1 Labor Standards Review Notes For Distribution To The Class

CCV Notes on LABOR STANDARDS 2017
A. HOURS OF WORK
1. COVERAGE/EXCLUSIONS
(Article 82, Labor Code)
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.
Who are excluded?
The following are excluded from the coverage of the law on labor standards:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic workers or kasambahay and persons in the personal
service of another;
e. Workers paid by results;
f. Non-agricultural field personnel; and
g. Members of the family of the employer.
2. NORMAL HOURS OF WORK

What is the total normal hours of work per day?
Eight (8) hours daily.
What is overtime work?

Any work in excess of eight (8) hours is considered overtime work.
May normal working hours be reduced?

Yes, provided that no corresponding reduction is made on the employee’s
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
number of hours should be regarded as the employee’s full working day.
Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |1

What are flexible working hours?
“Flexible work arrangements” refer to alternative arrangements or
schedules other than the traditional or standard work hours, workdays and
workweek. The effectivity and implementation of any of the flexible work
arrangements should be temporary in nature.
Under R.A. No. 8972, otherwise known as “The Solo Parents’ Welfare Act
of 2000,” solo parents are 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 defined by the employer.
COMPRESSED WORK WEEK

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 increased to
more than eight (8) hours but not to exceed twelve (12) hours, without
corresponding overtime premium. This concept can be adjusted
accordingly in cases where the normal workweek of the firm is five (5) days.
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 covered employees or their duly
authorized representatives.
How should compensation be made under a valid CWW?
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 twelve (12) hours. In any case, any work performed
beyond twelve (12) hours a day or forty-eight (48) hours a week shall be
subject to overtime pay.
MEAL BREAK
What is the rule on time-off for regular meal?

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.
Is meal break compensable?

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.
WAITING TIME
• What is covered by compensable working hours?
The following shall be considered as compensable hours worked:
a. All time during which an employee is required to be on duty or to be at
the employer’s premises or to be at a prescribed workplace; and
b. All time during which an employee is suffered or permitted to work.
• 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 work or the employee is required or
engaged by the employer to wait. Time spent waiting for work is
compensable if it is spent “primarily for the benefit of the employer and
[its] business.”
OVERTIME WORK, OVERTIME PAY

• What are some basic principles on overtime work?
1. Work rendered after normal eight (8) hours of work is called “overtime
work.”
2. In computing overtime work, "regular wage" or "basic salary" means
"cash" wage only without deduction for facilities provided by the employer.
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.
4. "Overtime pay" means the additional compensation for work performed

beyond eight (8) hours.
5. Illustrations on how overtime is computed:
a. For overtime work performed on an ordinary day, the overtime
pay is plus 25% of the basic hourly rate.
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.
d. For overtime work performed on a regular holiday, the overtime
pay is plus 30% of the basic hourly rate which includes 100% additional
compensation as provided in Article 94 [b] of the Labor Code.
e. For overtime work performed on a rest day which falls on a
regular holiday, the overtime pay is plus 30% of the basic hourly rate
which includes 160% additional compensation.
• What is the distinction between PREMIUM PAY and

OVERTIME PAY?
“Premium pay” refers to the additional compensation required by law for
work performed within eight (8) hours on non-working days, such as
rest days and regular and special holidays.
“Overtime pay” refers to the additional compensation for work performed
beyond eight (8) hours a day. Every employee who is entitled to
premium pay is likewise entitled to the benefit of overtime pay.
What is built-in overtime pay?

In case the employment contract stipulates that the compensation includes
built-in overtime pay and the same is duly approved by the DOLE, the non-
payment by the employer of any overtime pay for overtime work is justified
and valid.
• What is emergency overtime work? (Article 89, Labor Code).
a. General rule.
The general rule remains that no employee may be compelled to render
overtime work against his will.

b. Exceptions when employee may be compelled to render
overtime work:
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;
2. When overtime work is necessary to prevent loss of life or property or in
case of imminent danger to 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;
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;
4. When the work is necessary to prevent loss or damage to perishable
goods;
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
6. When overtime work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
May an employee validly refuse to render overtime work under

any of the afore-said circumstances?
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
employer.
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 merely by the agreement of the parties.
NIGHT WORK (R.A. NO. 10151),

NIGHT SHIFT DIFFERENTIAL (ARTICLE 86, LABOR CODE)

What is the new law on night work?
R.A. No. 10151 [JUNE 21, 2011].
a. Significance of the law.

R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and
Article 131 [Exceptions] of the 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 all employees, including women
workers. Chapter V covers newly renumbered Articles 154 up to 161 of the
Labor Code.
b. Coverage of the law.
The law on nightwork applies not only to women but to all persons,
who shall be employed or permitted 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 midnight to five o'clock in the morning, to be
determined by the DOLE Secretary, after consulting the workers’
representatives/labor organizations and employers.
c. Night worker, meaning.
"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 hours of work.
NIGHT SHIFT DIFFERENTIAL PAY

• How is it reckoned and computed?
Night shift differential is equivalent to 10% of employee's regular wage for
each hour of work performed between 10:00 p.m. and 6:00 a.m. of the
following day.
• 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 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.
• How is Night Shift Differential Pay computed?

1. Where night shift (10 p.m. to 6 a.m.) work is regular work.
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 day, special day or regular holiday or a total of
110% of the regular hourly rate.
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.
3. For overtime work in the night shift. Since overtime work is not
usually eight (8) hours, the compensation for overtime night shift work is
also computed on the basis of the hourly rate.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total
of 110% of 125% of basic hourly rate.
b. On a rest day or special day or regular holiday. Plus 10% of
130% of regular hourly rate on said days or a total of 110% of 130% of the
applicable regular hourly rate.
PART-TIME WORK
• What is part-time work?
“Part-time work” is “a single, regular or voluntary form of employment
with hours of work substantially shorter than those considered as normal in
the establishment.” A “part-time worker” is an employed person whose
normal hours of work are less than those of comparable full-time
workers.
Part-time work may take different forms depending on the agreed hours of
work in a day, the days of work in a week or other reference periods. In the
Philippines, however, the two most common and acceptable

forms are four (4) hours work per day and weekend work or two
(2) full days per week.
CONTRACT FOR PIECE WORK

(SEE CIVIL CODE)
• What is contract for piece work under the Civil Code?

By the contract for a piece of work, the contractor binds himself to execute
a piece of work for the employer, in consideration of a certain price or
compensation. The contractor may either employ only his labor or skill, or
also furnish the material.
B. WAGES
WAGE VS. SALARY

• 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. “Salary,” on the other hand, is used to
describe the compensation for higher or superior level of employment.
• What is the distinction in respect to execution, attachment or

garnishment?
In cases of execution, attachment or garnishment of the
compensation of an employee received from 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 employee’s
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 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

understood to relate to a position or office, or the compensation given for
official or other service; while wage is the compensation for labor.
MINIMUM WAGE DEFINED

What are the attributes of wage?
“Wage” has the following attributes:
1. It is the remuneration or earnings, however designated, for work done or
to be done or for services rendered 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 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 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 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.
• What is basic wage?

“Basic wage” means all the remuneration or earnings paid by an
employer to a worker for services 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 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.
What is minimum wage?

The minimum wage rates prescribed by law shall be the basic cash
wages without deduction therefrom of whatever benefits, supplements or

allowances which the employees enjoy free of charge aside from the basic
pay.
• What is statutory minimum wage?

The term “statutory minimum wage” refers simply to the lowest basic
wage rate fixed by law that an employer can pay his workers.
• What is regional minimum wage rate?

The term “regional minimum wage rates” refers to the lowest basic
wage rates that an employer can pay his workers, as fixed by the
Regional Tripartite Wages and Productivity Boards (RTWPBs),
and which shall not be lower than the applicable statutory minimum wage
rates.
• What are included/excluded in the term “wage rate”?

The term "wage rates" includes cost-of-living allowances as fixed by
the RTWPB, but excludes other 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.
Can COLA be integrated into the minimum wage?

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”).
• What is COLA?
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 defined,
“cost of living” refers to “the level of prices relating to a range of everyday
items” or “the cost of purchasing the goods and services which are included
in an accepted standard level of consumption.” Based on this premise,
COLA is a benefit intended to cover increases in the cost of living.
• What is the “NO WORK, NO PAY” principle?
Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 10

The “no work, no pay” or “fair day’s wage for fair day’s labor”
means that if the worker does not work, 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 out or illegally
suspended or illegally dismissed, or otherwise illegally prevented from
working, in which event, he should be entitled to his wage.
MINIMUM WAGE SETTING

• What is a Wage Order?
The term “Wage Order” refers to the order promulgated by the Regional
Board pursuant to its wage fixing authority.
When is it proper to issue a Wage Order?

Whenever conditions in the region so warrant, the Regional Board shall
investigate and study all pertinent 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 (1) newspaper of general
circulation in the region.
• What are the standards/criteria for minimum wage fixing?

In the determination of regional minimum wages, the Regional Board shall,
among other relevant factors, consider the following:
(1) Needs of workers and their families
1) Demand for living wages;
2) Wage adjustment vis-à-vis the consumer price index;
3) Cost of living and changes therein;
4) Needs of workers and their families;
5) Improvements in standards of living.
(2) Capacity to pay
1) Fair return on capital invested and capacity to pay of employers;
2) Productivity.
(3) Comparable wages and incomes
1) Prevailing wage levels.
(4) Requirements of economic and social development

1) Need to induce industries to invest in the countryside;
2) Effects on employment generation and family income;
3) Equitable distribution of income and wealth along the imperatives of
economic and social development.
• What are the methods of fixing the minimum wage rates?

There are two (2) methods, to wit:
1. “Floor-Wage” method which involves the fixing of a determinate
amount to be added to the prevailing statutory minimum wage rates. This
was applied in earlier wage orders; and
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 the
existing minimum wage (up to a certain amount stated in the Wage Order)
are also to be given a wage increase. 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 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 Order states a specific salary, such as
P250.00, and only those earning below it shall be entitled to the wage
increase.
MINIMUM WAGE OF WORKERS PAID BY RESULTS

What are the minimum wage rates of workers paid by results?
According to Article 124 of the Labor Code:
“All workers paid by results, including those who are paid on piecework,
takay, pakyaw or task basis, shall receive not less than the prescribed
wage rates per eight (8) hours of work a day, or a proportion thereof for
working less than eight (8) hours.”
• Who are workers paid by results?

They are workers who are engaged on pakyao, piecework, task and other
non-time work. They are so 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:
a. Supervised workers; and
b. Unsupervised workers.
As the term clearly connotes, supervised workers are those whose
manner of work is under the control of the employer; while unsupervised
workers are those whose work is controlled more in the results than in the
manner or method of performing it.
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 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?
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)

• 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 minimum wage.
COMMISSIONS
• What is “commission”?
“Commission” is the recompense, compensation or reward of an
employee, agent, salesman, executor, trustee, receiver, factor, broker or
bailee, when the same is calculated as a percentage on the amount of
his transactions or on the profit of the principal.

• Is commission part of wage?
Commission may or may not be considered part of wage/salary depending
on the peculiar circumstances of a case and on the purpose for which the
determination is being made. For instance, the rule on the inclusion of
commissions for purposes of computing the separation pay may essentially
differ from the inclusionary rule thereof for purposes of computing the 13th
month pay.
• Is there a law which mandates the payment of commission?

None. According to Lagatic v. NLRC,1 there is no law which requires
employers to pay commissions.
• Is there a standard formula to compute commission?

None. There is no law which prescribes a method for computing
commission. The determination of the amount of commissions is the result
of collective bargaining negotiations, individual employment contracts or
established employer practice.
DEDUCTIONS FROM WAGES

• May employer deduct from wage of employees?
The general rule is that an employer, by himself or through his
representative, is prohibited from 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.
(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) For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in writing by
the individual worker concerned; and
(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;
(e) Deductions made for agency fees from non-union members who
accept the benefits under the CBA negotiated
by the bargaining union. This form of deduction does not require the
written authorization of the non-bargaining union member concerned;
(f) Deductions for value of meal and other facilities;
(g) Deductions for premiums for SSS, PhilHealth, employees’
compensation and Pag-IBIG;
(h) Withholding tax mandated under the National Internal Revenue
Code (NIRC);
(i) Withholding of wages because of the employee’s debt to the employer
which is already due;
(j) Deductions made pursuant to a court judgment against the worker
under circumstances where the wages may be the subject of attachment or
execution but only for debts incurred for food, clothing, shelter and medical
attendance;
(k) When deductions from wages are ordered by the court;
1 G.R. No. 121004, Jan. 28, 1998.
NON-DIMINUTION OF BENEFITS
• What is the applicability of the non-diminution rule in Article

100 of the Labor Code?
Albeit Article 100 is clear that the principle of non-elimination and non-
diminution of benefits apply only 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,
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.
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 explicitly prohibits employers from eliminating or reducing the

benefits received by their employees. This rule, however, applies only if the
benefit is based on any of the following:
(1) An express policy;
(2) A written contract; or
(3) A company practice.
There is not much controversy if the benefit involved is provided for under
Nos. 1 and 2 above. Thus, if it 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 policy.
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.
On No. 3 above, please see discussion below.
COMPANY PRACTICE
What is company practice?
Company practice is a custom or habit shown by an employer’s repeated,
habitual customary or succession 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.
To ripen into a company practice that is demandable as a matter of right,
the giving of the benefit should not be by reason of a strict legal or
contractual obligation but by reason of an act of liberality on the
part of the employer.
What are the criteria that may be used to determine existence of

company practice?
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 whether an act has ripened into a company practice:
(1) The act of the employer has been done for a considerable period of time;
(2) The act should be done consistently and intentionally; and
(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.
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines,
Inc.2)
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A

CONSIDERABLE PERIOD OF TIME.
If done only once as in the case of Philippine Appliance Corporation
(Philacor) v. CA,3 where the CBA signing bonus was granted only once
during the 1997 CBA negotiation, the same cannot be considered as having
ripened into a company practice.
In the following cases, the act of the employer was declared company
practice because of the considerable period of time it has been practiced:
(a) Davao Fruits Corporation v. Associated Labor Unions.4 - The
act of the company of freely and continuously including in the computation
of the 13th month pay, items that were expressly excluded by law has lasted
for six (6) years, hence, was considered indicative of company practice.
(b) Sevilla Trading Company v. A. V. A. Semana.5 - 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 pay for at
least two (2) years was considered a company practice.
(c) The 2010 case of Central Azucarera de Tarlac v. Central
Azucarera de Tarlac Labor Union-NLU,6 also ruled as company
practice the act of petitioner of granting for thirty (30) years, its workers
the mandatory 13th month pay computed in accordance with the following
formula: Total Basic Annual Salary divided by twelve (12) and
Including in the computation of the Total Basic Annual 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.
1 G.R. No. 181806, March 12, 2014.
2 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.
3 G.R. No. 149434, June 3, 2004.

