independently undertake the performance of the job, work or
b
service; and
3. The contractors workers engaged by the contractor and farmed out to the principal to accomplish the
o
job, work or service.

R
What are the contracts involved in this trilateral relationship?
Only two (2) contracts are involved, namely:
n r
1) Service Agreement between the principal and the contractor wherein the obligation arising therefrom is
civil in nature and thus cognizable by the regular courts.
a a
2) Employment contract between the contractor and its workers supplied to the principal.
B
h
Is there any employment relationship and/or contractual relationship between the principal and the
contractors workers farmed out to the principal?
s
None. There is no employment relationship nor any form of contractual relationship of whatsoever nature
e
between the principal and the workers supplied by the contractor. Hence, the principal can ask the
l
contractor to remove any of the latters employees assigned or farmed out to it anytime without need to
observe due process.
b
e.
o
EFFECTS OF LABOR-ONLY CONTRACTING
R
LEGITIMATE JOB CONTRACTING.
n r
What are the elements of legitimate job contracting?
The following four (4) words are very important: CONTROL, MANNER & METHOD and
a a
RESULT in determining the elements of legitimate job contracting arrangement.
h B
Here are the elements based on law, Department Order No. 174 and jurisprudence:
C s
(a) The contractor is engaged in a distinct and independent business and undertakes to perform the job
e
or work on its own responsibility, according to its own manner and method;
l
(b) The contractor has substantial capital to carry out the job farmed out by the principal on his own
account, manner and method,
b
investment in the form of tools, equipment, machinery
and supervision;
o
(c) In performing the work farmed out, the contractor is free from the control and/or direction of the
R
principal in all matters connected with the performance of the work EXCEPT as to the result
thereto; and
n
(d) The Service Agreement ensures compliance with all the rights and benefits for all the employees of
the contractor under labor laws.
a
Absence of any of the foregoing requisites makes it a labor-only contracting arrangement.
B
Therefore:
C h
If the first party has control over the manner and method of performing the job or work, including
s
e
its result, and the second party who supplied the workers to the first party to perform the job or work
l
has no such control over such manner and method, then the first party is the direct employer of the
b
workers supplied by the second party to perform the job or work and such second party shall not be
considered as a legitimate contractor but a labor-only contractor.
Contrarily, if the first party has NO control over the manner and method of performing the job or
o
work as such control thereover is reposed on the second party, and the first partys interest pertains
R
only to the result of the performance of the job or work, then there exists here a legitimate job
contracting arrangement where the first party is considered the principal and the second party, the
n
contractor.
a
Example:
h
Principal ABC University
C
Contractor XYZ Security Agency
Contractors Employees Security Guards assigned by Contractor to Principal
Scenario 1: If it is ABC University that controls the manner and method of performing the job or
work of XYZ Security Agencys security guards (such as when it is ABC University, that (1) sets the
schedule of the Security Guards; (2) makes the assignments to their respective posts; (3) monitors their
o
43
R
e s
l
b
LAST-MINUTE
attendance/absences; (3) supervises their every action and performance of their duties, and the like),
r
then, ABC University is the direct employer of the guards and the XYZ Security Agency is but a
a
labor-only contractor.
B
Scenario 2: If it is ABC Security Agency which controls such manner and method of performing the
job or work of the Security Guards it assigned to ABC University, and ABC University is interested
s
only on the result of the arrangement (such as the safety of the students, teachers and employees,
e
safeguard of school property and premises, peace and tranquility inside its campus, etc.), then, there is
here legitimate job contracting arrangement where ABC University is the principal, XYZ Security
l
Agency is the contractor, and the Security Guards, the contractors employees.
o b
What is the amount of SUBSTANTIAL CAPITAL required under the new Rules?
According to Department Order No. 174, Series of 2017 (issued on March 16, 2017), the following
R
consists of substantial capital:
1. In the case of corporations, partnerships or cooperatives paid-up capital stocks/shares of at least
n r
P5 Million; or
a a
2. In the case of single proprietorship - a net worth of at least P5 Million.
x Substantial capital and investment in tools, etc. are two separate requirements.
h B
Substantial capital and investment in tools, equipment, implements, machineries and work premises
s
should be treated as two (2) distinct and separate requirements in determining whether there is legitimate
job contracting arrangement. It is enough that only one of these two requisites is complied with to make
e
the job contracting arrangement legitimate.
l
x May individuals engage in legitimate job contracting?
b
Yes. Legitimate job contracting may not only be engaged by corporation, partnership or single proprietorship.
Individuals may become legitimate job contractors themselves for as long as they have SPECIAL SKILLS or
o
TALENTS.
R
x Are individuals engaged as legitimate job contractors required to fulfill the requisites of legitimate job
contracting as afore-described?
n r
NO. They need not be registered as independent contractors with DOLE; they need not have substantial capital
a a
(such as the P5 Million stated above). All that they are required is to have their tools consisting of SPECIAL
SKILL, TALENT or EXPERTISE.
x
h
What are examples of individuals as independent contractors?
B
C
1.
skills are not employees but legitimate independent contractors.
e s
Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio talents and others with special talents and
l
2. Orozco v. The Fifth Division of the Honorable Court of Appeals2 - A newspaper columnist is not an
b
employee but an independent contractor of the newspaper publishing the column.
3. Jose Mel Bernarte v. Philippine Basketball Association3 - Basketball or soccer referee or umpire, an
o
independent contractor.
R
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit masiador and sentenciador are
independent contractors.
n
5. Escasinas v. Shangri-las Mactan Island Resort5 - A doctor may be engaged as an independent
a
contractor.
h B
LABOR-ONLY CONTRACTING.
C s
x Is labor-only contracting allowed under the law and issuances?
e
NO, it is absolutely prohibited.
l
x What are the elements of labor-only contracting?
b
Based on law, Department Order No. 174 and jurisprudence, the following are the elements:
(a) The contractor does not have either (i) SUBSTANTIAL CAPITAL or (ii) INVESTMENTS
contractor's employees recruited and placed are performing activities which are
R o
in the form of tools, equipment, machineries, supervision, work premises, among others, AND the
directly
n
related to the main business operation of the principal;
a
or
h
(b) The contractor does not exercise the right to control over the performance of the work of the
employee.
1
2
3
4
G.R. No. 138051, June 10, 2004.
G.R. No. 155207, Aug. 13, 2008.
G.R. No. 192084, Sept. 14, 2011.
G.R. No. 196426, Aug. 15, 2011.
C
5 G.R. No. 178827, March 4, 2009.
o
44
R
e s
b l LAST-MINUTE
NOTE: - There is labor-only contracting even if only one of the two (2) elements above is present.
r
- An unregistered contractor is presumed to be a labor-only contractor. Registration should be
a
made with the DOLE.
x What are the EFFECTS of labor-only contracting?
B
1. The labor-only contractor will be treated as the agent or intermediary of the principal. Since the act of
an agent is the act of the principal, representations made by the labor-only contractor to the employees
s
will bind the principal.
e
2. The principal will become the direct employer as if it directly employed the workers supplied by the
l
labor-only contractor to undertake the contracted job or service. The principal will be responsible to
b
them for all their entitlements and benefits under labor laws.
3. The principal and the labor-only contractor will be solidarily treated as the direct employer
R o
a n a r
h B
e s
b l
R o
a n a r
h B
C e s
b l
R o
a n
h B
C e s
b l
R o
a n
C h
o
45