4 G.R. No. 85073, Aug. 24, 1993, 225 SCRA 562.
5 G.R. No. 152456, April 28, 2004, 438 SCRA 239.
6 G.R. No. 188949, July 26, 2010.
2. THE ACT SHOULD BE DONE CONSISTENTLY AND

INTENTIONALLY.
The following cases may be cited to illustrate this principle:
(a) Tiangco v. Leogardo, Jr.,1 where the employer has consistently been
granting fixed monthly 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 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.
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.
The general rule is that if it is a past error that is being corrected, no vested
right may be said to have arisen 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 apply.
The following cases would illuminate this principle:

(a) Globe Mackay Cable and Radio Corporation v. NLRC,2 where
the Supreme Court ruled on the 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 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 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 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 unilaterally discontinued.
(b) TSPIC Corp. v. TSPIC Employees Union [FFW],3 where the

Supreme Court reiterated the rule enunciated in Globe-Mackay, that an
erroneously granted benefit may be withdrawn without violating 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 increase granted under
Wage Order No. 8, all in accordance with the CBA. Hence, any amount
given to the employees in excess of what they were entitled to, as computed
above, may be legally deducted 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, the same may ripen into a company practice.
Example:
(a) Hinatuan Mining Corporation and/or the Manager v. NLRC,4
where the act of the employer in granting separation pay to resigning
employees, despite the fact that the Labor Code does not grant it, was
considered an established employer practice.
BONUS
What is the rule on its demandability and enforceability?
Bonus, as a general rule, is an amount granted and paid ex gratia to the
employee. It cannot be forced upon the employer who may not be obliged
to assume the onerous burden of granting bonuses or other benefits aside
from the employees’ basic salaries or wages. If there is no profit, there
should be no bonus. If profit is reduced, bonus should likewise be reduced,
absent any agreement making such bonus part of the compensation of the
employees.
• When is bonus demandable and enforceable?
It becomes demandable and enforceable:
(1) If it has ripened into a company practice;
(2) If it is granted as an additional compensation which the employer
agreed to give without any condition such as success of business or more
efficient or more productive operation, hence, it is deemed part of wage

or salary.
(3) When considered as part of the compensation and therefore
demandable and enforceable, the amount is usually fixed. If the
amount thereof is dependent upon the realization of profits, the bonus is
not demandable and enforceable.
FACILITIES VS. SUPPLEMENTS

What are facilities?
The term “facilities” includes articles or services for the benefit of the
employee or his family but does not include tools of the trade or articles
or services primarily for the benefit of the employer or necessary to the
conduct of the employer’s business. They are items of expense necessary for
the laborer’s and his family’s existence 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.
1 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
2 G.R. No. 74156, June 29, 1988, 163 SCRA 71.
3 G.R. No. 163419, Feb. 13, 2008.
4 G.R. No. 117394, Feb. 21, 1997.
• What are supplements?

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.
• What are the distinctions between facilities and supplements?

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 laborer’s
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, cannot be considered as facilities but supplements which could
not be reduced having been given not as part of wages but as a necessary

matter in the maintenance of the health and efficiency of the crew during
the voyage.
• What is the rule on deductibility of facilities and supplements?

Facilities are deductible from wage but not supplements.
WAGE DISTORTION/RECTIFICATION
What is wage distortion?
“Wage distortion” contemplates a situation where an increase in prescribed
wage rates results in either of the following:
1. Elimination of the quantitative differences in the rates of wages or
salaries; or
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 structure
based on the following criteria:
a. Skills;
b. Length of service; or
c. Other logical bases of differentiation.
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
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 between one level of position from the next higher level, and
resulting in a parity between the lowest level and the 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 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.
• What are the elements of wage distortion?

The four (4) elements of wage distortion are as follows:

(1) An existing hierarchy of positions with corresponding salary rates;
(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;
(3) The elimination of the distinction between the two levels; and
(4) The existence of the distortion in the same region of the
country.
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.
Involved in the classification of employees are various factors such as the
degrees of responsibility, the 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.
• What is the formula for rectifying or resolving wage

distortion?
Following is the formula for the correction of wage distortion in the pay
scale structures:
Minimum Wage = % x Prescribed Increase = Distortion

Adjustment
Actual Salary
The above formula was held to be just and equitable.
DIVISOR TO DETERMINE DAILY RATE

• Who is a monthly-paid employee?
A “monthly-paid employee” is one who is paid his wage or salary for
every day of the month, including unworked rest days, special days or
regular holidays.
• Who is a daily-paid employee?
A “daily-paid employee” is one who is paid his wage or salary only on

the days he actually worked, except in cases of regular holidays wherein
he is paid his wage or salary even if he does not work during those days,
provided that he is present or on leave of absence with pay on the working
day immediately preceding the regular holidays.
• What are the factors/divisors in computing benefits and wage

deductions?
Equivalent daily rate (EDR), the basis for deductions for absences and for
computing overtime pay and other benefits.
Monthly Rate x 12
No. of Days Considered = Equivalent Daily Rate (EDR)
Paid in a Year
REST PERIODS
1. WEEKLY REST DAY
• What is the duration of weekly rest period?
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
normal work days.
Is the employer’s prerogative to determine the rest period of its

employees subject to limitations?
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 preference
of employees as to their weekly rest day when such preference is based on
religious grounds.
2. EMERGENCY REST DAY WORK

• 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. 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 imminent
danger to public safety;
b. In case of urgent work to be performed on machineries, equipment, or
installations, to avoid serious loss which the employer would otherwise
suffer;
c. In the event of abnormal pressure of work due to special circumstances,
where the employer cannot ordinarily be expected to resort to other
measures;
d. To prevent serious loss of perishable goods;
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 similar cases; and
f. When the work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.
HOLIDAY PAY/PREMIUM PAY

1. COVERAGE, EXCLUSIONS
• Who are covered by the law on holiday pay?
Generally, all employees are entitled to and covered by the law on holiday
pay.
• Who are excluded from its coverage?
The following are excluded:
a. Those of the government and any of the political subdivisions, including
government-owned and controlled corporations;
b. Those of retail and service establishments regularly employing less than
ten (10) workers;
c. Domestic workers or Kasambahays;
d. Persons in the personal service of another;
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;
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 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.
What are REGULAR and SPECIAL HOLIDAYS?
A. Regular Holidays
New Year’s Day - 1 January
Araw ng Kagitingan - 9 April
Maundy Thursday
Good Friday
Labor Day - 1 May
Independence Day - 12 June
National Heroes Day - 25 August (Last Monday of
August)
Bonifacio Day - 30 November
Christmas Day - 25 December
Rizal Day - 30 December
B. Special (Non-Working) Days

Chinese New Year
Black Saturday
Ninoy Aquino Day - 21 August
All Saints Day - 1 November
C. Special Holiday (for all schools)

EDSA Revolution
Anniversary – 25 February
Not included in the enumeration above on regular holidays are (1) Eid’l
Fitr and (2) Eidul Adha.
The reason is that proclamations declaring the observance of these national

holidays 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, 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 fall.
• 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 reckoning certain divisors and computation of
employee benefits.
• What is premium pay for holidays and rest days?

“Premium pay” refers to the additional compensation required by law to
be paid for work performed within the regular eight (8) hours on non-
working days, such as rest days, regular and special holidays.
• How is premium pay for holidays computed?

a. Regular Holidays
• If the employee did not work, he/she shall be paid 100 % of his/her
salary for that day. Computation: (Daily rate + Cost of Living Allowance) x
100%. The COLA is included in the computation of holiday pay.
• If the employee worked, he/she shall be paid 200 % of his/her regular
salary for that day for the first eight hours. Computation: (Daily rate +
COLA) x 200%. The COLA is also included in computation of
holiday pay.
• If the employee worked in excess of eight hours (overtime work), he/she
shall be paid an additional 30 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.
• 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%)].
• If the employee worked in excess of eight hours (overtime work) during a
regular holiday that also 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
worked);
b. Special (Non-Working) Days

• 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).
• If the employee worked in excess of eight hours (overtime work), 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 130% x 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 additional 50% of his/her daily rate on the
first eight hours of work. Computation: [(Daily rate x 150%) + COLA].
• If the employee worked in excess of eight hours (overtime work) during a
special day that also 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 150% x 130% x number of hours worked).
c. Special Holiday for all schools

 For private establishments, 25 February 2014 is an ordinary workday
and no premium is required to be paid for work on said day.
 On the other hand, employees in private schools, whether academic or
administrative personnel, shall be paid in accordance with the rules for pay
on special (non-working) days as stated above.
What are the effects of absences on the computation of holiday

pay?
1. Employees on leave of absence with pay - entitled to holiday pay
when they are on leave of absence with pay.
2. Employees on leave of absence without pay on the day
immediately preceding the regular holiday – may not be paid the
required holiday pay if they have not worked on such regular holiday.

3. Employees on leave while on SSS or employee’s compensation
benefits - Employers should grant the same percentage of the holiday pay
as the benefit granted by competent authority in the form of employee’s
compensation or social security payment, whichever is higher, if they are
not reporting for work while on such
benefits.
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 holiday pay if
they worked on the day immediately preceding the non-working day or rest
day.
2. HOLIDAY PAY/PREMIUM PAY OF TEACHERS, PIECE

WORKERS, TAKAY, SEASONAL WORKERS, SEAFARERS
Are private school teachers entitled to holiday pay during

semestral vacations? What about Christmas vacation”
No, as far as regular holidays during semestral vacations are
concerned.
Yes, as far as regular holidays during Christmas vacation are concerned.
Are hourly-paid teachers entitled to holiday pay?

A school is exempted from paying hourly-paid faculty members their pay
for regular holidays, whether 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, 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 their hourly rates should they teach
during said extensions.
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 pay should not be less than his
average daily earnings for the last seven (7) actual working days
preceding the regular holiday. In no case, however, should the holiday pay
be less than the applicable statutory minimum wage rate.
What are the distinctions between “supervised” and

“unsupervised” workers paid by results to determine their
entitlement to holiday pay?
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 holiday pay. If unsupervised, he is not.
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 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
(2) Those whose time and performance are unsupervised. Here, the
employer’s 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 is done in the company premises, while payment on
pakyao and takay basis is commonly observed in the agricultural industry,
such as in sugar plantations where the work is performed in bulk or in
volumes, hence, difficult to quantify.
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.
Are seafarers entitled to holiday pay?
Yes. Any hours of work or duty including hours of watchkeeping performed
by the seafarer on designated rest days and holidays shall be paid rest day
or holiday pay.

• What are important principles on holiday pay?
In case of two (2) regular holidays falling on the same day, the worker
should be compensated as follows:
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.
“Monthly-paid” employees are not excluded from the coverage of holiday
pay.
LEAVES
1. SERVICE INCENTIVE LEAVE
• What is service incentive leave?

Every covered employee who has rendered at least one (1) year of service is
entitled to a yearly service incentive leave of five (5) days with pay.
The term “at least one year of service” should mean service within
twelve (12) months, whether continuous or broken, reckoned from the date
the employee started working, including authorized absences and paid
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 considered as one (1) year for the purpose of determining entitlement to
the service incentive leave benefit.

All employees are covered by the rule on service incentive leave except:
a. Those of the government and any of its political subdivisions, including
government-owned and controlled corporations;
b. Domestic workers or kasambahays;
c. Persons in the personal service of another;
d. Managerial employees as defined in Book III of the Labor Code;
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 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
k. Members of the family of the employer who are dependent on him for
support.
• Are unavailed service incentive leaves commutable to cash?

Yes. The service incentive leave is commutable to its money equivalent if
not used or exhausted at the end of the year.
2. MATERNITY LEAVE
• What is maternity leave?

“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
permitted to retain her rights and benefits flowing from her employment.
• What is the period of leave?

60 days – for normal delivery
78 days – for caesarian delivery
• What is the amount granted?

Daily maternity benefit equivalent to one hundred percent (100%) of her
average daily salary credit for sixty (60) days or seventy-eight (78) days
in case of caesarian delivery/
• What is the number of delivery or miscarriage covered?
The maternity benefits shall be paid only for the first four (4)
deliveries or miscarriages/

• Is an unmarried woman entitled to maternity leave benefit?
Yes. For as long as a woman is pregnant, she is entitled to maternity leave
benefit regardless of whether she is married or unmarried.
PATERNITY LEAVE
• What is paternity leave benefit?

“Paternity leave” covers a married male employee allowing him not to
report for work for seven (7) 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 and/or in the nursing of
the newlyborn child.
“Delivery” includes childbirth or any miscarriage.
“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers
to a woman who is legally married to the male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live
together.
• What is the covered total number of deliveries?
Every married employee in the private and public sectors is entitled to a
paternity leave of seven (7) 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 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.
Is an unavailed paternity leave benefit convertible to cash?

No. In the event that the paternity leave benefit is not availed of, said leave
shall not be convertible to cash.
PARENTAL LEAVE
(R.A. No. 8972)

• What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo
parent to enable him/her to perform 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
his/her physical presence is required. This leave shall be non-cumulative.
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.
• Who is a solo parent?