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b ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

x What are the important labor-related constitutional principles?

d. Non-impairment of obligations of contracts.

a. SECOND OF TWO PROTECTION-TO-LABOR CLAUSES:

participation of the SEBA?

a x What is the principle of co-determination?

10.Absence of receipt is not essential to hold a person guilty of illegal recruitment.

R o ILLEGAL RECRUITMENT AS A FORM OF ECONOMIC SABOTAGE

x When is illegal recruitment considered a crime involving economic sabotage?

ILLEGAL RECRUITMENT VS. ESTAFA

a n x What is meant by this theory?

1 G.R. No. 196036, Oct. 23, 2013.

1 G.R. No. 138193, March 5, 2003.

a n x What are the requisites for compensability of injury or illness of seafarers?

What is direct hiring?

x Is remittance of foreign exchange earnings by OFWs mandatory?

1 G.R. No. 81510, March 14, 1990.

x What is the validity of an AEP?

3. Theoretical instructions. Learnership may or may not be supplemented by related theoretical

CONFLICT, HOW RESOLVED:

C (a) When no experienced workers are available;

a n x Who are excluded?

wages and backwages.

x What is the total normal hours of work per day?

x What is compressed work week?

x What are REGULAR and SPECIAL HOLIDAYS?

x Are seafarers entitled to holiday pay?

h x What are some principles on service charge?

What is minimum wage?

1 G.R. No. 181806, March 12, 2014.

3. THE ACT SHOULD NOT BE A PRODUCT OF ERRONEOUS INTERPRETATION OR

1 G.R. No. 74156, June 29, 1988, 163 SCRA 71.

C (b) to reduce his wages and benefits; or

consider the following:

1) Demand for living wages;

3) Cost of living and changes therein;

WAGE RATE OF PERSONS WITH DISABILITY (PWDs)

R What are acts of discrimination under the Magna Carta of Women?

1 G.R. No. 162994, Sept. 17, 2004.

R What is the 4-fold test of existence of employer-employee relationship?

x What are the grounds to terminate probationary employment?

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

Rx What is the most important distinguishing feature of casual employment?

1 G.R. No. 105033, Feb. 28, 1994.

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