The term "solo parent" refers to any individual who falls under any of the
following categories:
(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;
(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;
physical and/or mental incapacity of spouse as certified by a public medical
practitioner;
legal separation or de facto separation from spouse for at least one (1) year,
as long as he/she is entrusted with the custody of the children;
declaration of nullity or 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;
abandonment of spouse for at least one (1) year;

(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;
(9) Any other person who solely provides parental care and support to a
child or children;
(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.
• 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 longer left alone with the
responsibility of parenthood, shall terminate his/her eligibility for these
benefits.
• Who are considered children under this law?

"Children" refer to those living with and dependent upon the solo parent
for support who are unmarried, unemployed and not more than eighteen
(18) years of age, or even over eighteen (18) years but are incapable of self-
support because of mental and/or physical defect/disability.
Is an unavailed parental leave convertible to cash?

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.
LEAVE FOR VICTIMS OF VIOLENCE AGAINST WOMEN AND

CHILDREN (R.A. No. 9262)
• What is this kind of leave?

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
necessity arises as specified in the protection order. Its purpose is to enable
the woman employee to attend to the medical and legal concerns relative
to said law. This leave is not convertible to cash.

• What is the requirement for its entitlement?
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 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.
SPECIAL LEAVE BENEFIT FOR WOMEN

• What is this special leave benefit [GYNECOLOGICAL
SURGERY LEAVE]?
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 and civil status shall be entitled to a special leave of two (2) months
with full pay based on her gross monthly compensation subject to
existing laws, rules and regulations due to surgery caused by
gynecological disorders under the following terms and conditions:
1. She has rendered at least six (6) months continuous aggregate
employment service for the last twelve (12) months prior to surgery;
2. In the event that an extended leave is necessary, the female employee
may use her earned leave credits; and
3. This special leave shall be non-cumulative and non-convertible to
cash.
“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, uterus,
fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a
competent physician. Gynecological surgeries shall also include
hysterectomy, ovariectomy, and mastectomy.
• Is this leave similar to maternity leave?
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.

A woman, therefore, may avail of this special leave benefit in case she
undergoes surgery caused by gynecological disorder and at the same time
maternity benefit as these two leaves are not mutually exclusive.
SERVICE CHARGE
• What are the kinds of establishment covered by the law on
service charge?
The rules on service charge apply only to establishments collecting service
charges, such as hotels, 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.
• Who are the employees covered by this law?

The same rules on service charges apply to all employees of covered
employers, regardless of their 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?

Specifically excluded from coverage are employees who are receiving wages
of more than P2,000.00 a month. However, it must be pointed out that
the P2,000.00 ceiling is no longer realistic considering the applicable
minimum wages prevailing in the country. Hence, it must be disregarded.
• How is the service charge distributed?

a. Percentage of sharing.
All service charges collected by covered employers are required to be
distributed at the following rates:
1. 85% to be distributed equally among the covered employees; and
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.
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.
• Can the service charge be integrated into the wages of covered

employees?
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 is the
average monthly share of each employee for the past twelve (12) months
immediately preceding the abolition or withdrawal of such charges.
What are some principles on service charge?

Tips and services charges are two different things. Tips are given by
customers voluntarily to waiters and other 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 the food, goods or services ordered by the customers.
 Service charges are not in the nature of profit share and,
therefore, cannot be deducted from wage.
THIRTEENTH MONTH PAY

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 method by which their wages are
paid, are entitled to the 13th month pay benefit. Managerial employees
are not entitled to 13th month pay.
What is the minimum period of service required in a calendar

year to be entitled to 13th month pay?
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.

 When should 13th month pay be paid?
It must be paid not later than December 24 of every year.
 Who are excluded from its coverage?

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 controlled corporations, except those
corporations operating essentially as private subsidiaries of the
government.
2. Employers already paying their employees 13th month pay or more in a
calendar year or its equivalent 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 are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the
performance thereof, except where the workers are paid on piece-rate basis,
in which case, the employer shall be covered by the Revised Guidelines
insofar as such workers are concerned. Workers paid on piece-rate
basis shall refer to those who are paid a standard amount for every piece or
unit of work produced that is more or less regularly replicated without
regard to the time spent in producing the same.
Are domestic workers or Kasambahays covered?

Yes. They are now covered under the Kasambahay Law.
Are extras, casuals and seasonal employees entitled to 13th

month pay?
Yes, they are entitled thereto.
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.
What is the minimum amount of the 13th month pay?

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.
What is meant by “basic salary” or “basic wage”?

“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
remunerations or earnings paid by the employer for services rendered
during normal working hours.
For purposes of computing the 13th month pay, “basic salary” should be
interpreted to mean not the amount actually received by an employee, but
1/12 of their standard monthly wage multiplied by their length of service
within a given calendar year.
SEPARATION PAY
What are the separation pays expressly provided under the
Labor Code?
The Labor Code prescribes the payment of separation pay only in the
following four (4) situations:
(1) When termination is due to authorized causes:
(1) installation of labor-saving devices;
(2) redundancy;
(3) retrenchment; or
(4) closing or cessation of business operations; and
(5) disease.
What are separation pays provided in jurisprudence?

In accordance with jurisprudence, the following separation pay may be
cited:
(1) Separation pay in lieu of reinstatement; and
(2) Separation pay as financial assistance in cases where the dismissal
was held valid and legal but the employee is given financial assistance by
reason of long years of service, unblemished record, substantial justice, etc.

What is the prevailing doctrine regarding grant of financial
assistance?
THE TOYOTA DOCTRINE.
Under this doctrine, all grounds in Article 282 of the Labor Code, except
analogous causes, would not merit payment of financial assistance.
In the following cases, the Toyota doctrine was applied; hence, no financial
assistance was awarded because the grounds invoked are in accordance
with Article 282:
Reno Foods v. Nagkakaisang Lakas ng Manggagawa (NLM), where
it was maintained that labor adjudicatory officials and the Court of Appeals
must demur the award of separation pay based on social justice when an
employee’s dismissal is based on serious misconduct or willful
disobedience; gross and habitual neglect of duty; fraud or willful breach of
trust; or commission of a crime against the person of the employer or his
immediate family – grounds under Article 282 of the Labor Code that
sanction dismissals of employees.
Equitable PCI Bank v. Dompor, Moya v. First Solid Rubber
Industries, Inc., and Unilever Philippines, Inc. v. Rivera, where the
infractions committed by the respondent constituted serious misconduct or
willful disobedience resulting to loss of trust and confidence.
Central Philippines Bandag Retreaders, Inc. v. Diasnes, and
Quiambao v. Manila Electric Company, involving gross and habitual
neglect of duties due to respondent’s repeated and continuous absences
without prior leave and frequent tardiness.
 Exception to Toyota doctrine: When termination is based on

analogous causes.
Toyota, however, makes a distinction when the grounds cited are the
analogous causes for termination under Article 282(e), like inefficiency,
incompetence, ineptitude, poor performance and others. It declared that in
these cases, the NLRC or the courts may opt to grant separation pay
anchored on social justice in consideration of the length of service of the
employee, the amount involved, whether the act is the first offense, the
performance of the employee and the like, using the guideposts enunciated
in PLDT on the propriety of the award of separation pay.

Illustrative cases.
Yrasuegui v. Philippine Airlines, Inc., where the dismissal of
petitioner (an international flight attendant) due to his obesity was held
valid as an analogous cause under Article 282(e) of the Labor Code. The
Supreme Court, however, as an act of
social justice and for reason of equity, awarded him separation pay
equivalent to one-half (1/2) month’s pay for every year of service, including
his regular allowances. The Court observed that his dismissal occasioned by
his failure to meet the weight standards of his employer was not for serious
misconduct and does not reflect on his moral character.
 THE SOLIDBANK DOCTRINE.

Under this 2010 doctrine, as distinguished from just cause termination,
employees terminated due to authorized cause are not entitled to be
paid additional separation pay by way of financial assistance. The reason is
that the employer is only required under the law to pay his employees
separation pay in accordance with Article 283 of the Labor Code. That is all
that the law requires. The Court should refrain from adding more than what
the law requires, as the same is within the realm of the legislature.
RETIREMENT PAY
a. ELIGIBILITY
 Who are covered under the retirement pay law?
The following employees are eligible to avail of retirement benefits under
Article 287 of the Labor Code:
1. All employees in the private sector, regardless of their position,
designation or status and irrespective of the method by which their wages
are paid;
2. Part-time employees;
3. Employees of service and other job contractors;
4. Domestic helpers or persons in the personal service of
another;
3. Underground mine workers;
4. Employees of government-owned and/or controlled corporations
organized under the Corporation Code (without original charters).

 Who are excluded?
Article 287, as amended, does not apply to the following employees:
1. Employees of the national government and its political subdivisions,
including government-owned and/or controlled corporations, if they are
covered by the Civil Service Law and its regulations.
2. Employees of retail, service and agricultural establishments or
operations regularly employing not more than ten (10) employees. These
terms are defined as follows:
a. “Retail establishment” is one principally engaged in the sale of goods
to end-users for personal or household use. It shall lose its retail character
qualified for exemption if it is engaged in both retail and wholesale of
goods.
b. “Service establishment” is one principally engaged in the sale of
service to individuals for their own or household use and is generally
recognized as such.
c. “Agricultural establishment/operation” refers to an employer
which is engaged in agriculture. This term refers to all farming activities in
all branches and includes, among others, the cultivation and tillage of soil,
production, cultivation, growing and harvesting of any agricultural or
horticultural commodities, dairying, raising of livestock or poultry, the
culture of fish and other aquatic products in farms or ponds, and any
activities performed by a farmer or on a farm as an incident to, or in
conjunction with, such farming operations, but does not include the
manufacture and/or processing of sugar, coconut, abaca, tobacco,
pineapple, aquatic or other farm products.
What is the optional and compulsory retirement age?

a. Under Article 287.
This article provides for two (2) types of retirement:
(1) Optional retirement upon reaching the age of sixty (60) years.
(2) Compulsory retirement upon reaching the age of sixty-five (65)
years.
It is the employee who exercises the option under No. 1 above.
b. Under retirement plan.

The optional and compulsory retirement schemes provided under Article
287 come into play only in the absence of a retirement plan or agreement
setting forth other forms of optional or compulsory retirement schemes.
Thus, if there is a retirement plan or agreement in an establishment
providing for an earlier or older age of retirement (but not beyond 65 which
has been declared the compulsory retirement age), the same shall be
controlling.
c. Retirement at an earlier age or after rendering certain period

of service.
Based on Article 287 the employers and employees are free to agree and
stipulate on the retirement age, either in a CBA or employment contract. It
is only in the absence of such agreement that the retirement age shall be
fixed by law, that is, in accordance with the optional and compulsory
retirement age prescribed under Article 287.
d. By mutual agreement, employers may be granted the sole and

exclusive prerogative to retire employees at an earlier age or
after rendering a certain period of service.
Cainta Catholic School v. Cainta Catholic School Employees

Union [CCSEU], where the Supreme Court upheld the exercise by the
school of its option to retire employees pursuant to the existing CBA where
it is provided that the school has the option to retire an employee
upon reaching the age limit of sixty (60) or after having rendered
at least twenty (20) years of service to the school, the last three
(3) years of which must be continuous. Hence, the termination of
employment of the employees, arising as it did from an exercise of a
management prerogative granted by the mutually-negotiated CBA between
the school and the union is valid.
e. To be valid, retirement at an earlier age must be voluntarily

consented to by the employee.
In Jaculbe v. Silliman University, the Supreme Court ruled that in
order for retirement at an earlier age to be valid, it must be shown that the

employee’s participation in the plan is voluntary. An employer is free to
impose a retirement age of less than 65 for as long as it has the employees’
consent. Stated conversely, employees are free to accept the employer’s
offer to lower the retirement age if they feel they can get a better deal with
the retirement plan presented by the employer.
What is the minimum years of service required for entitlement

under the law?
Five (5) years is the minimum years of service that must be rendered by
the employee before he can avail of the retirement benefits upon reaching
optional or compulsory retirement age under Article 287.
What is the retirement age of underground mine workers?

The optional retirement age of underground mine workers is 50 years of
age; while the compulsory retirement age is 60 years old.
What is the minimum number of years of service required of

underground mine workers?
Minimum years of service is also 5 years.
Are the retirement benefits of underground mine workers

similar to ordinary retirees?
Yes. In fact, other than the retirement age, all other requirements as well as
benefits provided in the law are applicable to underground mine workers.
AMOUNT OF RETIREMENT PAY

What is retirement pay under the law?
a. One-half (½) month salary.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee, upon reaching the
optional or compulsory retirement age specified in Article 287, shall be
entitled to retirement pay
equivalent to at least one-half (½) month salary for every year of service, a
fraction of at least six (6) months being considered as one (1) whole year.
b. Components of one-half (½) month salary.

For purposes of determining the minimum retirement pay due an employee
under Article 287, the term “one-half month salary” shall include all of
the following:
(1) Fifteen (15) days salary of the employee based on his latest salary
rate.
(2) The cash equivalent of five (5) days of service incentive leave;
(3) One-twelfth (1/12) of the 13th month pay due the employee; and
(4) All other benefits that the employer and employee may agree upon
that should be included in the computation of the employee’s retirement
pay.
c. “One-half (½) month salary” means 22.5 days.
“One-half [½] month salary” is equivalent to “22.5 days” arrived at
after adding 15 days plus 2.5 days representing one-twelfth [1/12] of the
13th month pay plus 5 days of service incentive leave.
What are some principles on retirement benefits?

1/12 of 13th month pay and 5 days of service incentive leave (SIL) should
not be included if the employee was not entitled to 13th month pay and SIL
during his employment.
Example: R & E Transport, Inc. v. Latag,1 where it was held that

employees who are not entitled to 13th month pay and SIL pay while still
working should not be paid the entire “22.5 days” but only the fifteen (15)
days salary. In other words, the additional 2.5 days representing one-
twelfth [1/12] of the 13th month pay and the five (5) days of SIL should not
be included as part of the retirement benefits.
The employee in this case was a taxi driver who was being paid on the
“boundary” system basis. It was undisputed that he was entitled to
retirement benefits after working for fourteen (14) years with R & E
Transport, Inc. However, he was not entitled to the 13th month pay since
Section 3 of the Rules and Regulations Implementing P.D. No. 851 exempts
from its coverage employers of those who are paid on purely boundary
basis. He was also not entitled to the 5-day service incentive leave pay
pursuant to the Rules to Implement the Labor Code which expressly
excepts field personnel and other employees whose performance is
unsupervised by the employer.

But in the 2010 case of Serrano v. Severino Santos Transit,2 which
involves a bus conductor (petitioner) who worked for 14 years for
respondent bus company which did not adopt any retirement scheme. It
was held herein that even if petitioner as bus conductor was paid on
commission basis, he falls within the coverage of R.A. 7641 (Retirement Pay
Law, now Article 287 of Labor Code). This means that his retirement pay
should include the cash equivalent of the 5-day SIL and 1/12 of the 13th
month pay for a total of 22.5 days. The affirmance by the Court of Appeals
of the reliance by the NLRC on R & E Transport case was held erroneous.
For purposes of applying the law on SIL as well as on retirement, there is a
difference between drivers paid under the “boundary system” and
conductors paid on commission basis. This is so because in practice, taxi
drivers do not receive fixed wages. They retain only those sums in excess of
the “boundary” or fee they pay to the owners or operators of the vehicles.
Conductors, on the other hand, are paid a certain percentage of the bus’
earnings for the day. It bears emphasis that under P.D. No. 851 and the SIL
Law, the exclusion from its coverage of workers who are paid on a purely
commission basis is only with respect to field personnel.
RETIREMENT BENEFITS OF WORKERS PAID BY RESULTS

• What are the retirement benefits of workers paid by results?
For covered workers who are paid by results and do not have a fixed
monthly rate, the basis for the determination of the salary for fifteen (15)
days shall be their average daily salary (ADS). The ADS is the average salary
for the last twelve (12) months reckoned from the date of their retirement,
divided by the number of actual working days in that particular period.
RETIREMENT BENEFITS OF PART-TIME WORKERS

• How should the retirement benefits of part-time workers be
computed?
Applying the principles under Article 287, as amended, the components of
retirement benefits of part-time workers may also be computed at least in
proportion to the salary and related benefits due them.

J. WOMEN WORKERS
a. PROVISIONS AGAINST DISCRIMINATION
• What are acts of discrimination under the Labor Code?
(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
(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.
• What are acts of discrimination under the Magna Carta of

Women?
R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a
comprehensive women’s human 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.
Based on the definition of the term “Discrimination Against Women”
in R.A. No. 9710, the following are considered discriminatory acts:
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 basis of
equality of men and women, of human rights and fundamental freedoms in
the political, economic, social, cultural, civil or any other field;
2. Any act or omission, including by law, policy, administrative measure, or
practice, that directly or indirectly excludes or restricts women in the
recognition and promotion of their rights and their access 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 sex or gender-based disadvantages or
limitations of women, as a result of which women are denied or 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 adverse effects of those
measures or practices; and
4. Discrimination compounded by or intersecting with other grounds,
status, or condition, such as ethnicity, age, poverty or religion.

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
freedom, equity, security and
human dignity.
1 G.R. No. 155214, Feb. 13, 2004.
2 G.R. No. 187698, Aug. 9, 2010.
b. STIPULATION AGAINST MARRIAGE

• Is the prohibition against marriage valid?
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 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 of
her marriage.
• What are the relevant pieces of jurisprudence on marriage?

1. Philippine Telegraph and Telephone Company v. NLRC.1 - It was
declared here that the company policy of not accepting or considering as
disqualified from work any woman worker who contracts marriage runs
afoul of the test of, and the right against, discrimination afforded all women
workers by our labor laws and by no less than the Constitution.
2. Star Paper Corp. v. Simbol, Comia and Estrella.2 - The following
policies were struck down as invalid for violating the standard of
reasonableness which is being followed in our jurisdiction, otherwise called
the “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] 3rd degree of relationship, already employed by the
company.
“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 should resign to
preserve the policy stated above.”

3. Duncan Association of Detailman-PTGWO v. Glaxo Welcome
Philippines, Inc.3 In this case, the prohibition against marriage
embodied in the following stipulation in the employment contract was held
as valid:
“10. You agree to disclose to management any existing or future
relationship you may have, either by 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 Company as a matter of Company policy.”
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
competitor companies upon its employees was held reasonable under the
circumstances because relationships of that 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 procedures.
c. PROHIBITED ACTS
• 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 employer:
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;
2. To discharge such woman on account of her pregnancy, or while on
leave or in confinement due to her pregnancy;
3. To discharge or refuse the admission of such woman upon returning to
her work for fear that she may again be pregnant;
4. To discharge any woman or any other employee for having filed a
complaint or having testified or 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 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 prejudice a woman employee merely
by reason of marriage.
1 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
2 G.R. No. 164774, April 12, 2006.
3 G.R. No. 162994, Sept. 17, 2004.
d. ANTI-SEXUAL HARASSMENT ACT

(R.A. No. 7877)
• What are the 3 situations contemplated under this law?
R.A. No. 7877 declares sexual harassment unlawful only in three (3)
situations, namely:
(1) employment;
(2) education; and
(3) training environment.
• Can sexual harassment be committed also against a man?

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?
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
authority, influence or moral ascendancy over another in a work or training
or education environment, demands, requests or otherwise requires any
sexual favor from another, regardless of whether the demand, request or
requirement for submission is accepted by the object of said act.
Further, any person who directs or induces another to commit any act of
sexual harassment as defined in 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:
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, promotions, or
privileges; or the refusal to grant the sexual favor results in limiting,
segregating or classifying the employee which in any way would
discriminate, deprive or diminish employment opportunities or otherwise
adversely affect said employee;
2. The above acts would impair the employee’s rights or privileges under
existing labor laws; or
3. The above acts would result in an intimidating, hostile, or offensive
environment for the employee.
• 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 provide the procedures for the resolution or
prosecution of acts of sexual harassment. The employer or head of office is
required to:
1. promulgate appropriate rules and regulations, in consultation with and
jointly approved by the employees or students or trainees, through their
duly designated representatives, prescribing the procedure for the
investigation of sexual harassment cases and the administrative sanctions
therefor. The said rules and regulations issued shall include, among others,
guidelines on proper decorum in the workplace and educational or training
institutions.
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, coaches,
trainors and students or trainees to increase understanding and prevent
incidents of sexual harassment. It shall also conduct the investigation of
alleged cases constituting sexual harassment.

K. EMPLOYMENT OF MINORS
(Labor Code and R.A. No. 7678, R.A. No. 9231)
• Who is a “child” or “working child”?

For legal purposes, the term “child” refers to any person less than
eighteen (18) years of age.
A “working child” refers to any child engaged as follows:
i. when the child is below eighteen (18) years of age, in work or economic
activity that is not “child labor;” and
ii. when the child below fifteen (15) years of age:
(a) in work where he/she is directly under the responsibility of his/her
parents or legal guardian and where only members of the child’s family are
employed; or
(b) in “public entertainment or information” which refers to artistic,
literary, and cultural performances for television show, radio program,
cinema or film, theater, commercial advertisement, public relations
activities or campaigns, print materials, internet, and other media.
• What are the working hours of a child?

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 during
working hours shall be counted as hours worked.
The following hours of work shall be observed for any child allowed to
work under R.A. No. 9231 and its Implementing Rules:
(a) For a child below 15 years of age, the hours of work shall not be more
than twenty (20) hours per week, provided that the work shall not be more
than four (4) hours at any given day;
(b) For a child 15 years of age but below 18, the hours of work shall not
be more than eight (8) hours a day, and in no case beyond forty (40) hours
a week; and
(c) No child below 15 years of age shall be allowed to work between eight
(8) o’clock in the evening and six (6) o’clock in the morning of the following
day and no child 15 years of age but below 18 shall be allowed to work

between ten (10) o’clock in the evening and six (6) o’clock in the morning of
the following day.
What is the prohibition of employing minors in certain

undertakings and advertisements?
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
violence or pornography.
L. HOUSEHELPERS
(Labor Code as amended by R.A. No. 7655,
An Act Increasing the Minimum Wage of Househelpers; See also

– Household Service under the Civil Code) (NOTE: The above
provisions of the Labor Code on Househelpers cited in the 2014
Syllabus have already been repealed by R.A. No. 10361,
otherwise known as “Domestic Workers Act” or “Batas
Kasambahay” approved by President Benigno S. Aquino III on
January 18, 2013).
• 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 all parties to an employment contract for
the services of the following Kasambahay, whether on a live-in or live-out
arrangement, such as, but not limited to:
(a) General househelp;
(b) Yaya;
(c) Cook;
(d) Gardener;
(e) Laundry person; or
(f) Any person who regularly performs domestic work in one household on
an occupational basis.

The following are not covered:

(a) Service providers;
(b) Family drivers;
(c) Children under foster family arrangement; and
(d) Any other person who performs work occasionally or sporadically and
not on an occupational basis.
• Who is a domestic worker or kasambahay?

“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 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 sporadically and not on an occupational basis.
This term shall not include children who are under foster family
arrangement which refers to children 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.
Because of these new terminologies prescribed in the law, the use of the
term “househelper” may no longer be legally correct.
• 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.
• What are the rights and privileges of a kasambahay?

The rights and privileges of the Kasambahay are as follows:
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods,
service incentive leave, and 13th month pay;
(c) Freedom from employers' interference in the disposal of wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;

(h) Access to outside communication;
(i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
(I) Right to certificate of employment;
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices.
The foregoing rights and privileges are discussed below.
What is the minimum wage of kasambahay?
Under the Kasambahay Law, the following are the minimum wages of
kasambahays:
(a) Two thousand five hundred pesos (P2,500.00) a month for those
employed in the National Capital Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for those employed in
chartered cities and first class municipalities; and
(c) One thousand five hundred pesos (P1,500.00) a month for those
employed in other municipalities.
Are the minimum wages subject to review by the RTWPBs or

Regional Boards?
Yes. After one (1) year from the effectivity of the Kasambahay Law, and
periodically thereafter, the Regional Tripartite and Productivity Wage
Boards (RTPWBs) shall review, and if proper, determine and adjust the
minimum wage rates of domestic workers.”
What are some important principles on wage of kasambahay?

Frequency of payment of wages. - The wages of the Kasambahay shall
be paid at least once a month. This is so because the minimum wage rates
are on a monthly basis.
The equivalent minimum daily wage rate of the Kasambahay shall be
determined by dividing the applicable minimum monthly rate by thirty (30)
days.
The amount of the minimum wage depends on the geographical area
where the Kasambahay works.
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 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.
3. Mode of payment. - It should be paid in cash and not by means of
promissory notes, vouchers, coupons, 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 the amount paid in cash every pay day, and
indicating all deductions made, if any. The copies of the pay 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 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.
6. Prohibition against withholding of wages. – It shall be unlawful
for an employer, directly or indirectly, to withhold the wages of the
Kasambahay. If the Kasambahay leaves without any justifiable reason, any
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 other means whatsoever.
• What are important terms and conditions of employment of

kasambahay?
The following is a rundown of the basic terms and conditions that should be
observed in the employment of a Kasambahay:
a. Employable age. - Children whose age is below 15 years are absolutely
prohibited to work as Kasambahay.
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 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 Civil Code, however, specifically provides that
househelpers shall not be required to work for more 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.
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 13th month pay which shall not be
less than one-twelfth (1/12) of his/her total basic salary earned in a
calendar year.
The 13th month pay shall be paid not later than December 24 of every year
or upon separation from employment.
e. Daily rest period. – The Kasambahay shall be entitled to an aggregate
daily rest period of eight (8) hours.
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 weekly
rest day but the preference of the Kasambahay, when based on religious
grounds, shall be respected.
g. Service incentive leave. - A Kasambahay who has rendered at least
one (1) year of service shall be 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 not be convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least
one (1) month of service shall be covered by the Social Security System
(SSS), Employees Compensation Commission (ECC), Philippine Health
Insurance Corporation (PhilHealth), and Home Development Mutual Fund
or Pag-IBIG, and shall be entitled to all the benefits in accordance with
their respective policies, laws, rules and regulations.
i. Obligation of employer to register and enrol 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.
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 damage to tools,
materials, furniture and equipment in the household.
k. Standard of treatment. - The Kasambahay shall be treated with
respect by the employer or any member of the household. He/she shall not
be subjected to any kind of abuse, including repeated verbal or
psychological, nor be inflicted with any form of physical violence or
harassment or any act tending to degrade his/her dignity, as defined under
the Revised Penal Code, Violence Against Women and their Children Law
(R.A. No. 9262), Special Protection of Children Against Child Abuse,
Exploitation and Discrimination Act (R.A. No. 7610) as amended by R.A.
No. 9231, Anti-Trafficking in Persons Act of 2003 (R.A. No. 9208), and
other applicable laws.
l. Board, lodging and medical attendance. - The employer shall
provide for the basic necessities of the Kasambahay, to include the
following:
(1) At least three (3) adequate meals a day, taking into consideration the
Kasambahay's religious beliefs and cultural practices;
(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 injuries sustained during service without
loss of benefits.
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 alternative learning
systems and, as far as practicable, higher education or technical vocational
education and training.
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) and
the Occupational Safety and
Health Center (OSHC) within six (6) months from the promulgation of this
IRR. The said standards shall take into account the peculiar nature of
domestic work.
s. Prohibition on debt bondage. - It shall be unlawful for the employer
or any person acting on his/her 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 the value of the service is not
reasonably applied in the payment of the debt.
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 agricultural or nonagricultural workers.
If so assigned, the Kasambahay will no longer be treated as such
but as a regular employee of the establishment.
• What are the rules on termination of Kasambahay?

a. Pre-termination of employment. – The following rules shall be
observed:
(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.
(2) In case the duration is not determined by stipulation or by nature of
service, the employer or the Kasambahay may give notice to end the
employment relationship five (5) days before the intended termination of
employment.
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:
(1) Verbal or emotional abuse of the Kasambahay by the employer or any
member of the household;
(2) Inhuman treatment including physical abuse of the Kasambahay by the
employer or any member of the household;
(3) Commission of a crime or offense against the Kasambahay by the
employer or any member of the household;

(4) Violation by the employer of the terms and conditions of the
employment contract and other standards set forth in the law;
(5) Any disease prejudicial to the health of the Kasambahay, the employer,
or members of the household; and
(6) Other causes analogous to the foregoing.
If the Kasambahay leaves without cause, any unpaid salary due, not
exceeding the equivalent of 15 days 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.
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:
(1) Misconduct or willful disobedience by the Kasambahay of the lawful
order of the employer in connection with the former's work;
(2) Gross or habitual neglect or inefficiency by the Kasambahay in the
performance of duties;
(3) Fraud or willful breach of the trust reposed by the employer on the
Kasambahay;
(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;
(5) Violation by the Kasambahay of the terms and conditions of the
employment contract and other standards set forth under the law;
(6) Any disease prejudicial to the health of the Kasambahay, the employer,
or members of the household; and
(7) Other causes analogous to the foregoing.
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.
d. Invalid ground for termination. - Pregnancy and marriage of the
Kasambahay are not valid grounds for termination of employment.
e. Employment Certification. - Upon the termination of employment,
the employer shall issue the Kasambahay, within five (5) days from request,
a certificate of employment indicating the nature, duration of the service
and work description.

M. EMPLOYMENT OF HOMEWORKERS
• 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 or
contractor. It differs from regular factory production principally in that, it
is a decentralized form of production where there is ordinarily very little
supervision or regulation of methods of work.
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 and the work performed therein is under the
active or personal supervision by or for the latter.
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
cannot be determined with reasonable certainty.
e. “Employer.” – It refers to any natural or artificial person who, for his
own account or benefit, or on behalf of anyperson residing outside the
Philippines, directly or indirectly, or through any employee, agent,
contractor, subcontractor or any other person:
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 direction; or
2. sells any goods, articles or materials for the purpose of having such goods
or articles processed in or about a home and then repurchases them himself
or through another after such processing.
f. “Contractor” or “subcontractor.” - It refers to any person who, for
the account or benefit of an employer, delivers or causes to be delivered to a
homeworker, goods or articles to be processed in or about his home and
thereafter to be returned, disposed of or distributed in accordance with the
direction of the employer.
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?

Immediately upon receipt of the finished goods or articles, the employer is
required to pay the homeworker or the contractor or subcontractor, as the
case may be, for the work performed less the corresponding homeworker’s
share of SSS, PhilHealth and ECC premium contributions which should be
remitted by the contractor or subcontractor or employer to the SSS
with the employer’s 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 collected from the
workers.
What are prohibited homeworks?

No homework shall be performed on the following:
1. Explosives, fireworks and articles of like character;
2. Drugs and poisons; and
3. Other articles, the processing of which requires exposure to toxic
substances.
N. APPRENTICES AND LEARNERS

What are the distinctions between learnership and
apprenticeship?
The following are the distinctions:
1. Practical training. Both learnership and apprenticeship involve
practical training on-the-job.
2. Training agreement. Learnership is governed by a learnership
agreement; while apprenticeship is governed by an apprenticeship
agreement.
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.
3. Theoretical instructions. Learnership may or may not be

supplemented by related theoretical instructions; while apprenticeship
should always be supplemented by related theoretical instructions.
4. Ratio of theoretical instructions and on-the-job training. For
both learnership and apprenticeship, the normal ratio is one hundred (100)
hours of theoretical instructions for every two thousand (2,000) hours of
practical or onthe-job training. Theoretical instruction time for occupations
requiring less than two thousand (2,000) hours for proficiency should be
computed on the basis of such ratio.
5. Competency-based system. Unlike in apprenticeship, it is required
in learnership that it be implemented based on the TESDA-approved
competency-based system.
6. Duration of training. Learnership involves practical training on the
job for a period not exceeding 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.
7. Qualifications. The law does not expressly mention any qualifications
for learners; while the following qualifications are required to be met by
apprentices under Article 59 of the Labor Code:
(a) Be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written
instructions.
8. Circumstances justifying hiring of trainees. Unlike in
apprenticeship, in learnership, the law, Article 74 of the Labor Code,
expressly prescribes the pre-requisites before learners may be validly
employed, to wit:
(a) When no experienced workers are available;
(b) The employment of learners is necessary to prevent curtailment of
employment opportunities; and
(c) The employment does not create unfair competition in terms of labor
costs or impair or lower working standards.
9. Limitation on the number of trainees. In learnership, a
participating enterprise is allowed to take in learners only up to a maximum
of twenty percent (20%) of its total regular workforce. No similar cap is
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 learnership period; while in
apprenticeship, the enterprise is given only an “option” to hire the
apprentice as an employee.
11. Wage rate. The wage rate of a learner or an apprentice is set at
seventy-five percent (75%) of the statutory minimum wage.
O. PERSONS WITH DISABILITY

(R.A. No. 7277, as Amended by R.A. No. 9442)
• Who are persons with disability (PWDs)?

“Persons with Disability” are those suffering from restriction or
different abilities, as a result of a mental, physical or sensory impairment,
to perform an activity in the manner or within the range considered normal
for a human being.
• What is impairment?
“Impairment” refers to any loss, diminution or aberration of
psychological, physiological, or anatomical structure or function.
• What is disability?
“Disability” means (1) a physical or mental impairment that substantially
limits one or more psychological, 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?
“Handicap” refers to a disadvantage for a given individual, resulting from
an impairment or a disability that limits or prevents the function or activity
that is considered normal given the age and sex of the individual.
b. RIGHTS OF PERSONS WITH DISABILITY

• What are the rights of PWDs?
Under the law, PWDs are entitled to equal opportunity for employment.
Consequently, no PWD shall be denied access to opportunities for suitable
employment. A qualified employee with disability shall be subject

to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or
allowances as a qualified able-bodied person.
• What is the wage rate of PWDs?
The wage rate of PWDs is 100% of the applicable minimum wage.
• 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 applicable minimum wage.
c. PROHIBITION ON DISCRIMINATION AGAINST PERSONS

WITH DISABILITY
• What is the rule on discrimination against employment of
PWDs?
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
training, and other terms, conditions and privileges of employment. The
following constitute acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in
such a manner that adversely affects his work opportunities;
(b) Using qualification standards, employment tests or other selection
criteria that screen out or tend to screen out a PWD unless such standards,
tests or other selection criteria are shown to be job-related for the position
in question and are consistent with business necessity;
(c) Utilizing standards, criteria, or methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(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, 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;
(e) Favoring a non-disabled employee over a qualified employee with
disability with respect to promotion, training opportunities, study and
scholarship grants, solely on account of the latter’s disability;
(f) Re-assigning or transferring an employee with a disability to a job or

position he cannot perform by reason of his disability;
(g) Dismissing or terminating the services of an employee with disability by
reason of his disability unless 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 reasonable accommodations for persons with disability;
(h) Failing to select or administer in the most effective manner employment
tests which accurately reflect the skills, aptitude or other factor of the
applicant or employee with disability that such tests purports to measure,
rather than the impaired sensory, manual or speaking skills of such
applicant or employee, if any; and
(i) Excluding PWD from membership in labor unions or similar
organizations.
EMPLOYER-EMPLOYEE RELATIONSHIP
1. Four-Fold Test
What is the 4-fold test of existence of employer-employee
relationship?
1. Selection and engagement of the employee;
2. Payment of wages or salaries;
3. Exercise of the power of dismissal; or
4. Exercise of the power to control the employee’s conduct.
These tests, however, are not fool-proof as they admit of exceptions.
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 and
methods by which the same is to be accomplished.
What is the 2-tiered test of employment relationship?

The two-tiered test enunciated in Francisco v. NLRC,1 is composed of:
(1) The putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished[control test];
and
(2) The underlying economic realities of the activity or relationship [broader
economic reality test].2
Employment relationship under the control test is determined 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
The broader economic reality test calls for the determination of the nature
of the relationship based on the circumstances of the whole economic activity,
namely:
(1) The extent to which the services performed are an integral part of the
employer’s business;
(2) The extent of the worker’s investment in equipment and facilities;
(3) The nature and degree of control exercised by the employer;
(4) The worker’s opportunity for profit and loss;
(5) The amount of initiative, skill, judgment or foresight required for the success
of the claimed independent enterprise;
(6) The permanency and duration of the relationship between the worker and the
employer; and
(7) The degree of dependency of the worker upon the employer for his continued
employment in that line of business.4
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. 5 Following the broader economic
reality test, the Supreme Court found petitioner in Orozco v. The Fifth Division
of the Honorable Court of Appeals,6 who is a columnist in the Philippine Daily
Inquirer (PDI), not an employee of PDI but an independent contractor. Thus:
“Petitioner’s main occupation is not as a columnist for respondent but as a
women’s rights advocate working in various women’s organizations. Likewise,
she herself admits that she also contributes articles to other publications. Thus, it
cannot be said that petitioner was dependent on respondent PDI for her
continued employment in respondent’s line of business.
“The inevitable conclusion is that petitioner was not respondent PDI’s employee
but an independent contractor, engaged to do independent work.”
• Is it necessary to have a written contract of employment in

order to establish employer-employee relationship?
No. It may be an oral or written contract. A written contract is not
necessary for the creation and validity of the relationship.

The only exception is in the case of Kasambahay where it is
required that the contract of employment should be in writing.
1 G.R. No. 170087, Aug. 31, 2006.
2 Id.
3 Id.
4 Id.
5 Id.
6 G.R. No. 155207, April 29, 2005.
2. KINDS OF EMPLOYMENT
What are the general classifications of employment?

There are five (5) classifications of employment:
(a) Regular employees referring to those who have been “engaged to
perform activities which are usually necessary or desirable in the usual
business or trade of the employer”;
(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 of the
employee”;
(c) Seasonal employees referring to those who work or perform services
which are seasonal in nature, and the employment is for the duration of the
season;
(d) Casual employees referring to those who are not regular, project, or
seasonal employees;
(e) Fixed-term employees whose term is freely and voluntarily
determined by the employer and the employee.
a. PROBATIONARY EMPLOYMENT
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 calendar date of the 6th month
following.”
May probationary period be extended?

Yes, but only upon the mutual agreement by the employer and the
probationary employee.
What is the effect of allowing a probationary employee to
work beyond the probationary period?
He is considered a regular employee.
What is the effect if there is no written contract providing for

probationary employment?
If there is no written contract, the employee is considered a regular
employee from day one of his employment. And even if there is one, he is
deemed regular if there is no stipulation on probationary period.
What are the grounds to terminate probationary employment?

Under Article 281, a probationary employee may be terminated only on
three (3) grounds, to wit:
1. For a just cause; or
2. For authorized cause; or
3. When the probationary employee fails to qualify as a regular
employee in accordance with reasonable standards made known
by the employer to the employee at the start of the employment.
Is procedural due process required in termination of

probationary employment?
Yes, but only in the case of Numbers 1 and 2 above.
No, in the case of No. 3 above.
When should termination of probationary employment be

made?
Termination to be valid must be done prior to lapse of probationary
period. Termination a few days after lapse of probationary period cannot be
done without due process as he has already become a regular employee by
that time.
b. REGULAR EMPLOYMENT
How does one become a regular employee?

Under the Labor Code, regular employment may be attained in either of
three (3) ways, namely:
1. By nature of work. - The employment is deemed regular when the
employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer.
2. By period of service. - The employment is reckoned as regular when
the employee has rendered at least 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.
3. By probationary employment. - The employment is considered
regular when the employee is allowed to work after a probationary period.
Is the manner or method of paying wage material in

determining regularity of employment?
No. The manner and method of payment of wage or salary is immaterial to
the issue of whether the employee is regular or not.
c. PROJECT EMPLOYMENT
What is the litmus test of project employment?
The litmus test of project employment, as distinguished from regular
employment, is whether or not the 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.
A true project employee should be assigned to a project which begins and
ends at determined or determinable times and be informed thereof at the
time of hiring.
What are the indicators of project employment?

Either one or more of the following circumstances, among others, may be
considered as indicator/s that an employee is a project employee:
1. The duration of the specific/identified undertaking for which the
worker is engaged is reasonably determinable.
2. Such duration, as well as the specific work/service to be performed, are
defined in an employment agreement and is made clear to the employee at
the time of hiring.

3. The work/service performed by the employee is in connection with
the particular project or undertaking for which he is engaged.
4. The employee, while not employed and awaiting engagement, is
free to offer his services to any other employer.
5. A report of the termination of employment in the particular
project/undertaking is submitted to the DOLE Regional Office having
jurisdiction over the workplace, within thirty (30) days following the date of
his separation from work.
6. An undertaking in the employment contract by the employer to pay
completion bonus to the project employee as practiced by most
construction companies.
Is length of service material in determining validity of project

employment?
No. Length of service is not a controlling determinant of employment
tenure.
What are some principles on project employment?

1. Project employees should be informed of their status as such at inception
of the employment relationship.
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 indispensable
requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is
regular.
5. “Project-to-project” basis of employment is valid.
On termination of project employment.
1. Project employees enjoy security of tenure only during the term of their
project employment.
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.
d. SEASONAL EMPLOYMENT
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
2. They must have also been employed for more than one (1) season.
Can a regular seasonal worker file an illegal dismissal case in
the event he is not hired for the next season?
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 pay.
e. CASUAL EMPLOYMENT
What is the most important distinguishing feature of casual
employment?
The most important distinction is that the work or job for which he was
hired is merely incidental to the 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.
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 be reckoned from the hiring date.
Repeated rehiring of a casual employee makes him a regular employee.
f. FIXED-TERM EMPLOYMENT
What are the requisites in order for fixed-term employment to
be valid?
The two (2) requisites or criteria for the validity of a fixed-term contract of
employment are as follows:
1. The fixed period of employment was knowingly and voluntarily
agreed upon by the parties, without any force, duress or
improper pressure being brought to bear upon the employee and

absent any other circumstances vitiating his consent; or
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.
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 activities directly related to the
principal business of the employer (Regularity by virtue of nature of
work)
When does a fixed-term employee become regular?
1. When he is allowed to work beyond the agreed fixed term.
2. When there are successive renewals of fixed-period contracts.
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
security of tenure.
3. JOB CONTRACTING
Is job contracting valid if the contractor-supplied employees
are engaged to perform not merely peripheral but core
jobs with the principal?
Yes, per the 2012 case of Digital Telecommunications Philippines,
Inc. v. Digitel Employees Union (DEU), where the Court recognized
the management prerogative to farm out any of its activities, regardless of
whether such activity is
peripheral or core in nature.
b. DEPARTMENT ORDER NO. 174 (Series of 2017)

What is this issuance?
This is the prevailing implementing rules on legitimate job contracting.
c. DEPARTMENT CIRCULAR NO. 01-12

What is this issuance?
This was issued by the DOLE Secretary to clarify that Department Order
No. 18-A, Series of 2011, is not applicable to Business Processing

Outsourcing (BPO)/Knowledge Process Outsourcing (KPO) and
the Construction Industry because:
(1) BPOs and KPOs since these companies may hire employees in
accordance with applicable laws, and maintain these employees based on
business requirements, which may or may not be for different clients of the
BPOs at different periods
of the employees' employment.
(2) the Construction Industry because the licensing and the exercise of
regulatory powers over the construction industry are lodged with the
Philippine Contractors Accreditation Board (PCAB), which is under the
Construction Industry Authority of the Philippines (ClAP), and not with the
DOLE. Thus, the DOLE, through its regional offices, shall not require
contractors licensed by PCAB in the Construction Industry to register under
D.O. 18-A, Series of 2011. Moreover, findings of violation/s on labor
standards and occupational health and safety standards shall be
coordinated with PCAB for its appropriate action, including the possible
cancellation/suspension of the contractor’s license.
d. TRILATERAL RELATIONSHIP IN JOB CONTRACTING

What is meant by trilateral relationship?
As distinguished from employment contract 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, there are three (3) parties
involved, to wit:
1. The principal who decides to farm out a job, work or service to a
contractor;
2. The contractor who has the capacity to independently undertake the
performance of the job, work or service; and
3. The contractual workers engaged by the contractor to accomplish the
job, work or service.
e. EFFECTS OF LABOR-ONLY CONTRACTING LEGITIMATE JOB

CONTRACTING.
What are the requisites of legitimate job contracting?

(1) The contractor must be duly registered with the DOLE. If not

registered, the contractor is presumed a labor-only contractor.
(2) The contractor carries a distinct and independent business and
undertakes to perform the job, work or service on its own responsibility,
according to its own manner and method, and free from control
and direction of the principal in all matters connected with the
performance of the work except as to the results thereof;
(3) The contractor has substantial capital and/or investment in the
form of tools, equipment, machineries, work premises, and other materials
which are necessary in the conduct of the business; and
(4) The Service Agreement between principal and contractor should
ensure compliance with all the rights and benefits of workers under
Labor Laws such as labor and occupational safety and health standards,
free exercise of the right to self-organization, security of tenure, and social
and welfare benefits. Absence of any of the foregoing requisites makes it a
labor-only contracting arrangement.
What is the amount of substantial capital under the new Rules?

1. In the case of corporations, partnerships or cooperatives – paid-
up capital stocks/shares of at least P5 Million; or
2. In the case of single proprietorship - a net worth of at least P5
Million.
“Substantial capital” and “investment in tools, etc.” are two

separate requirements.
“Substantial capital” and “investment in tools, equipment, implements,
machineries and work premises” should be treated as two (2) distinct and
separate requirements in determining whether there is legitimate job
contracting arrangement.
May individuals engage in legitimate job contracting?

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
TALENTS.

Are individuals engaged as legitimate job contractors required
to fulfill the requisites of legitimate job contracting
as afore-described?
NO. They need not be registered as independent contractors with DOLE;
they need not have substantial capital. All that they are required is to have
their tools consisting of SPECIAL SKILLS or TALENTS.
What are examples of individuals as independent contractors?

1. Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio
talents and others with special talents and skills are not employees but
legitimate independent contractors.
2. Orozco v. The Fifth Division of the Honorable Court of
Appeals2 - A newspaper columnist is not an 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 independent contractor.
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit
masiador and sentenciador are independent contractors.
5. Escasinas v. Shangri-la’s Mactan Island Resort5 - A doctor may be
engaged as an independent contractor.
Respondent hotel resort, pursuant to Article 157 of the Labor Code which
requires that an employer which employs more than 200 workers, should
“furnish” its employees with the services of a full-time registered nurse, a
part-time physician and dentist, and an emergency clinic, engaged the
services of respondent doctor who, in turn, hired petitioners as full-time
registered nurses. Petitioners contend that they are regular employees of
respondent hotel resort. The Supreme Court, in holding that respondent
doctor is an independent contractor and that petitioners are employees of
the doctor and not of respondent hotel resort, declared:
“Against the above-listed determinants, the Court holds that respondent
doctor is a legitimate independent contractor. That Shangri-la provides the
clinic premises and medical supplies for use of its employees and guests
does not necessarily prove that respondent doctor lacks substantial capital
and investment. Besides, the maintenance of a clinic and provision of
medical services to its employees is required under Art. 157, which are not
directly related to Shangri-la’s principal business - operation of hotels and

restaurants.
“As to payment of wages, respondent doctor is the one who underwrites the
following: salaries, SSS contributions and other benefits of the staff; group
life, group personal accident insurance and life/death insurance for the
staff with minimum benefit payable at 12 times the employee’s last drawn
salary, as well as value added taxes and withholding taxes, sourced from her
P60,000.00 monthly retainer fee and 70% share of the service charges
from Shangri-la’s guests who avail of the clinic services.
“With respect to the supervision and control of the nurses and clinic staff, it
is not disputed that a document, ‘Clinic Policies and Employee Manual’
claimed to have been prepared by respondent doctor exists, to which
petitioners gave their conformity and in which they acknowledged their co-
terminus employment status. It is thus presumed that said document, and
not the employee manual being followed by Shangri-la’s regular workers,
governs how they perform their respective tasks and responsibilities.
“Contrary to petitioners’ contention, the various office directives issued by
Shangri-la’s officers do not imply that it is Shangri-la’s management and
not respondent doctor who exercises control over them or that Shangri-la
has control over how the doctor and the nurses perform their work. The
letter addressed to respondent doctor dated February 7, 2003 from a
certain Tata L. Reyes giving instructions regarding the replenishment of
emergency kits is, at most, administrative in nature, related as it is to safety
matters; while the letter dated May 17, 2004 from Shangri-la’s Assistant
Financial Controller, Lotlot Dagat, forbidding the clinic from receiving cash
payments from the resort’s guests is a matter of financial policy in order to
ensure proper sharing of the proceeds, considering that Shangri-la and
respondent doctor share in the guests’ payments for medical services
rendered. In fine, as Shangri-la does not control how the work should be
performed by petitioners, it is not petitioners’ employer.”
1 G.R. No. 138051, June 10, 2004.
2 G.R. No. 155207, Aug. 13, 2008.
3 G.R. No. 192084, Sept. 14, 2011.
4 G.R. No. 196426, Aug. 15, 2011.
5 G.R. No. 178827, March 4, 2009.

LABOR-ONLY CONTRACTING.
When is there labor-only contracting?
(a) The contractor does not have substantial capital or investments in the
form of tools, equipment, machineries, work premises, among others, and
the employees recruited and placed are performing activities
which are usually necessary or desirable to the operation of the
company, or directly related to the main business of the
principal within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or
outside the premises of the principal; OR
(b) The contractor does not exercise the right of control over the
performance of the work of the employee.
NOTE: Even if only one of the two (2) elements above is present, there is
labor-only contracting.
What are the effects of labor-only contracting?

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 will
bind the principal.
2. The principal will become the employer as if it directly employed the
workers supplied by the labor-only contractor to undertake the
subcontracted job or service. It will be responsible to 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.
4. The employees will become employees of the principal, subject to the
classifications of employees under Article 280 of the Labor Code.
What are the distinctions between legitimate job contracting

and labor-only contracting?
The chief distinctions between legitimate job contracting, on the one hand,
and the prohibited labor-only contracting, on the other, may be summed up
as follows:

1. In the former, no employer-employee relationship exists between the
contractual employees of the job contractor and the principal; while in the
latter, an employer-employee relationship is created by law between the
principal and the contractual employees supplied by the labor-only
contractor.
2. In the former, the principal is considered only an “indirect employer,” as
this term is understood under Article 107 of the Labor Code; while in the
latter, the principal is considered the “direct employer” of the contractual
employees in accordance with the last paragraph of Article 106 of the Labor
Code.
3. In the former, the joint and several obligation of the principal and the
legitimate job contractor is only for a limited purpose, that is, to ensure
that the employees are paid their wages. Other than this obligation of
paying the wages, the principal is not responsible for any claim made by the
contractual employees; while in the latter, the principal becomes jointly
and severally or solidarily liable with the labor-only contractor to the
latter’s employees in the same manner and extent that the principal is liable
to employees directly hired by him/her, as provided in Article 106 of the
Labor Code, as amended.
4. In the former, the legitimate job contractor undertakes to perform a
specific job for the principal; while in the latter, the labor-only contractor
merely provides, supplies, recruits and places the personnel to work for the
principal.
What are the prohibitions other than labor-only contracting?

Contracting out of jobs, works or services when not done in good
faith and not justified by the exigencies of the business such as
the following:
(1) Contracting out of jobs, works or services when the same results in the
termination or reduction of regular employees and reduction of work
hours or reduction or splitting of the bargaining unit.
(2) Contracting out of work with a "Cabo." "Cabo" refers to a person or
group of persons or to a labor group which, in the guise of a labor
organization, cooperative or any entity, supplies workers to an employer,
with or without any monetary or other consideration, whether in the
capacity of an agent of the employer or as an ostensible independent
contractor.

(3) Taking undue advantage of the economic situation or lack of bargaining
strength of the contractor's employees, or undermining their security of
tenure or basic rights, or circumventing the provisions of regular
employment, in any of the following instances:
(i) Requiring them to perform functions which are currently being
performed by the regular employees of the principal; and
(ii) Requiring them to sign, as a precondition to employment or continued
employment, an antedated resignation letter; a blank payroll; a waiver of
labor standards including minimum wages and social or welfare benefits;
or a quitclaim releasing the principal, contractor or from any liability as to
payment of future claims.
(4) Contracting out of a job, work or service through an in-house agency.
(5) Contracting out of a job, work or service that is necessary or desirable or
directly related to the business or operation of the principal by reason of a
strike or lockout whether actual or imminent.
(6) Contracting out of a job, work or service being performed by union
members when such will interfere with, restrain or coerce employees in the
exercise of their rights to self-organization as provided in Art. 248 (c) of the
(7) Repeated hiring of employees under an employment contract of short
duration or under a Service Agreement of short duration with the same or
different contractors, which circumvents the Labor Code provisions on
Security of Tenure.
(8) Requiring employees under a subcontracting arrangement to sign a
contract fixing the period of employment to a term shorter than the term of
the Service Agreement, unless the contract is divisible into phases for which
substantially different skills are required and this is made known to the
employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the employment
contracts between the contractor and the employees deployed to work in
the bargaining unit of the principal's certified bargaining agent to the sole
and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted employees
in excess of those provided for in the applicable Collective Bargaining
Agreement (CBA) or as set by the Industry Tripartite Council (ITC).

MANAGEMENT PREROGATIVES
What are management prerogatives?
Management prerogatives are granted to the employer to regulate every
aspect of their business, generally without restraint in accordance with
their own discretion and judgment. This privilege is inherent in the
right of employers to control and manage their enterprise
effectively. Such aspects of employment include hiring, work
assignments, working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working regulations,
transfer of employees, lay-off of workers and the discipline, dismissal and
recall of workers.
What are the limitations to the exercise of these prerogatives?

1. Limitations imposed by:
a) law;
b) CBA;
c) employment contract;
d) employer policy;
e) employer practice; and
f) general principles of fair play and justice.
2. It is subject to police power.
3. Its exercise should be without abuse of discretion.
4. It should be done in good faith and with due regard to the rights of labor.
A. DISCIPLINE
 What are the components of the right to discipline?
The right or prerogative to discipline covers the following:
1) Right to discipline;
2) Right to dismiss;
3) Right to determine who to punish;
4) Right to promulgate rules and regulations;
5) Right to impose penalty; proportionality rule;
6) Right to choose which penalty to impose; and
7) Right to impose heavier penalty than what the company rules prescribe.

B. TRANSFER OF EMPLOYEES
 What are the various kinds of transfer?
a. Two (2) kinds of transfer. - A transfer means a movement:
1. From one position to another of equivalent rank, level or salary, without
a break in the service; or
2. From one office to another within the same business establishment.
 What are salient points to consider in transfer?
 The exercise of the prerogative to transfer or assign employees from one
office or area of operation to another is valid provided there is no
demotion in rank or diminution of salary, benefits and other
privileges. The transfer should not be motivated by discrimination or
made in bad faith or effected as a form of punishment or demotion without
sufficient cause.
 Commitment made by the employee like a salesman in the
employment contract to be re-assigned anywhere in the
Philippines is binding on him.
 Even if the employee is performing well in his present
assignment, management may reassign him to a new post.
 The transfer of an employee may constitute constructive dismissal
when:
1) When the transfer is unreasonable, inconvenient or prejudicial to the
employee;
2) When the transfer involves a demotion in rank or diminution of salaries,
benefits and other privileges; and
3) When the employer performs a clear act of discrimination, insensibility,
or disdain towards the employee, which forecloses any choice by the latter
except to forego his continued employment.
 The refusal of an employee to be transferred may be held justified if
there is a showing that the transfer was directed by the employer under
questionable circumstances. For instance, the transfer of employees
during the height of their union’s concerted activities in the
company where they were active participants is illegal.
 An employee who refuses to be transferred, when such
transfer is valid, is guilty of insubordination or willful
disobedience of a lawful order of an employer under Article 282 of
the Labor Code.

 Refusal to transfer due to parental obligations, additional
expenses, inconvenience, hardship and anguish is not valid. An
employee could not validly refuse lawful orders to transfer based
on these grounds.
 Refusal to transfer to overseas assignment is valid.
 Refusal to transfer consequent to promotion is valid.
 Transfer to avoid conflict of interest is valid.
 A transfer from one position to another occasioned by the abolition of
the position is valid.
C. PRODUCTIVITY STANDARD
 How may productivity standards be imposed?
The employer has the prerogative to prescribe the standards of productivity
which the employees should comply. The productivity standards may be
used by the employer as:
1. an incentive scheme; and/or
2. a disciplinary scheme.
As an incentive scheme, employees who surpass the productivity
standards or quota are usually given additional benefits.
As a disciplinary scheme, employees may be sanctioned or dismissed for
failure to meet the productivity standards or quota.
 Illustrative cases:
In the 2014 case of International School Manila v. International
School Alliance of Educators (ISAE),1 the teacher was held guilty of
gross inefficiency meriting her dismissal on the basis of the Court’s finding
that she failed to measure up to the standards set by the school in teaching
Filipino classes.
In the 2012 case of Reyes-Rayel v. Philippine Luen Thai Holdings
Corp.,2 the validity of the dismissal of petitioner who was the Corporate
Human Resources (CHR) Director for Manufacturing of respondent
company, on the ground of inefficiency and ineptitude, was affirmed on the
basis of the Court’s finding that petitioner, on two occasions, gave wrong
information regarding issues on leave and holiday pay which generated
confusion among employees in the computation of salaries and wages.
In another 2012 case, Realda v. New Age Graphics, Inc.,3 petitioner, a
machine operator of respondent company, was dismissed on the ground,
among others, of inefficiency. In affirming the validity of his dismissal, the

Supreme Court reasoned:
“xxx (T)he petitioner’s failure to observe Graphics, Inc.’s work standards

constitutes inefficiency that is a valid cause for dismissal. Failure to observe
prescribed standards of work, or to fulfill reasonable work assignments due
to inefficiency may constitute just cause for dismissal. Such inefficiency is
understood to mean failure to attain work goals or work quotas, either by
failing to complete the same within the allotted reasonable period, or by
producing unsatisfactory results.”
D. GRANT OF BONUS
See discussion on this under Topic III (Labor Standards) above.
E. CHANGE OF WORKING HOURS
What is the extent of the exercise of this prerogative?

Employers have the freedom and prerogative, according to their discretion
and best judgment, to regulate and control the time when workers should
report for work and perform their respective functions.
Manila Jockey Club Employees Labor Union – PTGWO, v. Manila
Jockey Club, Inc.4 - The validity of the exercise of the same prerogative
to change the working hours was affirmed in this case. It was found that
while Section 1, Article IV of the CBA provides for a 7-hour work schedule
from 9:00 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. from
Mondays to Saturdays, Section 2, Article XI thereof expressly reserves to
respondent the prerogative to change existing methods or facilities and to
change the schedules of work. Consequently, the hours of work of regular
monthly-paid employees were changed from the original 9:00 a.m. to 5:00
p.m. schedule to 1:00 p.m. to 8:00 p.m. when horse races are held, that is,
every Tuesday and Thursday. The 9:00 a.m. to 5:00 p.m. schedule for non-
race days was, however, retained. Respondent, as employer, cited the
change in the program of horse races as reason for the adjustment of the
work schedule. It rationalized that when the CBA was
signed, the horse races started at 10:00 a.m. When the races were moved to
2:00 p.m., there was no other choice for management but to change the

work schedule as there was no work to be done in the morning. Evidently,
the adjustment in the work schedule is justified.
F. RULES ON MARRIAGE BETWEEN EMPLOYEES OF

COMPETITOR-EMPLOYERS
What is the best illustrative case of this prerogative?
Duncan Association of Detailman-PTGWO v. Glaxo Welcome
Philippines, Inc.5 - The contract of employment in this case expressly
prohibited an employee from having a relationship with an employee of a
competitor company. It provides:
“10. You agree to disclose to management any existing or future
relationship you may have, either by 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 Company as a matter of Company policy.”
The Supreme Court ruled that this stipulation is a valid exercise of
management prerogative. The prohibition against personal or marital
relationships with employees of competitor-companies upon its employees
is reasonable under the circumstances because relationships of that 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
trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information.
1 G.R. No. 167286, Feb. 5, 2014.
2 G.R. No. 174893, July 11, 2012.
3 G.R. No. 192190, April 25, 2012.
4 G.R. No. 167760, March 7, 2007.
5 G.R. No. 162994, Sept. 17, 2004.
G. POST-EMPLOYMENT BAN
Is a non-compete clause valid?
Yes. The employer and the employee are free to stipulate in an employment
contract prohibiting the employee within a certain period from and after
the termination of his employment, from:
(1) starting a similar business, profession or trade; or

(2) working in an entity that is engaged in a similar business that might
compete with the employer.
The non-compete clause is agreed upon to prevent the possibility that upon
an employee’s termination or resignation, he might start a business or work
for a competitor with the full competitive advantage of knowing and
exploiting confidential and sensitive information, trade secrets, marketing
plans, customer/client lists, business practices, upcoming products, etc.,
which he acquired and gained from his employment with the former
employer. Contracts which prohibit an employee from engaging in business
in competition with the employer are not necessarily void for being in
restraint of trade.
What are the requisites in order for a non-compete clause to be

valid?
A non-compete clause is not necessarily void for being in restraint of trade
as long as there are reasonable limitations as to time, trade, and
place.
Example:
The non-compete clause (called “Non-Involvement Provision”) in the 2007
case of Daisy B. Tiu v. Platinum Plans Philippines, Inc., provides as
follows:
“8. NON-INVOLVEMENT PROVISION – The EMPLOYEE further
undertakes that during his/her engagement with EMPLOYER and in case
of separation from the Company, whether voluntary or for cause, he/she
shall not, for the next TWO (2) years thereafter, engage in or be involved
with any corporation, association or entity, whether directly or indirectly,
engaged in the same business or belonging to the same pre-need industry
as the EMPLOYER. Any breach of the foregoing provision shall render the
EMPLOYEE liable to the EMPLOYER in the amount of One Hundred
Thousand Pesos (P100,000.00) for and as liquidated damages.”
Starting on January 1, 1993, petitioner worked for respondent as Senior
Assistant Vice-President and Territorial Operations Head in charge of its
Hongkong and Asean operations under a 5-year contract of employment
containing the aforequoted clause. On September 16, 1995, petitioner
stopped reporting for work. In November 1995, she became the Vice
President for Sales of Professional Pension Plans, Inc., a corporation
engaged also in the pre-need industry. Consequently, respondent sued

petitioner for damages before the RTC of Pasig City. Respondent alleged,
among others, that petitioner’s employment with Professional Pension
Plans, Inc. violated the above-quoted non-involvement clause in her
contract of
employment. Respondent thus prayed for P100,000 as compensatory
damages; P200,000 as moral damages; P100,000 as exemplary damages;
and 25% of the total amount due plus P1,000 per counsel’s court
appearance, as attorney’s fees. Petitioner countered that the non-
involvement clause was unenforceable for being against public order or
public policy:
First, the restraint imposed was much greater than what was necessary to
afford respondent a fair and reasonable protection. Petitioner contended
that the transfer to a rival company was an accepted practice in the pre-
need industry. Since the products
sold by the companies were more or less the same, there was nothing
peculiar or unique to protect. Second, respondent did not invest in
petitioner’s training or improvement. At the time petitioner was recruited,
she already possessed the knowledge and expertise required in the pre-need
industry and respondent benefited tremendously from it. Third, a strict
application of the noninvolvement clause would amount to a deprivation of
petitioner’s right to engage in the only work she knew.
In upholding the validity of the non-involvement clause, the trial
court ruled that a contract in restraint of trade is valid provided
that there is a limitation upon either time or place. In the case of
the pre-need industry, the trial court found the two-year
restriction to be valid and reasonable.
On appeal, the Court of Appeals affirmed the trial court’s ruling. It
reasoned that petitioner entered into the contract on her own will and
volition. Thus, she bound herself to fulfill not only what was expressly
stipulated in the contract, but also all its
consequences that were not against good faith, usage, and law. The
appellate court also ruled that the stipulation prohibiting non-employment
for two years was valid and enforceable considering the nature of
respondent’s business.
In affirming the validity of the Non-Involvement Clause, the Supreme Court
ratiocinated as follows:
“xxx a non-involvement clause is not necessarily void for being in

restraint of trade as long as there are reasonable limitations as
to time, trade, and place.“In this case, the non-involvement clause
has a time limit: two years from the time petitioner’s
employment with respondent ends. It is also limited as to trade,
since it only prohibits petitioner from engaging in any pre-need
business akin to respondent’s. It is limited as to place since the
prohibition covers only Hongkong and Asean operations. “More
significantly, since petitioner was the Senior Assistant Vice-President and
Territorial Operations Head in charge of respondent’s Hongkong and Asean
operations, she had been privy to confidential and highly sensitive
marketing strategies of respondent’s business. To allow her to engage in a
rival business soon after she leaves would make respondent’s trade secrets
vulnerable especially in a highly competitive marketing environment. In
sum, we find the non-involvement clause not contrary to public
welfare and not greater than is necessary to afford a fair and
reasonable protection to respondent.
“Thus, as held by the trial court and the Court of Appeals, petitioner is
bound to pay respondent P100,000 as liquidated damages. While we
have equitably reduced liquidated damages in certain cases, we cannot do
so in this case, since it appears that even from the start, petitioner had not
shown the least intention to fulfill the non-involvement clause in good
faith.”
------------oOo------------
JURISDICTION OVER MONEY CLAIMS CASES

1. CLASSIFICATION OF MONEY CLAIMS.
Money claims falling within the original and exclusive jurisdiction of the
Labor Arbiters may be classified as follows:
1. Any money claim, regardless of amount, when asserted in an
illegal dismissal case (hence, accompanied with a claim for
reinstatement). Here, the money claim is but an accompanying remedy
subordinated to the principal cause of action, i.e., illegal dismissal; or
2. Any money claim exceeding the amount of P5,000.00 per
claimant.
If the amount does not exceed P5,000.00, it is, under Article 129, the DOLE
Regional Director has jurisdiction to take cognizance thereof.

SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.
Award of statutory benefits even if not prayed for is valid.
Claim for notarial fees by a lawyer employed by a company is within the
jurisdiction of the Labor Arbiter.
(a) VERSUS REGIONAL DIRECTOR

1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL
MONEY CLAIMS LODGED UNDER ARTICLE 129.
As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional
Directors have jurisdiction over claims amounting to P5,000 or below,
provided the following requisites concur:
1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee does not exceed
P5,000.00.
2. IN INSPECTION OF ESTABLISHMENT CASES UNDER

ARTICLE 128, DOLE REGIONAL DIRECTORS HAVE
JURISDICTION REGARDLESS OF WHETHER OR NOT THE
TOTAL AMOUNT OF CLAIMS PER EMPLOYEE EXCEEDS
P5,000.00.
a. Requisites.
For the valid exercise by the DOLE Secretary or any of his duly authorized
representatives (DOLE Regional Directors) of the visitorial and
enforcement powers provided under Article 128(b), the following requisites
should concur:
(1) The employer-employee relationship should still exist;
(2) The findings in question were made in the course of inspection by labor
inspectors; and
(3) The employees have not yet initiated any claim or complaint with the
DOLE Regional Director under Article 129, or the Labor Arbiter under
Article 217.
3. HOWEVER, JURISDICTION OVER CONTESTED CASES

UNDER THE EXCEPTION CLAUSE IN ARTICLE 128(b) OF THE

LABOR CODE INVOLVING INSPECTION OF ESTABLISHMENTS
BELONGS TO THE LABOR ARBITERS AND NOT TO DOLE
REGIONAL DIRECTORS.
a. Relation of paragraph (b) of Article 128 to the jurisdiction of
Labor Arbiters.
The Labor Arbiters have jurisdiction over contested cases under the
exception clause in Article 128(b). which states:
“xxx. The Secretary or his duly authorized representatives shall issue writs
of execution to the appropriate authority for the enforcement of their
orders, except in cases where the employer contests the findings of the
labor employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of
inspection.”
In interpreting the afore-quoted provision of the exception clause, three (3)
elements must concur to divest the Regional Directors or their
representatives of jurisdiction thereunder, to wit:
(a) That the employer contests the findings of the labor
regulations officer and raises issues thereon;
(b) That in order to resolve such issues, there is a need to
examine evidentiary matters; and
(c) That such matters are not verifiable in the normal course of
inspection.
The 2009 case of Meteoro v. Creative Creatures, Inc.,1 best illustrates
the application of the exception clause. Here, it was held that the Court of
Appeals aptly applied the “exception clause” because at the earliest
opportunity, respondent company registered its objection to the findings of
the labor inspector on the ground that there was no employer-employee
relationship between petitioners and respondent company. The labor
inspector, in fact, noted in his report that “respondent alleged that
petitioners were contractual workers and/or independent and talent
workers without control or supervision and also supplied with tools and
apparatus pertaining to their job.” In its position paper, respondent again
insisted that petitioners were not its employees. It then questioned the
Regional Director’s jurisdiction to entertain the matter before it, primarily
because of the absence of an employer-employee relationship. Finally, it
raised the same arguments before the Secretary of Labor and the appellate
court. It is, therefore, clear that respondent contested and continues to

contest the findings and conclusions of the labor inspector. To resolve the
issue raised by respondent, that is, the existence of an employer-employee
relationship, there is a need to examine evidentiary matters.
JURISDICTION OVER CASES INVOLVING

LEGISLATED WAGE INCREASES AND WAGE DISTORTION
1. CASES IN ORGANIZED ESTABLISHMENTS.
Jurisdiction is with the Voluntary Arbitrator.
2. CASES IN UNORGANIZED ESTABLISHMENTS.
Jurisdiction is with Labor Arbiter.
JURISDICTION OVER CASES OF DOMESTIC WORKERS OR

KASAMBAHAY
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction if the amount of the claim exceeds
P5,000.00; otherwise, the jurisdiction is vested with the DOLE Regional
Director under Article 129 of the Labor Code.
Incidentally, it is no longer legally correct to use the term “domestic
servant” or “househelper” in reference to a person who performs domestic
work. Under R.A. No. 10361, “domestic servant” or “househelper” should
now be referred to as “domestic worker” or “kasambahay.”
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-

COMPETE CLAUSE AND OTHER POST-EMPLOYMENT
PROHIBITIONS
1. JURISDICTION IS LODGED WITH THE REGULAR COURTS.

In case of violation of the non-compete clause and similar post-
employment bans or prohibitions, the employer can assert his claim for
damages against the erring employee with the regular courts and not with

the labor courts.
EMPLOYER’S CLAIMS FOR CASH ADVANCES, CAR,

APPLIANCE AND OTHER PERSONAL LOANS OF EMPLOYEES
1. LABOR ARBITERS HAVE NO JURISDICTION.

With respect to resolving issues involving loans availed of by employees
from their employers, it has been the consistent ruling of the Supreme
Court that the Labor Arbiters have no jurisdiction thereover but the regular
courts.
Where the claim to the principal relief sought is to be resolved not by
reference to the Labor Code or other labor relations statute or a collective
bargaining agreement but by the general civil law, the jurisdiction over
the dispute belongs to the regular courts of justice and not to the Labor
Arbiter and the NLRC. In such situations, resolutions of the dispute
requires expertise, not in labor management relations nor in wage
structures and other terms and conditions of employment, but rather in the
application of the general civil law. Clearly, such claims fall outside the area
of competence or expertise ordinarily ascribed to Labor Arbiters and the
NLRC and the rationale for granting jurisdiction over such claims to these
agencies disappears.”
The following loans may be cited:
a. Cash loans/advances are in the nature of simple collection of a sum of
money brought by the employer, as creditor, against the employee, as
debtor. The fact that they were employer and employee at the time of the
transaction does not negate the civil jurisdiction of the trial court. The case
does not involve adjudication of a labor dispute but recovery of a sum of
money based on our civil laws on obligation and contract.
b. Car loans such as those granted to sales or medical representatives by
reason of the nature of their work. The employer’s demand for payment of
the employees’ amortizations on their car loans, or, in the alternative, the
return of the cars to the company, is not a labor, but a civil, dispute. It
involves debtor-creditor relations, rather than employee-employer
relations.
c. Appliance loans concern the enforcement of a loan agreement
involving debtor-creditor relations founded on contract and do not in any

way concern employee relations. As such it should be enforced through a
separate civil action in the regular courts and not before the Labor Arbiter.
d. Loans from retirement fund also involve the same principle as
above; hence, collection therefor may only be made through the regular
courts and not through the Labor Arbiter or any labor tribunal.
E. DOLE REGIONAL DIRECTORS
1. JURISDICTION
1. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over
the following cases:
(a) Labor standards enforcement cases under Article 128;
(b) Small money claims cases arising from labor standards violations in the
amount not exceeding P5,000.00 and not accompanied with a claim for
reinstatement under Article 129;
(c) Occupational safety and health violations;
(d) Registration of unions and cancellation thereof, cases filed against
unions and other labor relations related cases;
(e) Complaints against private recruitment and placement agencies
(PRPAs) for local employment; and
(f) Cases submitted to them for voluntary arbitration in their capacity as
Ex-Officio Voluntary Arbitrators (EVAs) under Department Order
No. 83-07, Series of 2007.
LABOR STANDARDS ENFORCEMENT CASES

1. SUBJECT OF THE VISITORIAL AND ENFORCEMENT
POWERS: THE ESTABLISHMENT AND NOT THE EMPLOYEES
THEREIN.
The subject of the visitorial and enforcement powers granted to the DOLE
Secretary or his duly authorized representatives under Article 128 is the
establishment which is under inspection and not the employees
thereof.
Consequently, any awards granted are not confined to employees who
signed the complaint inspection but are equally applicable to all those

who were employed by the establishment concerned at the time
the complaint was filed, even if they were not signatories
thereto. The reason is that the visitorial and enforcement powers
are relevant to, and may be exercised over, establishments, not
over individual employees thereof, to determine compliance by
such establishments with labor standards laws. Necessarily, in
case of an award from such violation by the establishment,
all its existing employees should be benefited thereby. It must be
stressed, however, that such award should not apply to those who resigned,
retired or ceased to be employees at the time the complaint was filed.
2. ORIGINAL JURISDICTION.
The DOLE Regional Directors exercise original jurisdiction over the
following:
(a) Cases involving inspection of establishments to determine compliance
with labor standards (Visitorial Power); and (b) Cases involving issuance
of compliance orders and writs of execution (Enforcement Power).
3. VISITORIAL POWER OF REGIONAL DIRECTORS UNDER
ARTICLE 128(a).
Pursuant to their visitorial power under Article 128(a), the DOLE Regional
Directors shall have:
(a) access to employer’s records and premises at any time of the day or
night, whenever work is being undertaken therein; and
(b) the right:
(1) to copy from said records;
(2) to question any employee and investigate any fact, condition or matter
which may be necessary to determine violations or which may aid in the
enforcement of the Labor Code and of any labor law, wage order, or rules
and regulations issued pursuant thereto.
4. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER

ARTICLE 128(b).
The statutory basis of the authority of the DOLE Regional Directors to
administer and enforce labor standards is found in Article 128(b) of the
Pursuant thereto, the DOLE Regional Director, in cases where the

employer-employee relationship still exists, shall have the power:
a. to issue compliance orders to give effect to the labor standards
provisions of the Labor Code and other labor legislations based on the
findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection.
b. to issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer contests
the findings of the labor employment and enforcement officer and raises
issues supported by documentary proofs which were not considered in the
course of inspection, in which case, the contested case shall fall under the
jurisdiction of the Labor Arbiter to whom it should be endorsed by the
Regional Director.
c. to order stoppage of work or suspension of operations of any unit
or department of an establishment when non-compliance with the law or
implementing rules and regulations poses grave and imminent danger to
the health and safety of workers in the workplace. Within 24 hours, a
hearing shall be conducted to determine whether an order for the stoppage
of work or suspension of operations shall be lifted or not. In case the
violation is attributable to the fault of the employer, he shall pay the
employees concerned their salaries or wages during the period of such
stoppage of work or suspension of operation.
d. to require employers, by appropriate regulations, to keep and maintain
such employment records as may be necessary in aid of his visitorial
and enforcement powers under the Labor Code.
SMALL MONEY CLAIMS CASES

1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money
claims cases arising from labor standards violations in the amount not
exceeding P5,000.00 and not accompanied with a claim for reinstatement
under Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims
and benefits, including legal interest, owing to an employee or domestic
worker or kasambahay, arising from employer-employee relations provided
the claim does not exceed P5,000.00.
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION
BY DOLE REGIONAL DIRECTORS UNDER ARTICLE 129.

The following requisites must all concur, to wit:
(1) The claim is presented by an employee or domestic worker or
kasambahay;
(2) The claimant, no longer being employed, does not seek reinstatement;
and
(3) The aggregate money claim of the employee or domestic worker or
kasambahay does not exceed P5,000.00.
In the absence of any of the aforesaid three (3) requisites, the Labor
Arbiters have original and exclusive jurisdiction over all claims
arising from employer-employee relations, other than claims for employees’
compensation, social security, PhilHealth and maternity benefits.
DOLE SECRETARY
1. POWERS OF THE DOLE SECRETARY.
The DOLE Secretary, being the head of the Department of Labor and
Employment, is possessed of a number of powers, some of which are
mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
2. Power to suspend/effects of termination;
3. Assumption of jurisdiction;
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
VISITORIAL AND ENFORCEMENT POWERS

1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 128 of the Labor Code, as amended, basically enunciates the three
(3) kinds of power which the DOLE Secretary and/or the Regional
Directors, his duly authorized representatives, may exercise in connection
with the administration and enforcement of the labor standards provisions
of the Labor Code and of any labor law, wage order or rules and regulations
issued pursuant thereto.
The three (3) kinds of power are as follows:
1) Visitorial power:
2) Enforcement power: and
3) Appellate power or power of review.

2. WHO EXERCISE THE POWERS.
Nos. 1 and 2 above are exercised under the original jurisdiction of the
DOLE Regional Directors.
This has been earlier discussed under the separate topic of “VII.
PROCEDURE AND JURISDICTION, E. DOLE Regional
Directors, 1. Jurisdiction”, supra. Hence, the same will no longer be
touched under the instant topical discussion.
The appellate power in No. 3 above may only be exercised by the DOLE
Secretary in respect to any decision, order or award issued by the DOLE
Regional Directors.
3. NATURE OF THE VISITORIAL AND ENFORCEMENT

POWERS.
The visitorial and enforcement powers granted to the DOLE Secretary and
the DOLE Regional Directors who are his duly authorized representatives,
are quasi-judicial in nature.
4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL

JURISDICTION TO EXERCISE THE VISITORIAL AND
ENFORCEMENT POWERS UNDER ARTICLES 37, 128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the
DOLE Regional Directors, the DOLE Secretary’s duly authorized
representatives commonly referred to in these three (3) articles, who have
the original jurisdiction to exercise the visitorial power granted therein.
5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF

VISITORIAL AND ENFORCEMENT POWERS IS APPELLATE IN
NATURE.
It is clear from the above disquisition that the original jurisdiction over
the exercise of the visitorial and enforcement powers belongs to the DOLE
Regional Directors, as the duly authorized representatives of the DOLE
Secretary.
The role of the DOLE Secretary is confined to the exercise of his appellate
jurisdiction over the decisions, orders and awards of the DOLE Regional

Directors in cases brought before them for adjudication under Articles 128
and 274.
APPEALS FROM DOLE REGIONAL DIRECTORS

1. CASES APPEALABLE TO DOLE SECRETARY.
Not all decisions, awards or orders rendered by the DOLE Regional
Directors are appealable to the DOLE Secretary.
Only those issued in the following cases are so appealable:
(a) Labor standards enforcement cases under Article 128;
(b) Occupational safety and health violations; and
(c) Complaints against private recruitment and placement agencies
(PRPAs) for local employment.
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
As earlier pointed out, the following cases decided by the DOLE Regional
Directors are not appealable to the DOLE Secretary but to some other
agencies/tribunals indicated below:
(a) Decisions in small money claims cases arising from labor standards
violations in the amount not exceeding P5,000.00 and not accompanied
with a claim for reinstatement under Article 129 are appealable to the
NLRC;
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary
arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs)
under Department Order No. 83-07, Series of 2007 may be elevated
directly to the Court of Appeals by way of a Rule 43 petition. This is so
because the DOLE Regional Directors, in so deciding,
are acting as Voluntary Arbitrators; hence, what should apply are the rules
on appeal applicable to voluntary arbitration.
JURISDICTION OVER WAGE DISTORTION CASES

 Jurisdiction over wage distortion cases depends on whether
the establishment is organized or unorganized.
In organized establishments, the employer and the union are required
to negotiate to correct the wage distortion.
Any dispute arising from such wage distortion should be resolved through
the grievance procedure under the CBA and if it remains unresolved,

through voluntary arbitration.
In unorganized establishments, where there are no CBAs or
recognized or certified collective bargaining unions, the jurisdiction is with
the Labor Arbiter.

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CCV Notes on LABOR STANDARDS 2017

Who are covered by the labor standards provisions of the Labor

2. NORMAL HOURS OF WORK

What is overtime work?

May normal working hours be reduced?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |1

COMPRESSED WORK WEEK

What are the conditions for its validity?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |2

Is meal break compensable?

b. All time during which an employee is suffered or permitted to work.

• When is waiting time compensable?

OVERTIME WORK, OVERTIME PAY

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |3

• What is the distinction between PREMIUM PAY and

What is built-in overtime pay?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |4

May an employee validly refuse to render overtime work under

Can overtime pay be waived?

NIGHT WORK (R.A. NO. 10151),

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |5

a. Significance of the law.

NIGHT SHIFT DIFFERENTIAL PAY

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |6

• How is Night Shift Differential Pay computed?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |7

CONTRACT FOR PIECE WORK

• What is contract for piece work under the Civil Code?

WAGE VS. SALARY

• What is the distinction in respect to execution, attachment or

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |8

MINIMUM WAGE DEFINED

• What is basic wage?

What is minimum wage?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva |9

• What is statutory minimum wage?

• What is regional minimum wage rate?

• What are included/excluded in the term “wage rate”?

Can COLA be integrated into the minimum wage?

• What is the “NO WORK, NO PAY” principle?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 10

MINIMUM WAGE SETTING

When is it proper to issue a Wage Order?

• What are the standards/criteria for minimum wage fixing?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 11

• What are the methods of fixing the minimum wage rates?

MINIMUM WAGE OF WORKERS PAID BY RESULTS

• Who are workers paid by results?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 12

• What are the categories of workers paid by results?

WAGE RATE OF APPRENTICES AND LEARNERS

WAGE RATE OF PERSONS WITH DISABILITY (PWDs)

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 13

• Is there a law which mandates the payment of commission?

• Is there a standard formula to compute commission?

DEDUCTIONS FROM WAGES

• Are there exceptions to this rule?

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 14

• What is the applicability of the non-diminution rule in Article

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 15

What are the criteria that may be used to determine existence of

Labor Law Review – Comm. Cecilio Alejandro C. Villanueva | 16

1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A